Tài liệu Arb med arb model international practice and applicability in vietnam

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY ARB-MED-ARB MODEL: INTERNATIONAL PRACTICE AND APPLICABILITY IN VIETNAM Major: Economics Specialization: International Trade Policy and Law Code: 8310106 Full Name: Le Hong Nhung Supervisor: Assoc. Prof, Dr. Nguyen Minh Hang, Ha Noi, 2019 STATEMENT OF ORGINAL AUTHORSHIP The master thesis “Arbitration-Med-Arb model: international practice and applicability in Viet Nam”, which was completed as a result of the course named Master of International Trade policy and Law, is the author‘s sole work with the best devotion, endeavor and hard-working period given. The author guarantee that the master thesis have been carried out in conformity with the thesis writing regulation and process issued by the Foreign Trade University ACKNOWLEDGEMENT This thesis is the result of six months of researching. It is an interesting and learning experience. In completing this thesis, the author would like to give my special thanks to many people for their significant help, contribution, and recommendations during my writing process. Foremost, special mentions and the most sincere thanks should belong to Associate Prof. Dr. Nguyen Minh Hang, my supervisor at Foreign Trade University. With her master knowledge and experiences, she helped me in writing this thesis. I could not complete this thesis without her positive suggestions and guidance. Secondly, I would also like to give my thanks to the authors who provided me with valuable books for my thesis. My last appreciation is to the Faculty of Graduate Studies of Foreign Trade University for organizing such a meaningful master course and all the support, my family and my friends for their supports and encouragements. Hanoi, 15th January 2019 Le Hong Nhung TABLE OF CONTENTS STATEMENT OF ORGINAL AUTHORSHIP ACKNOWLEDGEMENT LIST OF FIGURES & TABLES LIST OF ABBREVIATION SUMMARY OF THESIS RESEARCH RESULT INTRODUCTION .....................................................................................................1 1. Rationale .........................................................................................................1 2. Literature review ............................................................................................2 3. Research questions .........................................................................................4 4. Research’s objective .......................................................................................5 5. Scope of study .................................................................................................6 6. Methodologies .................................................................................................7 7. Research disposition ......................................................................................8 CHAPTER 1: THEORETICAL FRAMEWORK .................................................9 1.1. Alternative dispute resolutions .....................................................................9 1.1.1. Background ............................................................................................9 1.1.2. Definition..............................................................................................11 1.1.3. Methods and forms of ADR .................................................................13 1.1.4. ADR and litigation ...............................................................................13 1.2. Mediation ......................................................................................................16 1.2.1. Rationale of mediation .........................................................................17 1.2.2. Definition and process .........................................................................18 1.2.3. Stages of commercial mediation..........................................................20 1.2.4. Types of commercial mediation ...........................................................23 1.2.5. International organization’s activities for commercial mediation ....24 1.2.6. Advantages and disadvantages of commercial mediation ..................27 1.3. Arbitration ....................................................................................................28 1.3.1. Rationale of arbitration .......................................................................28 1.3.2. Definition and process .........................................................................29 1.3.3. Stages of commercial arbitration ........................................................31 1.3.4. Arbitration agreement ........................................................................33 1.3.5. Forms of commercial arbitration ........................................................34 1.3.6. Benefits and drawbacks of commercial arbitration ...........................35 1.4. The key differences between mediation and arbitration ..........................36 1.5. The understanding of arb-med-arb model ................................................39 CHAPTER 2: INTERNATIONAL EXPERIENCE ON APPLYING ARBMED-ARB MODEL: STUDY