RESPONDENT’S FAILURE TO SUBMIT A STATEMENT OF DEFENSE OR ATTEND THE HEARING IN ARBITRAL PROCEEDINGS

In the practice of resolving commercial disputes through arbitration, it is not uncommon for the Respondent to fail to submit a statement of defense or to be absent from the arbitral hearing despite having been duly summoned. Vietnamese law, along with the procedural rules of Arbitral institutions, including the MCAC, provides clear provisions to ensure that arbitral proceedings continue in accordance with due process while safeguarding the legitimate rights and interests of the parties.

1. Respondent’s Failure to Submit a Statement of Defense.

Pursuant to Article 35(2) of the 2010 Law on Commercial Arbitration, the Respondent is entitled to submit a Statement of Defense within 30 days from the date on which the Respondent receives the Statement of Claim and the accompanying documents. This time limit may be extended by the Arbitral Center at the request of one or both parties, depending on the specific circumstances of the case. If the Respondent fails to submit the Statement of Defense within the prescribed period and the request for an extension is not accepted, the Arbitral Tribunal may still proceed with the resolution of the dispute on the basis of the documents and evidence already contained in the case file.

Failure to submit a statement of defense means that the Respondent effectively forfeits the opportunity to formally present arguments and substantiate their claims, potentially placing them in a passive and disadvantageous position during the arbitral proceedings.

In addition, Article 9(4) of the Rules of Arbitration of the Middle Commercial Arbitration Center (MCAC) provides that: “If the Respondent fails to submit the Statement of Defence, the arbitral proceedings shall still proceed.”[1].

Accordingly, the Respondent’s failure to submit the Statement of Defense does not affect the continuation of the arbitral proceedings at the MCAC. The Arbitral Tribunal retains the authority to conduct the hearing and carry out the arbitral procedures in accordance with the law and the MCAC Rules of Arbitration.

2. The Respondent was absent from the Arbitral Hearing

Pursuant to Article 56(2) of the 2010 Law on Commercial Arbitration, where the Respondent, despite having been duly summoned, fails to appear at the arbitral hearing without a valid reason, the Arbitral Tribunal retains the authority to proceed with the hearing and render an award based on the documents and evidence contained in the case file.

This principle is further reflected in Article 27 (1) and (2) of the Rules of Arbitration of the Middle Commercial Arbitration Center (MCAC):

“1. The Respondent has been duly summoned to attend a hearing but fails to appear without a legitimate reason or leaves a hearing without the permission of the Arbitral Tribunal, the Arbitral Tribunal shall proceed with the dispute resolution on the basis of the documents and evidence readily available.

2. In case there is a Counterclaim, the Respondent has been duly summoned to attend a hearing but fails to appear without a legitimate reason, or leaves a hearing without the permission of the Arbitral Tribunal, shall be deemed to have withdrawn the Counterclaim. In such case, the Arbitral Tribunal shall only proceed with the resolution of the Counterclaim if the Claimant so requests.”[2].

In cases of justified absence, pursuant to Article 57 of the 2010 Law on Commercial Arbitration and Article 26 of the Rules of Arbitration of the Middle Commercial Arbitration Center (MCAC), the Respondent may request an adjournment of the hearing. The Arbitral Tribunal shall assess the reasonableness of the justification and determine whether to grant the adjournment and, if so, its duration, taking into account all relevant circumstances of the case.

From the foregoing provisions, it is clear that the Respondent’s absence or non-participation in the proceedings does not affect the progress of the dispute resolution process. The Arbitral Tribunal retains the authority to proceed with the hearing and render an award based on the case file and the evidence collected.

3. Conclusion

In conclusion, the Respondent’s failure to submit a statement of defense or to attend the hearing does not hinder the resolution of the dispute. The Arbitral Tribunal may still examine the case and render an award based on the admissible documents and evidence contained in the case file.

This procedure is consistent with the provisions of the law and reflects the principles of efficiency, fairness, and timeliness in arbitral proceedings. Allowing the Arbitral Tribunal to continue the proceedings despite the Respondent’s absence helps prevent dilatory or obstructive conduct, while also affirming the flexibility and expediency of arbitration compared with court litigation.

The article published on MCAC provides an in-depth analysis of issues related to cases where the Respondent fails to submit a statement of defense or does not attend the hearings in arbitral proceedings. For more detailed information, please contact us via hotline +84 935 925 068 or email contact@mcac.vn.

See also: Is an arbitration agreement concluded by an unauthorized person valid ?