!! rethinking the role of judicial independence in socialist-transforming east asia

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RETHINKING THE ROLE OF JUDICIAL INDEPENDENCE INSOCIALIST-TRANSFORMING EAST ASIA

JOHN GILLESPIE*

Abstract This article argues that judicial independence is a poor indicator ofthe capacity of courts effectively to resolve commercial disputes. Judicialpower is a more accurate measure because it assesses whether courts havesufficient jurisdiction, discretionary authority and enforcement powers tomake decisions over socially meaningful commercial problems. In fact, judi-cial independence may reduce the power of newly emerging commercialcourts in socialist-transforming Asia, which need politics to protect themfrom interference by powerful governments and private investors. This arti-cle explores the trade-offs between judicial power and political patronage byinquiring into the circumstances where patronage may slide into interference.It also investigates the conditions in which judges are most likely to acquireor arrogate discretionary powers to understand politics on their terms.Finally, this article analyses the highly polarized views in this region aboutwhat constitutes valid judicial determinations. The message for internationalagencies contemplating judicial reforms is that reducing political influenceand promoting law-based decisions will not uniformly generate popularsupport and legitimacy for courts.

I. INTRODUCTION

During the past two decades, transplanting the ‘rule of law’ has become aglobal industry.1 While the ‘law and development’ movement in the 1960s and1970s stressed legal education and research, the latest trend, which came out ofthe East Asian Financial Crisis in 1997, has emphasized the ‘rule of law’ anddirect implantation of western institutions’ models.2 As socialist-transforming

* Professor and Director of the Asia Pacific Business Regulation Group, Department ofBusiness Law and Taxation, Faculty of Business and Economics, Monash University, Melbourne,Australia. The author gratefully acknowledges the financial support provided by the AustralianResearch Council and the generous assistance of numerous Vietnamese judges, State officials andlawyers.

1 B Garth, ‘Rethinking the Processes and Criteria for Success’ in RV Van Puymbroeck (ed),Comprehensive Legal and Judicial Development (The World Bank, Washington, DC, 2001)11–28; D Kennedy, ‘The “Rule of Law” Political Choices, and Development Common Sense’ inD Trubek and A Santos (eds), The New Law and Economic Development: A Critical Appraisal(CUP, Cambridge, 2006) 110–50.

2 See, eg, M Pomerleano ‘The East Asia Crisis and Corporate Finances: The Untold MicroStory’ (1999) <http://ideas.repec.org/p/wbk/wbrwps/1990.html> (accessed 3 Oct 2005).

[ICLQ vol 56, October 2007 pp 837–870] doi: 10.1093/iclq/lei203

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countries in East Asia (principally China and Vietnam) restructure their legalsystems to embrace international markets, the globalization of western legalinstitutions seems less difficult than ever before. Of these reforms, reinvigo-rating the court system is considered vital for promoting growth in the world’smost dynamic economic region.3

There is a potent western mythology that treats courts as the capital of‘law’s empire’.4 Courts are considered crucial to economic development notonly because they resolve commercial disputes, but also because they allowcitizens to bring actions to check bureaucratic and legislative power. Theauthority to perform these functions is thought to rest on the perception thatcourts are distanced from politics and other branches of government.5 Despitenumerous studies that challenge the notion that only neutral and impersonalcourts can uphold the law, the multilateral agencies that champion the transna-tional legal order (World Bank, Asian Development Bank, etc) regard judicialindependence as a prerequisite for effective courts.6

The focus in this article is on judicial reform in socialist-transforming EastAsia, particularly Vietnam.7 By any measure, courts in this region have beensubjected to an extreme form of political control.8 Under socialism, party andgovernment agencies regularly interfered with court decisions. But this wasnot aberrational behaviour, because socialist theory does not recognize theseparation of powers doctrine and judicial independence. Compounding theirlowly status, courts were poorly funded, lacked well-trained and experiencedjudges, and struggled against systemic corruption.9

There is general agreement among international donor agencies that coun-tries in this region need courts that can resolve commercial cases fairly andefficiently. Judicial reform projects stress the need to build institutional capac-ity and increase judicial independence.10 However, the history of court reform

838 International and Comparative Law Quarterly

3 See J Anderson et al, Judicial Systems in Transition Economies: Assessing the Past andLooking to the Future (World Bank, Washington, DC, 2005) xi–xiii; contra D Clarke, ‘EconomicDevelopment and the Rights Hypothesis: The China Problem’ (2003) 51 AJCL 89, 96–7.

4 See R Dworkin, Law’s Empire (Harvard University Press, Cambridge, MA, 1986) 12–14.Others argue that courts deliver economically efficient solutions.

5 See M Shapiro, Courts: A Comparative and Political Analysis (University of Chicago Press,Chicago, 1981) 32–5. Also see M Kammen, A Machine that Would Go of Itself: The Constitutionin American Culture (Transaction Publishers, Piscataway, 1986) 31.

6 See A Santos, ‘The World Bank’s Uses of the “Rule of Law” Promise in EconomicDevelopment’ in D Trubek and A Santos (eds), The New Law and Development: A CriticalAppraisal (CUP, Cambridge, 2006) 277–86).

7 Although there are many social and economic differences, China and Vietnam share manysimilar problems stemming from their adoption of a Soviet-inspired judicial system. Analogousissues have also arisen in court reforms in Mongolia, Laos and Cambodia.

8 See Z Qianfan, ‘The People’s Court in Transition: The Prospects of the Chinese JudicialReform’ (2003) 12 J of Contemporary China 69, 76; P Nicholson, ‘Judicial Independence and theRule of Law: The Vietnam Court Experience’ (2001) 3 Australian J of Asian L 37, 38–44.

9 See R Peerenboom, ‘Judicial Accountability and Judicial Independence: An Empirical Studyof Individual Case Supervision in the People’s Republic of China’ (2006) 55 The China J 67–92.

10 In 2003 there were 24 foreign-sponsored judicial reform projects in East Asia promotingjudicial independence. See Asian Development Bank, Law and Policy Reform Bulletin (Asian



suggests that independence from politics is not necessarily the most effectiveway to foster robust and effective courts.11 Judgments create losers. Attackson courts are inevitable, especially during their vulnerable inception period.Since judges lack the ‘purse and the sword’ to defend themselves, to someextent courts must rely on politics to function effectively. Politics thus threat-ens judicial independence, but it is also vital for the protection of embryoniccourts. This conundrum raises the central question considered in this article: isjudicial independence a useful measure of judicial effectiveness?

Vietnam has been selected for study because the complex interplaybetween politics and judicial power is still fresh in the minds of judges andlawyers. Economic courts, which form the focus of this study, were recentlyestablished in 1994. Comparisons with judicial reforms in China are madewhere they shed light on the pace and depth of judicial reforms in Vietnam.

After briefly discussing judicial reform projects in part II, the article in partIII proposes using judicial power to evaluate the effectiveness of court reformsin Vietnam. Parts IV–VI then use a series of cases studies to assess the juris-dictional, discretionary and authoritative power accumulated by economiccourts. The discussion then investigates the potential for judges to develop acoherent system of judicial reasoning that checks or mediates political inter-ference. The article concludes that this is most likely to happen in the commer-cial arena where judicial power does not directly impinge upon party power.

II. TRANSPLANTING JUDICIAL INDEPENDENCE

Most historians agree that Montesquieu overstated the role of judicial inde-pendence in securing liberty in England. Few would claim that the separationof powers was ever a central feature of 18th-century English constitutionallaw, yet disciples of Montesquieu privileged this principle in the USConstitution.12 The US constitutional architecture aimed to create checks andbalances to prevent the accumulation of power that might weaken the reviewpowers of the courts. Of the three main objectives of the US Constitution—representative democracy, separation of powers and judicial review over legis-lation—two were bound up with judicial independence.13 Although the

Judicial Independence in East Asia 839

Development Bank, Manila, 2003), <http://www.adb.org/Documents/Periodicals/Law_Bulletin/bulletin03.pdf> (accessed 30 June 2006). See, eg, LT Dung, ‘Judicial Independence inTransitional Countries’ (2003) Working Paper, UNDP Governance Centre, Oslo; Legal VicePresident, Legal and Judicial Reforms: Strategic Directions (World Bank, Washington DC, 2003)25–35. Also see P Hack, ‘Introduction: Judicial Integrity’ in Andras Sajo (ed), Judicial Integrity,(Martinus Nijhoff, Leiden, 2004) 1–8.

11 See B Friedman, ‘The History of the Countermajoritarian Difficulty, Part One: The Road toJudicial Supremacy’ (1998) 73 New York University L Rev 333, 394–5.

12 B Tamanaha, On the Rule of Law: History, Politics, Theory (CUP, Cambridge, 2004) 52–4;JN Shklar, ‘Political Theory and the Rule of Law’ in AC Hutchinson and P Monahan (eds), TheRule of Law: Ideal or Ideology (Carswell, Toronto, 1987) 5.

13 See L Claus, ‘Constitutional Guarantees of the Judiciary: Jurisdiction, Tenure and Beyond



character of independence differs among common and civil law countries,most constitutions stress the need for judicial independence. In fact thedoctrine is central to most rule-of-law theories.14

That judicial independence is entrenched in Western constitutional theorydoes not explain why it has become a key component in judicial reformprogrammes in East Asia. After all, law and development theorists have fordecades cautioned that Western legal institutions, including judicial indepen-dence, are historically constructed and do not necessarily promote economicbenefits when transferred across political and cultural borders.15

To some extent the ascendancy of US constitutional thinking in legalreform projects in socialist-transforming East Asia mirrors a broader hege-mony propelled by US political, economic and military supremacy.16

Douglass North provides much of the theoretical inspiration for the mostrecent wave of law and development transplants.17 He reasoned from compar-ative historical research that ‘impersonal exchanges with third-party enforce-ment [through effective judicial systems] has been the crucial underpinning ofsuccessful modern economies involved in the complex contacting necessaryfor modern economic growth’.18 As a corrective, he urged international agen-cies to refashion commercial courts in the developing world into the ‘neutral’Western mould.19 Many foreign-sponsored law reform projects in socialist-transforming East Asia have adopted North’s thesis and are not only strength-ening the capacity of courts, but also supporting judicial independence.20

It is difficult to recognize Vietnam in western constitutional prescriptions forjudicial independence. As we shall see, judges have limited tenure and areselected through political processes. Politically sensitive judgments aredirected by the party. By any measure courts are not independent from politics.


(2006) 54 AJCL 459, 476–83; G Dietze, The Federalist: A Classic on Federalism and FreeGovernment (The Johns Hopkins Press, Baltimore, 1965) 41–102, 255–6.

14 See generally J Raz, ‘The Rule of Law and Its Virtue’ in Joseph Raz (ed), The Authority ofLaw (Clarendon Press, Oxford, 1979); R Summers ‘A Formal Theory of Rule of Law’ (1993) 6Ratio Juris 127–42.

15 See D Trubek and M Galanter, ‘Scholars in Self-Estrangement: Some Reflections on theCrisis in Law and Development Studies in the United States’ [1974] Wisconsin L Rev 1062,1080–3; see also K Pistor and P Wellons, The Role of Law and Legal Institutions in AsianEconomic Development, 1960–1995 (Asian Development Bank, Manila, 1999) 218–44.

16 See generally U Mattei, ‘A Theory of Imperial Law: A Study on US Hegemony and theLatin Resistance’ (2003) 3 Global Jurist Frontier <http://www.bepress.com/gj/frontiers>.

