What is a commercial dispute? What are the common methods for resolving commercial disputes today?
In the course of business operations, commercial disputes are inevitable—especially when parties fail to prepare adequately in terms of legal aspects during contract negotiation and execution. Understanding the nature of commercial disputes and selecting the appropriate resolution method are key factors in protecting your rights and maintaining sustainable business relationships.
What is a Commercial Dispute?
A commercial dispute refers to conflicts or disagreements arising between parties in the process of entering into, performing, or terminating commercial activities. These disputes may involve contracts for the sale of goods, services, distribution, agency, franchising, leasing, financial leasing, construction, or investment, finance, banking, insurance activities, among others.
According to Article 30 of the 2015 Civil Procedure Code of Vietnam, these disputes fall under the jurisdiction of the courts unless the parties choose or are able to resolve the issue through alternative methods.
Common Methods for Resolving Commercial Disputes
Depending on the nature of the dispute and the agreement between the parties, businesses may choose one of the following methods to resolve commercial disputes:
1. Negotiation
Negotiation is the simplest, fastest, and most cost-effective dispute resolution method, allowing parties to maintain their business relationship. The parties meet to discuss and reach a mutual agreement without involving any third party.
However, negotiation is only effective when all parties are cooperative and genuinely want to resolve the dispute amicably.
2. Mediation
Mediation involves the participation of a neutral third party—known as the mediator—who facilitates the resolution process and helps the disputing parties reach a common ground. Mediation may be conducted through professional mediators, mediation centers, or court-connected mediation (prior to trial proceedings).
In Vietnam, commercial mediation is gaining attention due to its flexibility, time-saving process, and high level of confidentiality.
3. Commercial Arbitration
Commercial arbitration is a dispute resolution method chosen by the parties, carried out through an arbitration institution or arbitrator. The arbitral award is final and enforceable, similar to a court judgment.
Its major advantages include flexibility, faster resolution, and confidentiality. However, arbitration may involve higher costs compared to litigation. In Vietnam, reputable arbitration institutions such as the Vietnam International Arbitration Center (VIAC) are commonly chosen by businesses.
4. Court Litigation
Litigation is the most common and formal method of dispute resolution in Vietnam. When negotiation or arbitration is not feasible or agreed upon, disputes are brought before the court and resolved through civil litigation procedures.
The court has the authority to enforce its judgments and ensure justice. However, litigation may be time-consuming and public in nature, which can affect a company’s reputation.
Which Method Should Businesses Choose?
Selecting the right method for dispute resolution depends on several factors:
The nature and complexity of the dispute
The relationship between the parties
The need for confidentiality and speed
Terms of dispute resolution agreed upon in the contract
It is advisable for businesses to include clear dispute resolution clauses in contracts from the outset to minimize legal risks.
Professional Legal Services for Commercial Dispute Resolution
At [Law Firm Name], we have accompanied hundreds of domestic and foreign enterprises in resolving commercial disputes. We offer strategic, tailored legal solutions with key advantages:
Strategic advice to resolve disputes effectively and cost-efficiently
Drafting and reviewing contract terms to prevent legal risks
Representation in negotiations, mediation, arbitration, or court litigation
A team of experienced lawyers in commercial law, contracts, and investment
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
Call us now or leave us a message to get advice. Initial consultation is free of charge.
