Textbook International Trade and Business Law

1056 Pages·2012·6.16 MB·English

HANOI LAW UNIVERSITY

TEXTBOOK
INTERNATIONAL TRADE
AND BUSINESS LAW

Edited by
Professor Dr Surya P. Subedi
DPhil (Oxford); Barrister (England)
Professor of International Law

School of Law, Univeristy of Leeds, UK

THE PEOPLE’S PUBLIC SECURITY PUBLISHING HOUSE
HANOI - 2012
2

This Textbook has been prepared with financial assistance from the
European Union. The views expressed herein are those of the authors and
therefore in no way reflect the official opinion of the European Union nor
the Ministry of Industry and Trade.
3
LIST OF AUTHORS

Nguyen Thanh Tam Chapter 1; and Chapter 3 - Section 1,
and Trinh Hai Yen Section 2; and Chapter 4 - Section 3
Nguyen Dang Thang Chapter 2 - Section 1, Section 2
Nguyen Duc Kien Chapter 2 - Section 3;
and Chapter 5 - Section 4
Federico Lupo Pasini Chapter 2 - Section 4, Section 7;
and Chapter 4 - Section 1
Nguyen Nhu Quynh Chapter 2 - Section 5
Nguyen Thi Thu Hien Chapter 2 - Section 6
Nguyen Ngoc Ha Chapter 2 - Section 8
Andrew Stephens Chapter 3 - Section 3
Trinh Hai Yen Chapter 3 - Section 4;
and Chapter 4 - Section 2
Le Hoang Oanh Chapter 3 - Section 5
Nguyen Minh Hang Chapter 5 - Section 1
Ho Thuy Ngoc Chapter 5 - Section 2, Section 3 (Items 4-5);
and Chapter 7 - Section 6
Vo Sy Manh Chapter 5 - Section 3 (Item 1, Item 3)
Marcel Fontaine Chapter 5 - Section 3 (Item 2)
Nguyen Ba Binh Chapter 6 - Section 1
Nguyen Thi Thanh Phuc Chapter 6 - Section 2
Ha Cong Anh Bao Chapter 6 - Section 3
Trinh Duc Hai Chapter 7 - Sections 1-5
4 TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW
FOREWORD

This Textbook has been prepared with the support of the Multilateral
Trade Assistance Project III (EU-Viet Nam MUTRAP III) funded by the
European Union, and it is the result of the contribution of national and
international academics and trade law experts. The cooperation between
Vietnamese and international experts testifies the definitive integration of
Vietnam in the international cultural system. The trade and economic world
integration of Vietnam achieved with the accession to the WTO in 2007
contributed in a decisive manner to the full participation of Vietnamese
experts and academics in the world scientific and cultural community.
Indeed, a growing number of Vietnamese students and academics which are
involved in international exchange programmes and this Textbook are the
evidence of this phenomenon.
With the support of EU-Viet Nam MUTRAP III Project and other
development cooperation programmes, the curricula of the main universities
in Vietnam have been updated to take into consideration the rapid
evolutions of the trade and economic situation. This Textbook, mainly
directed to bachelor students, provides a picture of the legal aspects of the
most relevant international trade issues. While recognizing the differences
between the international ‘public’ and the ‘private’ trade law, the editor and
contributors of the Textbook recognized that the two different disciplines
cannot be studied separately. Lawyers and legal experts must have a
thorough knowledge of all the aspects involving an international transaction,
from the competent jurisdiction to settle any pathologic aspect of an
international contract to the market access’ rights protected by the WTO in a
third country. Besides that, the Textbook is also a combination of global
(WTO, Vienna Convention of the International Sales of Goods), regional
FOREWORD 5
(EU, NAFTA and ASEAN), bilateral (the agreements between Vietnam and
some trading partners) and Vietnamese relevant rules. The Textbook benefited
from the contribution of experts and academics combining the technical to
the geographical expertise: for example, an US contributor wrote the section
on NAFTA while an European drafted the section dedicated to the EU,
while Vietnamese authors focused on the domestic relevant trade aspects.
The result is a Textbook which captures different views regarding the law
regulating international trade. This Textbook is a good example of what the
Vietnamese lawyers and legal experts will have to face once they will start
their professional life: a world characterized by harmonized international
rules, common rules of legal interpretation but different attitudes regarding
the practical implementation of the day-by-day commercial operations. The
need to improve the trade relations, particularly important for an open
economy like Viet Nam, requires the ability to understand these different
attitudes and, when possible, to identify the best international practices
which could be reproduced into the domestic legal framework.
The Textbook is also a good instrument for government officials daily
confronted with a dynamic international arena and eager to know the basic
information regarding various aspect of international trade law.
This Textbook is really a small reproduction of the real world Vietnamese
lawyers and legal experts will have to face and it is an excellent starting
point for all those interested in having a basic knowledge of the complex set
of rules dealing with international trade.
Nguyen Thi Hoang Thuy

