“A lack of awareness about the benefits of mediation leads to huge amounts of money being spent by businesses on court proceedings.” “But it is not just about financial and time costs; it’s also about relationship costs. Lengthy legal proceedings mean hundreds of thousands of broken commercial relationships,” said Arnaldo Abruzzini, Secretary General of Eurochambers.
The advantages of alternative dispute resolution processes such as commercial mediation, conciliation, and arbitration over litigation are numerous. Disputing parties can expect to benefit from less costly and much faster process, with commercial proceedings seldom taking longer than a week, the ability to maintain amicable relationships with one another (and save face), and full confidentiality in the process. The legislative basis for mediation is noted to improve and countries, such as Vietnam, have pursued mediation reforms as a response to contemporary demands.
Mediation Services in Vietnam
Disputing parties are entitled to choose the mediation rules of a commercial mediation institution or agree on their own mediation procedures. Where the parties have no agreement on the order and procedures for mediation, commercial mediators shall conduct the mediation how they the mediator find appropriate to the content of the dispute and in the best interest of the parties. Choosing procedures for mediation from the onset is critical as it determines all aspects of the mediation process, such as appointing a mediator, mediation steps, mediation fees, enforcement of settlement mediation agreement and other related matters.
Commercial Mediation Legal Grounds in Vietnam
Mediation, an alternative dispute resolution mechanism, has just been introduced into the legal system of Vietnam and in primary provisions under the following laws:
- Law on Commercial Arbitration 2010
According to Article 9 of the Law on Commercial Arbitration No. 54/2010/ QH12 (the “Law on Commercial Arbitration 2010”), Parties shall have the freedom, during the process of arbitration proceedings, to negotiate and reach agreement with each other to resolve their disputes or to request the arbitration tribunal to mediate in order for the parties to reach agreement and resolve their dispute. Furthermore, if the parties reach a settlement agreement through mediation conducted by the arbitration tribunal, the arbitration tribunal shall issue a decision recognizing the agreement of the parties, which have the same value as the arbitral award.
- Civil Procedure Code 2015
The Civil Procedure Code No 92/2015 / QH13 dated 25 November 2015 (the “Civil Procedure Code 2015”) replacing the Civil Procedure Code 2004 has recognized the jurisdiction of the Court in the settlement of disputes on investment, business, and commerce.
The Civil Procedure Code 2015 added a new chapter regarding the recognition results of out-of-court mediation (“Mediated Settlement Agreement”). Accordingly, one or both parties to the mediated settlement agreement can apply to the courts for the recognition of their agreement. After being recognized, the mediated settlement agreement is enforceable as a full and final court judgment in compliance with the Vietnamese Law on the Enforcement of Civil Judgments.
- Decree 22 Commercial Mediation in Vietnam
On 24 February 2017, the Government of Vietnam issued Decree No. 22/2017/ND-CP (“Decree 22”) on commercial mediation, which came into effect on 15 April 2017. It is the first legislation specifically governing commercial mediation and creates the legal framework for the development of commercial mediation in Vietnam. Decree 22 includes the principles, conditions, and procedures of commercial mediation as an alternative dispute resolution method, thus creating the conditions for the establishment of mediation centers in Vietnam. By Decree 22, commercial mediation is applied in cases of (i) a dispute between parties practicing commercial activities; (ii) a dispute between parties with at least one party practicing commercial activities or (iii) another dispute under the laws can be resolved by the commercial mediation. The Decree 22 stipulates that mediation shall only apply to disputes of a commercial nature or disputes in which at least one party is engaged in the commercial activity or disputes specifically designated by other laws to be settled by commercial mediation. The statute defines, “commercial activities” as activities for the purpose of generating profits, including the sale and purchase of goods, provision of services, investment, and commercial promotion.