Key Considerations in Resolving International Financial Contract Disputes in Vietnam

Are you a business engaged in an international financial contract? Worried about potential disputes and looking to be well-prepared to protect your rights? In today’s global economy, international financial contracts are prone to disputes due to the complexity of multiple legal systems, procedures, and high costs — especially in Vietnam.

Below are essential considerations to help you handle disputes effectively and in line with Vietnamese law and international practices.

1. Dispute Resolution Agreement & Jurisdiction

Right to choose the dispute resolution method
Under both Vietnamese and international commercial principles, the parties have the right to choose methods such as negotiation, mediation, international arbitration, or litigation. This allows for proactive responses depending on the severity of the conflict and cost considerations.

Clearly define the competent authority and jurisdiction
If the contract does not clearly specify the dispute resolution authority (arbitration or court) and the place of resolution, disagreements can arise. Differences in national laws can pose disadvantages for the Vietnamese party if not well prepared.

2. Prioritize Negotiation and Mediation Before Litigation

Negotiation is quick, cost-effective, and helps preserve partnerships
This is often the first choice for international businesses due to its flexibility, lower costs, and ability to maintain working relationships.

Mediation by an independent third party
Professional mediators can help the parties find mutually acceptable solutions, maintain confidentiality, and offer a less expensive process than arbitration or court. However, mediation outcomes are non-binding, so they may not always provide a final resolution.

3. International Arbitration – The Optimal Choice for Final Binding Decisions

Definition and legal validity of arbitration
Arbitral awards are internationally recognized and enforceable. Arbitration is a flexible method that is less restricted by national legal systems.

Important considerations when selecting arbitration

• Always include a clear arbitration clause (e.g., VPC, ICC, VIAC, etc.)

• Clearly specify the applicable law, language, and place of arbitration

• Be cautious of the “waiver of objection” principle and burden of proof — failure to timely object may result in a loss of advantage during disputes.

Reference materials in Vietnam
The Vietnam International Arbitration Centre (VIAC) has published numerous case studies and decisions useful for businesses operating in Vietnam to learn from.

4. Court Litigation – Final Option with Clear Enforceability

Advantages: Court judgments in Vietnam carry enforceable legal weight, often stronger than arbitral awards.

Disadvantages: Litigation can be time-consuming and costly. It should be carefully considered, especially in complex disputes.

5. Statute of Limitations & Evidence Preparation

Statute of limitations
Under Article 319 of the 2005 Commercial Law, businesses have two years from the date their rights were violated to initiate a commercial dispute lawsuit. Monitoring contract performance is critical to avoid missing this deadline.

Required documents and evidence
International financial companies should gather:

• Contracts, annexes, minutes, payment receipts, delivery records, etc.

• Evidence proving the breach and resulting damage

• Legal documentation such as business licenses, power of attorney, or authorization letters
  This is crucial for building a strong legal foundation.

6. The Crucial Role of Lawyers in International Dispute Resolution

Lawyers help interpret complex contract terms, accurately identify rights and risks, and assist in contract amendments if needed.

They also develop dispute strategies, gather evidence, prepare case files, and represent clients in negotiations, arbitration, or court proceedings.

7. Harmonizing with International Laws and Treaties – in Vietnam

Compliance with international treaties and trade customs is essential when handling international disputes. Note that international financial contracts are often governed by both Vietnamese law and applicable international conventions or customs.

Conclusion

Disputes in international financial contracts in Vietnam require careful preparation from contract drafting to dispute handling. Don’t let stress, complexity, or cost discourage you:

• Clearly agree on dispute resolution methods and jurisdiction

• Prioritize negotiation and mediation — turn to arbitration or court only when necessary

• Actively collect evidence and track the statute of limitations

• Always consult a lawyer for strategic advice, document preparation, and effective legal protection

Contact DEDICA Law Firm for expert legal consultation!

📞 Hotline: (+84) 39 969 0012 (Available on WhatsApp, WeChat, and Zalo)

🏢 Head Office: 144 Vo Van Tan Street, Xuan Hoa Ward, Ho Chi Minh City (144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City)

🕒 Business Hours: Monday – Friday (8:30 AM – 6:00 PM)

Reach out today for a free initial consultation with our team of professional lawyers!