17 See D North, Institutions, Institutional Change and Economic Performance (CUP,Cambridge, 1990) 118–21. See also E Jensen, ‘The Rule of Law and Judicial Reform: ThePolitical Economy of Diverse Institutional Patterns and Reformers’ Responses’ in E Jensen and THeller (eds), Beyond Common Knowledge (Stanford University Press, Stanford, 2003) 345–9.

18 North, ibid 35. 19 See CW Gray and WW Jarosz, ‘Law and the Regulation of Foreign Direct Investment: The

Experience from Central and Eastern Europe’ (1995) 33 Columbia J of Transnational L 1. 20 See P Bergling, Rule of Law on the International Agenda (Intersentia, Antwerpen and

Oxford, 2006) 84–91; and Asian Development Bank, Law and Policy Reform Bulletin (AsianDevelopment Bank, Manila, 2003) <http://www.adb.org/Documents/Periodicals/Law_Bulletin/bulletin03.pdf> (accessed 30 June 2006).



However, this critique only makes the uninformative observation thatcourts in Vietnam differ from western constitutional settings. It does notexplain whether judges possess the power to resolve meaningfully commercialdisputes or assess their transformative capacity to resist external political andeconomic pressure. A conceptual framework is needed in which to evaluatethe capacity of commercial courts in Vietnam to make socially and economi-cally meaningful decisions.

III. JUDICIAL POWER

This article advances the thesis that judicial independence is not a reliablemeasure of judicial effectiveness. Judicial power more accurately predictswhether courts are effective and can make authoritative and socially meaning-ful decisions. Judicial power is not predicated on judicial independence; courtsthat lack judicial independence can still be powerful. The case for promotingjudicial independence to secure civil and democratic rights is not questioned;regrettably many human rights abuses are still committed by States.21 Thisdiscussion focuses instead on the interplay between judicial independence andjudicial power in developing effective commercial courts.

This article assesses judicial power by examining its three commonlyaccepted components.22 First, courts must have jurisdiction over matters ofcommercial controversy. Although they are related, jurisdictional power andjudicial independence are not mutually inclusive. For example, courts in some‘soft-authoritarian’ regimes, such as Singapore, are independent from theexecutive, but they lack jurisdictional power to consider matters that genuinelyconstrain State power,23 such as the constitutionality of State action.Singaporean courts are independent but not jurisdictionally powerful in consti-tutional matters.

Secondly, courts need discretionary powers to make meaningful deci-sions.24 Judicial independence has a complex interrelationship with discre-tionary power. As conventionally conceived, independence is assessed byreference to the structural mechanisms that protect judges from internal and


21 The Office of the High Commissioner for Human Rights promotes judicial independence asa mechanism for citizens to check the power of the State. See ‘Basic Principles on theIndependence of the Judiciary’, adopted by the Seven the United Nations Congress on thePrevention of Crime and the Treatment of Offenders, Milan 26 Aug–6 Sept 1985; indorsed by theGeneral Assembly Resolutions 40/32 of 29 Nov 1985 and 40/146 of 13 Dec 1986.<http://193.194.138.190/html/menue3/b/h_comp50.htm>.

22 See P Solomon, ‘Courts in Russia: Independence, Power and Accountability’ in Andras Sajo(n 10) 226–30.

23 See L Thio, ‘Rule of Law in Singapore’ in Randall Peerenboom (ed), Asia Discourses ofRule of Law: Theories and Implementation of Rule of Law in Twelve Asian Countries, France andthe US (Routledge, London, 2004) 188–91.

24 See generally K Hawkins, ‘The Use of Discretion: Perspectives from Law and SocialScience’ in Keith Hawkins (ed), The Use of Discretion (OUP, Oxford, 1992) 11.



external pressures. According to the International Bar Association, judicialindependence requires financial and organizational autonomy, security oftenure, adequate remuneration and clear rules governing appointment.25

Political interference, for example, can reduce discretionary power by discour-aging judges from making certain choices. As we shall see, however, politicalpower is a double-edged sword that can both reduce and expand the power ofjudges to make socially meaningful decisions.

Discretionary power is also manifest where judges use legal reasoning toexpand their sphere of influence over economic, social and political matters.The use of such power is revealed in judicial discourse. Unfortunately the fewjudgments published in Vietnam by the Supreme Court rarely give reasons forreaching decisions. Newspaper accounts of court actions are usually highlysensationalist and convey little understanding of courtroom discourse. For thisreason analysis of judicial discretion relies on personal observations by theauthor and interviews with judges and lawyers.

Thirdly, judicial power is also predicated on the authority of judges to makebinding decisions. The successful enforcement of judgments is one way ofassessing this power. Another method is to empirically measure social percep-tions about judicial competence and integrity. Newly constituted courts thatlack social prestige, such as those in Russia, struggle to have their decisionsimplemented.26

Judicial power is sometimes by reference to litigation rates. Even byregional standards commercial litigation in Vietnam is extremely low.27

Coming off a low base, cases have increased less than 35 per cent from 1999to 2005.28 According to this measure Vietnamese courts lack power to resolvecommercial disputes.

Litigation rates, however, are not necessarily an accurate gauge of judicialpower in Vietnam. McMillan and Woodruff have shown that most Vietnamesebusinesses prefer to use relational connections rather than courts to resolve


25 See full text of the International Bar Association standards <http://www.ibanet.org/pdf/HRIMinimumStandards.pdf>. Vietnam’s Chief Justice, Pham Hung, signed the ‘BeijingStatement of Principles of Judicial Independence’ in 1997. This non-binding statement does notdiscuss the sensitive question of judicial independence from political interference.<http://www.lawasia.asn.au/uploads/images/Beijing_Statement.pdf> (accessed 16 June 2007).

26 See P Kahn, ‘The Russian Bailiffs Service and the Enforcement of Civil Judgments’ (2002)18 Post-Soviet Affairs 148–81.

27 In 2002 the annual inflow of cases filed in Vietnamese courts was approximately 200,000 or0.00251 cases per person. During the same period there were approximately 7 million cases inChina or 0.00583 cases per person, over double the rate in Vietnam.

28 Average annual increases in litigation are difficult to estimate because litigation rates havenot increased steadily. For example, over 1280 new cases were filed in 1999, only 598 new caseswere filed in 2002, but the litigation rate rose to 1,260 new cases in 2005. Civil litigation rates arerising much faster. There were approximately 25,000 cases in 1994 rising to over 50,000 in 2005.See Toa An Nhan Dan Toi Cao, ‘Bao Cao Tong Ket Cong Tac Toa An Nam 2005 va PhuongHuong Nhiem Vu Cong Tac Toa An Nam 2006’ (Report on 2005 and the plan for 2006 SupremePeople’s Court) (2005).



commercial disputes.29 It is possible that as the economy grows and largerdomestic firms transact more frequently with foreigners (especially thoserequiring formal contracts), legal rules may increasingly supplement thepersonal sentimental bonds that order commercial exchanges.30 This transfor-mation may stimulate more demand for court-based dispute resolution. Forexample, over the last decade disputes among companies have become thefastest-growing form of litigation in China.31 So far economic developmenthas not stimulated demand for litigation in Vietnam. The number of privatefirms employing more than 100 staff has increased tenfold during the last 10years, but research suggests that demand for litigation has scarcely grown.32

Mainly for reasons concerning cost and enforcement, commercial arbitrationhas not become a credible alternative to court-based litigation in Vietnam.

Some Vietnamese commentators blame low commercial litigation rates inVietnam on poorly trained judges, underdeveloped laws and inefficient courtadministrators.33 Foreign commentators add to this list factors that limit judi-cial independence such as a lack of tenure for judges, poor salaries and partyinfluence over court administration.34 The following discussion contends thatstructural reforms alone will not create powerful courts; in addition judgesneed jurisdictional, discretionary and authoritative powers.

IV. JURISDICTIONAL POWER

There are three levels of courts in Vietnam.35 The Supreme Peoples Court (ToaAn Nhan Dan Toi Cao) is responsible for judicial work (cong tac xet xu), hearingappeals and supervising and reviewing decisions made by provincial courts. Atthe second level, provincial/city courts hear first instance and appellate cases.Over 600 district-level courts at the third level hear first instance cases. Judgesare organized into chambers of courts that specialize in criminal, civil, economic,labour, military and administrative law. Because of the low number of cases,expertise in commercial matters is only developing in superior-level courts.


29 J McMillan and C Woodruff, ‘Interfirm Relationships and Informal Credit in Vietnam’(1999) 114 Quarterly J of Economics 1285. A recent survey confirms these findings. Leadco,‘Diagnostic Study on the Functioning of Existing Commercial Disputes Resolution System:Judicial and Non-Judicial’ (Supreme People’s Court, June 2007) 63–5.

30 A survey recently showed that higher income groups (9 per cent) were almost twice as likelyto have used the courts than low-income groups (5 per cent). See UNDP, ‘Access to Justice:Survey from the People’s Perspective’ (unpublished paper, Hanoi, 2004) 11.

31 See H Fu, ‘Putting China’s Judiciary into Perspective’ in Jensen and Heller (n 17) 199–200. 32 Large private firms have increased from approximately 100 in 1994 to over 1,000 in 2004.

See M Taussig, ‘Private Sector Development Project, Asian Development Bank’ (unpublishedreport, Hanoi, March 2004).

33 See Interagency Steering Committee, ‘Comprehensive Needs Assessment for theDevelopment of Vietnam’s Legal System to the year 2010’ (Ministry of Justice, 2002) 27; Leadco(n 29) 58–69.

34 See B Quinn, ‘Vietnam’s Continuing Legal Reform: Gaining Control over the Courts’(2003) 4 Asian-Pacific L and Policy J 431.

35 Law on the Organization of Courts 2002; Leadco (n 29) 24–6.



As in China, Vietnamese courts lack powers to enforce constitutionalcommands or review administrative acts for bias,36 but economic and civilcourts possess broad jurisdictional powers over most types of commercialdisputes.37 The division of jurisdictional powers among these courts follows theSoviet distinction between transactions for profit and necessity. Rather confus-ingly, economic courts have jurisdiction over corporations and contracts forprofit, while civil courts have jurisdiction over other commercial transactionssuch as intellectual property. Together these courts have jurisdictional power tohear most socially important commercial cases but, as the next section argues,they lack the discretional power to expand creatively their jurisdictional powers.

V. DISCRETIONARY POWER

The second element of judicial power concerns the discretionary power tomake significant decisions. This power is the most difficult to evaluate. Notonly is it shaped by the political and legal structures that regulate courts, butalso by the epistemological assumptions underlying judicial decision-making.

A. Structural Constraints on Discretionary Power

Most literature about Vietnamese courts focuses on the structural environ-ment, such as State policy towards the courts, court administration and party‘management’ of judges.38 This discussion is necessary because it maps theregulatory context governing judicial discretionary powers. But, as we shallsee, structural analysis is only suggestive—a proxy. What really matters iswhether judges are capable and willing to use interpretive reasoning to medi-ate political, economic and social imperatives.

1. State policy concerning judicial power

Revolutionary leaders in Vietnam during the high-socialist period(1945–1986) rejected the need for powerful courts. They frequently invokedLenin’s observation that under capitalism ‘judicial powers are an exploitationmachine for the bourgeoisie’.39 During this time judges were expected to


36 Constitution 1992, Art 91; Ordinance on Administrative Procedures 2003. Also see MDowdle, ‘Of Parliaments, Pragmatism, and the Dynamics of Constitutional Development: TheCurious Case of China’ (2002) 35 New York University J of Intl L and Politics 1, 22–32.