Project Director
EU-Viet Nam MUTRAP III
6 TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW
PREFACE

International Trade and Business Law is about empowering states in
some areas and facilitating their business or other transactions with other
states and entities - while restraining their activities in other areas for the
greater good of the individual and the society, both national and international.
This body of law aims to lay down the rules of fair play in the conduct of
international economic relations to ensure a fairer society for all. In other
words, the role of International Trade and Business Law is to ensure a level
playing field for all states in order to enable them to maximize their
potential and/or to optimize their unique selling points. Each and every
individual is gifted with some unique qualities or strengths; the legal system
of any state should be designed to enable these individuals to fulfill their
potential without harming or undermining the interests of others in the
society. The objective is for individuals to pursue their dreams - whatever
these may mean to them. Some people are happy to become millionaires or
even billionaires, while some others are happy to become nuns or monks, or
to work for charitable organizations.
The same is true of nation-states: basically, a collection of individuals
bound by certain common characteristics and objectives. Therefore,
International Trade and Business Law, is designed to enable states to offer to
the international community what they have; this is in return for what other
states have to offer to them. Thus, the element of reciprocity and the
promotion of national interests lie at the heart of human behaviour, and
states are no exception. This is especially the case with International Trade
and Business Law.
Dissimilarly to other specific areas of international law, International
Trade and Business Law is directly relevant to the economy and prosperity
PREFACE 7
of a nation. In other words, it concerns directly the basic economic interests
of a nation. Hence, each and every state is careful in accepting the rules
governing international trade and business. Every state knows, however,
that without accepting certain basic principles of international law of trade
and business it would not be able to trade with other states or otherwise to
engage in other business activities.
The irony in the world of international trade is that every state wishes
other states to open their doors as widely as possible by pursuing policies of
trade and economic liberalization; conversely, states may also try to close
their own doors as tightly as possible by pursuing protectionist policies. Here,
indeed, is where the law is needed: to intervene to ensure fair play, and fairly
to settle disputes in the case of foul play. The role of the law may be
described as akin to that of a referee or an umpire in a sports match whose
sole purpose is to ensure fair play. Associated with the idea of fair play is
the creation of a level playing field for the business participants of the day.
Trade is one of the early attributes of human activity. The very word
‘trade’ signifies an economic activity that is voluntary and is based on
reciprocity. Starting with the barter system in antiquity, humans began,
when forms of money were invented, to trade in goods for cash. In fact, it
was trade that contributed to the invention of money. As this voluntary
reciprocal economic activity began to grow both geographically and in
volume, it was regulated, initially by the traders themselves and then by the
authorities, such that trade was fair; that it was free from distortions.
Much of human civilization has developed with and around the
expansion of trade and the desire firstly, to survive and subsequently, to
create wealth through trade. Early attempts to regulate trade were designed
to facilitate trade by providing the basic code of conduct for those engaged
in international trade. This code of conduct was developed in due course
under both public and private international law to cater for the growth in
trade and business activities. Accordingly, one of the visions of the new
world order conceived towards the end of World War II was the
liberalization of international trade to stimulate economic growth through
the establishment of an International Trade Organization (‘ITO’).
8 TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW
Although the ITO never came into existence, its fundamental concept
of the liberalization of international trade was pursued through the GATT
and some other international legal instruments; many of these eventually
became part of the WTO law when this world trade organization was
established in 1995, following the conclusion of the Uruguay Round of
Multilateral Trade Negotiations between 1986 and 1994. There have been a
number of developments within private international law, too, since the end
of World War II. These were designed to facilitate as well as to regulate
international trade and business. Consequently, there is now a considerable
body of public and private international law dealing with international trade
and business, and this Textbook entitled, International Trade and Business
Law, is an attempt to provide a comprehensive yet succinct overview of this
