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Vietnam is a major manufacturing and processing hub for foreign companies. Many businesses outsource production, assembly, or processing to Vietnamese partners under manufacturing or processing contracts. While most relationships function smoothly, disputes are not uncommon—especially when goods are delayed, defective, missing, or when advance payments are not properly used.
When a dispute escalates, foreign companies often face a critical question:
In a manufacturing dispute in Vietnam, is it better to pursue a civil lawsuit or file a criminal complaint?
The answer is not straightforward. Choosing the wrong approach can waste time, increase costs, or even weaken your legal position. Understanding the difference between civil and criminal routes is essential before taking action.
Most manufacturing disputes involve issues such as:
Failure to deliver processed goods
Goods delivered late or below agreed quality
Unauthorized subcontracting
Misuse of materials or advance payments
Refusal to return tooling, molds, or materials
Legally, these issues are primarily contractual and commercial, not criminal. This distinction is crucial when deciding how to proceed.
Civil litigation (or commercial arbitration, if agreed) is the standard method to resolve manufacturing disputes when:
The dispute arises from contract performance
Obligations were not fulfilled as agreed
Losses can be quantified commercially
Vietnamese courts and arbitration tribunals are designed to handle these disputes.
Civil litigation allows businesses to:
Claim damages and compensation
Terminate contracts legally
Recover advance payments or materials
Enforce contractual penalties
Most importantly, civil proceedings are predictable and legally grounded when the dispute is contractual.
However, civil litigation also has drawbacks:
Proceedings can be time-consuming
Evidence requirements are strict
Enforcement may be challenging if assets are hidden
These limitations often push foreign companies to consider alternative pressure mechanisms.
Foreign companies sometimes believe that filing a criminal complaint will:
Pressure the Vietnamese partner into settlement
Speed up recovery
Deter further misconduct
In some cases, Vietnamese partners even threaten criminal exposure themselves as leverage.
Criminal proceedings may be relevant only when there is clear evidence of criminal intent, such as:
Fraud at the time of contract signing
Intentional appropriation of funds or materials
Forgery, deception, or asset concealment
Criminal liability requires proof beyond contractual breach. Failure to deliver goods alone is usually not a crime.
Filing a criminal complaint in a purely commercial dispute can:
Be rejected by authorities
Delay recovery rather than accelerate it
Damage negotiation leverage
Expose the complainant to counter-claims
Vietnamese authorities are increasingly cautious about criminalizing civil disputes.
In practice, criminal complaints often fail because:
The dispute is contractual, not fraudulent
Intent to deceive cannot be proven
Funds were used for business operations, not personal gain
When criminal intent cannot be established, authorities usually direct parties back to civil courts.
Foreign companies sometimes file criminal complaints too early, believing it will strengthen their position. In reality, this can:
Signal weak civil evidence
Escalate conflict unnecessarily
Make settlement harder
Once criminal authorities decline to proceed, the civil case may be weakened.
Before choosing between civil or criminal routes, the dispute must be properly qualified.
Key questions include:
Was there intent to deceive from the beginning?
Was the contract performed partially?
Are losses purely commercial?
Is evidence strong enough for criminal standards?
Only a legal assessment can answer these questions objectively.
For most manufacturing disputes in Vietnam:
Civil litigation or arbitration is the correct route
Remedies are clearer and enforceable
Risks are more manageable
Criminal proceedings should be considered exceptional, not strategic tools.
Winning a case—civil or criminal—means little without enforcement.
Foreign companies must consider:
Whether the Vietnamese partner has assets
Whether assets can be frozen or enforced
Whether early legal action can preserve value
Civil proceedings allow better control over enforcement planning when handled properly.
Common reasons include:
Emotional reaction to financial loss
Pressure from internal management
Misunderstanding of Vietnamese law
Advice from non-specialists
These mistakes often lead to wasted time and higher costs.
Many companies seek legal advice only after the dispute explodes.
At that stage:
Evidence may already be compromised
Communications may have weakened the legal position
Options may be limited
Manufacturing disputes are rarely isolated incidents—they repeat across suppliers.
With ongoing legal consultancy, businesses can:
Structure manufacturing contracts to reduce criminal ambiguity
Detect early warning signs of misuse or non-performance
Take civil action before disputes escalate
Avoid inappropriate criminal escalation
This proactive approach protects both legal position and business relationships.
Foreign manufacturers relying on Vietnam face cumulative risk:
Multiple suppliers
Repeated advance payments
Complex supply chains
Without continuous legal oversight, disputes multiply and become harder to control.
DEDICA provides ongoing legal consultancy services and dispute support for foreign companies involved in manufacturing and processing disputes in Vietnam.
DEDICA assists clients by:
Reviewing manufacturing and processing contracts
Assessing whether disputes are civil or criminal in nature
Advising on the safest and most effective legal strategy
Representing clients in civil litigation and arbitration
Supporting enforcement and asset recovery
DEDICA’s approach focuses on legal accuracy, risk control, and commercial outcomes, not aggressive escalation without legal basis.
In manufacturing disputes in Vietnam, civil litigation is usually more advantageous and legally appropriate than criminal complaints.
Criminal proceedings should be reserved for rare cases involving clear fraud or criminal intent. Using them incorrectly can delay recovery and weaken your position.
By engaging ongoing legal consultancy, businesses can:
Choose the right dispute resolution path
Avoid costly legal mistakes
Protect long-term manufacturing operations in Vietnam
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
Contact us today for a free initial consultation with our experienced lawyers!
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