OF SINGAPORE ................................................42 2.1. Singapore’s development in mediation and arbitration ..........................42 2.1.1. Singapore’s development in mediation ...............................................42 2.1.2. Singapore’s development in arbitration ..............................................45 2.2. Singapore's Arb-Med-Arb model ...............................................................50 2.2.1. SIAC-SIMC Arb-Med-Arb Protocol ...................................................50 2.2.2. Procedure of Singapore’s Arb - Med - Arb model..............................52 2.2.3. Advantages of Arb - Med – Arb ...........................................................55 CHAPTER 3: APPLICABILITY OF AMA MODEL IN VIET NAM AND RECOMMENDATIONS ........................................................................................60 3.1. Vietnam’s approach on applying Arb – Med - Arb model ......................60 3.1.1. Vietnam economy review .....................................................................60 3.1.2. Vietnam development in commercial mediation and arbitration ......63 3.1.3. Arb-Med-Arb applicability in Viet Nam and issues...........................74 3.2. Recommendations for Viet Nam .................................................................79 3.2.1. For Government ...................................................................................79 3.2.2. For associations and enterprises .........................................................89 CONCLUSION ........................................................................................................91 1. Conclusions ...................................................................................................91 2. Limitation of research .................................................................................92 REFERENCES ........................................................................................................93 LIST OF FIGURES & TABLES Table 1.1: Comparing ADR and Court Procedure ..............................................16 Figure 1.1: Commercial mediation process ..........................................................20 Table 2.1: Circumstances to use commercial mediation .....................................27 Figure 2.1: Commercial arbitration process ........................................................31 Table 2.2: Comparison Between Arbitration & Mediation ................................38 Figure 3.1: Total Number of New Cases Handled by SIAC (2006-2016) ..........46 Firgue 3.2: Procedure of Singapore Arb-Med-Arb model ..................................52 Table 3.1: Advantages of Mediation versus Arbitration .....................................55 Figure 3.3: Advantages of Arb-Med-Arb .............................................................57 Figure 3.4: Newly established enterprises of May from 2014 – 2018 .................61 Figure 4.1: Viet Nam’s Arb-Med-Arb model (expected).....................................75 LIST OF ABBREVIATION ADR Alternative Dispute Resolution AMA Arbitration-Mediation-Arbitration ARB-MED-ARB Arbitration-Mediation-Arbitration CMC Community Mediation Centres FDI Foreign Direct Investment HKMAAL Hong Kong Mediation Accreditation Association Limited ICC International Chamber of Commerce PD Practice Direction on Mediation PDRC Primary Dispute Resolution Centre SMC Singapore Mediation Center SIAC Singapore International Arbitration Center SICC Singapore International Commercial Court SIMC Singapore International Mediation Center SIMI Singapore International Mediation Institute TRACENT Ho Chi Minh City Commercial Arbitration Center UN United Nations UNCITRAL United Nations Commission on International Trade Law VIAC Vietnam International Arbitration Center VMC Vietnam Mediation Center WB World Bank WTO World Trade Organization SUMMARY OF THESIS RESEARCH RESULT The thesis ―Arb-Med-Arb model: international practice and applicability in Vietnam‖ focuses on giving recommendation on how Vietnam can apply the experiences of developed jurisdiction around the world, which in this study are Hong Kong, US, especialy Singapore in order to improve the country‘s commercial dispute resolution context. In general, Vietnam‘s alternative dispute resolutions on commercial dispute in general is still limited. In addition, the commercial mediation activities is scattered between arbitration center national wide without a uniform Mediation and Arbitration Act until the recent Decree No. 22/ND-CP about commercial mediation that have been issued in April 2018 and Law on commercial arbitration issued in June 2010. Despite a remarkable movement, Vietnam regulation still possessed many drawback regarding the code of conduct for mediators and arbitrators. The solutions which have been found in the study of the three developed dispute settlement hubs of the world shall help to attract the interest of Vietnam enterprises on using multitiered-clause Arbitration - Mediation Arbitration to sellte disputes, improving the standard and conduct of mediator and arbitrator, fortify the enforceability of the mediation settled agreement and arbitration award. 