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Covid-19: What Solution For Dispute Resolution Activities

July 04, 2021

On March 10, 2020, Chief Justice of the Supreme People's Court Nguyen Hoa Binh issued the Urgent Directive No. 02/2020 on the prevention of COVID-19 epidemic in the People’s Court system. Accordingly, the Court will suspend accepting and settling disputes until the end of March 2020 and at the same time carry out preventive measures for individuals and organizations coming to work at the Court.

Currently, besides litigation, commercial arbitration is the method that many businesses refer to. Therefore, with the above Directive from the Court, enterprises settling disputes by commercial arbitration might be confused about whether COVID-19 affects the dispute resolution proceedings of commercial arbitration.

To clarify the above issues, ... there was an interview with Mr. Phan Gia Qui – former Chief Justice of People’s Economic Court of Ho Chi Minh City, Arbitrator at Vietnam International Arbitration Centre (VIAC).

Sir, what is your viewpoint on the impact of the COVID-19 epidemic on dispute resolution activities?

With the widespread infection, the Covid-19 epidemic is currently a global concern. This epidemic affects a vast number of industries, and of course, the operation of the court system and arbitration centres cannot avoid such negative effects. The Supreme Court's issuance of the aforementioned Order has partly reflected the difficulties faced by judicial bodies as well as the parties in dispute.

Apparently, this suspension will significantly impact the progress of settling cases in Court; however, for the sake of protecting the health of the community and limiting the risk of infection, the Court's decision is appropriate.

It is known that the suspension by COVID-19 affects most of the process of receiving and processing of the Court. What about commercial arbitration, are arbitration centres facing obstacles because of Covid-19?

Generally speaking, although they have different mechanisms, both the court and arbitration centres are either working directly or indirectly. Working directly means that the parties will hand over the papers at the court or arbitration centres; discuss matters regarding the disputes; and address their inquiries . Working indirectly includes exchanging information and documents via postal services, electronic devices or any other means of communication that provides a record of sending pursuant to the law. Under the impact of COVID-19, both the court and the arbitration centres aim to restrict direct contact and encourage indirect ways to exchange information to ensure safety for the staff as well as the parties.

As for commercial arbitration, the Law has “unintentional” provisions that help the arbitration center and parties to adapt well to this pandemic. Some points worth mentioning are as follows:

First, the arbitration centres do not require the parties to come to the headquarters to submit documents and they can use postal services instead. Specially, unlike the Court, when submitting documents for arbitration, the parties must submit 05 sets (if the Arbitral Tribunal consists of 3 arbitrators) and 03 sets (if the Arbitral Tribunal consists of a sole arbitrator). Thanks to this regulation, enterprises can always receive information about the dispute without going to the centre to receive the documents or discuss with the staff in charge of the case.

Second, most arbitration centers deliver letters and documents via postal services instead of requiring the parties to receive them directly. This method is somewhat more flexible and less time-consuming for the arbitration centres as well as the parties involved in dispute resolution. At the Vietnam International Arbitration Centre (VIAC), this mechanism is strictly controlled through the process of "confirm sending - confirm receipt" in order to minimize inaccuracies; the data received and sent is also systematized for comparing and monitoring. In the context of the outbreak of COVID-19, this measure is a way to ensure that the proceedings are maintained constantly; the parties still receive information on time; and the dispute resolution is going quickly and effectively.

For direct contact in particular, in order to ensure health safety, arbitration centers are also suggested by enterprises and arbitrators to sufficiently prepare medical equipment. As an arbitrator of the Vietnam International Arbitration Centre (VIAC), we have recently received an Official Notice from the Centre recommending us to strictly implement disease preventive measures when working with the parties at the dispute resolution hearing. These are signs that arbitration centres, although there are no official instructions like the Court, have taken active and timely action to help protect the community.

Among the matters related to COVID-19's influence on dispute resolution, it can be seen enterprises worry most about whether hearings are adjourned. What are your comments on this issue?