body of law.
The Textbook covers a wide range of topics in International Trade and
Business Law pertaining to both public and private international law. It is
the result of an ambitious project designed to produce a comprehensive tool
of study for Vietnamese students, government officials, lawyers and scholars.
Vietnam adopted a new economic reform policy, known as ‘Doi Moi’,
in order to usher the country along the road to economic liberalization and
economic reform in 1986. As part of that drive, Vietnam made an
application to join the WTO and was in 2007 duly admitted to this world
trade organization. Since the introduction of ‘Doi Moi’ and membership of
the WTO, in particular, Vietnam has witnessed a massive growth in
international trade and business activity, requiring new laws, regulations and
policies to regulate such activities.
Vietnam’s membership of the WTO was a catalyst for a number of
new developments in the legal system of the country, because Vietnam had
to undertake a number of new commitments to join the WTO. Complying
with these commitments required enacting new laws and adopting new
policies. Vietnam’s membership of the WTO has transformed the legal
landscape in the country. Consequently, Vietnam is now not only a fully-
fledged member of the WTO; it is also a thriving market economy with a
socialist political system. The country has in the recent past attracted a
PREFACE 9
huge amount of foreign investment and has become one of the world’s
fastest-growing economies. Parallel to such opportunities come the
responsibilities to operate within agreed international rules. There has, for
Vietnam’s success, to be a well-educated or-trained human resource capable
of interacting with other global actors and promoting and protecting the
national interests of the country.
Vietnam’s interaction with the actors in the field of international trade
and business has increased a great deal. The Vietnamese legal system has
responded and is still responding to the challenges stimulated by these
changes in the sphere of international economic and legal activity.
Therefore, there is a need to prepare a new generation of Vietnamese lawyers
and government officials who can understand and handle appropriately the
matters raised by these phenomenal changes taking place nationally and
internationally; they must help the people of the country to maximize the
benefits resulting from these changes. For this, they need good academic
material - and this Textbook on International Trade and Business Law is
designed to meet that need and demand.
It includes chapters authored by both Vietnamese and foreign authors
dealing with both international legal and Vietnamese legal issues pertaining
to both public and private international trade and business law. Such an
inclusive approach provides the students with both international and
Vietnamese perspectives into these areas of law.
The various contributors provide a comprehensive treatment of the
topics selected for inclusion in the Textbook. These range from WTO law,
including the trade in goods and services, and intellectual property
protection, to international commercial dispute resolution, including
international commercial arbitration, regional trading arrangements or
regional economic integration schemes such as NAFTA, EU and ASEAN,
and e-commerce. The chapters are both informative and analytical and are
contributed by academics, practitioners, government officials and researchers
of both older and younger generation most of whom carry a wealth of
expertise and experience in the areas concerned.
Since this Textbook is designed primarily for law students, government
10 TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW
officials, researchers and lawyers in Vietnam, the approach is obviously a
legalistic one based on the analysis of national and international legal
instruments, case law or jurisprudence and established customs and norms
of behaviour. An attempt has been made to make it as reader- or student-
friendly as possible. All chapters end with a list of questions for reflection
by students and other readers in order to stimulate their thinking and
analysis. Similarly, all chapters provide a list of further reading for those
willing to develop further their understanding of a given area of law.
Although the length and the style of presentation vary from one chapter to
another, as is quite natural for a collection of this nature, consisting as it
does of contributions by many people with their own different legal,
practical and scholarly backgrounds, an attempt has been made to achieve
uniformity and consistency throughout the text in order to present it as a
cohesive Textbook. All in all, it is hoped that this Textbook would prove to
be a valuable academic material and source of reference for those interested
in International Trade and Business Law and in its application and
ramifications in Vietnam.
It has been a pleasure for me to work with the Coordinating
Committee of the Action of the Hanoi Law University (HLU) on this
Textbook and I wish to thank them for their excellent cooperation.

Professor Dr. Surya P. Subedi
DPhil (Oxford); Barrister (England)
Professor of International Law
University of Leeds, UK
Editor