1 INTRODUCTION 1. Rationale An era of connection and cooperation is the way people usually call the 21st century. An outburst of a smartphone or high-tech computer for instance would imply that its parts are collected and produced in different countries. These components are then assembled into the final product and distributed over the world. That is international trade at its absolute finest. Powering such international trade are complex technologies which have reduced the obstacles for global advertising, near-instant global communication, prompt product and services delivery. In conclusion, the term ―globalism‖ has been reconceptualized by technology. There are however features of globalism where technology cannot assist (at least not yet). Since the characteristics of international businesses, the contracts signed between the sides are generally quite sophisticated, consisting of a expansive heavily negotiated clauses regarding to each party‘s commercial requirements. In addition to trade terms, parties‘ awareness of the need to have a well-written dispute settlement clause are increasing . Go along with the development of technology, the mechanisms for resolving dispute have not stayed immovable and have gradual developed to dedicate to globalism as much as achievable. In this field, arbitration has been found an ideal substitute to the traditional court procedures. Generally, arbitrations are supposed more efficient and flexible than courts, while the parties are offered confidentiality. The enforcement is another enormous advantage of arbitration. In particular, an arbitration awards are more readily enforceable than judgment from foreign court. The question that people are finding the key is: are we on the top of the progression for dispute settlement clauses? Can arbitration clauses (or any substitute dispute resolution clauses) still be refined? The Singapore International Arbitration Centre (SIAC) and Singapore International Mediation Centre (SIMC) assuredly realize that fact. Altogether, the SIAC and SIMC have requested to bring 2 up a nontraditional dispute settlement model compositing the advantages of arbitration and mediation clauses, whose name is the Singapore Arb-Med-Arb Protocol (― AMA Protocol‖). The AMA Clause allows parties to choose to settle disputes by method of arbitration to deal with their differences or by mediation before reaching arbitration. A multi-tiered clause is considered as a form of arbitration clause which combines mediation and arbitration proceedings in order to increase the chance of settling disputes between the parties via goodwill and positive discussions and to inspire constructive negotiations before a fully-completed arbitration procedure. In this thesis, the author would like to look into this new approach to settle disputes and see what advantages AMA could have for the parties. Moreover, the author also want to show the key points for question: ―Can Vietnam be able to apply this model to resolve the disputes in the future?‖. Consequently, being a Master student majoring in International Trade Policy and Law, for the desire to devote my knowledge to the better Vietnam‘s dispute settlement, so as to keep pace with the global standards, the author selected the topic: “Arb-Med-Arb model: international practice and applicability in Vietnam”. 2. Literature review Although commercial mediation and arbitration have long developing journey all over the world, Vietnam‘s mediation and arbitration is still inexperienced and the term is new to some extent. Especially, Arbitration - Mediation - Arbitration model has ever been researched thoroughly as well as applied in Viet Nam. As a result, the study‘s subject is quite new and there has not been any same or analogous topic up to the moment that the author has finished the paper. The author would like to review some experiential researches from both Vietnamese and foreign sources as follows: - Nguyen Trung Nam, Trinh Nguyen (2017) – “Mediation – arbitration in commercial and construction disputes” is a research about the issues in the circumtances of construction dispute settlement under Viet Nam‘s laws and 3 point out some recommendations, composing mediation‘s applying methods, in the context of Viet Nam, combining the other ADR procedures so as to require a multi-tiered dispute settlement mechanism, or in the unique form of Arb-Med-Arb innovated in Singapore, in order to promote the efficiency and enforceability of the dispute settlement way in construction conflict via the improvements of commercial mediation, from the past to recent situation. The major acknowledgement of this paper is the information about the issues relating to construction disputes in Viet Nam. - Financier Worldwide Magazine (2018) – “Arb-med-arb in cross-border disputes”: in this study, the authors pointed out the simple idea behind multi-tiered dispute resolution is to provide several possible avenues to dispute settlement within one dispute resolution procedure. The result is a mechanism that combines various dispute resolution methods, such as mediation and arbitration, in different ways. In addition, the researcher