International commercial arbitration in Laos, Thailand and Vietnam: comparative perspectives in the light of the UNCITRAL model law, and the reference to the arbitration laws of England and People's Republic of China. Suvanpanich, Thawatchai The copyright of this thesis rests with the author and no quotation from it or information derived from it may be published without the prior written consent of the author For additional information about this publication click this link. http://qmro.qmul.ac.uk/jspui/handle/123456789/1608 Information about this research object was correct at the time of download; we occasionally make corrections to records, please therefore check the published record when citing. For more information contact [email protected] UNIVERISITY OF LONDON DOCTOR OF PHILOSOPHY EXAMINATION INTERNATIONAL COMMERCIAL ARBITRATION IN LAOS, THAILAND AND VIETNAM: COMPARATIVE PERSPECTIVES IN THE LIGHT OF THE UNCITRAL MODEL LAW, AND WITH REFERENCE TO THE ARBITRATION LAWS IN ENGLAND AND THE PEOPLE'S REPUBLIC OF CHINA January 2001 THAWATCHAI SUVANPANICH ( ' L ABSTRACT The development of markets and indeed the 1997 financial crisis in the South East Asia led to the increase international disputes the region of and emergence of international commercial arbitration as the preferred settlement of disputes mechanism. One "cultural" difference in the developed developing can observe a way and countries approach the resolution of disputes: while the state controlled judicial authority is essential in the developing developed for flexible countries, countries opt and non-judicial settlement. Foreign investors have exercise pressure for the launch of international commercial arbitration in the countries where they invest. This thesis the international constitutes a survey of commercial arbitration regimes in Laos, Thailand and Vietnam in the light of the UNICTRAL Model Law and the the United Kingdom, the United States, China. It arbitration systems of and provides to legislators in their intends to local guidance regulatory efforts and assist courts and judges in their developing an arbitration culture. Further it will be useful to businesspersons in South East Asia. The with economic activity paramount consideration is to bridge the gap between developed and developing arbitration systems. Chapters One and Two highlight the importance and provide for a definition of party autonomy in international commercial arbitration. The theoretical background and the practice in each jurisdiction in question are discussed and the advantages of in arbitration comparison with litigation are presented. Chapter Three focuses Three the on arbitration agreement. stages regarding issue distinguished. of validity of such agreements are Chapter Four looks at the selection of arbitrators and the criteria for such a choice. Chapter Five deals both hoc institutional with arbitral procedure; ad and arbitration in the jurisdictions in question is discussed. Chapter Six law issues. Particular is addresses choice of attention paid on choice law lex of substantive and on arbitri. The thesis finally make critically evaluates the arbitration systems in Laos, Thailand, Vietnam and assesses their compatibility with the Model Law and the international standards set by the UK and the US practices. References are also made to the Chinese multi-jurisdictional arbitration system, but are rather limited. 2 Acknowledgments The to his to the following individuals, author wishes express sincerest gratitude whose support, assistance and advice made this project possible. With respect to valuable advice: Hon. Pintip Sucharitkul, President of the Thai Supreme Court (Dika Court), Justice Jaran Pukdithanakul, Justice Kanok Indrambarya, Justice Vichai Ariyanuntaka, Justice Voravuthi Dvadasin are Thai Justices- and Lord Dervaird. As to -all specific support, assistance and advice on this research: Dr. Julian Lew, Dr. Loukas Mistelis (CCLS, Queen Mary and Westfield College, University London), Henry Uscinski of (Herbert Smith, Thailand), Professor Pryles (Minter Ellison Lawyers, Australia), Ms. Ha Thi Ngoc Ha (Legal adviser, Ministry of Foreign Affairs, Vietnam). As to general assistance: Ms. Korawan Chirungsaprasuk (Senior Manager Public Relation Division, National Petrochemical Public Company Limited, Thailand) Ms. Jinsupang Kosolbhand (Senior and Manager, Valvoline, Thailand). In term his of personal support and encouragement: wife. Justice Kornkanya Suvanpanich; his brothers, Manas Jumpeereang. In the addition, author expresses deepest appreciation to members of the CCLS academic and administrative support staff. 3 Table Contents of Abstract 2 ........................................................................................ Acknowledgements 3 ...................................................................... Abbreviations 16 .............................................................................. Table Court Cases of 17 ................................................................. Introduction 19 ................................................................................. Background Justification 19 and ........................................................................ 21 Method of research ....................................................................................... Scope 23 the of study ......................................................................................... Aims to be 24 achieved ...................................................................................... Overview 26 of each system .............................................................................. China 26 ........................................................................................................ Laos 47 ......................................................................................................... Thailand 48 ................................................................................................... Vietnam 52 .................................................................................................... Chapter 1 Definition Party Autonomy 54 of ................................... 54 1. Definition of arbitration ................................. ....................................... 1.1. Dispute 56 ................................................ ....................................... China 63 .................................................... ....................................... Laos 64 ...................................................... ....................................... Thailand 64 ................................................ ....................................... Vietnam 66 ................................................. ....................................... 