37 Civil Procedure Code 2004, Arts 24 and 29. 38 See, eg, P Nicholson and NH Quang, ‘The Vietnamese Judiciary: The Politics of

Appointment and Promotion’ (2005) 14 Pacific Rim L and Policy J 1, 14–22.; BJ Quinn, ‘LegalReform in the Context of Vietnam’ (2002) 15 Columbia J of Asian L 219, 245–6.

39 For a comprehensive account about the pre-doi moi Vietnamese court system see PNicholson, Borrowing Court Systems: The Experience of Socialist Vietnam (Martinus Nijhoff,Leiden, 2007) part 2.



follow unquestionably party and statutory rulings and educate the people toobserve the law.40 Courts were treated as instruments of State rule andWestern notions of judicial independence were dismissed as ‘bourgeois’propaganda.41

Following doi moi (renovation) reforms in 1986, the party decided that fiatand moral rule could no longer govern a modern industrial society. Drawingfrom constitutional changes introduced in the Soviet Union under perestroika,the party in 1991 introduced the nha nuoc phap quyen (or ‘law-based State’)doctrine.42 It called for stable, authoritative and compulsory law; equality ofeconomic sectors before the law; the use of law to constrain and superviselegal enforcement; and a judiciary capable of resolving private, commercialdisputes. Unlike Soviet reforms, the party in Vietnam retained phap che xa hoichu nghia (socialist legality), a doctrine that denied the very possibility ofjudicial independence from party ‘leadership’.43

The conceptual dualism set in motion by these opposing ideals is reflectedin the 1992 Constitution, which requires judges to determine cases accordingto the law, protect the ‘collective rights and the lives, property, freedom,honour and dignity of citizens’, and, at the same time, preserve ‘socialist’legality, the State and the people’s right to mastery.44 Significantly for ourdiscussion, courts in China have not allowed a similar State ideology toprevent them from gaining meaningful discretionary powers.45

2. The structural independence of the judiciary

The notion of judicial independence from the State needs rethinking in Chinaand Vietnam’s polity. In both countries there is a functional division, ratherthan a separation of powers among State organs.46 The ‘concentration-of-power’ (tap trung quyen luc) doctrine in Vietnam places the NationalAssembly at the apex of State power and invests it with powers, which arerarely used, to supervise court decisions.


40 Circular Letter No 556-TT issued by the Prime Minster on 24 Dec 1958. Also see PVanBach, ‘Le Nin Voi Van De Phap Che Xa Hoi Chu Nghia’ [Lenin and Socialist Legality] [1970]Tap San Tu Phap 9–16.

41 See generally Le Trung Ha, ‘Chuyen Huong To Chuc Cua Cac Toa An Nhan Dan DiaPhuong De Dap Ung Voi Tinh Hinh va Nhiem Vu Moi’ [Changes in Local Court to Meet theRequirements of the New Conditions and Requirements] (1965 ) Tap San Tu Phap 1, 2.

42 See Author Unknown, Sua Doi Hien Phap Xay Dung Nha Nuoc Phap Quyen Viet Nam DayManh Su Nghiep Doi Moi [Amending the Constitution, Establishing a ‘law-based State’ andPromoting Doi Moi Achievements] (1992) 30, 32–3, 37.

43 See P Solomon, ‘Gorbachev’s Legal Revolution’ (1990) 17 Canadian Business L J 184–94.For a discussion of socialist legality in Vietnam see P Van Bach (n 40) 9–16.

44 See Law on the Organization of People’s Courts 1992, article 1; also see VietnameseConstitution 1992, Art 126.

45 See R Peerenboom, China’s Long March toward the Rule of Law (CUP, Cambridge, 2002)302–9.

46 See BN Son, ‘Su Doc Lap Cua Toa Na Trong Nha Nuoc Phap Quyen’ [Independence of theCourt and the Rule of Law] [2003] Tap Chi Nghien Cuu Lap 43–50. A similar constitutionalconfiguration exists in China see Perrenboom (n 45) 85.



Party ‘leadership’ (su lanh dao cua dang) over the courts is a more signif-icant structural constraint to judicial independence.47 According to PolitburoResolution No 8 on Forthcoming Principal Judicial Tasks 2002: ‘The partyshall lead judicial agencies closely in political organization and personnelmatters and ensure that the judicial activities really follow the viewpoints ofthe party and the law of the state.’ Like other public employees, judges arerequired to ‘strictly abide by the party’s lines and policies’.48

As in China, recruitment and selection procedures also induce judges tofollow party policies and directives.49 The nomenkultra system ensures that over90 per cent of judges are party members. Judges are reappointed (every fiveyears) according to selection criteria that stress ‘loyalty to the motherland’, goodmoral character, especially honesty and truthfulness, legal knowledge andsupport for socialist legality.50 Selection committees generally interpret thesehighly subjective criteria by reference to a judge’s compliance with party poli-cies and professional competence in a field of law.51 Judges aspiring to highjudicial positions are inculcated with the finer points of party ideology and poli-cies at the Ho Chi Minh Political Academy.

Party groups (dang bo and chi bo) interpret and disseminate central partyrulings to judges. For example, the Hanoi Party Group interpreted PolitburoResolution No 8 2002 for the Hanoi Provincial Court.52 Judges and court offi-cials attend regular ‘party group’ meetings to discuss party resolutions pertain-ing to court work. Senior party cadres working inside the court system leaddiscussions by repeatedly sensitizing judges to the political and social impli-cations of their decisions. Loyalty is assessed during monthly self-criticism(phe binh tu phe binh) meetings. In short, judges are not structurally indepen-dent from the party, which operates both inside and outside courts.


47 Constitution 1992, Art 4. 48 Ordinance on Public Employees 1998, (as amended) Arts 1(4), 6(2). 49 These views are based on over 50 interviews with Vietnamese judges [Interviews with judges]:

Dang Quang Phuong, Director, Institute for Judicial Science, Supreme Court, Hanoi Mar 1999, Sept1999, Feb 2000, Mar 2002; Ngo Cuong, Vice Director, Institute of Judicial Science, Hanoi, Feb 2002,Mar 2004, Jan 2005; Nguyen Khac Cong, Judge Supreme Court, Hanoi, Oct 1997, Mar 1999, Oct2002; Nguyen Van Dung, Judge, Economic Division, Supreme Court, July 1998; Ma 1999; NguyenNien Bich, Judge Supreme People’s Court, Hanoi, Mar 2004; Nguyen Thi Loi, Deputy Chief Judge,Civil Division, Hanoi Peoples Court, Hanoi July 1998, Mar 1999, June 2003; Hoang Huu But, ViceChief Justice, Hanoi People’s Court, Sept 2002, Mar 2004; Chung Lam, Chief Judge, Hoan KiemDistrict Court, Mar 2004; Tran Thi Hai, Chief Judge, Civil Jurisdiction, Dong Da District Court,Hanoi, Sept 1999, Aug 2003. For details about China see S Liu, ‘Beyond Global Convergence:Conflicts of Legitimacy in a Chinese Lower Court’ (2006) 31 Law and Social Inquiry 82–8.

50 Selection committees comprise deputies from people’s councils, government officials andsenior judges. See Law on Organization of the People’s Courts 2002, Arts 37, 40, 41.

51 According to Item II of Inter-circular No 05/TTLN of the Ministry of Justice and SupremePeople’s Court Providing Guidelines of the Ordinance on People’s Judges and Assessors 1993,‘loyalty to motherland’ and ‘firmly defending the socialist legality’ are partially based on ‘politi-cal knowledge certificates’ (chung chi trinh do ly luan chinh tri) issued by national political insti-tutes (hoc vien chinh tri quoc gia).

52 Toa An Nhan Dan Thanh Ha Noi, Bao Cao Ket Qua 4 Nam Thuc Hien Nghi Quyet So 08-NG/TW Ngay 2.1.2002 [Report on the Results of Four Years Implementation of Resolution No08-NG/TW Ngay 2 Jan 2002] (Hanoi, 3 Nov 2005).



3. Post-doi moi judicial reforms

Almost a decade after judicial reforms began in China, Vietnam embarked onits first major reforms in 1992.53 Like China, reforms sought to reconfigurecourts geared for a command economy to resolve rights-based disputes in themixed-market economy. Attempts were made to centralize court administra-tion by relocating powers to appoint judges from local government to the pres-ident of Vietnam. Programmes were introduced to professionalize thejudiciary through tertiary education and specialized legal training courses.Reforms also sought to reduce government authority over local courts bygiving superior courts greater powers to promote law-based decision-makingthroughout the court system.54

The second round of court reforms in 2002 aimed to concentrate furtherpower over local courts into the hands of the Supreme Court.55 Administrativecontrol over court budgets was transferred from local government authoritiesand the Ministry of Justice to the Supreme People’s Court (SPC). Furtherstrengthening judicial self-management, the chief justice rather than the pres-ident now appoints judges.56 Without central political support from thePolitburo, the SPC would have been powerless to regain management powersfrom the Ministry of Justice and local government. Naturally the boundariesbetween party and State are never precise in Vietnam.

The third round of reforms followed a wave of press articles during 2000and 2001 denouncing false prosecutions, judicial corruption and the criminal-izing of civil and economic cases.57 Responding to media criticism, thePolitburo issued Resolution No 8 2002, which criticized aspects of judicialwork (cong tac tu phap)58 and called for strong and stable judicial personneland clearer organizational structures and responsibilities.59


53 For details about Chinese reforms see S Lubman, Bird in a Cage: Legal Reforms in Chinaafter Mao (Stanford University Press, Stanford, 1999) 250–97. For discussions about judicialreform in Vietnam see Le Cam, ‘Cai Cach He Thong Toa An Trong Giai Doan Xay Dung NhaNuoc Phap Quyen Viet Nam’ [Reform the Court System to Build Up a Law Based State inVietnam] [2002] Nghien Cuu Lap Phap 21; N M Cuong, ‘Yeu Cau Cua Viec Xay Dung Nha NuocPhap Quyen Doi Voi Doi Moi To Chuc va Hoat Dong Cua Cac Co Quan Tu Phap’ [How toReform Judicial Authorities to Build up a Law-Based-State] [2002] Nghien Cuu Lap Phap 30.

54 See Ba Tuan ‘De Chanh An TANDTC Co Dieu Kien Bo Nhiem Tham Phan Duoc Xac ThucHon’ [Allowing the Chief Justice of the Supreme People’s Court the Ability to Nominate JudgesWill Be More Realistic] [19 Mar 2002] Phap Luat 2.

55 See Law on the Organization of People’s Courts 2002, Arts 45, 46. 56 ibid Art 40. 57 For a discussion about the Nam Cam case and court scandals see Unknown Author,

‘Vietnam Da Xuat Hien Toi Pham Co To Chuc o Trinh Do Cao’ [High-Level Organised CrimeMakes Its Appearance in Vietnam] [15 June 2002] Vnexpress.

58 The term cong tac tu phap refers to all the agencies connected with courts, including theprocuracy and police.

59 See V Chi Cong, ‘Thay Gi Ve Cong Tac To Chuc va Quan Ly Can Bo Qua Vu An TruongVan Cam’ [What Can be Seen About Organizing and Managing Cadres Through the Truong VanCam Affair] [2002] Tap Chi Cong San, <http://www.tapchicongsan.org.vn>.