also stated some advantages and limitations of the AMA Protocol. - Bryan Cave Leighton Paisner team (2015) – “Singapore’s new “ArbMed-Arb” protocol: a positive development?” is a sientific article that study how the SIMC - SIAC protocol works and consider the benefits and downsides of attaching one of Singapore‘s newest dispute settlement methods to commercial contracts. - Anindya Basarkod and Dr. Markus Altenkirch (2018) – “Arb-Med-Arb: what is it and how can it help the parties to solve their disputes efficiently?” is a paper looking into Arbitration - Mediation - Arbitration as a new approach to resolve disputes and show what advantages Arbitration Mediation - Arbitration could have for the conflict sides. - Daniel Chong, Sharon Lin, (2018) - “Arb-Med-Arb: Connecting the Dots between Arbitration and Mediation”: in this study, the authors pointed out some key aspects of ―Arb-Med-Arb‖, the differences between arbitration and mediation. In addition, the reason why people should use 4 Arb-Med-Arb to solve the dispute and a sample of Arb-Med-Arb clause are also mentioned in this research. My review will not explore all aspects of disputes resolution but focus on the which main points have been mentioned in the above articles or studies. Most of the above research define the Arb-Med-Arb model and show some main advantages but does not mention the method used to apply AMA in Asian country such as Viet Nam. Although the study named “Mediation – arbitration in commercial and construction disputes”by Nguyen Trung Nam, Trinh Nguyen (2017) showed the issues in the circumtances of construction dispute settlement under Viet Nam‘s laws and point out some recommendations, the definition, characteristics and important advantages of Arb-Med-Arb are not mentioned here. In short, up to now, there has not been any comprehensive study researched on all-sided Arb-Med-Arb model and the method that used to apply this multi-tiered dispute settlement mechanism in Viet Nam. My contribution will highlight the advantages of this dispute resolution method in general (not focus on any specific field) and answer the question: ―How can we apply Arb-Med-Arb in Viet Nam?‖. 3. Research questions There are some key questions of this study including: ―What is Arb – Med - Arb protocol?‖, ―What are the countries applied this clause in the world?‖ and ―What should Viet Nam act to apply this model in the future‖. In order to find out the answers for such research questions, we need to focus on these sub questions: - What are the basic principles of arbitration and mediation? - What are the differences between arbitration and mediation? - How can Arb-Med-Arb help the parties to solve their disputes in Singapore? - What are the benefits of Arb-Med-Arb model? - How can Viet Nam apply Arb-Med-Arb model? - What are implications for Viet Nam? 5 4. Research’s objective Arbitration and mediation are applied increasingly in the world to settle the disputes instead of court. That are very useful alternative dispute resolution, however, the combination of arbitration and mediation bring the surprising benefit. International economic integration is one of the main tasks of Viet Nam in the near future. Therefore, ―Economic integration is central in which the integration in other areas has to facilitate economic integration and contribute positively to economic development, defense consolidation, national security and preservation; and promote cultural identity and promote cultural and social development. Integration in the different fields must be implemented in a coordinated global integration strategy with a roadmap and steps in line with the actual conditions and capabilities of the country" (Resolution No. 22-NQ / TW dated 10 April 2013 on international integration). Up to 2018, Vietnam has negotiated and signed more than ten regional free trade agreements (FTA), including commitments on technical barriers to trade and will sign some next new FTAs such as: EVFTA, RCEP, …. The roadmap for tariff reductions in free trade agreements is committed for a period of ten years for each phase and is specified for each agreement. That is the reason why the amount of international trade transactions and import-export turnover are increasing drammatically. It is clear that at this moment, clear that Viet Nam should act now for the unexpected disputes in businesses and to protect Vietnamese enterprises in international market. Meanwhile there is not legal framework as well as any clause refer to Abitration – Mediation – Arbitration model. Therefore, the content of the thesis will highlight the objectives: - Systematize the basic principles of two alternation dispute resolution method: arbitration and mediation and the key differences between these approaches. - Understanding how Arbitration - Mediation – Arbitration model works ; 6 - Get deeper understanding on the way Singapore apply this protocol to resolve conflict in business and the advantages of this model. - Forecasting the difficulties that Vietnam has to face with when applying this model, giving suggestion and proposal for Vietnam Government, arbitration and mediation service providers to facilitate