Forms of commercial dispute resolution.

23 February, 2026 162 Views

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Nowadays, Vietnam is one of the countries with the most comprehensive and extensive integration into the global economy. This has strongly promoted cooperation, trade, and commercial transactions both domestically and internationally. However, alongside these opportunities come challenges and risks in business and commercial activities, as conflicts of interest inevitably arise in commercial relationships between parties. When such commercial disputes occur, all parties seek the most complete, prompt, and suitable resolution method—one that preserves business partnerships while safeguarding their legitimate rights and interests. This is the primary desire of parties involved in commercial disputes.

To provide the clearest and most comprehensive perspective on resolving commercial disputes, and to assist parties in understanding and selecting the most appropriate dispute resolution method, BKC Law presents a detailed explanation of this issue in the article below:

1. Legal Grounds for Resolving Commercial Disputes

Civil Code 2015
Commercial Law 2005
Civil Procedure Code 2015
Commercial Arbitration Law 2010
Decree 22/2017/ND-CP on Commercial Mediation

2. What is a Commercial Dispute?

Pursuant to Clause 1, Article 3 of the Commercial Law 2005, it is stipulated:

“Commercial activities are activities aimed at profit, including the purchase and sale of goods, provision of services, investment, commercial promotion, and other profit-oriented activities.”

Accordingly, a commercial dispute is a conflict, disagreement, or dispute over interests arising from commercial business activities among involved parties, such as investment, purchase and sale of goods, provision of services, commercial promotion, and other profit-oriented activities.

3. What are the Current Methods for Resolving Commercial Disputes?

Pursuant to Article 317 of the Commercial Law 2005, there are four methods for resolving commercial disputes, including:

Negotiation between the parties
Mediation
Resolution by commercial arbitration
Resolution by the Court

Based on the above methods and considering the actual conditions and circumstances, the parties to a commercial dispute may select the most suitable resolution method.

To provide a clearer understanding of the above commercial dispute resolution methods, BKC Law analyzes each method in detail as follows:

Negotiation between the Parties

This is a traditional method for resolving commercial disputes directly between the parties, based on voluntary negotiation to eliminate conflicts of interest without the involvement of any third-party judgment or decision.

This method is the initial and simplest step for parties to resolve disputes. It offers maximum benefits by minimizing resolution costs, preserving business relationships, and avoiding any binding obligations from third parties.

However, the outcome of negotiation depends entirely on the parties’ agreement, and enforcement relies on their voluntary compliance without any compulsory execution by a third party or competent state authority.

Mediation

Pursuant to Clause 1, Article 3 of Decree 22/2017/ND-CP, commercial mediation is specifically defined as follows: “Commercial mediation is a method of resolving commercial disputes agreed upon by the parties, with the assistance of a commercial mediator acting as an intermediary to support dispute resolution in accordance with this Decree.”

Thus, mediation is a method of dispute resolution in which the parties agree to select an agency, organization, or individual to act as an intermediary mediator.

This method is considered highly advantageous due to its ease of implementation, flexibility, low cost, and minimal time consumption. Disputing parties often agree to select reputable mediators with experienced experts knowledgeable in the relevant fields and industries. It is also objective and impartial, as the mediation outcome is witnessed and recorded by a third party, leading to a higher compliance rate compared to negotiation.

However, this method does not follow any statutory procedural rules; the procedure is determined by the parties themselves. A further drawback is that the mediation outcome is not binding unless voluntarily complied with (except where recognized by a competent court pursuant to Article 419 of the Civil Procedure Code 2015).

Resolution by Commercial Arbitration

Characteristics of Commercial Arbitration

Regarding procedures and processes for dispute resolution:

Pursuant to Clause 1, Article 3 of the Commercial Arbitration Law 2010, commercial arbitration is specifically defined as: “Commercial arbitration is a method of dispute resolution agreed upon by the parties and conducted in accordance with this Law.”

Accordingly, the procedures and processes for commercial arbitration are agreed upon by the disputing parties and conducted pursuant to the Commercial Arbitration Law 2010. Commercial arbitration is not required to follow the civil procedure rules under the Civil Procedure Code 2015.

Regarding organization, management, and establishment of commercial arbitration:

This is an institutionalized form of arbitration established with ongoing management, operated regularly by experienced arbitrators to resolve commercial disputes.

It is a non-governmental organization independent of the state system, possessing legal personality, its own charter and seal, operating autonomously, and maintaining a fixed list of arbitrators.