Perhaps the introduction of a hybrid inquisitorial adversarial system willprove to be the most significant steps towards judicial independence. It hasbeen hailed by the party as a buoc dot pha (breakthrough) that will bring‘democracy’ to the courtroom.60 Yet in contrast to more far-reaching reformsin China, Vietnam has retained most elements of the Soviet-inspired inquisi-torial system that gives judges powers to dominate courtroom discourse andoversee the production of evidence.61 Although the reforms fall well short offully realized adversarial systems, as we shall see they have given lawyersmore opportunities to compel judges to frame their decisions within legalparameters.62

To recap, politics both protects and constrains judicial power. Law reformsaim to defend judges from interference by government agencies, but they alsopreserve the party’s prerogative powers to lead the courts. Structural analysisof this kind suffers from a major shortcoming. It does not tell us how judgesactually decide cases, only what the external legal and political regulatoryenvironment expects from them. To understand the potential for judges to usetheir discretionary power to make meaningful decisions it is necessary toexamine judicial discourse.63

B. Judicial Narratives and Discretionary Power

The ‘artificial reason of law’ invoked by Sir Edward Coke in 1607 against thepolitical interventions of the King sought to give judges and lawyers powerover how moral, economic and political imperatives influenced courtroomdiscussions.64 Although it is not the complete story, political allies also playedtheir part and the judge’s ‘voice’ protected the court. The evolution of judicialreasoning and a professionalized system of law in England made it possiblefor judges to partially insulate themselves against clientelism, nepotism, hier-archical status and political cronyism. As Jiri Priban observed, ‘the “normali-


60 Politburo Resolution No 49 NQ/TW on the Strategy of Judicial Reform to 2020. 61 See R Peerenboom, ‘What We Have Learnt about Law and Development? Describing,

Predicting, and Assessing Legal Reforms in China’ (2006) 27 Michigan J of Intl L 823, 844–7. 62 See N Phu Son, ‘Bo Luat To Tung Dan Su Can The Hien Thin Than Cai Cach Tu Phap’

[Civil Procedure Code Should Express the Spirit of Judicial Reform] [2004] Tap Chi Nghien CuuLap Phap 24–31; Bach Quoc An, Nguyen Khanh Ngoc, ‘Mot So Co Hoi va Thach Thuc Dat RaDoi Voi He Thong Phap Luat va Tu Phap Nuoc Ta Trong Boi Canh Thuc Hien Hiep Dinh ThuongMai Viet Nam Hoa Ky’ [Opportunities and Challenges for the Systems of Laws and Justice inVietnam in the Context of Implementing the Bilateral Trade Agreement Between Vietnam andUS: Some Legal Aspects of the BTA between Vietnam and US] [2002] Thong Tin Khoa HocPhap Ly 102–37.

63 Discourse is taken to mean ‘all forms of spoken interaction, formal and informal, and writ-ten texts of all kinds’, especially political, economic, moral, cultural and legal modes of commu-nication’. J Potter and M Wetherell, Discourse and Social Psychology (Sage Publications,London, 1987) 7.

64 See C Hill, Intellectual Origins of the English Revolution Revisited (OUP, Oxford, 1997)228–30; J Ferejohn and P Pasquino, ‘Rule of Democracy and Rule of Law’ in JM Maravall andA Przeworski (eds), Democracy and the Rule of Law (CUP, Cambridge, 2003) 244.



sation” function of legalist fictions helps to reduce the complexity of socialreality and set up the structures and social communication framework of posi-tive law’.65 Aided by ‘artificial’ judicial reasoning, law was well on the wayto becoming an institutionalized presence shaped by increasingly autonomouscourts. What is instructive for our purposes is that creative legal reasoning wasused to mediate political interference long before formal constitutionalsettings safeguarded judicial independence.

For centuries courts in equity have exercised broad discretionary powers ofright and justice to interpret legislation. But in civil law jurisdictions likeVietnam, judges are relegated in the official discourse to the secondary func-tion of passively and mechanically applying the law to resolve commercialcases.66 They are expected to assume that legislation is comprehensive, inter-nally consistent and that for every social problem there is a governing rule. Inbrief, the law is supposed to have already judged and judges mechanically fitfacts into the matrix of law. According to this official portrait, Vietnamesejudges lack the discretionary power to manufacture ‘legal fictions’ to mediatepolitical interference.

Judges in every legal system need discretion to reconcile the gap betweenlegislative rhetoric and reality. Even in mature civil law systems, such as inFrance, statutes alone cannot possibility provide solutions to every problem.67

The problem is particularly acute in China and Vietnam, where commerciallegislation is frequently contradictory and incomplete.68 The following discus-sion examines judicial discourse to ascertain how Vietnamese judges resolvethe many ‘hard’ commercial cases that are not directly covered by statute.69 Itlooks behind the official portrait to see whether judges have developed aninterpretive tradition that gives them discretionary power to creatively applylaw to new situations. It also searches for accountability mechanisms that haveevolved to ensure that judges do not overreach themselves and project powerbeyond their constitutional and political mandate.

1. Party-mediated judicial discretion

To begin this analysis we need to determine how much space party leadershipgives judges to interpret creatively law. Courtroom discourse in Vietnam ispoorly researched. But one issue is clear: judicial decision-making is not


65 J Priban, ‘Legitimation Between the Noise of Politics and the Order of Law’ in J Priban andD Nelken (eds), Law’s New Boundaries: The Consequences of Legal Autopoiesis (Ashgate,Aldershot, 2001) 107. Also see C Fried, ‘The Artificial Reason of the Law or: What LawyersKnow?’ (1981) 60 Texas L Rev 35–58.

66 Interviews with judges. 67 See J Merryman, The Civil Law Tradition (Stanford University Press, Stanford, 1969) 89. 68 See M Woo, ‘Law and Discretion in the Contemporary Chinese Courts’ (1999) 8 Pacific

Rim L & Policy J 581, 583–6. 69 In a recent survey district court judges rated commercial cases as the most difficult they

faced. UNDP, Report on Survey Needs of District People’s Courts Nation Wide (2007) 236–41.



‘independent’ (doc lap) from ‘party leadership’ (su lanh dao cua dang).Judges interviewed by the author understood judicial independence to meanfreedom from party ‘interference’ (su can thiep), but conceded the distinctionbetween party leadership and interference is unclear.70 Moreover, there isuncertainty in the minds of some judges whether informal directives thatspecifically address particular cases constitute party leadership.

Take, for example, the prosecution of traders in 2004 for circulating coun-terfeit VAT invoices.71 It was clear from the facts that the defendants violatedan administrative provision that prevented the commercial sale of VATinvoices. The procuracy, however, failed to prove the more serious criminalcharge that the defendants had fraudulently dealt with negotiable instru-ments.72 They faced the evidentiary problem that VAT invoices are notconsidered negotiable instruments under the Civil Code 1995, because they donot have an intrinsic negotiable value.

According to the defence counsel, the party instructed the trial judge(Nguyen Khac Son) to use ‘legal analogy’ (ap dung phap luat tuong tu) toovercome evidentiary deficiencies. Developed in the Soviet Union, thisdoctrine permits judges to criminalize (hinh su hoa) otherwise legal behaviourthat seriously damages State interests.73 The defence counsel believes theparty decided that the economic harm caused by the loss to State revenue wassufficiently serious to suspend legal reasoning—this form of deliberationwould have acquitted the defendants. On appeal the Supreme People’s Courtin February 2005 upheld the provincial court’s judgment.

Lawyers report that in sensitive cases judges converse in twin narratives.74

Judges are careful to portray their decisions as passively and mechanicallyapplying the law—a textual narrative. But where textual narratives do notproduce desired outcomes, judges quietly turn to party ‘policy’ narratives thatpermit creative law-making to preserve the ‘State benefit’. In the VAT case,for example, the presiding judge was instructed to use ‘legal analogy’ toexpand a criminal penalty well beyond its textual meaning in the Penal Code1999.

Party ‘leadership’ is less direct and prescriptive for cases which are notpolitically sensitive. Instead it conveys broad principles that set the generalpolitical and moral tone for decision-making. Within these vague guidelines


70 Interviews with judges. 71 Case No 57, First Instance Criminal Court, Thai Binh Provincial People’s Court, 8 Mar

2004. Interview with the defence counsel, Hanoi, Mar 2005. 72 Criminal Code 1999, 181. 73 Art 16 of the repealed 1926 Soviet Criminal Code provided that ‘if any socially dangerous

act is not directly provided for by the present Code, the basis and limits of the responsibility forit shall be determined by application of those articles of the Code, which provide for crimes mostsimilar in nature’. Also see Dinh, Van Que, Phap Luat Thuc Tien va An Le [Legal Practice andPrecedent] (Truth Publishing, Hanoi,1999) 181–7.

74 See Interviews with lawyers from four Hanoi-based law firms Investconsult, Vilaf, Visionand Associates, N H Quang and Associates and Leadco, between March 2002 and April 2007[Interviews with lawyers].



judges have considerable discretion to determine the ‘State benefit’ (loi ichcua nha nuoc). For example, in an action taken by a State-owned enterprise(SOE) in the Hanoi Economic Court in 2003, the judge concluded that theState benefit was preserved by allowing a State-owned company to recoverunlawfully transferred foreign currency. Confiscating the money would havecompromised the company’s competitiveness against the private sector. Incontrast, the procurator thought that the State’s benefit was served by confis-cating and returning the money to State revenue.

To summarize, in sensitive trials party ‘leadership’ authorizes judges tocreate legal fictions to secure politically acceptable outcomes. More generally,however, party narratives convey few concrete guidelines to understand horta-tive party policies and the ‘State benefit’. As the next section shows, ratherthan creatively using legal reasoning to fill this regulatory vacuum, mostjudges turn to superior State and judicial bodies to resolve ‘hard’ commercialcases.

2. Government directives to judges

Like their counterparts in China, Vietnamese courts have for decades func-tioned essentially as local government offshoots.75 Judges rely on governmentofficials to investigate litigants, gather evidence and in many cases determineliability. There is compelling evidence judges in both countries continue torely on government officials for discretionary guidance in ‘hard’ cases.

Consider the action by New World Cong Ty against the Nghia Tan (Ward)People’s Committee in Vietnam.76 A dispute arose in 2002 between NghiaTan People’s Committee in Hanoi and New World over a joint-venture agree-ment for an amusement park. The People’s Committee agreed to provide landin return for a profit fixed at seven million dong per month (approximatelyUS$430). The joint venture did not perform to expectations and after one yearthe People’s Committee accepted a reduced profit share of one million dongper month.

When the joint venture terminated, the People’s Committee demandedpayment for the profit forgone over the five-year term of the contract. Inresponse New World petitioned the economic division of the Hanoi ProvincialCourt to declare the contract invalid. It argued that the People’s Committeehad waived its contractual right to the profit and the joint-venture agreementwas thus void and unenforceable. In the alternative, it argued that the People’sCommittee was forbidden by the Ordinance on Economic Contracts 1989


75 In a recent survey district court judges admitted they routinely defer to the opinions givenby local government bodies. See UNDP (n 69) 298–300. Also see Z Qianfan, ‘The People’s Courtin Transition: The Prospects of the Chinese Judicial Reform (2003) 12 J of Contemporary China69–101.

76 This case study is based on information provided in interviews with lawyers working forLeadco during March 2003 and July 2004.



from entering economic contracts and lacked the authority under the LandLaw 1993 to lease land.

