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Disputes
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.