ARBITRATION FEES AT MCAC: PAYMENT OBLIGATIONS, ALLOCATION PRINCIPLES, AND REFUND CASES

When choosing arbitration to resolve disputes, parties are typically concerned about the fees and expenses payable, the timing of their financial obligations, the principles governing cost allocation, and the circumstances under which arbitration fees may be refunded.

At the Central Vietnam Commercial Arbitration Center (MCAC), these matters are governed by the 2010 Law on Commercial Arbitration, the MCAC Rules of Arbitration, and the Schedule of Arbitration Fees issued by the Center.
1. Components of arbitration fees

Under Article 34 of the 2010 Law on Commercial Arbitration, arbitration fees are charges for the provision of arbitration services. For institutional arbitration, arbitration fees are determined by the arbitration center. For ad hoc arbitration, arbitration fees are determined by the Arbitral Tribunal.

Under Article 34 of the MCAC Rules of Arbitration, arbitration fees include:

• Remuneration payable to the arbitrators resolving the dispute.
• Administrative expenses incurred by the Center in connection with the resolution of the dispute.
• Arbitrators’ travel, accommodation, and other related expenses, as determined in accordance with the Center’s guidelines in effect when the estimated costs are prepared, together with expenses for other assistance requested by the Arbitral Tribunal.
• Costs of expert assessments, asset valuations, expert consultations, and other assistance requested by the Arbitral Tribunal.

2. Obligations to pay and advance arbitration fees

The payment and advance payment of arbitration fees at MCAC are governed by Article 35 of the Rules of Arbitration and vary depending on the type of expense and the stage of the proceedings.

2.1. Payment of arbitration fees for Statements of Claim and Statements of Counterclaim

Unless otherwise agreed by the parties, the Claimant must pay in full the costs specified in Clauses 1 and 2, Article 34 of the MCAC Rules of Arbitration when submitting its Statement of Claim. The Respondent must pay the corresponding costs when submitting its Statement of Counterclaim.

These costs include arbitrators’ remuneration and the Center’s administrative expenses.

The applicable fees are determined according to the MCAC Schedule of Arbitration Fees in effect when the Statement of Claim or Statement of Counterclaim is submitted. Payment must be made in accordance with the Center’s notice and within the deadline specified by the Center.

2.2. Advance payment of travel, accommodation, and related expenses

The expenses specified in Clause 3, Article 34 of the MCAC Rules of Arbitration must be paid in advance after the Arbitral Tribunal has been constituted.

The Center consults the Arbitral Tribunal to prepare an estimate of these expenses, determine which party or parties must provide the advance payment, and notify the parties accordingly.

Within 15 days of receiving the notice, the relevant party or parties must pay the estimated expenses in full, unless otherwise agreed by the parties.

If these expenses are not advanced in full, the proceedings may be suspended. At the Center’s request, one party may make the advance payment on behalf of the other party so that the proceedings can continue.

2.3. Payment of costs for expert assessments, valuations, and expert consultations

The costs of expert assessments, asset valuations, expert consultations, and other assistance requested by the Arbitral Tribunal must be paid in accordance with Clauses 3 and 4, Article 19 of the MCAC Rules of Arbitration.

These costs arise depending on the specific requirements of the case and the need to clarify specialized matters during the dispute resolution process.

2.4. Settlement of advanced expenses

Before the Arbitral Tribunal prepares its arbitral award, the Center determines the actual expenses specified in Clause 3, Article 34 of the MCAC Rules of Arbitration and notifies the parties and the Arbitral Tribunal accordingly.

If the amount advanced exceeds the actual expenses, the Center refunds the difference to the party that made the advance payment.

If the actual expenses exceed the amount advanced, the parties must pay the additional amount specified in the Center’s notice.

3. Consequences of nonpayment of arbitration fees

Under Clause 1, Article 35 of the MCAC Rules of Arbitration, if the Claimant fails to pay the arbitration fees for its Statement of Claim in full within the deadline specified by the Center, it is deemed to have withdrawn its Statement of Claim.

Such deemed withdrawal does not affect the Claimant’s right to resubmit its Statement of Claim.

For a Statement of Counterclaim, Clause 2, Article 35 of the MCAC Rules of Arbitration provides that if the Respondent fails to pay the arbitration fees in full within the deadline specified by the Center, it is deemed to have withdrawn its Statement of Counterclaim.

Accordingly, full and timely payment of arbitration fees is necessary for a claim or counterclaim to continue being considered under the MCAC Rules of Arbitration.

4. Principles governing the allocation of arbitration fees

Clause 3, Article 34 of the 2010 Law on Commercial Arbitration provides that the unsuccessful party bears the arbitration fees unless otherwise agreed by the parties, otherwise provided by the applicable arbitration rules, or otherwise allocated by the Arbitral Tribunal.

Under Clause 1, Article 36 of the MCAC Rules of Arbitration, arbitration fees are allocated by the Arbitral Tribunal unless otherwise agreed by the parties.

Accordingly, the obligation to pay or advance arbitration fees during the proceedings must be distinguished from the ultimate obligation to bear those fees after the dispute has been resolved.

The fact that a party has paid or advanced arbitration fees does not automatically mean that the party must ultimately bear the entire amount. The Arbitral Tribunal determines the allocation based on the parties’ agreement, the outcome of the dispute, and the applicable rules.

In addition, the Arbitral Tribunal may order one party to reimburse all or part of the other party’s legal costs or other reasonable expenses.

5. Circumstances in which arbitration fees are refunded

Under Section II of the MCAC Schedule of Arbitration Fees, arbitration fees are refunded in the following circumstances:

5.1. Refund upon withdrawal of a Statement of Claim or Statement of Counterclaim

If the Claimant withdraws its Statement of Claim or any amendments or additions thereto, or if the Respondent withdraws its Statement of Counterclaim or any amendments or additions thereto, the refund is determined according to the timing of the withdrawal:

• A refund of 70% of the arbitration fees if the claim or counterclaim is withdrawn before the Arbitral Tribunal is constituted.
• A refund of 40% of the arbitration fees if the claim or counterclaim is withdrawn after the Arbitral Tribunal is constituted.
• A refund of 20% of the arbitration fees if the claim or counterclaim is withdrawn after the Center issues the notice of hearing but before the hearing date.

5.2. Refund upon termination of proceedings due to issues concerning the arbitration agreement

If the Arbitral Tribunal issues a decision terminating the proceedings because the arbitration agreement does not exist, is invalid, or cannot be performed, the Center refunds 30% of the arbitration fees.

5.3. Refund upon termination of proceedings pursuant to a court decision

If the Arbitral Tribunal issues a decision terminating the proceedings following a court decision determining that the dispute does not fall within the jurisdiction of arbitration, the Center refunds 20% of the arbitration fees.

5.4. Minimum fee retained after a refund

In all cases, the arbitration fees remaining after any refund must not be less than VND 10,000,000.

Parties should consult the MCAC Rules of Arbitration and Schedule of Arbitration Fees to determine their payment obligations, the applicable allocation principles, and the refund available at each stage of the dispute resolution process.
 

The article above has analyzed in detail is "ARBITRATION FEES AT MCAC: PAYMENT OBLIGATIONS, ALLOCATION PRINCIPLES, AND REFUND CASES". For more detailed information or legal assistance, please contact the MCAC Secretariat:

• Hotline: 0935 925 068 - 0236 3656799
• Email: contact@mcac.vn
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