Commercial arbitration is a dispute resolution method chosen by many businesses with foreign elements, but it is not popular with domestic enterprises

Legal grounds:

• Commercial Law 2005;
• Commercial Arbitration Law 2010.

According to the provisions of the Commercial Law 2005, there are methods of dispute resolution in commerce including:

• Negotiation between the parties;
• Mediation between the parties is chosen by an agency, organization or individual as agreed upon by the parties to act as a mediator;
• Settlement in Arbitration or Court.

The method of dispute resolution by arbitration is not really popular in Vietnam, and usually only businesses with foreign elements choose to apply. While domestic businesses still choose the court as the traditional dispute resolution agency.

In this article, we outline some very basic bullet points of commercial arbitration for your reference and consideration.

1. Advantages of dispute resolution by commercial arbitration

• Processing time is faster than settlement in court.
• The arbitrator is responsible for keeping the content of the dispute confidential.
• The arbitrator’s decision is final.
• The parties do not have the right to appeal at any organization or court (This feature is relative in each party, it’s an advantage if the case is won, but a disadvantage if the case is lost).

2. Disadvantages of dispute resolution by commercial arbitration

• The arbitration agreement may be void or the name of the Arbitration Center is incorrect or the arbitration agreement is incomplete, this method of dispute resolution is also unenforceable.
• It is very difficult to sit back and listen to each other’s actual difficulties, let alone ask the parties to sit down and agree on the method of arbitration.
• The parties do not have the right to appeal at any organization or court (This feature is relative in each party, it’s an advantage if the case is won, but a disadvantage if the case is lost).

3. Keep in mind if you want to resolve commercial disputes by arbitration

• A good arbitration agreement (terms) is required.
• Disputes arise in business and commercial activities between individuals and organizations that have business registration with each other and all have profit purposes.
• Disputes over intellectual property rights, technology transfer between individuals and organizations, and all have profit purposes.
• Disputes between parties in which at least one party has commercial activities.