Hoang Huu But (the trial judge) based his judgment on a letter from theCau Giay District People’s Committee confirming that the ward-levelPeople’s Committee was authorized to enter the joint-venture agreement. Hereasoned that once instructed to lease the land, the ward-level People’sCommittee was legally compelled to ‘obey a higher level’ (tuan theo menhlenh cap tren). Rather than creatively interpreting the statutory law to protectthe ward-level People’s Committee, the judge used the letter from the districtpeople’s committee to override central legislation. Lawyers believe this caseis explained by local protectionism; that local officials pressured (suc ep) thejudge to disregard legislation and find in favour of the State.

The notion that State officials possess the expertise and knowledgerequired to assess liability is deeply embedded in judicial thinking. Take, forexample, Nguyen Kim-Manh’s action against Pham Loc (Director) and HangPhim Truyen VN (Film Production Studio VN) for breach of copyright (banquyen).77 He alleged the defendants had infringed his copyright in a novelentitled Hon Nhan Khong Gia Thu (literally ‘Marriage without Registration’)by changing key elements of the story during the adaptation of the novel intoa film script.

The protagonist in the novel was depicted as an ace fighter pilot, war heroand a complex man struggling against his moral imperfections. Among hismany moral transgressions, the protagonist refused to recognize his illegiti-mate son. Glossing over these moral contradictions, the film script presenteda one-dimensional war story depicting tinh yeu thuong mai (commercial love)relationships.

Nguyen Thi Loi, the presiding judge in the Hanoi People’s Court, wasasked to determine whether the producer’s obligation to comply with censor-ship directions overruled the author’s property rights under Article 751(e) ofthe Civil Code.78 Censors from the Ministry of Culture and Informationrequested script changes without specifying which elements of the story wereunsuitable for public viewing. The author, Nguyen Kim-Manh, contended thatthe producers breached copyright by making unnecessary changes.

The judge could not resolve the case from a textual reading of the CivilCode. But rather than creatively interpreting the Code, she called on officialsfrom the Political Bureau of the Air Force and the Censorship Committee todetermine liability. She acted like a bureaucratic clerk in ensuring that legalprocedures were followed and the correct penalties were applied, but referredthe substantive decisions to layers of approval within the party and State.


77 This case study is based on interviews with Nguyen Thi Loi, Deputy Chief Judge, CivilDivision, Hanoi People’s Court, Hanoi, Apr 1999 and Sept 1999, and the transcript of the firstinstance judgment Case No 41, 16–19 Oct 1998.

78 Art 751(e) of the Civil Code gives authors rights to ‘protect the integrity of their work andpermit or not permit other persons to alter the content of the work’.



The deeply engrained deference shown by many judges to higher authori-ties (cap tren) allows government agencies to dominate courtroom discourseand inhibit the emergence of interpretive or hermeneutic narratives. This prac-tice discourages judges from arrogating discretionary power to creativelyapply law to new and novel situations.

3. Judicial interference in court decisions

Higher-level courts are not generally considered a threat to judicial power,except when they erode judicial discretion by directing inferior court decisionsoutside the appeal process. Direction of this kind routinely takes place inChina and Vietnam.79 Judicial committees (uy ban tham phan) comprisingsuperior and inferior judges review most inferior court cases in Vietnambefore decisions are announced.80 In a recent survey, 68 per cent of judgesquestioned admitted that in closed sessions they ‘request case outcomes’(thinh thi an) from senior judges.81 In principle majority decisions prevail, butin practice chief judges dictate the outcomes in ‘hard’ cases. Although there isno legislative basis for the practice, lawyers interviewed believe this type ofcollegial decision-making is still widely practised as a means of inducingconsistency and minimizing corruption. By encouraging a culture of ‘firstdecide then try’ (quyet dinh truoc khi xet xu), collegial decision-makingincreases the accountability of inferior court judges at the expense of theirdiscretionary power.82

‘Professional guidance’ (chi dao chuyen mon) by the Supreme Courtconstitutes another internal control over the emergence of hermeneutic narra-tives. The practice was borrowed from China in the 1950s to unify and stabi-lize the application of law by inferior court judges possessing little or no legaltraining.83 Professional guidance takes the form of individual rulings that areapplicable to specific cases. It contrasts with common law precedents in notnecessarily having a general application.

Judges routinely seek professional guidance from higher authorities toavoid the appearance of interpreting the law in sensitive cases that involveforeigners, novel commercial disputes and claims against the party and State.Consider the proceedings in the Hanoi City Court taken by Hyosus HongKong Ltd against Vietnam Commercial Joint Stock Bank (issuing bank) for


79 See Peerenboom (n 9) 67–92. 80 Interviews with lawyers. Also see Sida Liu (n 49) 91–4. 81 Even higher levels of procurators (94 per cent) and lawyers (89 per cent) believe it is a

frequent practice. See UNDP (n 69) 250–2. 82 B Ngoc Son, ‘Su Doc Lap Cua Toa Na Trong Nha Nuoc Phap Quyen’ [Independence of the

Court and the Rule of Law] [2003] Tap Chi Nghien Cuu Lap 43–50. 83 Interviews Dang Quang Phuong (n 49). See generally D Oden, ‘The Role of Courts and

Judicial Style Under the Soviet Civil Code’ in D Barry, F Feldbrugge, and D Lasok (eds),Codification in the Communist World: Symposium in Memory of Zsolt Szirmai (1903–1973) (AWSijthoff, Leiden, 1975) 317–31.



failing to honour an irrevocable letter of credit (LC).84 Lawyers acting for thecomplainant believed that the Vietnamese buyer, a large SOE owned by theHanoi People’s Committee, persuaded Hanoi provincial authorities to issue anofficial letter stating that the SOE and Hyosus Hong Kong Ltd were in disputeand instructing the issuing bank to dishonour the LC. According to theUniform Commercial Credit Practice (UCCP) rules governing the contract ofsale, the issuing bank was only entitled to dishonour the LC when a courtfound the seller guilty of fraud.

Rather than hearing the case, the court immediately sought guidance fromthe Supreme Court ‘Judicial Council’ (uy ban tham phan). The JudicialCouncil then sought an administrative ruling from the State Bank to determinewhether State banks should honour the LCs. Rather than using secondary legalsources, such as international practice, legislative deliberations and academiccommentary to inform its own hermeneutic discourse, the Judicial Councilrelied on a government agency to interpret the laws.85

Judicial Council Professional Guidance (chi dao chuyen mon) No 37/TKTon 18 May 1998 froze further proceedings in this and other LC cases.86 Itmade the narrow and technically incorrect argument that LCs are noteconomic contracts and as such are not justiciable by economic courts.Lawyers for the complainants speculated that professional guidance was usedto protect the State benefit by shielding State-owned banks from foreign cred-itors.

This case raises an important problem in Vietnam. Is discretionary powerproperly discharged by presiding judges or is justice better served by includ-ing higher courts, party and government officials in collective decision-making? An answer to this question depends on how much confidence isplaced in the legal system to guide discretionary powers and in presidingjudges to make legally and socially appropriate decisions. A danger withallowing judicial supervision to become too firmly entrenched is that it willcompromise the long-term capacity for judges to develop discretionary powerand make meaningful commercial decisions.

4. Moral and sentimental discourse in the courtroom

According to official thinking, judges are expected to exclusively rely on partyand textual narratives to uphold the law. But judges in China and Vietnam for


84 Uniform Commercial Credit Practice (UCCP) 500 rules developed by the InternationalChamber of Commerce in 1993 forbid issuing banks from dishonoring letters of credit onceprescribed shipping documents have been received by purchasers.

85 The State Bank (Vietnam’s central bank) promulgated Decision No 711, 25 May 2001 andDecision No 1233, 26 Sept 2001, outlining the circumstances in which State-owned banks canissue deferred LCs.

86 For example, the Hyosung Corporation sued the Vietnam Commercial Joint Stock Bank inthe Ho Chi Minh City People’s Court in May 1998 for failing to honour an irrevocable LCs. SeeK Chi, ‘Potential Quicksand’ [1998] Vietnam Economic News 18–19.



decades have found that law rarely produces socially acceptable outcomes. Inorder to generate social legitimacy judges in China and Vietnam (particularlyin lower courts) have used non-legal narratives to paper over gaps, conflicts,and ambiguities in the statutory law. They prefer situationally responsivejustice to a uniform rule of law.

Informality and flexibility are important decision-making techniques forlower courts in China and Vietnam.87 Judges in Vietnam ground their discre-tion on ‘reason and sentiment in carrying out the law’ (ly va tinh trong viecchap hanh phap luat)—a practice that developed during the high-socialistperiod when law alone was not expected to resolve most cases.88 More a polit-ical slogan than a legal principle, this practice seeks outcomes from the factswithout technically and rigidly applying the law. Judges generate legitimacyby conforming to local norms of justice, even when this involves bending orignoring central legal rules.89

In cases observed by the author, judges encouraged litigants to argue theircase using moral and sentimental language.90 In disputes over house owner-ship, for example, claimants invoked principles of fairness (cong bang) andreasonableness (hop ly). A war widow claimed she had a greater ‘social need’(nhu cau xa hoi) for a house than a farmer defending his ownership rights. Alocal government official invoked the sentiment of co long tot voi dan (goodheartedness towards the people) to support his claim for possession of a houseowned by another villager. A district court judge hearing a housing disputeevaluated evidence according to what was ‘reasonable’ in the circumstances.91

It was reasonable, even constitutional, he decided for some clan elders toallow landless relatives to occupy a clan house. Local morality and sentimentin these cases displaced central legal doctrines and other ‘secondary legal’sources that supported a textual narrative.

Sentiment also played a role in deciding an action by Artext Tang Long (aState-owned enterprise) against a private company in the Hanoi ProvincialCourt in 2003. Artext advanced a foreign-currency loan to the privatecompany to fund a wig export business. When the enterprise failed, the privatecompany reneged on repaying the loan, arguing that since the agreementviolated State Bank regulations, it was unlawful and unenforceable.


87 See M Woo, ‘Law and Discretion in the Contemporary Chinese Courts’ (1999) 8 PacificRim L and Policy J 581, 586–92.

88 These comments are based on interviews with a Vietnamese sociologist who specialises instate-village relations. Interviews Hoang Ngoc Hien, Sociologist, Nguyen Du School of CreativeWriting, Hanoi, 21 June 1998, Apr and Sept 1999, Aug 2000.

89 Interviews Tran Thi Hai, Chief Judge, Civil Jurisdiction, Dong Da District Court, Hanoi,Sept 1999, Aug 2000; Chung Lam, Chief Judge, Hoan Kiem District Court, Hanoi, Mar 2004.

90 The author observed five cases in the Vinh Phu Provincial Court in 1994 and three cases inCivil Division of the Hanoi People’s Court in 1998 and four economic, civil and labour cases inthe Hanoi City Court during March and April 2006.

91 The judge erroneously referred to the superseded 1980 Constitution which provide a Stateguarantee to provide housing. Tu Liem People’s Court, Case No 52/DSST, 2 Oct 1995.



Tuan Anh, the trial judge, ordered the private company to repay the loan inan out-of-court settlement. If the case had proceeded to trial, the director ofArtext would have been charged with the serious criminal offence of causinglosses to socialist property. Tuan Anh was persuaded by the moral argumentthat the director made one innocent mistake in his otherwise unblemished trad-ing record. To avoid imposing a custodial sentence, he overlooked contractualrules that clearly showed the loan agreement was unlawful.

