When participating in international trade, Vietnamese businesses often encounter significant obstacles due to differences in legal systems, cultures, languages, and dispute resolution mechanisms. Drafting a clear dispute resolution clause in the contract is the first and foremost step, but is often overlooked. In Vietnam, the current legal framework provides four main methods for dispute resolution: Negotiation, Mediation, Arbitration, and Court Litigation. This requires enterprises to carefully assess each method to make the most suitable choice.
First, prioritize negotiation – it is fast, cost-effective, and helps preserve business relationships. If negotiation fails, consider mediation, where a neutral third party assists both sides in finding a balanced solution.
International arbitration is a more advanced step that offers a confidential, flexible, neutral, and effective approach to resolving disputes. Advantages include simplified procedures, the ability to select arbitrators, and private hearings. This is particularly suitable for complex disputes involving parties from different countries. According to Vietnamese law, arbitration is only enforceable if there is a valid written arbitration agreement, and arbitral awards can be enforced both domestically and internationally.
Court litigation is the last resort. However, for disputes involving foreign elements, enforcing a court judgment across borders often faces legal barriers, and is time-consuming and costly. Businesses should therefore carefully consider: jurisdiction, applicable law, objectivity of the court, enforceability in relevant countries, as well as time and costs.
Recently (as of September 6, 2025), an analysis on Pháp Lý .net highlighted the advantages and ongoing improvements in Vietnam’s international dispute resolution framework, from public (state-to-state) to private (business-to-business) disputes. It also proposed innovative solutions such as developing a professional legal workforce, strengthening international cooperation, and refining the legal framework in Vietnam’s FTAs.
In practice, commercial arbitration in Vietnam is seen as a flexible, confidential, and enforceable option, though further improvements in quality and credibility among the business community are still needed.
Ensure the dispute resolution clause is clear (method, governing law, dispute resolution body) to avoid confusion when conflicts arise.
Understand the applicable law and the national laws related to enforcement of awards or judgments.
Prepare a dispute prevention strategy early, such as referring to ICC guidelines to prevent and resolve disputes quickly and cost-effectively.
Consult reputable lawyers or arbitration centers in Vietnam for strategic advice, drafting arbitration clauses, or representation during negotiation, arbitration, or court proceedings.
Are you a Vietnamese enterprise struggling with an international commercial dispute? Instead of letting the issue drag on, start by:
Drafting clear dispute resolution clauses in your contracts (applicable law, method, location, authority);
Planning for dispute prevention early – minimize risks, save costs;
Partnering with professional legal advisors for negotiation, mediation, arbitration, or litigation representation.
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