4 66 Model Law ........................................................................................ 1.2. Procedure 67 ....................................................................................... .. 1.3. Binding decision 71 ............................................................................. .. 2. Definition 71 of party autonomy ................................................................... .. 2.1. Contractual theory 73 .......................................................................... .. 2.2. Jurisdiction theory 77 .......................................................................... .. 2.3. Mixed theory 81 ................................................................................... .. 2.4. Autonomy theory 83 .............................................................................. 3. Party in 85 autonomy practice ....................................................................... 3.1. Party in domestic international 85 autonomy and arbitration ............... 3.2. Definition international 87 of .................................................................. 3.2.1. The 90 place of arbitration ........................................................... 3.2.2. Identity 93 of parties criterion ............................:......................... Place-of-business Test 93 a) ......................................................... b) Place-of-resident Test 94 ........................................................... Nationality-of-parties Test 94 c) ..................................................... 3.2.3. Nature dispute 95 of criterion ...................................................... 3.2.4. Opt-in 97 criterion ........................................................................ England 99 ................................................................................................... China 99 ........................................................................................................ Laos 102 ....................................................................................................... Thailand 102 ................................................................................................. Vietnam 104 .................................................................................................. 4. Conclusion 105 ............................................................................................... Chapter 2 Role Party Autonomy in Arbitration of 107 .................... 1. Party to business 107 autonomy response communities need .................... 1.1. Domestic 109 court ................................................................................ 1.2 Arbitration 116 ........................................................................................ 1.2.1. Choice of arbitrator 121 ............................................................... 5 law 122 1.2.2. Choice of applicable substantive ................................... 122 1.2.3. Choice of arbitral procedure ................................................. 123 1.2.4. Place of arbitration ................................................................ the interference 124 2. Party autonomy reduces court's .................................. 2.1. The the 124 assistance of national court .............................................. 2.2. The the 127 control of national court ..................................................... 2.2.1. Judicial the 127 review at place of arbitration ............................. 2.2.2. Judicial the 134 review at enforcement stage ............................. 2.2.2.1. Natural justice 134 .............................................................. 2.2.2.2. Mistake law 135 of .............................................................. 141 3. Conclusion ............................................................................................... Chapter 3 Arbitration Agreement 145 .............................................. 145 1. Definition of arbitration agreement ......................................................... 148 China ...................................................................................................... 150 Laos ....................................................................................................... 150 Thailand ................................................................................................. 151 Vietnam .................................................................................................. 151 2. Feature of arbitration agreement ............................................................ 151 2.1. Source of party autonomy .............................................................. 153 2.2. Exclusion the jurisdiction of court's ................................................ 157 2.3. Source of arbitrator's power ........................................................... 160 3. Legal framework of arbitration agreement ............................................. 160 3.1. Validity of arbitration agreement ..................................................... 160 3.1.1. Requirements of validity of arbitration agreement ................ 161 3.1.1.1. Requirement as general principle of contract ............. 161 (i) Capacity of parties ......................................................... (ii) Consent 164 of parties ......................................................... 3.1.1.2. Requirement feature 164 as special of arbitration ............. (i) The is in 165 agreement writing ............................................ 6 (ii) There be dispute 166 must ................................................... (iii) The differences concern a subject-matter capable of by 166 settlement arbitration ..................................................... 3.1.2. Legal invalidity consequences of of arbitration agreement 167 ....................................................................................... 3.1.3. Applicable law to an arbitration agreement 169 ......................... 3.1.3.1. Law to the applied arbitration agreement 169 ................... (i) State court 171 ...................................................................... At the a) enforcement of the 171 arbitration agreement stage ............................... b) At the the 172 setting aside of award stage .................... At the the 172 c) enforcement of award stage .................... (ii) International 174 arbitrator ................................................... 3.1.3.2. Law to the the to applied capacity of parties 175 arbitrate ..................................................................................... 3.1.3.3. Law to the 176 applied subject matter arbitrability ............ 