the development of dispute settlement mechanism 5. Scope of study There are a number of trade disputes cbalternative dispute settlement, such as negotiation, arbitration, mediation, or med-arb can be used in various dispute categories ranging from civil, family, commerce. From many studies, it is found that, alternative dispute settlement methods give the best answer regarding commercial disputes where the key economic development of the nation rests. This research focuses on the use of arbitration and mediation, arbitration - mediation arbitration model to resolve commercial disputes. The study specifies the research content on Arb-Med-Arb model of Singapore. In fact, Arb-Med-Arb model has many advantages, however, this is really new model in dispute resolution, so Singapore is the only country create and allow apply this model. In addition, the thesis also analyzes Vietnam‘s recent development on commercial mediation and arbitration such as: legislation, awareness... In short, the study would do research on the current Vietnam‘s arbitration and commercial mediation situation, which can be enhanced and introduce some implications on how to how to apply Arb-Med-Arb model in Vietnam according to international standard and experiences. The research time shall cover the period in the early twenty centuries until now because Singapore and Viet Nam have a later phase of mediation in comparison with other developed countries in the world. Moreover, several legal documents on commercial mediation and arbitration of international bodies from the late nineteen to early twenty centuries shall also be included. 7 6. Methodologies This thesis is completed based on the application of theory research method and practical research method. Theory research method includes analytical method, synthesis method and reference to the laws and regulations in order to achieve the requirements set for a research project. Practical research method mostly includes interview method with experts in the fields of international arbitration and mediation (as described in the Appendix 1). Data which is used in the analysis of the thesis is mostly secondary one. The data is collected, quoted from reports, researches of experiential researchers and organizations in the field of arbitration and mediation. Primary data for such study is hard to conduct since arbitration - mediation - arbitration model is quite new in Vietnam going along with the limitation of capital and time of the author. Theory research method: About analytical and synthesis method, in Chapter 2. Theoretical framework, theoretic and fact, the legal framework related mediation and arbitration, in general and internal coordination related to arbitration mediation - arbitration model, in particular are deeply analyzed in order to find out international and domestic practices and show the opportunities to apply arbitration - mediation - arbitration clause in Viet Nam. Some arbitration - mediation arbitration applied cases to settle disputes in Singapore are introduced and analyzed as experiences for Viet Nam to learn in future if Viet Nam involves in same cases. In Chapter 1. International experience on applying arbitration - mediation arbitration model: study of Singapore, the author use synthesis method and reference to the laws and regulations to show the experiences and find the implications for Viet Nam ... In Chapter 2. Applicability of arbitration - mediation - arbitration model in Viet Nam and recommendations, the method of reference to the laws and regulations is also used so as to figure out some unsuitable points regarding to laws and regulations of Viet Nam. Synthesis method will be also used in this chapter to conclude the thesis and suggest opening the new issues. 8 Interviews are carried out with some experts and associations to show the applying method and give recommendations for Chapter 3. 7. Research disposition Beside the table, chart lists, reference and appendix, the main content of the thesis includes the followings: - Introduction. - Chapter 1: Theoretical framework - Chapter 2: International experience on applying arb-med-arb model: study of Singapore - Chapter 3: Recommendations - Conclustion 9 CHAPTER 1: THEORETICAL FRAMEWORK In this chapter, it is supposed to be helpful to briefly set out the principles on arbitration and mediation before analyze the others deeper knowledge of the multitiered arbitration - mediation - arbitration clause and model. 