Methods of dispute resolution in Vietnam

dispute resolution in VN

Vietnam is a country whose economy is fast-growing and stable compared to that of other countries in the region. One of the crucial factors contributing to the economic growth of Vietnam is investment activities of businesses including State’s enterprises, local and foreign-owned ones (FDI). The State of Vietnam has made a lot of commitments and taken strong actions to guarantee the legitimate rights and interests of companies doing business and investing in this emerging market, especially every effort has been made for institutional and judicial reforms to facilitate investments and stimulate the economy.

The development of economy leads to an increase in civil and commercial transactions, and definitely also resulting in cases of dispute in many areas such as: internal disputes within an enterprise, disputes on contract, commercial activities, labor relations, investment, sanctions and administrative coercion in the field of taxation, intellectual property, construction, purchase and sale of goods, etc. In addition, there have been disputes related to criminal elements.

In Vietnam, the aforesaid disputes can be resolved by means of Negotiation, Mediation, Court or Arbitration. In fact, 90% of disputes are currently resolved by litigation way at Court or Arbitration Center. On behalf of Clients, lawyers will participate in these processes to protect the legitimate rights and interests of Clients.

1. Negotiation

Negotiation is a method of settling disputes that do not necessarily need participation of a third party. The basic features of this way are that the parties can comfortably present and share their opinions, persuade the others to accept their arguments, together find appropriate measures, and come to an agreement to solve the disputes.

The negotiation between the parties is not bound by legal regulations on the order and procedures for settlement. The process is flexible, effective, less expensive, convenient, fast and simple. Especially, the prestige, reputation as well as trade secrets shall be protected if the parties choose this method.

However, using this way, the negotiation result completely depends on the voluntariness, understanding, attitude, goodwill and cooperation of each disputing party without any legally binding mechanism to ensure the enforcement of the parties’ agreement during the process.

2. Mediation and Conciliation

Mediation is one of the options (Alternative Dispute Resolution) instead of bringing the case to a court. This is a method of involving the third party who is neutral but minimizing the intervention of this party in the results of dispute resolution between the parties who shall have full discretion. Mediation is not for determining who is right or wrong based on evidence rights and obligations to make decisions like at arbitration or court. Mediators or conciliators do not give a judgment but only help the involved parties seek mutual benefits, work out a solution acceptable and voluntarily followed by the parties.

3. Arbitration

Arbitration has a lot of outstanding advantages, bringing many benefits to the parties when there is a dispute in their business and commercial activities, specifically as follows:

Firstly, the arbitration procedures are flexible, convenient for the parties when they do not have to participate in many levels of trial. The parties are free to choose the arbitral proceedings which are also simpler than those in Court.

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Secondly, the right to select an arbitrator to resolve disputes allows the parties to choose experts with professional experience and practice in the subject of disputes, reputable to become arbitrators to resolve disputes of the parties and ensure the quality of final judgments.

Third, arbitration respects the confidentiality of the whole process. The arbitration meeting is not conducted in an open manner [different from proceedings of Court’s public trial, Thus, the parties can preserve their reputation in the marketplace.

Notwithstanding the foregoing, arbitrators may encounter difficulties in the dispute resolution process; especially in complicated disputes; such as: verification and collection of evidence, summon of witnesses, etc. Because arbitrators do not have an assisting apparatus, enforcement agency and coercive power as those of the Court. Thus, in a lot of cases, it is difficult for arbitrators to obtain personal information if there is no cooperation from either party.

The cost of arbitration is much higher than that of the Court. In addition, the arbitral award may be subject to review by the court. Thus, it may be annulled at the request of a party.

4. Dispute resolution in Vietnam by Court

This is the most popular way for dispute resolution in Vietnam, which has the following pros and cons:

The costs of solving a dispute by a Court will be lower than that of arbitration. The judgement issued by a Court is highly enforceable because it is enforced by the State authority. Moreover, the Court’s procedures are very strict as prescribed by law.

This method also has certain disadvantages. Its procedures are inflexible and lengthy. Besides, the principle of open trial of the Court is sometimes an obstacle for entrepreneurs when their business secrets can be disclosed. Also, the judgement may be appealed, resulting in a prolonged dispute.

ALB & Partners Law Firm, with a team of experienced litigation and dispute resolution lawyers, many of whom have been former judges at courts capable of successfully resolving hundreds of complex cases in many fields such as commerce, real estate, construction (especially FIDIC contract consultancy), finance, banking, civil, labor, intellectual property, debt collection, etc always take proactive approaches to settle disputes, provide useful advice and seek to achieve cost and time effective solutions for our Clients. Therefore, we take pride in ourselves as appreciated by Clients as one of the prestigious law firms in the field of litigation & dispute resolution in Vietnam.

For a typical case of our litigation and dispute resolution in Vietnam, on March 9th, 2021, We successfully assisted Hoa Binh Construction Group, the biggest construction corporation in Vietnam, in winning an arbitration case against FLC Group Joint Stock Company (“FLC”) with regard to collection of a debt of more than 276 billion VND (nearly $12 million). For further information on the case, please refer to our Client’s website: hoabinhconstructiongroupwinsthelawsuitagainstflcgroup.html

Should Clients need further assistance in this aforementioned service, please contact us via phone/whatsapp/zalo number: +84 907008722 or email: [email protected]

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