Hanoi, Vietnam

Four methods to resolve business disputes in Vietnam

By David Truong Lang, Viettonkin Consulting

The four prevalent methods of business dispute resolution in Vietnam include negotiation, mediation, arbitration, and court; the former three commonly referred to as Alternative Dispute Resolution (ADR).

Negotiation

Negotiation should be the first method used to settle any commercial disputes due to its resource effectiveness. Yet, it is often not used by Vietnamese businesses due to the lack of an offcial binding mechanism. Thus, disputes are often escalated to other methods for resolution.

Commercial Mediation

Vietnam has 10 commercial mediation centres. Commercial mediation is resolved in one of the following ways:

  1. The parties submit a request for mediation to the Vietnam Mediation Center (VMC).
  2. The parties submit a petition to the arbitration center; during the arbitration proceedings, the parties have the right to request conciliation.

However, Vietnamese businesses are often not familiar with and lack trust in mediation, and thus tend to opt for court and arbitration.

Arbitration

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute (WIPO). Arbitration has many advantages including: (i) simple procedures, (ii) transparency and fairness, (iii) confidentiality, (iv) it is voluntary and not linked state power, and (v) judgment finality, as the parties are obliged to comply.

Court

The greatest benefit of this method is the state power. The final decisions of The People’s Court must be respected and compiled by state agencies, economic and social organisations, and all citizens. However, the method also has drawbacks. The public hearing principle may expose many trade secrets, while complicated and cumbersome court procedures can lead to prolonged dispute resolution and economic losses for businesses.


David Truong Lang

David Truong Lang

GGI member firm
Viettonkin Consulting
Auditing & Accounting, Tax, Corporate Finance, Advisory
Ha Noi and Ho Chi Minh City, Vietnam
T: + 84 918 866 858
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W: viettonkinconsulting.com

Founded in 2009, Viettonkin is a multidisciplinary group of consulting firms specialising in accounting, legal, and a one-stop solution to FDI enterprises worldwide. The FDI consulting company aims to facilitate and connect investors in Southeast Asia with the rest of the world.

David Truong Lang is the Founder and CEO of Viettonkin. He has over 10 years of experience, focused on FDI investment and supporting worldwide enterprises.


Published: Litigation & Dispute Resolution Newsletter, No. 16, Summer 2022 l Photo: Hanoi Photography - stock.adobe.com

 

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