Which law should be applied to resolve the dispute? Because if there is an agreement to apply foreign law to resolve the dispute between Vietnamese legal entities, it will cause difficulties in resolving, litigation, explaining terms, concepts... In fact, Vietnamese Courts and Arbitration still resolve according to Vietnamese Law.
The resolution of this conflict must be carried out in the direction of harmoniously applying both Vietnamese law and foreign law that has been agreed to apply. That is, general issues on hull insurance will be applied according to Vietnamese law (on the seaworthiness of the ship, on registration, inspection, maritime safety, etc.). Specific and specialized issues such as the scope of insurance will be applied according to English Law and Practice, the law governing the ITC 1995 Term Hull Insurance Conditions, and other insurance conditions that the parties agree to insure.
Hull insurance terminology . The Vietnamese Maritime Code only regulates the most general issues of hull insurance. Important concepts and terms in hull insurance, often mentioned when resolving disputes, determining faults and insurance coverage, are not found in any guidance documents. For example, latent defect of the ship, or reasonable diligence, etc. These definitions can only be found in unofficial documents. However, in the process of resolving disputes, each party understands it differently, citing different unofficial documents, and the litigation agency also has its own understanding, with no basis to determine which party's understanding is correct and satisfactory. Or other concepts that are also very important such as "seaworthiness of the ship", "negligence", etc. The parties sometimes have to refer to definitions in English court precedents, which is difficult due to differences in language and access to necessary documents.
To solve this problem, there needs to be official documents and guidance documents that collect, define and explain basic concepts and
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This not only helps the litigation agencies resolve hull insurance disputes more effectively, but also helps the parties involved in hull insurance understand this issue better to implement the law on hull insurance more effectively.
The above are some shortcomings of the legal regulations on hull insurance. This inadequacy has directly affected the implementation of the law on hull insurance, causing difficulties for the parties involved in hull insurance relations. This is an important reason for us to have improvements in the law on hull insurance in particular and marine insurance in general, overcoming the above shortcomings to ensure the effectiveness of adjusting the law on hull insurance.
3.1.2 Practice of signing insurance contracts and the current status of enforcement of hull insurance laws in Vietnam
Vietnam is aware of the importance of the marine economy and has taken necessary and correct steps to implement this policy. The document of the 9th National Party Congress clearly stated: "Strongly develop and promote the strategic role of the marine economy combined with protecting the sea area". Developing maritime transport, improving capacity and promoting the shipbuilding industry are some of the necessary directions to achieve the above goal.
If in 1997, the Vietnamese fleet had a total of 287 ships, by 2003, our fleet had 880 ships, with a total tonnage of about 1.7 million tons, of which the cargo fleet consisted of 583 ships with a total tonnage of nearly 0.9 million tons. In 2002, the transport output reached 23.7 million tons, of which foreign transport was 14.5 million tons, domestic transport was 9.2 million tons [27; 67].
In 1965, Vietnam Insurance Company was established and became the only hull insurer in Vietnam, mainly insuring ocean-going vessels. However, at that time, Bao Viet only participated in hull insurance as a
agent of Lloyd's. For 30 years, from 1965 to 1995, Bao Viet was still the only hull insurer in Vietnam. In 1995, a series of insurance companies were established, partly breaking Bao Viet's monopoly in the field of hull insurance.
Currently, there are 27 enterprises participating in the Vietnamese insurance market, including 2 state-owned companies, 10 joint-stock companies and 15 foreign-invested companies. In addition, there are 30 representative offices waiting in line for operating licenses in Vietnam, not to mention some domestic financial institutions such as Vietcombank, which are hatching plans to enter the insurance business.
However, the hull insurance sector has only a few enterprises participating. Of which, Bao Viet, although losing its monopoly, still holds a significant market share. Next are Bao Minh, Petrolimex Insurance Company (PJICO), and Petroleum Insurance Company (PIC). As analyzed in Chapter I, this is explained by the complexity as well as the great value of hull insurance.
