Arbitrability

§ 2 LCA 2010 focuses on commercial arbitration, to settle commercial disputes, with at least one of the parties who is merchant and conducts commercial act. Additionally, the scope of arbitrable commercial disputes is determined by special law, such as Commercial Law 2005, Law on Investment 2014, and Law on PPP 2020.

Example from practice: A and B are wife and husband in a pending divorce process. In dividing their joint property, they agree to divide the shares jointly owned in a company: 40% for A, and 60% for B. Disputes arise because A will remain as active shareholder with all voting rights, but B only agrees to compensate the market value of this 40% of these shares, estimated 1200 billion VND. A and B agree to settle this dispute by arbitration. Is this dispute arbitrable?

Divorce is a civil procedure under jurisdiction of VN court (§ 28 Civil Procedure Code 2019). In the marriage, wife and husband are not merchants, the divorce is not a commercial act (§ 2 LCA). Therefore, divorce generally is not arbitrable under VN law. Although the parties in this Case have concluded an arbitration agreement to settle disputes among shareholders regarding the transfer of shares or compensation of shares value, that issues are still within the divorce procedure. Consequently, it will be very risky for an arbitration institution to accept this Case; it is very risky for the tribunal to decide that it has the jurisdiction to hear the Case. With all possibility, the award then can be set aside by VN court when challenged by a party.