Client’s Question:
We are currently involved in a commercial dispute being resolved at the Vietnam Trade and Investment Arbitration Center (VTIAC). During the proceedings, we wish to apply for interim urgent measures to protect our rights, such as requesting asset preservation or preventing the counterparty from transferring assets. Could you please advise how the application of interim urgent measures is implemented in arbitration proceedings at VTIAC?
VTIAC’s Response:
The application of interim urgent measures in arbitration is an important mechanism to timely safeguard the lawful rights and interests of the parties before the Arbitral Tribunal renders its final award. Pursuant to Articles 48–53 of the Law on Commercial Arbitration 2010 and the VTIAC Rules of Arbitration, we hereby provide the following detailed explanation:
1. Definition of Interim Urgent Measures
Interim urgent measures are decisions issued by the Arbitral Tribunal or a competent Court to preserve evidence, maintain the status quo of assets, prevent acts that may cause damage, or affect the arbitration proceedings. This is an effective tool to ensure that the arbitral award can later be enforced in practice.
2. Authority to Apply Interim Urgent Measures
According to Clause 1, Article 26 of the VTIAC Arbitration Rules: During the dispute resolution process, if a party believes that its lawful rights and interests are being infringed upon or are at imminent risk of being infringed, such party may submit a request to the Arbitral Tribunal or to a competent Court to apply interim urgent measures in accordance with relevant laws. If a party has already requested a Court to apply one or more interim urgent measures and subsequently submits a request to the Arbitral Tribunal for the same measures, the Tribunal must decline the request.
3. Types of Interim Urgent Measures
Upon the request of a party, the Arbitral Tribunal may apply one or more of the following interim urgent measures:
- Prohibiting changes to the current status of the disputed assets;
- Prohibiting or compelling either disputing party to perform certain acts to prevent adverse impacts on the arbitration proceedings;
- Attaching the disputed assets;
- Requiring preservation, storage, sale, or disposal of any assets of one or more disputing parties;
- Ordering temporary payment obligations between the parties;
- Prohibiting the transfer of ownership rights over the disputed assets.
4. Procedures for Requesting Interim Urgent Measures
Step 1: Filing the request
The request must clearly specify the interim urgent measure sought, the reasons for the request, and be accompanied by evidence proving the necessity of such measure.
Step 2: Financial security obligation
At the Tribunal’s discretion, the requesting party must provide financial security equivalent to the potential damage that may arise if the requested measure is incorrectly applied. This security may be made in cash, precious metals, gemstones, or negotiable instruments deposited into a frozen account at a bank designated by the Tribunal.
Step 3: Decision on application
Within three (03) working days from the date of receipt of the request, and upon the requesting party’s compliance with the financial security requirement, the Tribunal shall decide on the application of the interim urgent measure. If the request is rejected, the Tribunal shall notify the requesting party in writing, stating the reasons.
Enforcement of the Tribunal’s decision on interim urgent measures shall follow the provisions of the law on civil judgment enforcement. The requesting party is liable for its application. If the request proves unfounded and causes damages to the opposing party or a third party, the requesting party must provide compensation.
At the request of a party, the Tribunal may decide to modify, supplement, or revoke any interim urgent measure at any stage of the arbitration proceedings. Interim urgent measures shall be revoked in the following circumstances:
- The requesting party withdraws its request;
- The obligated party deposits the assets or another person provides adequate security to guarantee the obligation;
- The obligation of the obligated party ceases pursuant to law.
5. Notes for Clients
- Requests for interim urgent measures must be well-founded and supported by evidence demonstrating imminent risks of damage or obstruction of award enforcement.
- Parties should prepare complete documentation, evidence, and be ready to comply with security obligations.
- Interim urgent measures are temporary in nature and do not substitute the final arbitral award.
Conclusion:
In arbitration proceedings at VTIAC, interim urgent measures are an effective mechanism to protect the lawful rights and interests of the parties. However, for such a request to be accepted, it must be carefully prepared with strong legal grounds and convincing evidence. Clients are advised to consult lawyers or arbitration specialists to prepare a robust and compliant request.
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VIETNAM TRADE AND INVESTMENT ARBITRATION CENTER
M: 0934565488 | W: http://vtiac.vn/ | E: vtiac.contact@gmail.com