In reaching his decision, Tuan Anh treated laws as situationally relevantguidelines rather than absolute, universal and immutable sources of authority.‘Situational validity’ (thoa dang) has a long history in Vietnam, as it firstemerged in pre-colonial dispute resolution.92 It encourages judges to balancecompeting claims for redemptive justice against broader considerationsderived from ‘reality processes’ (qua trinh thuc tai). Judgments are valued forthe skill shown in selectively applying a wide range of local and importedpolitical, economic, moral and legal values to resolve social problems.Securing agreement from interested parties including the party and State ismuch more highly valued than consistently following codified norms andprocedures.

Superior court judges are less likely to use situational decision-making. Forexample, lawyers acting in the previously discussed clan house case, on appealconvinced the Hanoi Provincial Court to overturn the district court decision onthe grounds that the Land Law 1993 did not recognize social obligations torelatives.93 Nevertheless, law-based narratives by no means dominatediscourse in superior courts. In cases observed by the author, provincial courtjudges used political and moral arguments to resolve cases according to thesocial status of litigants. They pointedly extolled the war records and party andcommunity affiliations of socially prominent litigants to pressure less well-connected parties to settle.

So far the discussion has shown that three narratives inform decision-making. Judges are generally careful to portray themselves as followingtextual narratives. Yet in deciding ‘hard’ cases they turn to party policy andthao dang narratives for guidance. From a central legal perspective thao dangnarratives appear to give judges considerable autonomy and discretionarypower. But for judges embedded in the local norms, precepts and practices thatinform thao dang narratives, the appropriate outcome is generally well under-stood. They know more about the ‘rules of the game’ governing their localcommunity than about provincial, national and international rules.94 Theyconsequently require fewer assumptions and generalizations in using thao


92 Interviews with Hoang Ngoc Hien (n 88). 93 Hanoi People’s Court, Case No 20-PTDS, 31 Jan 1996. 94 See generally R Rorty, ‘Justice as a Larger Loyalty’ in R Bontekoe and M Stepaniants (eds),

Justice and Democracy: Cross-Cultural Perspectives (University of Hawaii Press, Honolulu,1997) 11–14; M Walzer, Thick and Thin: Moral Argument at Home and Abroad (University ofNotre Dame Press, Notre Dame, IN, 1994) 4–10.



dang narratives to resolve cases. Put differently, local rules provide thickdescriptions of everyday life and as such are highly prescriptive and nuanced,giving judges little discretionary room to manoeuvre. Laws, on the contrary,are highly edited versions of reality and give judges considerable scope toarrogate discretionary powers to create legal fictions to resolve disputes.

Judicial reforms have triggered a dilemma for the party: while local courtsare expected uniformly to apply central law, they generate legitimacy andauthority by bending these norms to produce situationally responsive justice.After decades of tacitly encouraging thao dang narratives, the party is nowactively encouraging judges to use law-based reasoning mediated by partypolicy to resolve ‘hard’ cases. Central authorities recognize that courts must‘protect the gia tri chung (common values) of human beings’, but encouragejudges to model their understanding of ‘common values’ on laws and partypolicies.95

Further movement towards law-based outcomes depends on the develop-ment of an authoritative set of secondary rules or doctrines to interpret the law.Without secondary rules to guide them, lower court judges may worry moreabout the situational validity of their actions and show less interest in fittingtheir decisions into a broader legal fabric.

5. Developing secondary legal rules

There is a growing awareness among senior party leaders that judges needsecondary rules and legal precedents and doctrines to resolve ‘hard’ commer-cial cases.96 They foresee a rapid increase in ‘hard’ cases as Vietnam furtherintegrates into world markets. Party and State guidelines cannot provide thedetail and nuance judges need to interpret technically complex commerciallaws and arguments. At the same time, narrow textual readings of legislationrarely generate the legal arguments judges need to apply law to case facts.Judges need secondary rules or doctrines to decide in what circumstances it isappropriate to give legislation a broad interpretation that extends legal protec-tion to litigants. They also need doctrines to search for redundancies, orreasons why certain contextual elements in cases are irrelevant.

What is needed is a method of synthesizing secondary rules from appellatecourt decisions, academic commentary and other legal sources. The SupremePeople’s Court (SPC) is leading the way in developing ‘secondary rules’. Ithas recently published selected cassation review decisions from the JudicialCouncil to develop a judicial precedent system. It also publishes similar fact


95 Ngayen Manh Cuong, ‘Yeu Cau Cua Viec Xay Dung Nha Nuoc Phap Quyen Doi Voi DoiMoi To Chuc va Hoat Dong Cua Cac Co Quan Tu Phap’ [How to Reform Judicial Authorities toBuild up a Law-Based-State] [2002] Nghien Cuu Lap Phap 31.

96 See Resolution No 49-NQ/TW June 2006 that instructress the SPC to ‘determining theimplementation of law and developing judicial precedents. See JICA, ‘Vietnam Japan JointResearch on the Development of Judicial Precedents’ (Hanoi, 2007) 203–4.



case judgments (nghi quyet hoi dong tham phan) and guidance letters (thongtu huong dan) that give inferior court judges detailed procedural instruc-tions.97 In another initiative, the SPC has prepared a judicial handbook thatgives inferior court judges broad ethical and procedural advice.

Perhaps because reforms started earlier or more emphasis has been placedon rigorous judicial training, the shift towards legal reasoning has movedfurther in China than in Vietnam.98 In Vietnam cassation review decisionsrarely provide legal reasoning to explain how judges apply the law to the facts.It is consequentially difficult for inferior-level judges and lawyers to ascertainwhether the court’s legal viewpoint applies to similar cases. So far, publisheddecisions have avoided important legal theoretical issues and mainly concernquestions of procedure.

Evidence suggests that judicial precedent and other secondary rules areslowly forming legal doctrines that will eventually assist commercial judges tointerpret legislation and make socially important decisions. Meanwhile, it isstill unclear whether the party and State will countenance a hermeneutic tradi-tion that gives administrative court judges powers to transpose political, moraland economic precepts into legally justiciable questions. This road leads topolicy-based judicial responses that may challenge party ‘leadership’.

C. The Role of Lawyers in Promoting Hermeneutic Narratives

Before doi moi reforms took hold in the mid-1990s, lawyers were peripheralplayers in court cases. State authorities appointed lawyers in serious criminaltrials, but litigants in civil cases went unrepresented.99 While fewer than 10per cent of litigants in post-doi moi Vietnam have legal representation, approx-imately 50 per cent are represented in economic cases. Lawyers believe thatadversarial reforms, though limited in scope, have given them more opportu-nities to insist that judges base outcomes on legal arguments.100

A case decided by the economic division of the Hanoi Provincial Court in2006 illustrates this process.101 UBIK Design Company brought an actionagainst the Union Metropole Joint Venture Company claiming a service fee


97 eg, the Annual Report in 2000 gave economic court judges doctrinal rules to distinguish civiland economic cases. See Toa An Nhan Dan Toi Cao (Supreme Peoples Court), ‘Giai Dap Mot SoVan De Ve Hinh Su, Dan Su, Kinh Te, Lao Dong, Hanh Chinh va To Tung’ [Annual Report onCriminal, Civil, Economic, Labour, Administrative and Procedural Laws] (1 Feb 2000) 63–64.

98 See Z Qianfan, ‘The People’s Court in Transition: The Prospect of the Chinese Reform’(2003) 12 J of Contemporary China 69–101.

99 Interviews Le Kim Que, President Bar Association of Hanoi, July 1998 and Sept 1999. Alsosee B Kim Chi, ‘Providing Legal Services in Vietnam: A Practitioner’s Viewpoint’ in S Leung(ed), Vietnam Assessment: Creating a Sound Investment Climate (Institute of Southeast AsianStudies, Singapore, 1996) 107–13.

100 Judges in large cities have applied the reforms more than their counterparts in rural andremote areas. See UNDP (n 69) 256–7, 262–5.

101 Comments on this case are based on interviews during March, April, and October 2006with lawyers from N H Quang & Associates, the law firm that represented the plaintiff.



for architectural designs prepared for the historic Metropole Hotel in Hanoi.The parties agreed they were bound by an economic contract, but disagreedabout liability for part performance of several service contracts. The plaintiff’slawyers were prevented by the Civil Procedure Code 2004 from presentingdocumentary evidence showing substantial progress on the servicecontracts.102 Although oral evidence is admissible, judges generally behave asif they are trying criminal actions and seek admissions of liability from liti-gants and even witnesses.

To some extent just by being there lawyers shape courtroom discourse.Pretending to be a judge while really pursuing political or economic interestsis fairly difficult when these purposes must be translated for the benefit oflawyers into an appropriate legal vocabulary. Unfortunately civil proceduralreforms have generated little formal compulsion for judges to listen tolawyers. To make matters worse, judges are under little pressure to rationalizeand legally justify decisions in any significant sense.

Lawyers in the UBIK case, for example, complained that the presidingjudge preferred arguments based on subordinate legislation such as ‘officialletters’ to those grounded in legal principles extracted from superior laws.Judges generally consider subordinate legislation politically safe, because itdiscloses party and State policy in meticulous detail. For example, the presid-ing judge in the UBIK case prevented lawyers from analogizing legal pointsfrom other cases. He cut short interpretive legal reasoning by directing lawyersto confine themselves to the facts.

Lawyers use pre-trial conciliation meetings to circumvent highly mediatedcourtroom exchanges and persuade judges with hermeneutic arguments.103

For example, lawyers in the UBIK case convinced the judge before the casebegan to use the Civil Code 1995 to interpret the service contracts. If the judgehad listened to the defendants and applied the Ordinance on EconomicContracts the plaintiff’s case would have failed, because the ordinance doesnot support claims for part performance of service contracts.104

It is useful to consider why the judge was open to legal arguments duringthe pre-trail meetings and closed down legal discussions during the trial. In thepre-tail exchanges the lawyers and judge discussed issues in an informalpersonalized language that emphasized the speculative nature of the ideas andinterpretive techniques. It also encouraged a reciprocating candour. Legalideas were raised as opinions or suggestions rather than immutable principlesand issues were debated using subjective phases such as ‘y kien cua toi la’ (inmy opinion) or ‘toi co cam giac la’ (it seems to me).


102 See Civil Procedure Code 2003, Arts 81–3. See Nguyen Phu Son (n 62) 29–30. 103 Pre-trial conciliation is compulsory before economic and civil court trials. Civil Procedures

Code, Art 180. 104 This was a controversial legal point because the Civil Code 1995 did not in legal theory

govern economic contacts. Since this case was decided the revised Civil Code 2005 now specifi-cally applies to economic contracts.



Lawyers constantly repeated principles, doctrines and strategies for resolv-ing the case. After several meetings is became clear that the judges had assim-ilated these ideas and were beginning to conceptualize the dispute incorresponding legal terms.105 The lawyers were convinced that hermeneuticarguments are much more likely to persuade judges in informal settings wherethe judges’ ignorance is not on public display.

Most lawyers interviewed use hermeneutic narratives to weave a protectivelegal web around their clients’ property rights. They struggle against narrowtextual analysis, which they believe gives too much authority to subordinaterules that are drafted to protect government interests. On a more prosaic note,they actively promote legal arguments to expand the demand for legal servicesinto new social and economic fields.

Unfortunately not all lawyers support hermeneutic reasoning. The winner-takes-all mentality in adversarial cases induces some lawyers to subvert law-based processes. They use moral and political appeals, press campaigns andeven bribery to secure an advantage. By strategically promoting political andmoral arguments, they undermine legal reasoning and the capacity and will-ingness of judges to transpose political, economic and social issues into legalquestions.