1.1. Alternative dispute resolutions 1.1.1. Background According to the report of the World Bank Group, the idea of using ADR as a method of resolving disputes by consensus rather than confrontation has come from traditional practices of many countries. In other words, ADR has originated from the history of many cultures, especially one in Asia where harmonization is always a major criteria (World Bank Group, 2011). However, the origin of modern ADR is often accepted is the United States by many studies, the thesis recounts the ADR platform of the USA. Earlier, ADR was first used to resolve civil rights by using mediation and considering action against overworked and delayed courts. Since then, ADR has developed rapidly, not only practical but also institutional with the encouragement of the Government, legal organizations, academics. For example, in 1990, all federal district courts were required to have a plan to reduce costs and delay in litigation process. Therefore, each federal district court developed some form of ADR process. Due to innovations in ADR, mandatory ADR development in courts, states and federal systems, the growing interest in ADR has made the United States the largest source of knowledge in the court connected ADR (USAID, 1998). Later in the 1980s, the demand for commercial ADR in the United States began to increase because of the desire for a more effective alternative to litigation. Therefore, ADR models such as negotiation, mediation and litigation have developed significantly. The institutionalization of ADR has changed the rules and legal practices. US regulations, public consultation and administrative dispute resolution have been added to the use of ADR. The United States is always leading in many areas and ADR is not an exception. Many countries copy US processes, others try to blend American style 10 with their own dispute settlement traditions. This process is being used to solve various problems not only commerce, social, civil, politics. Developing countries are involved in the implementation of ADR, including Vietnam. China or Hong Kong in particular are also affected by ADR trend from the United States. The fire spark of disappointment in litigation and arbitration has spread from the United States to other jurisdictions followed by China (Zheng Rungao, 2003). The dispute parties began to criticize the limitations of traditional dispute resolution that subsequently gave rise to ADR. Besides, China ADR‘s development can be explained by its special cultural background. The Chinese prefer a consensus, non-adversarial ways of dispute settlement follow philosophies suchas ―better bend than break‖, ―willows are weak yet they bind others wood‖. The reason is that in China, reservation of face and business relationship private is very important. Such platform has contributed to promote the growth of ADR, especially in the field of trade. While the USA model affects most of the world, the China‘s one in general are powerful for Asia or Southeast Asia in particular. Singapore is also affected by ADR trends from the US and is considered a pioneer in Southeast Asia's ADR. The reason for the need of ADR here is also due to the limitation of the litigation. In the early 1990s, Singapore courts were full of case files. More than 2000 cases are awaiting resolution in the Supreme Court. More than 10000 cases are inactive, many of which have been more than 10 years. The process of starting treatment takes 5-10 years for about 44% of cases. On the other hand, appeals take 2-3 years to be heard. Latency can be calculated as part of the life expectancy of the person and the processing time of the judgment has not been mentioned. Therefore, ADR was implemented by the Singapore judiciary to reduce the burden of the court and help desperate claimants (Judith Prakash, 2009). The thesis summarized the background of ADR, from the country of origin the United States, to countries in the same region and has much influence on Vietnam such as China and Singapore have the same reasons for developing ADR due to the limitation of litigation and court‘s proceed. Now the thesis will continue and define ADR. 11 1.1.2. Definition According to Yona Shamir, ADR is defined as: “Alternative Dispute Resolution (ADR, sometimes also called “Appropriate Dispute Resolution”) is a general term, used to define a set of approaches and techniques aimed at resolving disputes in a non-confrontational way. It covers a broad spectrum of approaches, from party-to-party engagement in negotiations as the most direct way to reach a mutually accepted resolution, to arbitration and adjudication at the other end, where an external party imposes a solution. Somewhere along the axis of ADR approaches between these two extremes lies “mediation,” a process by which a third party aids the disputants to reach a mutually agreed solution.” Source: (Yona Shamir, 2003) Alternative dispute resolution is a more common term, however many empirical studies and even the author finds the words Dispute Settlement more appropriate to nature. The purpose of dispute resolution is to make social life better (Park and Burger, 2009). That process will attempt to resolve and consider conflicts that help people and entrepreneurs keep relationships. The Latin word refers to this process for the sinner through the unimportant person of the social life and important to the social order. Lack of dispute resolution will make it difficult for people to go together. Or even the Great Gandhi once said: “I realized that the true function of a lawyer was to unite parties... The lesson was so indelibly burnt into me that a large part of my time during the twenty years of my practice as a lawyer was occupied in bringing about private compromise of hundreds of cases. I lost nothing thereby not even money; certainly not my soul”. Source: (Azquotes, 2018)