Preventing Disputes in International Logistics Service Contracts in Vietnam

Operating in the international logistics sector, Vietnamese businesses may face various risks of disputes if contracts are not carefully drafted. This article compiles the latest legal updates in Vietnam, real-world dispute scenarios, and practical solutions to effectively prevent disputes in international logistics service contracts.

1. Common Causes of Disputes & Current Legal Framework

1.1 Common Causes of Disputes

According to recent analyses, the main causes of disputes in international logistics service contracts in Vietnam include:

Poorly drafted contracts lacking key provisions

Many companies use pre-made templates or samples found online without tailoring them to international conditions: applicable law, each party’s responsibility for documents, customs procedures, goods inspection, points of delivery and receipt, etc.

Lack of due diligence on partners and shipping documents

Engaging with new or foreign partners without verifying their legal status, financial standing, and contract performance history. Shipping documents such as bills of lading, transport details, and customs records are sometimes missing, incorrect, or unclear.

Unclear applicable law and dispute resolution method

If the contract does not specify which law applies, who is responsible, or how disputes will be resolved, then when disputes arise, both parties (and courts/arbitrators) may lack the basis to handle the situation.

Unclear clauses on liability, limitation of liability, and exemptions

For example: who bears the loss if goods are damaged or lost; what the liability cap is; how to handle force majeure events or subjective faults.

Omitted or unclear claims procedures and time limits

For example: if a client opens the package late or checks the goods long after delivery and does not report defects promptly; or fails to make claims within the time limits stated in the contract or by law.

Not updated with digital trends – e-documents, digital signatures, online dispute resolution

In international trade, parties increasingly require digital processing, e-signatures, tracking systems... If contracts do not have clauses recognizing e-documents or digital confirmations, disputes can easily arise.

1.2 Vietnam’s Updated Legal Framework & Relevant Regulations

To prevent disputes, businesses should stay informed of the current regulations:

• Commercial Law (2005, amended multiple times) – defines rights and obligations of logistics service providers, payment methods, liability, and limitations thereof.

• Decree No. 163/2017/ND‑CP (and amendments) – regulates business conditions for logistics services and liability limitations.

• Civil Code 2015 – general rules for service contracts: subject matter, timeframes, form, notifications, liabilities.

• Maritime Code 2015 (amended) – applicable to international sea transport of goods: bills of lading, carrier’s obligations, liability exemptions, and limitations.

2. Practical Measures to Prevent Disputes

Based on causes and current laws, businesses can apply the following steps to mitigate risks:

2.1 Draft Detailed and Clear Contracts

• Define the service scope clearly: list all services the logistics provider will perform (transport, warehousing, packing, customs procedures...), indicate responsibilities and start/end points.

• Applicable law, contract language, dispute resolution venue: For international elements, specify applicable law (Vietnamese, foreign, or international), whether disputes are handled in court or arbitration, and the exact arbitration center.

• Liability and limitation clauses: Clearly state conditions for liability exemption or limitation (e.g., force majeure). If there is intent or gross negligence, limitation should not apply. Define cargo value clearly – if provided by the client, the service provider should be informed to set liability limits.

2.2 Agree on Documentation, Inspection, and Claim Deadlines

• Require complete transport and customs documents: bill of lading, warehouse dispatch slip, invoice, quality certificate, and others for special cargo.

• Pre-delivery inspection: If possible, customers should inspect goods at the port. Photos or videos may serve as evidence.

• Claim deadlines and confirmation of loss/damage: Contracts should specify how many days post-delivery a claim must be made. If not, laws typically require a claim within 14 days after receiving goods.

2.3 Payment, Insurance, and Performance Guarantees

• Safe payment methods: use letters of credit (L/C), collection, or partial prepayment. For post-payment, require clear commitments.

• Cargo insurance: clarify which party buys insurance, what type, coverage limit, and necessary documents.

• Bank guarantees and bill of lading endorsement: Use when cargo passes through multiple transit points to ensure service provider’s responsibility.

2.4 Choose Reliable Partners & Effective Dispute Resolution

• Partner due diligence: verify legal status, past contract fulfillment, customer feedback, financial reports, and market presence.

• Effective dispute resolution: Prioritize negotiation and mediation. If arbitration, specify if domestic or international, and name the arbitration center. Consider online dispute resolution if appropriate. Vietnamese law is evolving to support digital arbitration in line with international practice.

2.5 Helpful Additional Clauses

• Force majeure: define natural disasters, wars, pandemics as force majeure and legal consequences thereof, including notification duties.

• Clause on external condition changes: allow parties to renegotiate cost terms if major changes occur (e.g., sudden freight rate hikes, fuel costs, import taxes).

• Confidentiality, intellectual property, export-import licensing clauses: applicable when the contract involves sensitive or technological information.

3. Conclusion

Disputes in international logistics service contracts are not entirely avoidable, but they can be significantly reduced with well-drafted contracts and protective clauses. Understanding Vietnam’s logistics regulations, staying updated on legal changes, and negotiating contracts professionally will empower businesses to protect their interests more proactively.

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