D. Courtroom Corruption

The extent to which self-interest influences judicial decisions is difficult togauge. Lawyers that were interviewed believe it is a significant problem.106

Their anecdotal accounts intimate that at one level judicial corruption isformalized in a range of extra fees charged to process court documents. Smallbribes of this kind rarely determine outcomes, though they may reduce accessto courts by increasing costs.

At another level, some bribes induce judges to change determinations ofliability and/or remedies. Bribery persuades judges to substitute personalinterests for political, economic and legal considerations.107 Goal substitutionflourishes where the legal guidelines controlling judicial discretionary arevague and contradictory. Supreme Court professional guidance and similarfact cases have the potential to reduce judicial discretion and as a consequencethe opportunities for corruption. As one lawyer put it, judges ‘cannot turnnight into day’ and corrupt behaviour is more difficult to disguise in legallytransparent domains.


105 In some cases, lawyers arrange for judges to attend seminars and informal workshops thatexplain complex doctrinal issues, such as foreign legal protocols, electronic commerce, or inter-national banking law.

106 See generally P Nicholson, ‘The Vietnamese Courts and Corruption’ in T Lindsey and HDick (eds), Corruption in Asia (The Federation Press, Leichhardt, 2002) 215–17.

107 Lawyers interviewed say that judges use their associates as go-betweens to solicit bribesfrom litigants. A practice has arisen where judges return bribes to loosing parties.



In China and Vietnam discussions about judicial accountability mostcommonly arise in the context of corruption.108 Some forms of judicialaccountability have already been considered, such as party ‘leadership’,‘collegiate’ decision-making and responsibility for community expectationsmanifested in situational responsive decisions. Other mechanisms includeanti-corruption legislation, judicial supervision by legislative bodies and theprocuracy, and citizen-compliant mechanisms. Although recent anti-corrup-tion campaigns have resulted in some highly publicized prosecutions, withouta more transparent legal landscape judicial corruption is difficult to detect.109

There are trade-offs between judicial power and accountability systemsneeded to curb judicial corruption. As we shall see presently, judicial power ispartially determined by public esteem for the courts. Accountability mecha-nisms that strip away some judicial discretion, but in the process reducecorruption, may increase judicial prestige and power.

The lawyers interviewed believe that widespread bribery undermineshermeneutic narratives. Corrupt judges substitute personal values for legalreasoning. But equally importantly, many judges lean towards cautious textualinterpretation and guidance from higher authorities, because judicial creativityis easily misconstrued as corruption.

E. Developing Judicial Discretionary Powers

The case studies show that four main narratives inform judicial discretion.First, party policy, which is the most hierarchically important narrative,predisposes judges to privilege the party and ‘State benefit’. Since party-spon-sored precepts are generally vague and non-specific (except in politicallysensitive cases), judges search for other narratives to decide cases.

Secondly, in addition to party policy, the State promotes a textual narrativein which judges are supposed to passively and mechanically apply legislationto the facts in question. Because superior laws are frequently hortative, judgesseek guidance from the prescriptive sub-regulations issued by governmentagencies. Where legislation provides no clear answer, judges turn to highercourts for ‘professional guidance’ or to collective decisions made by judicialcommittees (uy ban tham phan). Textual narratives reduce judicial discretionby discouraging judges from imaginatively applying law to resolve ‘hard’cases.

Thirdly, in contrast to the previous narratives, thao dang narratives are notofficially encouraged. Judges are constantly reminded by the State to basetheir decisions on the law rather than sentiment and community morals.


108 See Peerenboom (n 45) 295–8. 109 eg, Vo Trong Hieu, a judge of the civil division of the Ho Chi Minh City People’s Court,

was denounced to the police when he failed to return a bribe solicited from an unsuccessful liti-gant. See Author Unknown, ‘Former Judge to Stand Trial for Taking Bribes’ [3 Oct 2004] ThanhNien 3; trans, Development Vietnam (Intellasia New Service, 6 Oct 2004) 17.



Nevertheless, judges (especially in the inferior courts) routinely apply situa-tional reasoning to bend laws in order to generate socially acceptableoutcomes. Together with local customs and precepts, law is one of manynormative sources for deciding cases. Counter-intuitively, thao dang narra-tives may actually reduce discretionary powers, because local-level judges areaccountable to community expectations. They also constrain the use ofhermeneutic legal reasoning to solve local problems.

Fourthly, the official textual narrative is far too carefully upheld by theState to allow judges to use openly hermeneutic narratives in the courtroom.This forces judges to develop legal fictions that overcome shortcomings intext-based outcomes in unmediated pre-trial exchanges. But any trace of thishighly creative law-making disappears in written judgments, which scrupu-lously apply the official textual narratives. Despite these constraints,hermeneutic narratives, mainly derived from imported ideas and practices, arebeginning to provide solutions to domestic commercial problems that are notcurrently available in local political economic and social thinking.

All this suggests that a rather different relationship exists between judicialindependence and judicial power than most court reform projects admit. Aslegal reasoning develops, judges do not become immune from extraneouspolitical and moral ideas, but rather the particular form in which political ormoral ideas enter the law is determined by the law’s sense of its own purposeand usefulness. Judges are never politically neutral. If a litigant, for example,objects to a judicial decision on the basis of political interference, the objec-tion is not external to legal reasoning. Rather, it represents an attempt to alterthe legal discussion so that what the judge thinks is internal to the law changes.Put differently, if the judicial decision changes it is not because legal reason-ing has been made to bend to political pressure, but because the decision-making structure, which already contained moral and political precepts, hasbeen given another moral and political shape. The development of hermeneu-tic narratives is vital for discretionary power in socialist-transforming EastAsia, because they provide the epistemological assumptions and logic thatenable judges to understand politics on their terms.

F. Assessing the Potential for Courts to Base Decisions on HermeneuticNarratives

Several countervailing factors influence the capacity and willingness of judgesto use hermeneutic narratives to decide cases. One of the main determinates isthe receptiveness of judicial thinking to new ideas and approaches. Fordecades socialist legal thinking discouraged judges from bringing legaldiscourse into conversation with local moral and economic norms and prac-tices.110 Inflexible central economic laws were reconciled with social and


110 Socialist legality does not recognise customary law. See Le Hong Hanh, Giao Trinh Ly Luan



economic conditions by applying ‘reason and sentiment’. Political prudencewas preferred to home-grown jurisprudence.111 This closed epistemologyprevented knowledge gained by judges from developing into a coherentsystem of ‘legal reasoning’.

Following doi moi reforms, and especially after the party-endorsed interna-tional trading agreements such as the Bilateral Trade Agreement (BTA) andthe World Trade Organization (WTO) agreements, the epistemologicalsettings governing official thinking have expanded.112 Further movement inthis direction is constrained, however, by the historical suspicion in socialistcountries that legal reasoning has its own internal logic and values that willlead judges away from the party line.113 For example, an influential SupremeCourt judge worries that hermeneutic narratives will over time create an epis-temological framework that encourages judges to reinterpret party policy.114

Meanwhile, pressure is mounting for courts that can competently resolve thecomplex commercial disputes generated by international trade and investment.For different strategic reasons international donors’ agencies and central regu-lators find common cause in promoting law-based decision-making. From acentral State perspective, thoa dang decision-making substitutes local solu-tions for party-sponsored legislation and promotes local protectionism, plural-ism and exceptionalism at the expense of nation building and nha nuoc phapquyen (law-based State). It also suits the party to distance itself from sensitivecommercial struggles between foreign and local enterprises and fromintractable civil disputes over housing and personal debt. For internationalagencies the main concern is to decouple local courts from their embedded-ness in local structures and traditions and open the decision-making to global-ized legal texts and processes.

Neither the Vietnamese State nor international donors have articulated aprogramme that will give judges discretionary power over important commer-cial disputes. The party promotes policy and textual narratives, while interna-tional agencies have mainly focused on structural changes designed to separatejudges from the party and State, such as pay rises, tenured appointments, andcomprehensive administrative reforms. Although these reforms are undoubt-edly needed, without fundamental changes to legal education they will notnecessarily engender a hermeneutic tradition that gives judges powers


Nha Nuoc va Phap Luat [Textbook on Theories of State and Law] (People’s Police PublishingHouse, Hanoi,1998) 291–325.

111 See N Hung Quang and K Steiner, ‘Ideology and Professionalism: The Resurgence of theVietnamese Bar’ in J Gillespie and P Nicholson (eds), Asian Socialism and Legal Change: TheDynamics of Vietnamese and Chinese Change (Asia Pacific Press, Canberra, 2005) 198–200.

112 See J Gillespie ‘Changing Concepts of Socialist Law in Vietnam’ in J Gillespie and PNicholson (eds), The Diversity of Legal Change in Socialist China and Vietnam (Asia PacificPress, Canberra, 2005) 45–75.

113 See R Kinsey, ‘Karl Renner on Socialist Legality’ in D Sugarman (ed), Legality, Ideologyand the State, (Academic Press, New York, 1983) 36–9.

114 Interviews Dang Quang Phuong (n 49).



to transpose political, moral and economic precepts into legally judicablequestions.

Lawyers are playing an important role in promoting a hermeneutic tradi-tion. Changes to civil procedural rules have given them more opportunities tointroduce new ideas into legal discourse. Lawyers use informal exchangeswith judges to introduce laws, precepts and doctrines borrowed from interna-tional legal practices. This body of knowledge is slowly expanding the ‘legalsources’ (thua nhan luat) available to judges. As lawyers gain advocacy skillsand knowledge, judges will increasingly need to transpose political, moral andeconomic considerations into a legal language that is susceptible to legalreasoning. Scrutiny by the international press and donor community may addfurther momentum for change.

If judges act politically and pretend to apply the law, the charade is easilyexposed and courts lose legitimacy. This does not mean that judges do nothave recourse to moral and political precepts and beliefs in deciding difficultcommercial cases; but rather that under scrutiny by lawyers, judges increas-ingly will apply legal criteria to interpret external (to the law) concepts.

VI. JUDICIAL AUTHORITY

The third element of judicial power concerns the capacity of judges to enforcetheir decisions. Whether judicial decisions reflect the imperatives of legal,party or thao dang narratives, seeing those decisions enforced is a matter ofcommon concern. There is ample empirical evidence that court judgments aredifficult to enforce in Vietnam. World Development Indicators in 2005 showthat it took on average 404 days to enforce a contract in Vietnam, comparedto 241 days in China and 69 days in Singapore.115

As in China, judicial authority in Vietnam is compromised by powerfulparty and State bodies.116 For example, a Supreme Court order for the evictionof residents made in 1997 remained unenforced in 2006.117 The plaintiffcommenced action to recover her house, which had been acquired (trung mua)by the Hanoi City People’s Committee during the 1960s. The State recognizedprivate ownership of houses in 1991.118 By the mid-1990s courts throughoutthe country were clogged with hundreds of politically sensitive cases seekingorders to evict party and State officials living in privately owned villas.119

115 World Development Indicators, World Bank 2005 <http://www.devdata.worldbank.org/wdi2005/Table5 3.htm>. A recent survey showed that lawyers believed that only 24 per cent ofcourt orders in commercial cases were successful. Leadco (n 29) 59–60.

116 D Clarke, ‘Power and Politics in the Chinese Court System: The Enforcement of CivilJudgments’ (1996) 10 Columbia J of Asian L; Peerenboom (n 45) 326–8.

