Client's Question:
I have a commercial contract dispute that arose about three years ago. I now wish to initiate arbitration proceedings. May I ask: Is my dispute still within the statute of limitations for arbitration? What is the time limit for initiating arbitration? If the limitation period has expired, can the dispute still be resolved?
VTIAC’s Answer:
Thank you for submitting your question to the Vietnam Trade and Investment Arbitration Center (VTIAC). We respond as follows:
1. What is the statute of limitations for initiating arbitration?
According to Article 33 of the Law on Commercial Arbitration 2010, the statute of limitations for initiating arbitration proceedings is:
“Two years from the date on which the lawful rights and interests were infringed, unless otherwise provided by a specialized law.”
In other words, if a dispute arises and you determine that your rights have been violated, the two-year period begins from that point in time.
Example: If the other party breached contractual obligations on August 1, 2023, then the latest date by which you can initiate arbitration is August 1, 2025. After this date, the right to initiate arbitration will lapse, unless a specialized law provides for a longer or shorter time limit.
2. Conditions for applying the arbitration statute of limitations
To have a dispute accepted for arbitration by the VTIAC Arbitral Tribunal, the following conditions must be met:
- There must be an act that infringes upon the lawful rights and interests of one party in a contractual or non-contractual relationship;
- Arbitration must be initiated within two years from the date of the infringing act;
- If this period has expired, the case may fall outside the jurisdiction of arbitration, except in specific cases where the law allows for extension or recalculation of the time limit.
3. The significance of the statute of limitations for arbitration:
The statute of limitations serves not only as a procedural safeguard but also has practical implications:
- It encourages parties to act promptly in resolving disputes, preventing unnecessary delay;
- It enhances the availability and reliability of evidence: the longer a dispute lingers, the more difficult it becomes to gather and preserve documents, records, or testimony;
- It allows the Arbitral Tribunal to more effectively verify facts, assess evidence, and issue accurate and fair awards.
4. Is your case still within the statute of limitations?
Since your dispute arose three years ago, unless a specialized law applicable to your case provides otherwise, it is likely that the statute of limitations has expired and the Arbitral Tribunal may decline jurisdiction.
However, we recommend that you provide VTIAC with further details of your case for a specific legal assessment. We can help determine the precise time of dispute occurrence, verify the applicable limitation period, and advise on any possible exceptions that may apply. Choosing arbitration offers several advantages such as flexible procedures, confidentiality, expedited resolution, and expert adjudication. VTIAC is always ready to support businesses in protecting their legal rights and interests in an effective and professional manner.
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VIETNAM TRADE AND INVESTMENT ARBITRATION CENTER
M: 0934565488 | W: http://vtiac.vn/ | E: vtiac.contact@gmail.com