When a business signs a consulting service contract with a foreign partner, the possibility of a dispute is always possible. Effective handling not only depends on the law but also depends on how to prepare the contract, the spirit of cooperation, and choosing an appropriate resolution method. Below is the latest summary of current legal regulations in Vietnam and practical steps for businesses to minimize risks and effectively handle disputes over foreign consulting service contracts.
Civil Law 2015(clauses related to civil contracts with foreign elements) stipulate that the violating party will be responsible according to the commitments in the contract, and the parties can agree on applicable foreign law if it does not violate the basic principles of Vietnamese law.
Commercial Arbitration Law 2010Clear regulations on commercial arbitration include disputes with foreign elements: parties are allowed to agree on arbitration, selection of arbitration organization, applicable law, and place of dispute resolution. The law also stipulates that when there is an arbitration agreement, the Court must refuse to accept it (except in cases where the agreement is invalid or cannot be performed).
Civil Code 2015, provisions on civil relations with foreign elements: the parties have the right to choose the applicable law. This principle is applied in consulting contract disputes if there is a foreign element. If no agreement can be reached, Vietnamese law or international treaties to which Vietnam is a member will apply.
Businesses can choose one or a combination of the following methods:
Negotiation and mediation
Time: Can be done immediately when a dispute arises, or the contract has a mediation clause.
Advantages: save costs, time, maintain cooperative relationships, maintain reputation with partners.
Limitations: if the other party is not willing, it is difficult to reach an agreement; There is no external coercive decision.
International commercial arbitration
If the contract has a clear arbitration clause: regulations, arbitration organization, applicable law, place of settlement. Vietnam recognizes foreign forms of arbitration under the Commercial Arbitration Law.
Advantages: faster than courts, discreet, flexible in procedures, applicable laws, specialization.
Note: costs are often higher than negotiation/mediation; If the arbitration agreement has unclear points, it is easy to dispute its validity.
Court in Vietnam
When there is no arbitration agreement, or the arbitration agreement is invalid / unenforceable.
The Court's jurisdiction is regulated by civil and commercial procedure law; If there is an international element, determine jurisdiction based on the defendant's location, the place of conclusion, the place of contract performance, assets, and the partner's headquarters.
Electronic arbitration/online dispute resolution(new trend)
Currently, Vietnam is gradually completing the legal framework to support electronic arbitration and online dispute resolution - especially useful when consulting contracts use digital technology and are performed remotely.
Issues to note: legal value of electronic evidence, electronic signatures, place of processing, location of judgment enforcement.
Prepare detailed contract:
Scope of work, deadline, results to be achieved, payment method, contract language, effects of force majeure.
Clear dispute resolution terms: choice of arbitration or court, applicable law, location of trial/arbitration, costs, language of proceedings.
Check applicable law: ensure the terms do not violate basic principles of Vietnamese law, avoiding cases where courts or arbitrators refuse because they violate international conventions or domestic regulations.
Identify relevant international treaties: if Vietnam participates in any agreement that has provisions on dispute resolution, applicable law, or recognition of foreign judgments (for example, the 1958 New York Convention on the recognition of foreign arbitral awards), this is very important.
Check the dispute clause in the contract
See if there is an arbitration agreement; If so, is the agreement complete (applicable law, arbitration organization, location, language, costs).
Check the validity of the arbitration agreement: does it violate Vietnamese law or social ethics/banned fruit?
Negotiation – mediation before lawsuit / arbitration
Send official notices to partners, requesting performance of obligations/completion of work/payment, with clear deadlines.
If there is a mediation clause, use commercial mediation or a neutral third party.
Choose litigation method (Arbitration or Court)
If the contract has an arbitration agreement: prepare lawsuit procedures at the agreed arbitration center; Collect evidence and make legal arguments.
If transferred to court: determine the competent court, applicable law, if there is a foreign element, comply with civil or commercial procedure regulations.
Prepare documents and evidence
Contracts, appendices, exchanges via email, international text messages, notarized translations if necessary.
Keep evidence of service performance, payments, breached obligations.
Enforcement of arbitration award/decision
If a foreign arbitration award is declared abroad: procedures for recognition and enforcement need to be carried out in Vietnam (if required).
If a domestic court or arbitrator: according to the civil judgment enforcement regulations or enforce the arbitration decision according to law.
Alwaysclearly state the applicable lawin the contract and ensure that the law is accepted; Avoid using the law of a country whose legal system is not internationally recognized or does not have a mutual assistance treaty.
Ensurearbitration clauseclearly designed, avoiding ambiguity regarding arbitration organization, location, language and costs.
Verify the identity and capacity of the foreign partner: legal, financial, history of implementing similar contracts.
Provision for force majeure situations, late deadlines, legal changes, exchange rate fluctuations...
Prepare a contingency plan, if arbitration or court is not possible, or if a foreign arbitration award is difficult to enforce.
Handling disputes over consulting service contracts with foreign partners requires businesses to both understand Vietnamese law and understand relevant international laws/international treaties, and at the same time focus on drafting contracts so that the dispute resolution terms are clear and enforceable. When there is a dispute, choosing arbitration is often more favorable if the contract is well prepared; However, if there is no arbitration agreement or there are difficulties, the Court is still the last option. Preparing evidence carefully and always prioritizing mediation/negotiation can help save costs and maintain relationships with partners.
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