Dispute resolution
Under Vietnamese laws, there are two dispute resolution
methods, namely courts and arbitration procedures.
Courts
Court procedures have two stages, first instance and appeal.
First instance
procedures
In principle, the People’s Court which has jurisdiction to
settle civil cases is the court having jurisdiction over the locality in which
the defendant’s head office is located. Parties to a contract are, however,
able to agree in the contract to submit any disputes for settlement to the
People’s Court of the locality in which the plaintiff’s head office is located,
but this must be expressly provided for in the relevant contract or in other
written agreements between the parties.
Legal proceedings are commenced by a petition submitted to
the competent court within the limitation period. The limitation period is
generally two years from the date the benefits and interest of the plaintiff
are breached, unless otherwise provided to by specific laws.
The first instance procedures typically last four months (or
six months in complicated cases). However, in practice, this usually takes
longer. During this time, the court investigates the case by requiring evidence
from the parties. Prior to trial, the parties are required to attempt
conciliation to reach an amicable resolution of the dispute. Conciliation
meetings will be organized by the court which require the participation of the
parties. If conciliation is successful, the mutual written agreement of the
parties will be recognized under a decision of the court as final and binding
on the parties. If conciliation fails, the parties will proceed to court trial.
The first instance trial is chaired by a judgment committee
consisting of one judge and two jurors that will adjudicate on the dispute
based on the principle of majority vote. A secretary of the court is in charge
of preparing the minutes of the trial.
At the court hearing, in addition to the parties involved in
the dispute, there may be other attendees including the prosecutor,
interpreters, witnesses and experts. On conclusion of the court hearing, the
court will issue its first instance judgment on the dispute. The court may also
issue other decisions in respect of particular issues arising from the trial.
Appeal procedures
Appeals may be lodged with the court higher than the first
instance court within 15 days from the date of the lower court’s judgement.
An appeal trial is conducted on a similar basis to a
first-instance trial except that the panel consists of three judges. The appeal
court will reconsider the case.
Special procedures following the first-instance trial and appeal
After the judgement of the first instance court or any
appeal court becomes effective, the judgment may still be subject to appeal by
the administration authority of the People’s Courts or the People’s Procuracies
at the provincial level or higher under the special procedures for supervision
and review as prescribed by law. However, the parties to the proceedings have
no right to initiate such appeal procedures.
Court fees
The plaintiff must deposit 50 percent of the prescribed
court fees when submitting its claims, except in some special cases. The losing
party is responsible for payment of these fees at the time the judgment is
issued.
Foreign court judgements are unenforceable in Vietnam in the
absence of a bilateral agreement for mutual recognition. Vietnam has entered
into bilateral agreements with countries including Russia, the Czech Republic,
Slovakia, Cuba, Hungary, Bulgaria, Poland, Laos, China, France, Ukraine,
Mongolia, Belarus and the People’s Democratic Republic of Korea. However, Vietnam
has not made any agreement on the reciprocal recognition of judgments with the
United States, Australia, any other Asian country or any western European
country.
Arbitration
procedures
The law provides for arbitration in Vietnam. However, it is
very seldom used in Vietnam, partly because of the inexperience of the
arbitrators in complicated commercial disputes. A dispute will be resolved by
arbitration if the parties have entered into an arbitration agreement before or
after the occurrence of the relevant disputes. A dispute between the parties
can be resolved by an arbitration tribunal established by an arbitration center
or by an ad-hoc arbitration tribunal established by the parties.
An arbitration tribunal consists of three arbitrators or of
a sole arbitrator as agreed by the parties. In Vietnam, there are only seven
arbitration centers, and it is generally considered that the most reputable
arbitration center is the Vietnam International Arbitration Centre.
In order to commence proceedings, the parties must enter
into an arbitration agreement. An arbitration agreement can be an arbitration
clause in a contract or a separate agreement. An arbitration agreement or
clause is independent from the underlying contract. Any modification,
extension, termination or invalidity of a contract does not affect the validity
of the arbitration clause. The arbitration clause should include provisions on
how to establish an arbitration tribunal, how to appoint arbitrators,
arbitration rules for settlement of dispute, venue of the arbitration,
applicable laws and the language used in the procedures. Each party shall bear
its own legal costs and disbursements relating to any dispute or arbitration,
unless otherwise agreed between the parties.
Vietnam is a party to the United Nations Convention on
Recognition and Enforcement of Foreign Arbitral Awards but only a very limited
number of foreign arbitral awards have been recognized and enforced in Vietnam
to date.