Bao Minh is the second largest insurance company in hull insurance. Bao Minh has insured over 50 seagoing vessels with a tonnage of 1,000 to 40,000 tons of leading shipping companies in Vietnam such as Vosco, Vinaline, Vinaship, Vitranschart, Vietfracht, Falcon, etc. with a worldwide scope of operations. Bao Minh's total ship insurance premium in 2003 reached 69.7 billion VND, an increase of 15.1% compared to 2002 and accounting for 18.3% of the total market share. Bao Minh's total ship compensation in 2003 was 34.6 billion VND, accounting for 49.6% of the year's revenue 9 . Vietnam Oil and Gas Insurance Company (PVIC) is currently insuring 150 vessels, with a total original hull insurance premium of about 6.5 million USD 10 .
9 Source: Bao Minh
10 Source Oil and Gas Insurance Company.
It can be said that compared to before, the awareness of ship owners about the role and importance of hull insurance has increased significantly. However, ship owners still only buy hull insurance because it is mandatory rather than voluntary, moreover, their knowledge about hull insurance is still limited. The application of insurance terms is still rigid, not based on actual needs. For example, while the ITC 1/10/1983 Hull Insurance Clause has a broader and stricter coverage, protecting shipowners more than the ITC 1/11/1995 Hull Insurance Clause, shipowners still insure their hulls under the ITC 1995 insurance conditions. The ITC clause is often regulated by English law and practice, but when applied, the parties do not have any provisions to specify the applicable law, leading to a situation where when a dispute arises, not only the parties but also the court have many difficulties in resolving it. Shipowners often choose to insure under the value of the ship in order to save costs, and when the ship is completely lost, they are not compensated for the value of the ship, leading to financial losses that are difficult to recover.
Although hull insurance has improved compared to the past, the current state of hull insurance in Vietnam is very concerning and requires improving the effectiveness of hull insurance, in which improving the effectiveness of law enforcement is one of the important and necessary directions.
Hull insurance companies are all state-owned companies or joint-stock companies, in which state capital still accounts for a decisive proportion, held by shareholders who are corporations and state-owned companies. These companies are still suffering losses in hull insurance. There are many reasons leading to this situation such as ineffective investment by insurance companies; the management of hull insurance is not yet strict enough to
Many violations occurred; the competition for market share among companies was fierce and unhealthy, such as insurance premiums dropping to very low levels, sometimes lower than reinsurance premiums, which was very unreasonable; the number of ship accidents with large losses was high, partly due to the high average age of the Vietnamese fleet, low ship safety, and insurance premiums tending to decrease... One important reason leading to the ineffectiveness of hull insurance is the low effectiveness of enforcing hull insurance laws.
The possibility of a ship accident depends largely on the safety of the ship and the qualifications of the captain and crew. To reduce the risk in hull insurance, it is necessary to improve the professional qualifications and qualities of the captain and crew, and improve the safety of the ship. To do so, it is necessary to improve the honesty and objectivity of the agencies that issue safety certificates for ships and professional certificates for crew. There must be a monitoring mechanism and stricter penalties to prevent ship owners from colluding with corrupt officials to create fake documents for ships that do not meet safety standards.
In developed countries, for example the UK, insurance companies only accept hull insurance through brokers. This solves many problems in the practice of signing hull insurance contracts. Brokers not only help insurance buyers overcome limited knowledge about hull insurance, help them get the most beneficial and suitable insurance contracts, but also help insurance companies relieve the burden of having to deal with the possibility of insurance fraud from the insurance buyers. Brokers contribute to the health of the hull insurance environment, improving the effectiveness of hull insurance. In Vietnam, there are also many hull insurance contracts signed through brokers, but this rate is not high.
Many. When Vietnamese insurance companies still have many limitations in management as at present, the regulation that hull insurance must go through brokers will help to improve the hull insurance environment in Vietnam, solving the current situation of hull insurance losses.
The practice of hull insurance in Vietnam shows that we must have comprehensive and thorough solutions to improve the effectiveness of hull insurance, so that this service industry can fully promote its strengths and advantages, contributing to promoting economic growth.
