A mediation session at the Hanoi court. Vietnamese enterprises are advised to use different dispute resolutions to settle disputes with foreign partners more efficiently. (Photo: VNA) To date, Vietnam has signed 15 FTAs with many countries andregions, of which the UK-Vietnam Free Trade Agreement (UKVFTA) was the latestput into force in May last year.
Nguyen Ngoc Son, standing member of the Science, Technology andEnvironment Committee of the National Assembly, said in the internationalbusiness and investment environment, disputes are inevitable and Vietnamesebusinesses must comply with the "rules of the game" in the globalmarket.
Transactions involving foreign partners are subject to differentlegal systems, commercial practices and business cultures which increases therisk of disputes. New business models and Industry 4.0 are leading to changesin dispute resolution methods (e-Courts, online adjudication…) and the scope ofjurisdiction to resolve disputes.
Currently, there are four methods of trade dispute resolution,including negotiation, mediation, court or arbitration. Each has certainadvantages and limitations, depending on the choice of the parties who have theneed to resolve disputes.
Son said in essence when a dispute occurs, the parties involvingthe dispute all want to find a solution that best ensures their interests andminimises the negative impact on their relationship and is less costly in termsof time and money. Therefore, seeking and applying an appropriate disputeresolution is extremely important.
In FTAs, the bilateral dispute settlement mechanism provides aneffective mechanism for enforcing those commitments and for resolving anydisputes that arise. Ideally, the parties should mutually agree on solutionsand avoid disputes through dialogue but if not feasible, the dispute settlementmechanism provides a way to resolve trade irritants through binding decisionsof a panel.
The UKVFTA replicates the effects of the dispute settlementprovisions in the EU-Vietnam FTA mutatis mutandis. However, if a disputearises, the UK will be directly responsible for any relevant costs associatedwith the dispute settlement process.
This mechanism ensures a faster system through stricter deadlinescompared to the WTO mechanism (up to 425 days compared to WTO’s 860 days), amore efficient system of panel composition, a more transparent system (amicuscuriae, public hearing) and an innovative system through the establishment ofan elaborated mediation mechanism.
According to the Vietnam International Arbitration Center (VIAC),the practice shows that the use of alternative dispute resolution (ADR) is apopular trend in the global business community given its effectiveness andefficiency.
ADR means any procedure, agreed to by the parties of a dispute, inwhich they use the services of a neutral party to assist them in reaching anagreement and avoiding litigation. They include arbitration, mediation,negotiated rulemaking, neutral factfinding and minitrials.
“Dispute settlement measures can be seen as a chain of links, notindependent. Each measure has its own advantages and limitations that theparties can consider and choose in accordance with their own context. It isimportant for the disputing parties to understand each of these methods toapply when a dispute arises,” Vu Le Giang from the Department of Civil andEconomic Laws under the Ministry of Justice said./.
VNA
