By First-Instance Decision No. 07/2023/QĐST-KDTM dated 28 December 2023, the Kien Giang People’s Court addressed Midas Keep Limited (“Midas Keep”)’s application to recognise and enforce in Viet Nam a foreign arbitral award rendered in Hong Kong International Arbitration Centre (“HKIAC“) Case No. HKIAC/A20290 against Epizode Company Limited (“Epizode”). The award, issued on 10 March 2021 and corrected on 22 March 2021 by sole arbitrator Christopher Chinn, Fellow of the Chartered Institute of Arbitrators, ordered Epizode to pay USD 635,666 (principal, on record) plus interest at 7% per annum, USD 10,000 in legal fees, and HKD 34,238.69 towards HKIAC fees. The Court granted recognition and enforcement, relying on Article 458 of the Civil Procedure Code of Viet Nam 2015 (“CPC”) and the New York Convention (“NYC”) on the Recognition and Enforcement of Foreign Arbitral Awards 1958, and assessed court fees pursuant to Resolution No. 326/2016/UBTVQH14 of the National Assembly Standing Committee.
BACKGROUND
Contract and arbitral clause:
On 24 October 2019 and 04 December 2019, Midas and Epizode entered into two written loan agreements. Under each agreement, Epizode undertook to repay the loan principal and to pay interest at 7% per annum, with the contracts governed by the law of Hong. Each agreement contains an arbitration clause requiring disputes to be resolved by arbitration administered under the 2018 HKIAC Administered Arbitration Rules, with the resulting arbitral award to be final and binding.
Following disbursement of the loan proceeds by Midas Keep, Epizode made a single partial repayment of USD 122,370.41 under the 24 October 2019 loan and then ceased further payments, thereby falling into default on the outstanding principal and contractual interest under both agreements. As later recorded in the arbitral award, the unpaid principal stood at USD 137,580.48 (Loan Agreement 24/10/2019) and USD 477,692.46 (Loan Agreement 04/12/2019), with contractual interest running at 7% per annum from 23 October 2020 and 02 November 2020, respectively, until full satisfaction.
Proceedings at HKIAC
On 22 October 2020, the parties confirmed Christopher Chinn as sole arbitrator in HKIAC Case No. HKIAC/A20290. Between December 2020 and March 2021, the tribunal and HKIAC repeatedly served notices, directions and correspondence on both parties by registered mail and by email. The court record notes that Epizode received these communications and filed written opinions on multiple occasions, thereby participating in the proceedings before the arbitral award was issued.
Arbitral Award
10 March 2021; corrected 22 March 2021. The sole arbitrator ordered Epizode Company Limited to pay Midas Keep Limited the following sums (with interest as specified), and the decision record notes the total principal converted to be approximately USD 635,666:
- USD 137,580.48 — principal under the 24/10/2019 loan, plus interest at 7% per annum from 23/10/2020 until full payment;
- USD 477,692.46 — principal under the 04/12/2019 loan, plus interest at 7% per annum from 02/11/2020 until full payment;
- HKD 34,238.69 — Epizode’s half share of HKIAC administrative fees, plus interest at 7% per annum from the 60th day after the award until paid;
- EUR 5,000 — Epizode’s half share of the arbitrator’s fee, plus interest at 7% per annum from the 60th day after the award until paid;
- USD 10,000 — legal fees, plus interest at 7% per annum from the 60th day after the award until paid.
Application to recognise and enforce in Viet Nam
On 14 June 2021, Midas Keep filed its application with the Vietnamese courts to recognise and enforce the foreign arbitral award in Viet Nam, enclosing the award and supporting materials in English together with Vietnamese translations duly certified and consularly legalised as required. The case was later accepted by the Kien Giang People’s Court under Acceptance No. 01/2023/TLST-KDTM (05 January 2023), and the Court issued Decision to Open Meeting No. 01/2023/QD-MPH (19 October 2023) to proceed under Articles 457, 458 of the CPC 2015 and the New York Convention 1958.
Ahead of the meeting, the Court verified Epizode’s corporate status with the Kien Giang Department of Planning and Investment, noting the company was inactive but not dissolved. The Court served procedural documents to Epizode’s registered office and to the address of its legal representative by registered mail and email. Epizode did not appear and made no submissions.
