It has been reported that the Hanoi People’s Court, upon application by a foreign party, recently recognised a foreign arbitral award for enforcement in Vietnam, pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958. The arbitral award had been issued in favour of the foreign party, Realogy Group LLC (“Realogy“), against a Vietnamese respondent (Minh Viet Investment Joint Stock Company (“Minh Viet“)) by a sole arbitrator in an arbitration under the JAMS International Arbitration Rules. The seat of arbitration is not known.
Realogy is a US company which provides residential real estate services and owns several international brands including Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, Sotheby’s International Realty, Better Homes and Gardens Real Estate.
The Hanoi People’s Court’s decision is not yet publicly available and very few details are known about the case. However, based on what has been reported, it appears that Minh Viet entered into an agreement with Realogy in November 2012 whereby Minh Viet was granted the exclusive right to use the Coldwell Banker brand in Vietnam. Pursuant to that agreement, Minh Viet was required to pay certain fees to Realogy in exchange for its right to use the brand. Minh Viet failed to make the required payments and, in February 2013, Realogy commenced arbitration. Seven months later the sole arbitrator issued an award which ordered that Minh Viet pay to Realogy US$ 559,829 in outstanding fees, interest and legal and other costs. Realogy then made its successful application for the recognition and enforcement of the award in February 2014.
Now that the award appears to have been recognised by the competent Vietnamese Court (in this case, the Hanoi People’s Court), its decision will in principle have the same legal effect as any other judgment issued by the Court and should be enforceable with immediate effect in accordance with the normal procedures for enforcing civil judgments in Vietnam. It appears from the reports that Minh Viet has already exhausted its right to appeal the Court’s decision.
It is hoped that this represents a further positive indication that the Vietnamese Courts are adopting a more pro-arbitration approach towards the recognition and enforcement of foreign arbitral awards than has been the case in the past. Another recent indication has been the Amendment to the Law on Enforcement of Civil Judgments No.64/2014/QH13, which became effective on 1 July 2015. These are encouraging signs for the foreign investors as regards the prospects of their enforcement of foreign arbitral awards against Vietnamese counter-parties.