In commercial contracts, the dispute resolution clauses is used commonly. Normally, this kind of clause provides the dispute resolution procedures and competent dispute resolution body. In addition, the parties’ obligation to bear court fee/arbitration fee as well as lawyer fee is also agreed therein but we see that such matter seems not to be really paid attention. In fact, this matter is provided in various ways but the most popular agreement shall be like the party who lost the case shall bear all the costs and expense arising from the legal proceedings, including lawyer fee, court/arbitration fee and other expenses.

Then, if the parties have a dispute and must bring the case to the Court or arbitration for settlement (with the assumption that the parties do not reach a settlement agreement during the legal proceedings), is the legal consequences regarding the parties’ obligation to bear lawyer fee and arbitration/court fee different between the case where there is an agreement upon this matter available between the parties previously and the case where there is no such agreement? We would like to generally and shortly share our view in this issue as below.

Firstly, with respect to lawyer fee, in legal proceedings at the Court, lawyer fee shall be borne by the party who has made the request, unless otherwise agreed by the concerned parties (Article 168.3 of the 2015 Civil Proceedings Code). As such, in the presence of a corresponding agreement, each party has grounds to request the other party to pay a part of whole their lawyer fee, subject to the agreement and the Court’s view. In arbitral proceedings, the arbitration law do not provide for allocation of such fee so the decision shall depend on the selected arbitration center’s rules and the arbitral tribunal’s consideration. In fact, arbitration centers commonly set rules for this matter, for example, the Vietnam International Arbitration Center (VIAC)’s rules provide that “The Arbitral Tribunal shall have the power to decide that one party shall bear all or part of the legal costs or other reasonable expenses incurred by the other party” (Article 36.2 of VIAC’s rules which came into force from 01 March 2017). Accordingly, as to the lawsuits settled by VIAC, even in the absence of the parties’ agreement upon this matter, the Arbitral Tribunal may request a party to compensate the lawyer fee for the other party (the party who wins the case), but if any agreement, the Arbitral Tribunal’s decision highly seems to be compliant with such agreement.

With respect to court/arbitration fee, in legal proceedings at the Court, the civil proceedings code provide that the litigants shall bear court fee if their claim is not accepted by the Court (Article 147.1 of the 2015 Civil Proceedings Code). The civil proceedings code does not allow the parties to agree upon allocation of the court fee. Accordingly, if otherwise agreed by the parties previously, such agreement highly seems to be rejected by the Court. Meanwhile, in arbitral proceedings, the party who lost the case must bear the arbitration fee unless otherwise agreed by the parties or otherwise provided by the applied arbitration rules or otherwise allocated by the Arbitral Tribunal (Article 34.3 of the 2010 Law on Commercial Arbitration). Based on such regulation, the parties’ agreement shall be a ground affecting the Arbitral Tribunal’s decision.

In the light of the above, we view that the parties’ agreement on allocation of lawyer fee and court/arbitration fee in advance shall considerably affect the judgment on this obligation in case of dispute later. Therefore, the contractual parties should take note the above to foresee all the potential consequences and properly agree thereon.