3.2. Separability 176 ..................................................................................... England 182 ........................................................................................... China 183 ............................................................................................... Thailand 183 ........................................................................................... Vietnam 185 ............................................................................................ 3.3. Competence-competence doctrine 186 ............................................... England 192 ........................................................................................... China 192 ............................................................................................... Thailand 194 ........................................................................................... Vietnam 195 ............................................................................................ 4. Conclusion 196 ............................................................................................... Chapter 4 Choice Arbitrator of 197 ................................................. 1. Definition of arbitrator 198 .............................................................................. 7 1.1. Person 199 ............................................................................................. 1.2. Capacity 200 of arbitrator ...................................................................... 2. Appointment of arbitrator 202 ........................................................................ 2.1. Number of arbitrators 203 ..................................................................... 2.1.1. Sole arbitrator 204 ........................................................................ 2.1.2. Two arbitrators 206 ...................................................................... 2.1.3. Three arbitrators 209 .................................................................... 2.2. Methods of appointing arbitrator 211 .................................................... 2.2.1. By arbitration agreement 212 ...................................................... 2.2.2. By list system 213 ........................................................................ China 214 ......................................................................................... Laos 215 ........................................................................................... Thailand 215 ..................................................................................... TAI MJ 215 .................................................................................. TCAI 216 .................................................................................... Vietnam 216 ..................................................................................... 2.2.3. By 218 appointing authority ......................................................... 2.2.4. By State 218 court ........................................................................ China 219 ......................................................................................... Laos 219 ........................................................................................... Thailand 220 ..................................................................................... Vietnam 220 ..................................................................................... 3. Requirement to 220 of equality of parties appoint arbitrator ........................ 4. Qualifications 225 of arbitrator ....................................................................... 4.1. Qualification determined by 225 parties ............................................... 4.1.1 Lawyer 226 .................................................................................... 4.1.2. Judge 228 .................................................................................... 4.2. Qualification determined by law 229 ..................................................... 4.2.1. General 229 .................................................................................. 8 4.2.2. Impartiality 231 ............................................................................. 4.2.3. Independence 233 ...................................................................... . 4.2.4. Nationality of arbitrator 234 ......................................................... . 4.2.5. Qualification of arbitrator by law in practice 235 ........................ . 4.2.5.1. Impartiality independence and 235 requirement .............. . China 237 .................................................................................. . Laos 238 .................................................................................... Thailand 238 .............................................................................. Vietnam 239 ............................................................................... 4.2.5.2. Requirement of nationality of arbitrator 239 ....................... China 239 ................................................................................... Laos 240 .................................................................................... Thailand 240 ............................................................................. Vietnam 241 ............................................................................... 4.3. Mechanism to 242 guarantee qualification of arbitrator ....................... 4.3.1. Disclosure 242 ............................................................................. 4.3.1.1. Consequence 243 of non-disclosure ................................. 4.3.1.2. The fact be disclosed 244 extent of must .......................... China 246 ......................................................................................... Model Law 247 ................................................................................. Laos 247 ........................................................................................... Thailand 247 ..................................................................................... Vietnam 248 ..................................................................................... 4.3.2. Challenge 248 .............................................................................. China 249 ......................................................................................... Laos 250 ........................................................................................... Thailand 250 ..................................................................................... Vietnam 254 ..................................................................................... 5. Conclusion 254 ............................................................................................... 9