VIETNAM Law and Practice Contributed by: Tony Nguyen, Ta Phuong Thao, Nguyen Minh Duc, Nguyen Phuong Anh, Nguyen Duc Tai and Truong Que Chi, EPLegal
1. Dispute Resolution Methods 1.1 Main Dispute Resolution Methods Commercial disputes can be resolved through four core mechanisms: • negotiation involves direct discussions between the parties with the aim of reaching a mutually acceptable settlement. It is typically the first step and allows parties to preserve business relation- ships while maintaining full control over the out- come; • mediation involves a neutral third-party acting as a mediator to facilitate and assist the disputing parties in reaching a mutually acceptable solution, with the aim of resolving the dispute amicably; • arbitration involves an arbitral tribunal, as an inde - pendent third party selected by the disputing par- ties, that renders a binding decision to resolve the dispute and bring the conflict to an end; and • litigation (court) involves a judicial body, acting in the name of State authority, that issues a binding judgment that the parties are legally obligated to comply with. 1.2 Choice of Dispute Resolution Method In practice, arbitration is an increasingly popular meth- od for resolving commercial disputes, particularly in cross-border transactions due to its neutrality, flex- ibility and confidentiality. While court litigation remains the traditional and familiar option in Vietnam. The choice of dispute resolution mechanism is pri- marily determined by party agreement. However, both legislation and practice indicate that certain mecha- nisms are more commonly associated with specific types of disputes. • Negotiation and mediation apply to all types of disputes. Negotiation is the first method used to resolve disputes, helping the parties clarify conflict- ing issues. Mediation is, in certain cases, a manda- tory procedural requirement, particularly in labour, land disputes and divorce disputes, subject to statutory exceptions. • Arbitration is mostly used in commercial, invest- ment, construction, real estate and financial disputes. It is especially prevalent in international
commercial disputes where parties seek a neutral forum and confidentiality. • Litigation applies to disputes falling within the juris- diction of the courts as provided under Articles 26, 28, 30 and 32 of the Code of Civil Procedure 2015.
1.3 Key Dispute Resolution Trends A Shift Towards Arbitration and ADR
There is a clear shift toward arbitration and other ADR mechanisms, driven by Vietnam’s increasing integration into the global economy. Businesses are increasingly favouring and becoming more familiar with arbitration for dispute resolution due to its speed, flexibility and confidentiality compared to traditional court proceedings. VIAC announced that in 2024, they handled 478 cas- es according to the statistical introduction and the detailed data recorded 475 cases, both indicating that 2024 was a record year for the number of cases. Emergence of Online Dispute Resolution (ODR) Technological advancements have created new ways to access justice and resolve disputes, including ODR, smart contracts and algorithmic decision-making tools. In the context of rapidly growing e-commerce and cross-border transactions, ODR is increasingly used as an effective alternative or complement to traditional mechanisms, reducing time and costs for disputing parties. Growing Complexity of Disputes Disputes are becoming increasingly complex, interna- tional and interconnected due to globalisation, supply chain disruptions and geopolitical factors. Many dis- putes involve multiple parties, jurisdictions and legal systems across borders. As a result, dispute resolu- tion increasingly requires sophisticated legal strate- gies and greater coordination across different legal frameworks. ESG-Driven Disputes on the Rise ESG considerations are increasingly shaping dis- putes in Vietnam, particularly in environmental com- pliance, sustainability commitments and corporate disclosures. Disputes involving pollution, land use and climate obligations are becoming more frequent, often involving regulators, communities and foreign
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