Although it is not a recent decision, a fascinating case from the Ho Chi Minh City People’s Court sheds light on the limits of an arbitration tribunal’s jurisdiction and serves as a valuable precedent for arbitration practitioners.

📌 Case Overview
The dispute involved CK Group (Claimant) and LP Co., Ltd. & HPC Marine Materials JSC (Co-Respondents) over contractual damages. The arbitration tribunal awarded damages to the respondents, but they challenged the tribunal’s jurisdiction, leading to a successful annulment request before the court.

📌 Legal Analysis: When Does a Tribunal Overstep Its Jurisdiction?
🔹 Key Arbitration Principles
* Competence-Competence Principle ⚖️: Tribunals have the power to rule on their jurisdiction, but courts can override if jurisdiction is exceeded.
* Party Autonomy 📝: A tribunal must strictly adhere to the arbitration agreement—any expansion beyond this is at risk of annulment.
* Severability of the Arbitration Agreement 🔗: The arbitration clause remains enforceable even if the main contract is disputed.

🔹 Key Findings from the Court
1️⃣ Failure to Apply Agreed Procedural Rules
The tribunal ignored discussions on using the IBA Rules on Evidence and applied Vietnamese law instead. While this was procedural misconduct, the court did not consider it a fundamental breach.

2️⃣ Tribunal Exceeded Its Jurisdiction
The arbitration clause in the May 16, 2017 agreement only covered disputes related to the respondents’ obligations.
However, the tribunal extended its authority to adjudicate the claimant’s counterclaims, which were not included in the arbitration agreement.
The respondents objected, but the tribunal still ruled on the counterclaims, violating Article 68(2)(a) and (c) of Vietnam’s Arbitration Law.

📌 Court’s Decision
✅ Award Annulled – Since the award interlinked both valid and ultra vires claims, it could not be partially annulled and was therefore fully set aside.

📌 Key Takeaways
🔹 Draft Arbitration Clauses with Precision
Clearly define which disputes are subject to arbitration.
Specify whether counterclaims or certain types of damages (e.g., lost profits) are within the tribunal’s scope.

🔹 Early Objections Are Critical
If a party believes the tribunal is exceeding its jurisdiction, it must raise timely objections.
The Competence-Competence principle allows tribunals to rule on their own jurisdiction, but courts have the final say if challenged.

🔹 Tribunals Must Adhere to Agreed Scope
Even if a tribunal believes it has broad discretion, it cannot expand its jurisdiction beyond the parties’ agreement.
Courts will strictly enforce the arbitration clause as written—not based on what the tribunal believes is reasonable.

Link full Decision: https://drive.google.com/file/d/10UfjRQPrpt-767wp3i3tj_1JOM3UHpjL/view?usp=sharing

Should you need any legal support, don’t hesitate to reach out to our Lawyers & Associates. We are pleased to assist your legal need.
THE LAM LAW LLC
🏢Indochina Park Tower, # 4 Nguyen Dinh Chieu Str, Dakao Ward, Dist 1, Ho Chi Minh City.
📞Tel: +84 (0)28 710 58 222 – 6288 3798 – Hotline: +84 (0) 97 309 77 77
✉ Email: info@thelamlawllc.com