Amendments to the Law on Commercial Arbitration: Is decentralization of management sufficient?

According to the dossier of the Draft Law amending and supplementing a number of articles of the Law on Commercial Arbitration (Draft)[1] which is expected to be considered by the XVI National Assembly at the 2nd Session (October 2026) and take effect from March 1, 2027, the focus of this amendment is on the decentralization of management of arbitration institutions. However, for enterprises, it is worth paying attention to the stability of the selected arbitration institution and the ability to continue to resolve disputes when that institution terminates its operation. These risks should be distinguished from procedural inadequacies that already exist under current law.

The main value of the Draft is to create a stable legal basis for decentralization, not simply shortening procedures.

Key changes of the Draft

The draft legislation codifies the transfer of the authority to grant, change, re-grant, revoke the establishment license and terminate the operation of arbitration centers, branches and representative offices of foreign arbitration institutions from the central management mechanism to the Chairman of the provincial People's Committee. This is not a completely new transfer: the decentralization mechanism has been implemented from July 1, 2025 on the basis of Decree 121/2025/ND-CP. However, this Decree is expected to expire on March 1, 2027, except for cases that are extended or replaced as prescribed; the specific handling mechanism according to Resolution 190/2025/QH15 applies until the end of February 28, 2027. If the law cannot be amended in time or other legal solutions are taken, the basis for implementing the transferred authority may be inconsistent. Therefore, the main value of the Draft is to create a stable legal basis for decentralization, not simply shortening procedures.

The amendments are summarized below:

Simplifying registration, but not replacing the appraisal of the arbitral institution

The draft allows the online submission of establishment documents through the National Public Service Portal and stipulates that the time limit for appraisal and submission of establishment licenses is 20 working days from the receipt of valid documents, instead of the 30-day period according to the current Law. Because the unit calculates different time limits, this should not be considered as a shortened level of exactly 10 days. A more notable change is that the center no longer has to actively submit a separate operation registration dossier after being licensed.

According to Article 25 proposed to be amended, within 05 working days from the date the Chairman of the Provincial People's Committee grants the Establishment License and approves the Charter, the Department of Justice shall issue the Operation Registration Certificate to the center. Thus, the Draft does not abolish the Operation Registration Certificate, but transfers the responsibility for carrying out the registration step to the state agency. The Center shall only announce the establishment and engrave the seal after being granted the Operation Registration Certificate.

Simplifying the procedure does not mean lowering the conditions for establishment. Licenses and registration certificates confirm the legal status as prescribed, but do not ensure that the center is suitable for all types of disputes. When selecting arbitrators, enterprises still need to evaluate the rules of procedure, the appointment of arbitrators, the capacity to administer the case, the cost and independence of the organization.

When the center ceases to operate, what will be the arbitration terms?

According to Articles 29 and 29a, which are expected to be amended, the Chairman of the Provincial People's Committee has the authority to terminate the operation and revoke the License to establish an arbitration center; The Government specifies the grounds and procedures. However, the Draft has not established a separate mechanism for transferring dossiers and handling disputes that are being accepted when the center terminates its operation.

It is necessary to distinguish the following three situations: (1) the center terminates before a dispute arises; (2) after a dispute arises but before the establishment of the Arbitral Tribunal; (3) or when the lawsuit is being resolved. The termination of the center's operation does not automatically mean that the arbitration agreement is invalid. Specific consequences should be considered according to the content of the agreement, the Law on Commercial Arbitration and the guiding regulations on the arbitration agreement that cannot be implemented. For law-making agencies, it is necessary to consider the mechanism for preserving and transferring records and protecting the procedural rights of the parties.

A number of decisions to settle requests for annulment of arbitral awards have been cited to illustrate differences in the way of jurisdiction assessment.

Issues directly affecting the dispute remain open

This amendment determines that it only focuses on decentralization and does not replace the task of comprehensively reviewing the Law on Commercial Arbitration. Therefore, the problems with dispute settlement jurisdiction and procedural notices below are not a direct consequence of the Draft, but are still worth noting when enterprises choose arbitrators.

The boundary between contractual disputes and direct disputes over real estate

For land-related transactions, it is necessary to distinguish disputes over contractual obligations (such as payment and compensation) from direct disputes over rights to real estate. Point a, Clause 1, Article 470 of the Civil Procedure Code 2015 raises the issue of the separate jurisdiction of Vietnamese Courts in cases involving foreign elements; this provision should not be interpreted to mean that all commercial disputes related to real estate cannot be resolved by arbitration.

A number of decisions to settle requests for annulment of arbitral awards have been cited to illustrate differences in the way of jurisdiction assessment. However, the inference from each case must be based on a full comparison of the facts, the request to initiate a lawsuit and the Court's arguments. Enterprises should clearly determine the nature of disputed rights and obligations before choosing a jurisdictional mechanism; not only based on whether the contract has the object of land or real estate.

Notice of proceedings and "deemed received" rules

Article 12 of the Law on Commercial Arbitration provides for the sending and receipt of notices and documents in arbitration proceedings. The fact that a notice is deemed to have been received depends on the conditions and methods of delivery according to applicable laws and procedural rules; it cannot be based solely on the address declared by a party itself. Actual risks often arise when the contact address is not updated, the delivery record lacks evidence, or the notification method is inappropriate.

It is necessary to distinguish the fact that the involved parties cannot actually read the duly sent notice from the fact that the notice does not meet the regulations or affects the right to participate in the proceedings. Not all cases of failure to receive the notice in fact are naturally grounds for cancellation of the award; the assessment must compare the bases in Article 68 of the Law on Commercial Arbitration. Enterprises should clearly agree on the point of contact to receive the notice and the obligation to update information.

What do enterprises need to prepare for disputes that take place at arbitration?

Although it does not directly amend the dispute settlement mechanism, the Draft still requires enterprises to be more cautious when choosing commercial arbitration. A properly drafted arbitration clause is not enough to ensure that the dispute can be resolved effectively. It is important that the agreement is practicable, even if the appointed arbitral institution changes its legal status or terminates its operations.

Accordingly, when negotiating and signing contracts, enterprises need to check the legal status, operation status and dispute resolution capacity of the selected arbitration center, and at the same time consider the appropriate handling mechanism if this center is no longer operating. The terms of address, notification method and obligation to update information should also be clearly stipulated in order to limit disputes over the validity of legal procedures. For contracts related to land use rights and real estate, especially transactions with foreign elements, it is even more important to assess the scope of arbitration's jurisdiction in advance.

Finally, the value of an arbitration clause does not lie in the fact that the parties have chosen a dispute resolution method, but in the ability of that method to actually operate when a dispute arises. Therefore, enterprises should not consider an arbitration clause as a procedural content in the contract, but should consider this as part of the legal risk management strategy right from the establishment of the transaction.