COURT’S FINDINGS AND DECISION
On the case file and the Procuracy’s opinion, the First-Instance Panel examined the application against the CPC 2015 and the New York Convention 1958. Its principal findings were:
- Jurisdiction and scope of review: In accordance with Article 458.4 of the 2015 CPC, the Court observed that, when considering an application to recognise and enforce a foreign arbitral award, it must not re‑examine the merits but only verify the conditions stipulated in Article 459. The award rendered in HKIAC Case No. HKIAC/A20290 (final award dated 10 March 2021, corrected 22 March 2021) is a foreign arbitral award with legal effect. Midas Keep’s application dated 14 June 2021 was filed within the statutory time limit and falls within the jurisdiction of the Kien Giang court.
- Authority and formal validity: The application was signed on Midas Keep’s behalf by Mr Victor S., who was still the company’s legal representative at the time of signing; his power of attorney had been duly consularised. All supporting documents, including the award and the two loan contracts, were translated into Vietnamese, notarised and legalised. The court therefore held that the dossier met all formal requirements for recognition and enforcement in Viet Nam.
- Arbitration agreement and proceedings: The two loan agreements contained a valid arbitration clause designating HKIAC and Hong Kong law. The tribunal was properly constituted, with sole arbitrator Christopher Chinn. The court noted that HKIAC and the tribunal had sent all procedural notices to Epizode by registered mail and email; Epizode had acknowledged these communications and filed written submissions. Accordingly, the tribunal ensured proper notice and the right to be heard. The award is final and binding, and there is no evidence of annulment or suspension at the seat.
- No grounds for refusal: After reviewing the case against the exhaustive grounds in Article 459 CPC (corresponding to Article V of the New York Convention), the Court found that none of the refusal grounds were engaged. Recognition and enforcement of the award did not contravene the fundamental principles of Vietnamese law. The court therefore concluded that the conditions for recognition under Article 458 CPC were satisfied.
In light of the above, by First-Instance Decision No. 07/2023/QDST-KDTM (28 December 2023), the Kien Giang People’s Court recognised and ordered enforcement in Viet Nam of the award in HKIAC Case No. HKIAC/A20290 (as corrected on 22 March 2021). The Court assessed VND 3,000,000 as the application fee, offset against the VND 3,000,000 prepaid. The award is final and binding.
OUR COMMENT
Dossier for Recognition and Enforcement of a Foreign Arbitral Award in Vietnam
When submitting an application for recognition and enforcement of a foreign arbitral award, the applicant must enclose not only the award itself but also supporting documents proving the existence and validity of the arbitration agreement between the parties. This is a crucial basis for the Vietnamese court to verify the validity of the arbitration agreement, an element that establishes the arbitral tribunal’s jurisdiction to render the award.
In this case, the Court examined the arbitration clauses contained in the loan agreements between Midas Keep and Epizode dated 24 October 2019 and 04 December 2019 before considering the validity of the arbitral award.
In addition, all documents originating from abroad must be legalized unless exempt under an international treaty or reciprocity and must be translated into Vietnamese, with the translations certified, before submission to a Vietnamese court. This is a mandatory requirement under the 2015 Civil Procedure Code and the practical approach of Vietnamese courts.
Service of Documents by Registered Mail
Service of documents on the parties is one of the most critical procedural steps affecting the validity of arbitral proceedings. In cross-border disputes, serving documents on a party located abroad is often challenging.
Vietnam is a contracting state to the 1965 Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Hague Service Convention”). Upon accession, Vietnam declared that it does not permit the alternative modes of service under Article 10(b) (service through judicial officers) and Article 10(c) (service through any person interested in a judicial proceeding).
However, Vietnam accepts service by postal channels under Article 10(a), on the condition that documents are sent by registered mail. Accordingly, where the party to be served is a Vietnamese legal entity, service is deemed properly effected through registered mail, which is consistent with Viet Nam’s declaration under the Hague Service Convention.
In the case at hand, both the Arbitral Tribunal and the Court served documents on the Respondent, Epizode, by registered mail. This method of service was accepted by the Court as valid and compliant with Vietnamese procedural requirements.
This article aims to furnish our clients and contacts with general information on the relevant topic for reference purposes only, without creating any duty of care on the part of ANHISA. The information presented herein is not intended to serve, nor should it be considered, as a substitute for legal or other professional advice.
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