Forms of Commercial Arbitration in Vietnam:

Pursuant to the Commercial Arbitration Law 2010, there are two forms of dispute resolution: institutional arbitration (also known as permanent arbitration) and ad hoc arbitration, distinguished as follows:

Content	Institutional Arbitration (Permanent Arbitration)	Ad Hoc Arbitration
Definition	Pursuant to Clause 6, Article 3 of the Commercial Arbitration Law: “is a form of dispute resolution at an Arbitration Center in accordance with this Law and the procedural rules of that Arbitration Center.”	A method of dispute resolution pursuant to the Commercial Arbitration Law 2010, with procedures agreed upon by the parties.
Management and Organization	This is an institutionalized form of arbitration established with ongoing management, having its own headquarters, charter, and separate procedural rules. It is a non-governmental organization independent of the state system, possessing legal personality, its own seal, operating autonomously, and maintaining a fixed list of arbitrators.	Ad hoc arbitration is established upon the occurrence of a dispute when the parties agree to select it, and terminates upon resolution of the dispute. Procedural rules and arbitrator selection are agreed upon by the parties. In practice, ad hoc arbitration typically has no separate headquarters, no administrative apparatus, and no fixed list of arbitrators.
Establishment and Dissolution	Establishment and termination of institutional arbitration are governed by the provisions of the Commercial Arbitration Law.	Ad hoc arbitration is established when a dispute arises and the parties agree to it. It terminates upon completion of the case resolution.

Advantages and Disadvantages of Commercial Arbitration as a Dispute Resolution Method:

Advantages

Disadvantages

Commercial arbitration is a prevailing trend in modern dispute resolution.
It is professional, time- and cost-efficient, handled by experienced experts with in-depth knowledge in the disputed fields.
Resolution is not limited by geographical or territorial boundaries between countries.
Proceedings are non-public, ensuring high confidentiality for the parties.
Arbitral awards are final and binding, with no right of appeal.

The longer a case takes, the higher the arbitration fees, and fees vary among arbitration centers.
In cases of non-objective or incorrect arbitral decisions, the court may be requested to review them.
Commercial arbitration may face difficulties in verifying, contacting, or collecting evidence in complex cases.

Resolution of Commercial Disputes by the Court

Jurisdiction of Courts over Commercial Disputes:

Pursuant to Article 30 of the Civil Procedure Code 2015, it is stipulated:

“Article 30. Disputes over business and commercial matters under the jurisdiction of the Court

1. Disputes arising in business and commercial activities between individuals and organizations registered for business, all with profit-making purposes.

2. Disputes over intellectual property rights and technology transfer between individuals and organizations, all with profit-making purposes.

3. Disputes between a person who is not yet a member of a company but has transacted the transfer of capital contribution with the company or its members.

4. Disputes between a company and its members; disputes between a company and its managers in limited liability companies or members of the Board of Directors, Director, General Director in joint-stock companies; disputes among members of the company related to the establishment, operation, dissolution, merger, consolidation, division, separation, asset transfer, or conversion of the company’s organizational form.

5. Other disputes over business and commercial matters, except those under the jurisdiction of other agencies or organizations as prescribed by law.”

Pursuant to the above, if a dispute falls within any of the above cases, the parties may file a lawsuit petition along with supporting documents to request resolution by the competent court.

Advantages and Disadvantages of Court Resolution for Commercial Disputes:

Advantages

Disadvantages

Court judgments are issued by competent state authorities, carrying high legal force and requiring mandatory compliance by the parties under the law.

Court proceedings follow strict, principled procedures with limited flexibility, as they must adhere to current legal regulations, sometimes leading to prolonged resolution times.
The principle of public trial does not ensure confidentiality of information for the disputing parties.
Court judgments or decisions may be appealed under the law, potentially prolonging the case if one party files an appeal after the judgment.

Statute of Limitations for Initiating Lawsuits on Commercial Disputes

Pursuant to Article 319 of the Commercial Law 2005: “The statute of limitations for initiating lawsuits regarding commercial disputes is two years from the date the lawful rights and interests are infringed, except in cases where, after a complaint, the logistics service provider does not receive notice of being sued at arbitration or court within nine months from the date of delivery of goods.”

The above is BKC Law Firm’s article on the resolution of commercial disputes and the current methods available. The useful information provided helps readers better understand contemporary commercial dispute resolution methods and select the most appropriate one to protect their rights and interests in accordance with the law.

For free legal consultation on commercial law at BKC Law, please contact our Lawyers via the following information:

Telephone: 0901 3333 41

Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City

Binh Tan Office: 41 Ten Lua, Binh Tan District, Ho Chi Minh City

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