Potential advantages of commercial arbitration in Vietnam

Hi DMS Law office in Vietnam! What are potential advantages of commercial arbitration over judicial proceedings ? Can you advise me about potential advantages of arbitral proceedings ?

Hi!

Potential advantages of arbitration over going to court

Arbitral proceedings may be more flexible, may save time and costs for businesses as follows:

Language

The language to be used in civil judicial proceedings is Vietnamese (Article 20 the Civil Code Procedures No. 92/2015/QH13 dated 25 November 2015). In arbitral proceedings, for disputes involving foreign elements or disputes to which at least one party is a foreign-invested enterprise, the parties shall reach agreement on the language to be used. If they have no such agreement, the arbitration council shall decide on the language to be used in arbitral proceedings (Clause 2 Article 10 Law on Commercial Arbitration No.54/2010/QH12 dated 17 June 2010).

Confidentiality

The Court trials shall be public (Clause 2 Article 15 the Civil Code Procedures No. 92/2015/QH13 dated 25 November 2015). Dispute settlement by arbitration shall be conducted non-public, unless otherwise agreed by the parties (Clause 4 Article 4 Law on Commercial Arbitration No.54/2010/QH12 dated 17 June 2010). Arbitral proceedings and an arbitral award can be made confidential, so enterprises can keep confidentiality about their business information. 

Time and costs for proceedings

Dispute settlement by court shall follow a prescribe regime, potentially involving multiple steps: first instance trial, appellate trials, cassation trial or re-opening procedures (Article 17 the Civil Code Procedures No. 92/2015/QH13 dated 25 November 2015). Arbitral awards are final (Clause 5 Article 4 Law on Commercial Arbitration No.54/2010/QH12 dated 17 June 2010). Therefore, arbitration is often faster and cheaper than going to court.

Selecting arbitrator

In judicial proceedings, you cannot select the judge. In arbitral proceedings, an arbitrator may be selected by the parties (Clause 5 Article 3 Law on Commercial Arbitration No.54/2010/QH12 dated 17 June 2010). Therefore, the parties may choose to appoint arbitrators with an appropriate degree of expertise when the subject matter of the dispute is highly technical.

Enforcement in other countries

Arbitration awards are generally easier to enforce in other countries than court judgments, especially in the territory of another Contracting State of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the New York Arbitration Convention).  

Related topics:

Can I choose to use foreign language in an arbitral proceedings in Vietnam ?

Vietnam investor visa

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Potential advantages of commercial arbitration in Vietnam ?