perspective on recognition and enforcement of SIAC awards in Vietnam, recognition and enforcement of SIAC awards in Vietnam, problems when enforcing SIAC awards in Vietnam, Rang Dong Plastic Company of Vietnam v. Sojitz of Japan, enforce SIAC awards in Vietnam, recognition of SIAC awards in Vietnam, enforcement of SIAC awards in Vietnam, SIAC awards in Vietnam, SIAC, enforcing SIAC awards in Vietnam, recognising SIAC awards in Vietnam

Recognition and enforcement of SIAC awards in Vietnam: The case of Rang Dong Plastic Company vs. Sojitz Japan

In the case of Rang Dong Plastic Company (RDP) vs. Sojitz Corporation of Japan, the Singapore International Arbitration Centre (SIAC) issued a ruling that required the Vietnamese company to compensate Sojitz for approximately VND 157 billion and pay VND 21 billion in costs and interest. Despite the SIAC’s decision, Rang Dong Holding (RDP) repeatedly ignored warnings and failed to fulfill its obligations to pay damages, costs, and late payment interest to its former Japanese strategic partner.

In a recent extraordinary meeting, RDP publicly announced its obligation to compensate Sojitz Planet Corporation approximately VND 156.9 billion along with a 10% annual interest rate from April 1, 2020, until the payment date.

In addition to the above-mentioned dispute over share purchase contracts, RDP was also obligated to pay SIAC fees exceeding SGD 370,000, legal costs, and reasonable expenses totaling USD 586,000 and over SGD 7,400 to its former partner, equivalent to more than VND 21 billion with an interest rate of 5.33% per annum until the payment date.

This is the final ruling of SIAC, and it was recently recognized and enforced by the High People’s Court of Ho Chi Minh City.

Perspective on the Recognition and Enforcement of SIAC Awards in Vietnam

In the context of international trade development and increasing cross-border investments, resolving international disputes through foreign arbitration has become a common and effective method. Many parties, in addition to choosing domestic arbitration in Vietnam, have opted for the Singapore International Arbitration Centre (SIAC) to resolve their disputes.

However, recognizing and enforcing foreign arbitration awards is not always straightforward. To enforce an award from a foreign institution like SIAC in Vietnam, the award must first be recognized and enforced by a Vietnamese court under Article 425, Section 1 of the 2015 Civil Procedure Code.

During this process, the judgement debtor may attempt to challenge the validity of the enforcement, making it difficult to enforce the award in Vietnam. In such cases, Vietnamese courts primarily focus on the procedural and legal aspects of the enforcement rather than delving into the substance of the dispute.

In addition to the aforementioned case, Vietnam has witnessed a similar case with a different outcome. In the case of SIAC arbitration No. 186 of 2019 (ABB/186/PLN), both the trial and appellate courts in Vietnam did not recognize and enforce the SIAC arbitral award in a dispute between GLOBAL PAYMENT SERVICE and UTC INVESTMENT CO., LTD (judgement creditor) and VMG, a Vietnamese content service provider (judgement debtor).

Given its successful involvement in numerous significant cross-border M&A transactions, as the Vietnam law firm focusing on Vietnam and international arbitration ASL LAW recommends the following measures for Vietnamese businesses to mitigate legal risks in future contracts, especially those with foreign elements:

  1. Regularly review contracts and update them to reflect relevant Vietnamese and international legal regulations applicable to the business activities of the company.
  2. Seek independent and specialized legal advice from the negotiation stage when drafting contracts to ensure that contract provisions are well-crafted and comply with the law.
  3. Include clauses for dispute resolution through commercial arbitration and specify a reputable and experienced arbitral institution within the same industry.
  4. Strictly adhere to contract agreements to avoid breaches and conflicts. In cases of disputes, prioritize negotiation and mediation before resorting to litigation or arbitration.
  5. When compelled to resort to SIAC arbitration, follow a suitable legal approach and strategy, including stages like receiving SIAC’s notification or the claimant’s initiation, the arbitration process, participation, and the recognition and enforcement process.

With ASL LAW’s experience, we hope these recommendations will be valuable for businesses in mitigating legal risks in the future.

ASL LAW is the top-tier Vietnam law firm for Contract Reviewing and Drafting. If you need any advice, please contact us for further information or collaboration.


    Your infomation

    ***Other service of ASL LAW – full service Vietnam law firm ***
    Retainer service to enterprises International trademark registration
    Oversea investment consultancy for Vietnamese enterprisesPatent in Vietnam
    PCT Patent in Vietnam PCT Patent Vietnam Entry
    Intellectual property services (Vietnam IP Firm) Vietnam Patent Agent
    Trademark in Vietnam Vietnam Patent Firm
    Vietnam Trademark Agent Patent translation in Vietnam
    How to register trademark in Vietnam Vietnam Patent Translation Agent
    Copyright in Vietnam Vietnam IP Firm
    Vietnam Trademark Vietnam IP Agent
    Notes to company formation in VietnamM&A
    How to open company in VietnamBanking & financial services
    Open representative office in VietnamContract consultancy
    Establish company in VietnamEmployment and labor
    Corporate services in VietnamLitigation and dispute resolution
    Vietnam Law FirmFranchise in Vietnam
    Vietnam Antidumping Law Firm Vietnam Franchise registration
    Vietnam countervailing law firm Vietnam Business Law Firm
    Vietnam Real estate law firm Vietnam construction law firm
    Law firm in Hanoi Law Firm in Ho Chi Minh
    Contact Me on Zalo
    WhatsApp chat