STATEMENT OF FACTS

RESPONDENT is a Singaporean trading company whose primary product is waste paper.

CLAIMANT is a Vietnamese company manufacturing high-quality tissues.

On 16 November 2015, RESPONDENT entered into a contract with CLAIMANT for the
sale of Virgin white tissue in bales with the total price of US $420,000. The payment
included advance payment upon signing of the Contract and full payment upon shipment
of the goods.

On 1 December 2015 RESPONDENT concluded the Annex with CLAIMANT after

further negotiation which compelled CLAIMANT to make advance payment of 25% of
the Contract value. On 15 December 2015 RESPONDENT received information of an
inspection carried out by VNC from CLAIMANT. RESPONDENT promptly replied with
confidence of the quality of the delivered goods.

On 29 December 2015, RESPONDENT received the inspection result and CLAIMANT’s

request to replace the goods. RESPONDENT turned down this request as it was
suspicious of the inspection procedure.

On 3 February 2016, RESPONDENT expressed its disapproval of contract termination in

response to CLAIMANT’s email on 31 January 2016 and insisted CLAIMAINT to
continue its obligations.

As there was no consensus between RESPONDENT and CLAIMANT about the dispute,
both parties agreed to resolve by arbitration in accordance with the Contract.
ISSUE 1: THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION
OVER THE DISPUTE:

1. [A] With Vietnamese law governs the arbitration agreement, the Arbitral Tribunal
doesn’t have jurisdiction to resolve the dispute because although [B] there is a
valid arbitration agreement between RESPONDENT and CLAIMAN, [C] the
arbitration agreement in the annex is null and void, therefore, it must be the ICC
who has the jurisdiction over the dispute.

A. VIETNAMESE LAW GOVERNS THE ARBITRATION AGREEMENT:

2. Under Art.14(1) Law on Commercial Arbitration 2010 (“LCA”), for a dispute

involving foreign elements, the arbitration council applies the law selected by the
parties. In this case, CLAIMANT and RESPONDENT agreed to include a clause
in the Contract which explicitly stated that “This Contract shall be governed by
Vietnamese law”.1 Thus, Vietnamese law is the governing law of the arbitration
clause.

B. THERE IS A VALID ARBITRATION AGREEMENT BETWEEN

CLAIMANT AND RESPONDENT:

3. The following will illustrate that [I] there is an existence of arbitration agreement
and [II] the arbitration agreement enforceable.

I, There is an existence of the arbitration agreement

4. Under Art. 5 LCA, a condition for dispute resolution by arbitration is that the
parties have an arbitration agreement. There is an arbitration agreement in form of
a contractual clause in the Contract. Therefore, an arbitration agreement exists
between the parties.

II, The arbitration agreement is enforceable

5. Under Art. 18 LCA, the arbitration agreement will be enforceable if it is not void.
6. Under Art 18(2) LCA, the arbitration agreement is void if the person who entered
into the arbitration agreement lacked authority as stipulated by law. Under Art 3(2)
1
Moot problem, Exhibit No.1, Art 9(1)
 Resolution No. 01/2014/NQ-HĐTP of the Council of Judges of the People’s
Supreme Court of Vietnam, the signatory must be one of the following: the legal
representative or the legally authorized representative who does not act beyond his
power. The contract was signed by RESPONDENT and CLAIMANT’s legal
representatives who both agreed on the arbitration agreement 2. Consequently, the
arbitration agreement in the Contract is enforceable as it was the parties’ legal
representatives who entered into the agreement.
7. Under Art 18(4) LCA the agreement is void if the form of the arbitration
agreement does not comply with article 16 of this Law. The arbitration agreement
between RESPONDENT and CLAIMANT was formulated as a clause in the
Contract and is in writing. The contractual clause thus constitutes a written
arbitration agreement.

C. THE ARBITRATION AGREEMENT IN THE ANNEX IS NULL AND

VOID:

8. The following will demonstrate that [I] the Annex is invalid because it was signed
by an unauthorized legal representative and although [II] the arbitration agreement
exists independently of the Contract, [III] it is void because the person who
entered into the arbitration agreement lacked authority as stipulated by law.

I. The Annex is invalid because it was signed by an unauthorized legal

representative

9. Under Art 13(1) Law on Enterprise 2014, only the legal representative of an
enterprise can exercise the rights and perform the obligations arising out of
transactions of the enterprise. CLAIMANT’s Legal Representative is Mr. Nguyen
Minh while Ms. Tran Linh is its Deputy Director 3. Therefore, transactions of
CLAIMANT must be performed by its legal representative, whio is Mr. Nguyen
Minh.
10. Under Art 13(1) Law on Enterprise 2014, when the legal representative of an
enterprise exits Vietnam, he must authorize in writing another person to exercise
the rights and perform the obligations of the legal representative . When
RESPONDENT concluded the contract with CLAIMANT, there was no

2
Moot problem, page 8
3
Moot problem, para.1, line 4
 authorization in writing from CLAIMANT’s legal representative. Hence, Ms. Tran
Linh cannot be considered CLAIMANT’s authorized legal representative.
11. Under Art. 142(1) Civil Code 2015, a civil transaction entered into and performed
by an unauthorized person representative shall not give rise to rights and
obligations of the principal. The Annex signed between Ms. Jennifer Lim and Ms.
Tran Linh is not binding to CLAIMANT. Under Art. 142(3) Civil Code 2015, a
person having transacted with an unauthorized person has the right to terminate
unilaterally the performance of or to terminate the civil transaction entered into. As
a result, RESPONDENT is entitled to declare the invalidity of the Annex.

II, The arbitration agreement exists independently of the Contract

12. Under Art. 19 LCA, an arbitration agreement shall exist totally independently of
the contract. Albeit the termination of the Contract, the Arbitration Agreement
stands valid considering its satisfaction of enforceability.

III, The arbitration agreement is void because the person who entered into the
agreement lacked authority as stipulated by law

13. Under Art 18(2) LCA, the arbitration agreement is void if the person who entered
into the arbitration agreement lacked authority as stipulated by law. Under Art 3(2)
Resolution No. 01/2014/NQ-HĐTP of the Council of Judges of the People’s
Supreme Court of Vietnam, the signatory must be one of the following: the legal
representative or the legally authorized representative who does not act beyond his
power. Ms. Tran Linh is either the legal representative or the legally authorized
representative of CLAIMANT. Consequently, the arbitration agreement in the
Annex is void.

CONCLUSION TO ISSUE 1:

14. With Vietnamese law governs the arbitration agreement, VIAC does not have
jurisdiction to resolve the dispute because the arbitration agreement in the Annex is
invalid and it is the ICC who has the authority.