Negotiating to Resolve Technical Service Contract Disputes with Foreign Partners in Vietnam
Why is it important to define the dispute resolution method right from the contract negotiation stage?
First and foremost, carefully drafting a contract with a foreign partner from the outset is a key foundation for dispute prevention. It is advisable to:
Clearly define the dispute resolution method (arbitration or court), the specific authority (e.g., VIAC), and the governing law (e.g., Vietnamese law, Singaporean law, or even international treaties).
Be cautious with vague terms such as “to be negotiated,” as they may be deemed unenforceable.
Clarifying these terms early not only enhances transparency but also increases the enforceability of the contract, allowing Vietnamese businesses to stay proactive when issues arise.
Step-by-step approach to effectively negotiate the resolution of technical service contract disputes
1. Thorough preparation – understand your position, strengths, and weaknesses
One key lesson from Thai An Law Firm is that before sitting down at the negotiating table, businesses must:
Identify negotiation goals, acceptable limits, and backup plans (BATNA – Best Alternative to a Negotiated Agreement).
Understand the foreign partner well: their strengths, interests, and pressures (e.g., time or cost).
Carefully prepare all relevant documents and evidence: contracts, emails, meeting minutes, technical reports, etc.
When well-prepared, the business can control the negotiation better and avoid being manipulated or disadvantaged due to a lack of information.
2. Start with negotiation and conciliation – quick, cost-effective, and low-pressure
According to ASLGate, direct negotiation is often the first recommended method because it:
Saves time and cost, and avoids legal procedures.
Requires honesty and goodwill from both parties to reach a mutual agreement.
If the foreign partner is also willing, businesses can take advantage of this approach to quickly resolve the issue and maintain the cooperative relationship.
3. When negotiation fails – consider a neutral intermediary: mediation or peaceful consultancy
Mediation is a form of Alternative Dispute Resolution (ADR) where a neutral third party helps the disputing parties find a solution. This method is flexible, confidential, and avoids cumbersome litigation procedures. According to Wikipedia:
Mediation is voluntary, simple in procedure, and confidential.
In Vietnam, commercial mediation (as per Decree 22/2017/ND-CP) is a viable option to consider before proceeding to arbitration or court litigation.
4. When negotiation fails – move to arbitration or court
If all negotiation and mediation efforts fail to yield results, businesses need to choose between:
International commercial arbitration: Neutral, quick, and flexible in both governing law and procedures – ideal for international contracts.
Vietnamese courts: Have high enforcement power, with clear procedures under local laws – suitable when arbitration is not feasible.
According to current Vietnamese law, the statute of limitations for filing a commercial contract dispute lawsuit is 2 years from the date the legitimate rights are infringed, except in some special cases. This is a crucial legal timeframe that businesses must monitor closely to avoid losing their right to litigation.
A practical and useful strategy checklist in Vietnam
To summarize, here is a practical checklist for effective implementation:
Prepare thoroughly before negotiations – identify BATNA, complete documentation, and gather evidence.
Prioritize direct negotiations – quick, cost-effective, and preserves business relationships.
Utilize commercial mediation when needed – flexible and low-risk.
Move to arbitration or court if negotiations fail – based on execution needs, governing law, and costs.
Do not miss the statute of limitations – 2 years is the standard short-term limit and must be carefully tracked.
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!
