Commercial activities conducted for the purpose of profit-making, including buying and selling goods, providing services, investing, promoting trade, and other activities for profit-making purposes. Commercial dispute means conflicts and disagreements over rights and obligations between parties in the process of carrying out commercial activities. In this article, LSX legal firm provides: “Causes of business and commercial disputes in Vietnam”
Legal grounds
- Civil Procedure Code 2015
- Decree 22/2017/ND-CP
- Law on Commercial Arbitration 2010
Characteristic of commercial dispute
Features of commercial disputes:
- Conflicts and conflicts over rights and obligations between the parties in a specific relationship.
- Conflicts, conflicts of rights, and obligations between the parties must arise from commercial activities.
- Commercial disputes are mainly disputes between traders.
Causes of business and commercial disputes
- Conflict of profit: The purpose of business is profit. However, many individuals and organizations that, for the sake of profit, have broken the contract, leading to a breach of the contract. For profit, they can sell their credibility, willing to deceive, cheat customers, cause damage to the partner,… leading to disputes.
- Differences in business practices also lead to disputes.
- The law still has certain gaps that cannot cover all the relationships that occur in the market.
- Changes in the law, embargoes, wars, etc. may affect the performance of the contract. Although belonging to force majeure cases, the damage brought and the settlement of those damages also causes disputes between the parties.
- Enterprises lack of legal knowledge, improper contract performance,… leads to disputes.
Forms of commercial dispute resolution
4 forms of commercial dispute settlement specified in Article 317 of the Law on Commercial 2005 as follows:
Negotiations between the parties
Negotiation is understood as a method of dispute settlement through which the parties voluntarily discuss, reach agreement, self-settlement, and resolve arising disagreements to eliminate disputes without the assistance or judgment of any third party.
The negotiation process between the parties does not bound by legal regulations on the order and procedures for settlement.
The outcome of the negotiation completely depends on the wish of each disputing party without any legal mechanism to ensure the enforcement of the agreement of the parties during the negotiation process.
Conciliation
Conciliation between the parties by a body, organization, or individual selected by the parties to act as the conciliation mediator.
According to Clause 1, Article 3 of Decree 22/2017/ND-CP, Commercial mediation means a method of resolving commercial disputes agreed upon by involved parties with the assistance of a commercial mediator acting as an intermediary in accordance with this Decree.
Principles of dispute resolution through commercial mediation:
1. Disputing parties shall participate in mediation on an entirely voluntary basis and are equal in terms of rights and obligations.
2. Information relating to a mediation case shall be kept confidential, unless otherwise agreed upon in writing by involved parties or otherwise prescribed by law.
3. Mediation agreement contents must neither violate prohibitory provisions of law nor contravene social morality, nor aim at shirking obligations nor infringe upon rights of a third party.
A dispute shall be resolved through commercial mediation if involved parties agree. The parties may reach an agreement on dispute resolution through mediation before or after a dispute arises or at any time in the process of dispute resolution.
Settlement of disputes by commercial arbitration
The Law on Commercial Arbitration 2010 stipulates that Commercial arbitration means a mode of dispute settlement agreed upon by the parties and conducted under this Law.
According to Article 4 of the Law on Commercial Arbitration 2010, the principles of dispute settlement by arbitration include:
- Arbitrators must respect the parties’ agreement if such agreement neither breaches prohibitions nor contravenes social ethics.
- Arbitrators must be independent, objective, and impartial and shall observe the law.
- Disputing parties are equal in their rights and obligations. The arbitration council shall create conditions for disputing parties to exercise their rights and fulfill their obligations.
- Dispute settlement by arbitration shall be conducted in private unless otherwise agreed by the parties.
- Arbitral awards are final.
Conditions for dispute settlement by arbitration
- A dispute shall be settled by arbitration if the parties have an arbitration agreement. An arbitration agreement may be made either before or after a dispute arises.
- When one of the parties being an individual to an arbitration agreement dies or loses his/her act capacity, such arbitration agreement remains valid for his/her heir or representative at law unless otherwise agreed by the parties.
- When one of the parties being an institution to an arbitration agreement has to terminate its operation, goes bankrupt, or is dissolved, consolidated, merged, divided, split up, or reorganized, such arbitration agreement remains valid for an institution that takes over the rights and obligations of the institution to such arbitration agreement, unless otherwise agreed by the parties.
Disputes settled by Court
Article 30 of the Civil Procedure Code 2015 stipulates the business and commercial disputes that fall under the jurisdiction of the Court:
- Firstly, disputes arise from business or trade activities among individuals and/or organizations with business registration, all for the purpose of profits.
- Secondly, disputes over intellectual property rights or technology transfers among individuals or organizations, all for the purposes of profits.
- Thirdly, disputes between persons who are not members of a company but involve in a transaction in the transfer of capital holding and the company and/or its members.
- Fourthly, disputes between a company and its members; disputes between a limited liability company and its manager or between a joint-stock company and members of its Board of Directors, its Director or its General Director, or among members of a company regarding the establishment, operation, dissolution, merger, consolidation, total division, partial division, property transfer and/or organizational transformation of the company.
- Lastly, other civil disputes relating to business or trade activities, except for cases within the jurisdiction of other agencies and organizations as prescribed by law.
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Contact LSX
Finally, hope this article is useful for you to answer the question about “Causes of business and commercial disputes in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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Related questions
The statute of limitations for lawsuits applicable to commercial disputes shall be two years from the moment when the legitimate rights and interests are infringed upon, except for cases specified at Point f, Clause 1, Article 237 of the Law on Commercial 2005.
Six months from the date of delivery of goods for complaints about quality of goods. Where goods are under warranty, the time limit for lodging complaints shall be three months from the expiry of the warranty period.
Firstly, accept or refuse to settle disputes.
Secondly, independent in dispute settlement.
Thirdly, refuse to provide dispute-related information.
Fourthly, enjoy remuneration.
Fifthly, keep secret the circumstances of disputes they settle, unless they have to provide information to competent state agencies under law.
Also, ensure impartial, fast, and prompt settlement of disputes.
Lastly, adhere to the rules of professional ethics.
Conclusion: So the above is Causes of business and commercial disputes in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
