Provision on the Loss of the Right to Object in Commercial Arbitration
This is a very important note, which I would like to share:
Article 13 of the Law on Commercial Arbitration 2010 provides that:
In the event that a party discovers any violation of the provisions of this Law or of the arbitration agreement but continues to participate in the arbitral proceedings without objecting to such violations within the time limit prescribed by this Law, that party shall lose the right to object before the Arbitration Tribunal or the Court.
This provision is further guided by Article 6 of Resolution No. 01/2014/NQ-HĐTP of the Judicial Council of the Supreme People’s Court, as follows:
Article 6. Loss of the Right to Object under Article 13 of the Law on Commercial Arbitration
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Where a party discovers a violation of the provisions of the Law on Commercial Arbitration or of the arbitration agreement but continues to participate in arbitral proceedings without objecting to such violations before the Arbitral Tribunal or the Arbitration Center within the time limit prescribed by the Law on Commercial Arbitration, that party shall lose the right to object before the Arbitration Tribunal or the Court with respect to those known violations.
If the Law on Commercial Arbitration does not stipulate a specific time limit, the time limit shall be determined according to the parties’ agreement or the applicable arbitration procedural rules. If neither the parties’ agreement nor the procedural rules provide a time limit, the objection must be raised before the Arbitral Tribunal renders its award.
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Prior to considering a party’s request regarding an alleged violation of the Law on Commercial Arbitration or the arbitration agreement, the Court must review the relevant documents, evidence, and arbitration procedural rules to determine whether one or more parties have lost the right to object.
Where the Court determines that the right to object has been lost in accordance with Article 13 of the Law on Commercial Arbitration and Clause 1 of this Article, the party that has lost the right to object shall not be entitled to file a complaint against the decision of the Arbitral Tribunal or request the annulment of the arbitral award based on such violations.
The Court shall not rely on violations in respect of which a party has lost the right to object as grounds to accept a request or claim of any party.
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When handling a request for annulment of an arbitral award, the Court must comply with the provisions set out in Point đ, Clause 2 and Point b, Clause 3 of Article 68 of the Law on Commercial Arbitration.
Where the Court finds sufficient grounds to accept or reject the request, it may make a decision accordingly, even if one or more parties have lost the right to object.
(Legal basis: Article 13 of the Law on Commercial Arbitration 2010; Article 6 of Resolution No. 01/2014/NQ-HĐTP of the Judicial Council of the Supreme People’s Court)