117 Duc Hoa, ‘Ban An Ach 10 Nam Vi Mot Lanh Dao TP Hanoi’ [A Court Judgment in Hanoicould not be Enforced for 10 Years] [July 2006] Dan Tri, <http://www8.dantri.com.van/Sukien/2006/7/127270.vip>.

118 See Ordinance on Residential Housing 1991. 119 For discussions about solving housing disputes see Tuoi Tre (23 June 1996); Tran Quang




In 2004 the Hai Ba Trung District Justice Department were preparing toenforce the eviction notice, when they received a telephone call from Le QuyDon, Vice Chairman of the Hanoi City People’s Committee. He ordered atemporary stop on the enforcement ‘to enable the relevant authorities to recon-sider’. The report speculated about possible collusion between the ViceChairman and the occupants of the villa and concluded that the long delay and‘darkness’ surrounding the case undermined public confidence in law enforce-ment and the judicial system.

On a rational calculation of their interests, most businesses prefer to usecomparatively effective extra-judicial, particularistic mechanisms to enforcebusiness agreements. Respondents surveyed show high levels of satisfactionwith dispute resolution by ‘grassroots’ mediation boards comprised ofmembers of neighbourhood councils (to dan pho)—informal mediation withbusiness partners or associations.120 Even judges stress pre-trial mediation asa way of avoiding court-based enforcement.121 As a last resort some creditorshire members of the dau gau (black society) or enter collusive arrangementswith the police or tax authorities to encourage recalcitrant debtors to pay.

A negative public perception further undermines the capacity of judges tosecure compliance with court orders. For Johnson, McMillan, and Woodruff‘the relevant question is what [the entrepreneur] believes would happen ifthere is a dispute in the future’.122 In China and Vietnam there is a well-docu-mented mismatch between what courts do and what society thinks they shoulddo. The people in Vietnam were conditioned during pre-colonial times intotreating law as a punitive instrument, rather than as a means of ordering hori-zontal social transactions.123 A deep-seated preference for non-adversarial(hoa giai) forms of dispute resolution persists today. In a recent survey over41 per cent of respondents cited loss of face and harmony as reasons for avoid-ing adversarial litigation.124

Some Vietnamese commentators point to a disjunction between legal reason-ing and everyday understandings of justice.125 This mismatch finds expressionin low levels of legal awareness (y thuc phap luat) and the numerous popular


Minh, ‘Lay Lai Nha O Vang Chu Ma Nguoi Khac Dang Ky Su Dung’ [June 2000] Nhan Dan,<http://www.nhandan.orgvn/vietnamese/phapluat/137.html>.

120 See UNDP (n 30) 16; Leadco (n 29) 61–63. Also see McMillan and Woodruff (n 29) 1285. 121 Do Xuan Loi, ‘Role of Mediation in Judgment Enforcement’ [2005] Democracy & L 44–5.122 S Johnson, J McMillan, and C Woodruff, ‘Court and Relational Contracts’, (2002) 18 J of

L, Economics and Organisations 221, 227. Also see P Solomon, ‘Judicial Power in Russia:Through the Prism of Administrative Justice’ (2004) 38 L & Society Rev 552.

123 See Pham Duy Nghia, ‘Confucianism and the Conceptions of the Law in Vietnam’ in JGillespie and P Nicholson (eds), Asian Socialism and Legal Change: The Dynamics ofVietnamese and Chinese Reform (ANU, Canberra, 2005) 76; Pham Duy Nghia, ‘Noi Doanh NhanTim Den Cong Ly’ [Where do Entrepreounr Go for Justice] [2003] Nghien Cuu Lap Phap 45–54.

124 See UNDP (n 30) 12–13; Leadco (n 29) 67. 125 Interviews with Hoang Ngoc Hien (n 88). Also see D Thi Ngoc ‘Tong Hop Cac Noi Dung

Co Ban Cua Hoi Thao “Van Hoa Tu Phap”’ [Major Contents of the Conference ‘Judicial Culture’][2001] Thong Tin Hhoa Hoc Phap Ly 13–32.



proverbs, such as ‘mot bo cai ly khong bang mot ty cai tinh’ (a granary ofreason does not equal a little bit of feeling) and ‘law is the lowest form ofmorality’. Further alienating the public from courts is the problem that legalreasoning is not particularly attuned to resolving disputes to the satisfaction ofall concerned—thao dang decision-making and mediation are more suited tosituational justice. This is because the role of law in judicial decisions is notto produce socially grounded decisions. On the contrary, as Gunter Teubnerobserved, court judgments ‘falsify the realities of the conflict and producedecisions that are based on self-produced fictions’.126

Legal reasoning produces acceptable outcomes, not because the law isresponsive to underlying social conditions and is generally understood, butrather because the law provides solutions to otherwise socially intractableproblems. Judges use law to reconstruct political, moral and economic prob-lems into an artificial legal language. Once this process is complete theseprecepts are no longer recognizable as political, economic or moral conflictsand have transformed into legal questions.

There is a well-founded popular scepticism about the efficacy of pursuingjustice through the courts. Surveys suggest that concerns about the profes-sional competency and impartiality of judges are more significant than culturalfactors. For example, surveys rate dishonest and unfair judges (74 per cent)and unclear legal rules (65 per cent) as the main reasons for avoiding litiga-tion.127 Judges are considered unsympathetic towards the private sector,basing decisions on status as well as bribes, and treating legal rules as conve-nient, but optional, ways of getting things done. The perception of systemicbias, incompetence and corruption influenced more than 90 per cent of privatesector respondents surveyed to conclude that courts would not satisfactorilyresolve commercial disputes.128

Both empirical and perception-based studies show that economic and civilcourt judges lack authority, and as a corollary they struggle to secure publiccompliance with their decisions. Courts dealing with commercial cases appearto lack integrity as measured by the reservoir of public support for courts asdispute resolution institutions. To some extent new courts everywhere taketime to attract public support.129 But courts dealing with commercial cases inVietnam have a well-deserved image problem that is likely to affect the will-ingness of the public to follow their pronouncements for some time to come.


126 G Teubner, ‘Alienating Justice: On the Surplus Value of the Twelfth Camel’ in Priban andNelken (n 65) 23.

127 See UNDP (n 30) 3. Similar results were found in a more recent survey about commercialcourts. See Leadco (n 29) 63–4.

128 McMillan and Woodruff (n 29) 1285–6. A more recent study about courts found that only35 per cent thought that courts would fairly and impartially resolve disputes. See UNDP (n 30)14–15.

129 See, eg, A Trochev, ‘Implementing Russian Constitutional Court Decisions’ (2002) 11 EastEur Constitutional Rev 95–103.



VII. CONCLUSION

This article began by positing that judicial independence is a proxy for whatreally matters in court reform: judicial power. The cases discussed reveal acomplex interdependency between judicial power and judicial independence.While politics always threatens judicial independence it both threatens andsupports judicial power. It is possible to have powerful courts that are notindependent from politics. For commercial courts in Vietnam to make author-itative and socially meaningful decisions they require the forbearance, if notthe active support, of politics.

Efforts by international agencies to promote effective courts are impededby their preoccupation with judicial independence. To refocus their efforts,reforms should begin with detailed empirical studies about the interplaybetween judicial independence and politics. Three elements of judicial power,namely jurisdiction, discretion and authority, offer promising ways to under-stand this dynamic relationship.

First, jurisdictional powers are vulnerable to politics. Legislatures can windback judicial power by amending procedural legislation. However, evenmono-party systems in socialist-transforming East Asia are generally reluctantto incur international (and perhaps domestic) censure by limiting the role ofthe courts in resolving commercial problems. In this view jurisdictionalpowers are safeguarded by international treaty obligations and public esteemand demand for courts.

Secondly, the relationship between discretionary power and judicial inde-pendence is complex. The party has promoted organizational changes thatpartially protect courts from government interference. It also supported adver-sarial court procedures that have empowered lawyers to push judges towardsa hermeneutic mode of reading law. Case studies suggest that legal argumentsformulated during pre-trial discussions with lawyers are reformulating, evensupplanting some State-sponsored doctrines.

Further movement in this direction is, however, contingent on partysupport. During their inception phase courts are highly vulnerable to politicalpressure. The party and State have a formidable array of political and admin-istrative weapons at their disposal, such as licensing, censorship and seditionpowers to control judges and lawyers who are pushing reforms in dangerousdirections. But their power to use these weapons is contrained. The party’slegitimacy is increasingly tied to economic prosperity, international economicintegration and securing a law-based State. It is also responding to pressuresfrom international donors and the investment community to establish courtswith the legal repertoire needed to resolve complex commercial disputes.

What seems likely in the future is that commercial courts will eventuallyacquire a qualified independence. Criminal and administrative courts hearingsensitive claims involving the ‘State benefit’, on the other hand, are likely to




remain under tight political control. As legal developments in Singapore andMalaysia demonstrate, well-developed commercial courts can coexist withilliberal political regimes, but courts are generally the last State institution togain power over political decision-making.130

Thirdly, judicial power to enforce decisions is closely tied to public percep-tion about judicial integrity. What constitutes integrity is not just a function ofhonesty and truthfulness. It also corresponds to the systems of validity thatguide judicial reasoning. This creates a problem for court reformers, becausethere are different views within society about what constitutes the most suit-able validity system. For example, foreign investors are likely to prefer law-based notions of validity that permit creative legal solutions to complexdisputes. Small-scale businesses, on the other hand, may prefer judges to uselocal community values to guide judicial reasoning. Faced with this clash ofvalues, reformers will struggle to improve judicial integrity with law-basedsolutions.

Together these themes suggest that judicial independence is not a precon-dition for developing effective courts in socialist-transforming East Asia. Thefirst lesson for international donors contemplating court reforms is thatattempts to ‘de-politicize’ the judiciary are likely to cut across deeplyingrained incentive structures and undermine political support for the courts.Without political forbearance newly created courts will struggle to acquire thediscretionary power required to make meaningful and enforceable decisions.

The second lesson is that only a fundamental change towards hermeneuticreasoning will increase the power of courts to make decisions over meaningfuleconomic issues. This shift in thinking will require substantive reforms to thelegal education system and the professional incentives to base judicial reasoningon law. Even then it will take time for judges and lawyers to develop hermeneu-tic reasoning that satisfies the different needs of commercial litigants.

The third lesson is that no judiciary is entirely beyond politics. At most, thejudiciary can reach an accommodation with political forces that provides rela-tive independence to use legal reasoning to make decisions. This compact canbe influenced by businesses pressing for effective dispute resolution and socialorganizations, media, trade unions and other civil society groups that demandaccess to justice.

The fourth lesson is that judicial integrity is more important than indepen-dence in exciting judicial power. Newly emerging courts need accountabilitymechanisms not only to develop high ethical and professional standards, butalso to generate social legitimacy. Highly autonomous courts can avoidoutside scrutiny. But if judges are to acquire judicial power they need thepublic to believe in their integrity and capacity to deliver socially meaningfuljudgments.


130 See S Cooney, ‘The Effects of Rule of Law Principles in Taiwan’ in Peerenboom (n 23)424–7; L Pech, ‘The Rule of Law in France’ in Peerenboom (n 23) 89–98.



The fifth lesson is that in socialist-transforming East Asia social expecta-tions for what constitutes effective commercial courts are fragmented.Commercially sophisticated entrepreneurs want decisions based on the ‘rule oflaw’, while most domestic entrepreneurs prefer outcomes that reflect localnorms and practices. Court reforms must traverse these different social expec-tations.

