BUSINESS LAW

TUTORIAL 8

1. Are other subjects (such as other individuals, organizations) considered as the

subject of the commercial dispute?
 Yes. According to Article 1 Clause 3 of Commercial Law 2005, activities not for
profit purposes conducted by a party in its transactions with traders in the territory of
the Socialist Republic of Vietnam in cases where the party conducting such not-for-
profit activities chooses to apply this Law. Therefore, apart from the trader who is the
main subject of a commercial dispute, in certain cases, other individuals and
organizations (who are not traders) can also be the subject of a commercial dispute
when in transactions.
2. Comparison between 4 dispute resolution methods: Negotiation, Mediation,
Commercial Arbitration and Court
Criteria Negotiation Mediation Commercial Court
Arbitration
Definition Parties together Parties discuss Parties will settle Parties settle the
discuss, settle and negotiate their disputes dispute at the
and resolve with the through state authority,
conflicts without participation of a arbitrators at the Court's
the participation third party to commercial judgment is
or judgment of support and arbitration guaranteed to
any third party. persuade the centers, and the be enforced
parties to find a arbitrators, in
way to resolve their capacity as
the conflict. independent
arbitrators, will
issue a valid
award that is
obligated by the
parties to enforce
Legal grounds None Decree Law on Civil Procedure
22/2017/ND-CP Commercial Code 2015
Arbitration 2010
Objects of The parties Through the Through the Through a
dispute having a dispute mediator arbitrator judge
resolution with each other
Scope of As agreed by the As agreed by the At the request of At the request
settlement parties parties the petitioner of the petitioner
Principles of Subject to the Confidentiality Non-disclosure Publish the case
resolution willingness of the (unless otherwise (unless the parties (except for
parties agreed or agree) disputes that are
specified) not made public
as prescribed by
law)
Condition of Without any There must be an  There is an  One of the
settlement conditions, the agreement agreement on parties files
proceeding is between the commercial a lawsuit in
subject to the parties on arbitration court
agreement of the commercial  Disputes  Disputes
will between the mediation falling under falling
parties the under the
jurisdiction of jurisdiction
commercial of the Court
arbitration
Legal binding Non-binding, Non-binding and Binding and The decision is
meant to non-enforceable obligatory by the obligatory by
encourage parties parties the parties,
to do it otherwise it will
themselves be enforced
Advantages  Convenient, The mediator is a Flexible, fast, Highly
fast, simple, person with doesn't take much coercive,
flexible, expertise, time forcing the
efficient and experience and parties to
inexpensive knowledge of the perform
 Protect the disputed area and
reputation of issue, so he will
the parties give appropriate
and business advice to both
secrets parties.

Disadvantages The outcome of  The outcome The longer the The procedure
the settlement of the dispute lasts, the is not flexible,
 depends on the settlement more expensive it the processing
goodwill of the depends on will be time is long due
parties the goodwill to compliance
of the parties with the law
 Expensive

3. What are the advantages and disadvantages of direct and indirect negotiation?
Direct Negotiation Indirect Negotiation
Advantages  In the process of direct negotiation,  Save money
the parties capture each other's  Have more time to make
psychology and reactions directly decisions
through gestures, facial  Can transact with multiple
expressions, and gestures through clients at the same time
which the parties can explain and  Ensure the urgency, the right
understand each other's views and time when needed
wishes, thereby influencing the
partners in a specific way to come
to a common consensus and find a
solution that harmonizes the
interests of the parties.
 Speeding up the resolution
Disadvantages Requires high costs for the activities of  Easy to delay
reception, travel and accommodation of  Easy to miss opportunities
partners  Difficult to know the true
intentions of customers

4. Conditions for settlement by Arbitration?

 According to Clause 1, Article 5 of the Law on Commercial Arbitration 2010,
disputes will be resolved by arbitration if the parties have an arbitration agreement.
The arbitration agreement can be made before or after a dispute occurs. Thus, the
condition for dispute settlement by arbitration is to have an arbitration agreement.
5. Procedures for settlement of business and commercial disputes at the Court
 There are 4 main steps:
- Initiating lawsuits and handling cases
- Preparing for trial
- Judge
- Execution of judgment
 6. Case Study:
M Joint Stock Company, headquartered in Nam Tu Liem district, Hanoi city signs a contract to
buy coffee from N Joint Stock Company based in Buon Ma Thuot city, Dak Lak province. The
total value of the contract, the two parties agree verbally: "If a dispute arises, it will be settled at
the Ho Chi Minh City Commercial Arbitration Center for settlement". Then, in the course of the
transaction, Company N delivers the goods to Company M of incorrect quality, causing a loss of
VND 1 billion to Company M. Therefore, the two sides arose a dispute.
Request:
1. Did the Ho Chi Minh City Arbitration Center resolve the above dispute?
 NO. According to Clause 2, Article 16 in the Arbitration Law 2010, an arbitration agreement
must be in writing. Therefore, the Ho Chi Minh City Arbitration Center did not resolve the above
dispute because verbal arbitration agreement has no legal validity
2. Settlement of the above dispute is resolved by the court, which court has the authority to
resolve
 According to Clause 1, Article 39 in Civil Procedure Code 2015, territorial jurisdiction of
Courts to settle civil lawsuits is:
- The Courts of the localities where the defendants reside or work, applicable to defendants
being individuals, or where the defendants are headquartered, applicable to defendants being
agencies or organizations, shall have the jurisdiction to settle according to first-instance
procedures for civil, marriage- and family-related, business, trade or labor disputes
prescribed in Articles 26, 28, 30 and 32 of this Code;

- The involved parties shall have the right to agree with each other in writing to petition the
Courts of the localities where the plaintiffs reside or work, applicable to plaintiffs being
individuals, or where the plaintiffs are headquartered, applicable to plaintiffs being agencies
or organizations, to settle civil, marriage and family-related, business, trade or labor disputes
prescribed in Articles 26, 28, 30 and 32 of this Code