Hearing is the final step to end the whole journey that the parties have gone through, therefore the companies’ concern is inevitable. The adjournment of a hearing means that the dispute resolution is delayed and prolonged, which will severely affect companies’ business activities when debts, claims for compensation, etc. are still unresolved. For arbitration centres, the postponement also partly impacts the proceedings as they have to consult the Arbitral Tribunal and the other party, summon, rearrange hearings...

In fact, in Vietnam International Arbitration Center (VIAC), many businesses have requested to adjourn or have contacted the centre for an official statement upon  receiving information about the last 02/2020 Directive. From the statistics provided by VIAC, since the outbreak of COVID-19, especially after the Lunar New Year, there have been 09 adjourned cases, 07 of which have been adjourned for reasons related to the epidemic. Thus, it can be seen that the adjournment rate is relatively high, requiring the arbitration centres to have a timely plan to adjust and reassure the parties attending the hearing.

As I mentioned earlier, VIAC has a Notice regarding hearing adjournment of the disputing parties and solutions. When working with the Centre’s Secretariat, I was informed that the preparation for hearings during the COVID-19 was carried out very thoroughly by VIAC, from supervising participants to implementing safety measures in in-person hearings.

With the complicated occurrences of the epidemic, it is certain that the parties involved in dispute resolution will continue to make proposals for adjournment. Will this hinder or delay the proceedings?

Of course there will be certain influences. However, when a dispute is resolved by arbitration, the interests and agreements of the parties are always taken into consideration. Unlike the court, as the “private judicial mechanism”, the hearing will be considered to be adjourned when one parties or all parties requests the Arbitral Tribunal to postpone it. Pursuant to Law on Commercial arbitration, Article 57, the arbitration council shall decide whether the hearing will be postponed or not based on the presented evidence and the opinion of the other party (if necessary).

Accordingly, to prevent the proceedings from being affected, the arbitration council has the authority to consider the legitimacy based on evidence that the requester provide and current situation, for example COVID-19, to decide instead of postponing the hearing whenever there is a request.

With the aim of preventing infection and limiting the complicated occurrences of the epidemic, on March 18, 2020, the Office of the Government has released an official statement regarding the temporary suspension of visa for foreigners entering Vietnam. At the same time, lately traveling between countries is also extremely difficult since there are many prohibitions and thorough medical checks from the competent authorities. So in your opinion, how will this affect the resolution of the dispute when one of the parties can be a foreigner? And how can this situation be overcome?

The dispute resolution hearing involves many participants, not only the parties, but also lawyers, even arbitrators might be foreigners. When bans are imposed, organising an in-person hearing is extremely difficult. To overcome this, many arbitration centres around the world have quite effective alternative solutions. At the Vietnam International Arbitration Centre (VIAC), according to Clause 1, Article 25 of the Centre's Rules of Arbitration, the in-person hearing can be replaced by teleconference or video-conference.

This can be considered the arbitration's advantage. The court currently does not have this mechanism, since litigation procedures at the Court must be conducted systematically from central to municipal level in accordance with the law. Because any given comments need appraisal and approval, the court cannot change anything themselves. Arbitration, on the other hand, is somewhat more flexible to meet the needs and interests of the parties when resolving disputes.

As for the above online method, actually, this form has been applied many times in the past at VIAC when the arbitrators cannot directly attend the in person due to some problems. Resolving disputes via electronic devices, in my opinion, is of great significance in the current context. It not only limits large gatherings but also overcomes difficulties in terms of travelling.

However, it should be noted that this method is only applicable if all parties agree. In my opinion, enterprises should consider this remedy. Apparently, we are implementing 4.0 in many ways, and in resolving disputes, the online “formula” should also be gradually included to make the resolution operation more convenient, especially in unusual circumstances.

COVID-19 is now a global concern, every organisation must have effective preventive measures for this infectious disease. But dispute resolution should not be delayed for the interest of companies in the long run. At this point, while facing the epidemic, dispute resolution postponement only creates more obstacles to companies; that’s why not only safety but also timeliness and quality need to be taken into consideration in order to relieve companies’ burdens.

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