Dispute Resolution before Arbitration and Courts

When a dispute arises, the choice between Commercial Arbitration and Courts directly affects time, cost, confidentiality, and enforceability. This choice — which should ideally be made when drafting the contract — is often only considered after the dispute has erupted.

Comparing Arbitration and Courts

  • Jurisdiction: arbitration only handles a dispute when the parties have a valid arbitration agreement (Article 5 of the Law on Commercial Arbitration 2010); without such an agreement, the dispute belongs to the courts;
  • Finality: an arbitral award is final — the parties cannot appeal — faster, but with less opportunity to correct errors than the two-instance court proceedings;
  • Confidentiality: arbitral proceedings are kept confidential unless the parties agree otherwise — suitable for disputes where reputational impact should be avoided; court hearings are public;
  • Time: arbitration is usually significantly faster than multi-level court proceedings;
  • Enforcement: arbitral awards are enforced like court judgments; foreign arbitral awards are recognized and enforced in Vietnam under the 1958 New York Convention, to which Vietnam is a party.

The Arbitration Agreement — The Most Valuable Clause in a Contract

A good arbitration agreement must specify: the arbitration center (e.g., VIAC), the number of arbitrators, the venue, the language of proceedings, and the applicable law. A vague agreement (“disputes shall be resolved by arbitration”) can trigger jurisdictional disputes and waste time from the very start. When reviewing contracts, this is a clause ANT Legal always checks carefully.

Arbitral Proceedings in Brief

  1. Filing the statement of claim and advancing arbitration fees;
  2. Constitution of the arbitral tribunal (each party appoints one, the two arbitrators choose the chair — or the center appoints);
  3. The parties submit statements and evidence; the hearing to resolve the dispute;
  4. The tribunal issues the award — final and enforceable.

When Should You Choose the Courts?

When there is no arbitration agreement; when interim emergency measures tied to state power are needed; when the dispute involves a third party not bound by the arbitration agreement; or when you want the opportunity to appeal at the appellate level.

How Does ANT Legal Assist?

  • Advising on the choice of dispute resolution mechanism from the contract drafting stage;
  • Representing clients in arbitral proceedings (VIAC and other centers);
  • Representing clients in filing lawsuits and participating in proceedings at courts of all levels;
  • Requesting recognition and enforcement of foreign arbitral awards in Vietnam.

Related Content

Torn between arbitration and courts for a dispute? Contact ANT Legal via Hotline/Zalo 0966.475.966 for a lawyer’s assessment and recommendation of the most suitable mechanism.

This content is for general reference only and does not replace legal advice for a specific case. The choice of dispute resolution mechanism depends on the agreement and the nature of each case.

Discuss this matter with ANT Legal

If a commercial dispute has arisen, ANT Legal can help assess evidence and compare negotiation, arbitration or court options based on the file.

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When a matter has deadlines, high value, multiple parties or requires risk review before signing, negotiating, complaining or filing a claim.

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Website information is for general reference only and does not replace legal advice for a specific matter.