Introduction

When a commercial dispute arises in Vietnam, parties have three primary resolution paths. Choosing the right method can save millions in costs and months in time. Attorney Vo Thien Hien has represented clients across all three forums and offers this comparative guide.

Court Litigation

Process

  1. File lawsuit at the competent People's Court
  2. Court-led mediation attempt (mandatory)
  3. First-instance trial (3-6 months after filing)
  4. Appeal (if either party disagrees)
  5. Enforcement of judgment

Advantages

  • Binding and enforceable decisions
  • Ability to apply interim measures
  • Lower filing fees than arbitration
  • Public precedent value

Disadvantages

  • Slow: 12-24 months for final resolution
  • Public proceedings (no confidentiality)
  • Judges may lack commercial expertise
  • Multiple appeal levels
  • Enforcement of foreign judgments is difficult

Best For

  • Domestic disputes with clear legal precedent
  • Cases requiring injunctive relief
  • Lower-value disputes
  • Cases where one party won't agree to arbitration

Commercial Arbitration

Process

  1. File request for arbitration (VIAC or other institution)
  2. Tribunal constitution (each party selects one arbitrator)
  3. Exchange of submissions and evidence
  4. Oral hearing
  5. Final award (binding, no appeal on merits)

Leading Institutions

  • VIAC (Vietnam International Arbitration Centre): Most popular in Vietnam
  • SIAC (Singapore): Popular for cross-border disputes involving Vietnam
  • ICC (Paris): For large international transactions

Advantages

  • Faster: typically 6-12 months
  • Confidential proceedings
  • Arbitrators with industry expertise
  • Awards enforceable internationally (New York Convention)
  • Flexible procedures

Disadvantages

  • Higher costs (arbitrator fees + institutional fees)
  • Requires prior agreement (arbitration clause)
  • Limited grounds for setting aside awards
  • No appeal on merits

Best For

  • International commercial disputes
  • High-value B2B disputes
  • Cases requiring confidentiality
  • Disputes needing specialized expertise

Mediation

Process

  1. Parties agree to mediate
  2. Select a mediator (independent or institutional)
  3. Joint and separate sessions
  4. If successful: settlement agreement (enforceable if court-recognized)
  5. If unsuccessful: parties retain right to litigate/arbitrate

Advantages

  • Fastest: weeks to months
  • Lowest cost
  • Preserves business relationships
  • Parties control the outcome
  • Court recognition available

Disadvantages

  • Non-binding (unless court-recognized)
  • Requires good faith from both parties
  • No precedent value
  • Cannot compel attendance

Best For

  • Ongoing business relationships
  • Disputes with potential for compromise
  • Multi-party disputes
  • Family business succession issues

Cost Comparison

| Method | Filing Fee | Duration | Total Cost Estimate | |--------|-----------|----------|-------------------| | Litigation | 0.5-3% of claim value | 12-24 months | $5,000-50,000 | | Arbitration (VIAC) | Based on claim value | 6-12 months | $15,000-100,000+ | | Mediation | Negotiable | 1-3 months | $2,000-15,000 |

Practical Tips

  1. Include a dispute resolution clause in every contract
  2. Consider multi-tier clauses: negotiate → mediate → arbitrate
  3. Choose the governing law carefully (Vietnamese law is mandatory for some matters)
  4. Preserve evidence from day one
  5. Engage counsel early — prevention is cheaper than cure

Conclusion

There is no one-size-fits-all approach. The best dispute resolution method depends on the nature of the dispute, the relationship between parties, and the desired outcome.

Contact Attorney Vo Thien Hien at Apolo Lawyers for strategic advice on dispute resolution in Vietnam.