3.1.3 Marine economic development goals and integration policies
The trend of market liberalization and promoting the development of marine economy in the world and the region has influenced the development trend of Vietnam's economy. Vietnam is located in the Asia-Pacific region, a dynamic economic center with high economic growth rate. The economic success of countries is due to the successful application of economic strategies towards the outside, especially creating an economy with strong export orientation such as Singapore, China, Korea, Philippines, Japan, etc. These are positive lessons for us to promote the development of marine economy.
In line with the innovation process and facing the urgent demands of the domestic international situation, the 7th Party Congress advocated multilateralization and diversification of foreign relations, marking the beginning of the international integration process in the new period. The country's development experience shows that this is a correct policy and direction, so in order to create more favorable conditions to promote socio-economic development, the 8th Party Congress decided to "accelerate the process of regional and world economic integration". Continuing to consistently implement the foreign policy of independence, self-reliance, openness, multilateralization and diversification of international relations, the Document of the 9th National Congress of Delegates has pointed out to proactively integrate into the international economy.
economy, it is necessary to "complete the legal system, improve the competitiveness of enterprises and the economy".
Vietnam has participated in regional and international forums such as ASEAN (since 1995), ASEAN Free Trade Area (AFTA) (since 1996), is a member of Asia-Europe Meeting (ASEM) (since 1996) and Asia-Pacific Economic Cooperation (APEC) (since 1998). Vietnam is actively negotiating to join the WTO by the end of this year.
It can be said that international economic integration has become an inevitable trend and brings many opportunities for rapid and sustainable economic development, but from participating in integration, there will arise many challenges and difficulties that we must overcome to ensure the successful construction of a socialist-oriented market economy. And hull insurance, a highly international field, also needs solutions to contribute to promoting the development of maritime transport to match Vietnam's great potential for the sea and maritime economy. In order to comply with international and regional maritime insurance laws and actively participate in the integration process, Vietnam needs to have measures to improve the effectiveness of enforcement of hull insurance laws to create a healthy legal environment.
The integration process requires comprehensive international cooperation in many aspects, including international cooperation on hull insurance, which is inevitable because hull insurance is highly international, has an important impact on maritime transport, and therefore also has an important impact on our country's economy as well as the economic interests of entities having maritime transport and maritime trade relations with Vietnam. In the integration process, Vietnam's participation and signing of international treaties related to hull insurance is inevitable. In fact, although Vietnam has not participated in any international conventions or agreements directly regulating hull insurance, we have participated in many important international conventions and treaties related to hull insurance such as: Convention
Convention on Tonnage Measurement of Ships (TONNAGE); Convention on Training, Certification and Watchkeeping for Seafarers (STCW); Convention on Maneuvering to Avoid Collisions (COLREG Convention 1972); International Convention on the Law of the Sea 1982 (signed on December 10, 1982, effective on November 16, 1995. Vietnam joined in 1994); Convention on the Prevention of Marine Pollution from Ships (MARPOL); ASEAN Framework Agreement on Facilitation of Ships in Distress and the Rescue of Persons on Board Ships in Distress (signed in 1995); The Tokyo MOU on Port State Control (PSC) that Vietnam has signed with countries in the Asia-Pacific region on inspection of ships of other countries when arriving at ports to ensure that ships at sea have sufficient conditions for maritime safety... The number of international conventions and treaties related to hull insurance that Vietnam has signed and participated in has contributed to making Vietnam's hull insurance law consistent with the world hull insurance law system, but it is still not enough. There are other international conventions and treaties that we must participate in to create more favorable conditions for Vietnam's hull insurance to integrate internationally. These are:
- Draft IMO Convention on Marine Insurance;
- International Convention on Maritime Search and Rescue (SAR);
- International Convention on Maritime Salvage (SALVAGE);
- Arrest of Ships Convention, 1999;
- Convention relating to the Conditions of Registration of Ships, 1986;
- International Convention on Liens and Mortgages on Ships, 1993;
- International Convention on General Rules Relating to Civil Jurisdiction in Collisions, 1952;
- York Antwerp Convention, 1994.
3.2 Orientation to improve the effectiveness of law enforcement on Vietnam's ship hull insurance