In the century of 21, our country’s economy is currently witnessing strong transformation and development in many aspects of life. As a result, the number of foreign companies and corporations investing and doing business in Vietnam is increasing and at the same time the number of disputes is also increasing nowadays. So about the matter “Commercial dispute with foreign elements in Vietnam” Let’s find out with LSX in the article below.
Legal basis
- Civil Procedure Code 2015;
- Commercial Law 2005;
- Law on Commercial Arbitration 2010.
Commercial dispute with foreign elements in Vietnam
Starting from the nature of the concept of dispute in general, we can draw the concept of a commercial dispute with foreign elements which is the conflict of disagreement (or conflict) about views, interests, about rights and obligations arising between two or more parties with foreign elements occurring in the course of conducting commercial activities for profit-making purposes such as purchase and sale of goods, provision of services, investment, trade promotion and other profitable activities.
According to the provisions of Clause 1, Article 30 of the Civil Procedure Code 2015, commercial business disputes are: Disputes arising in business and commercial activities between individuals and organizations with business registration with each other for profit. Specifically, commercial activities specified in Clause 1, Article 3 of the Commercial Law 2005 are: activities for profit-making purposes, including goods purchase and sale, service provision, investment, trade promotion and other activities for other profit-making purposes.
Thus, a commercial business dispute must meet all three factors:
+ Are disputes related to the rights and obligations of the parties;
+ Derived from commercial activities for profit purposes;
+ Arise between individuals, organizations with business registration, or can be called traders.
In addition, for business and commercial disputes involving foreign elements, the following factors must be ensured as specified in Clause 2, Article 663 of the Civil Code 2015:
+ At least one of the participating parties is a foreign individual or legal entity;
+ The participating parties are all Vietnamese citizens or Vietnamese legal entities, but the establishment, change, performance or termination of such relationship occurs in a foreign country;
+ The parties involved are all Vietnamese citizens or Vietnamese legal entities, but the subject matter of such civil relations is abroad.
Methods of settling commercial disputes involving foreign elements
Although it is a type of dispute with foreign elements, in essence, these disputes still arise from commercial business activities and in the field of commercial business, so dispute settlement methods will still include:
• Negotiation:
This is a method of resolving commercial disputes in which two parties sit down to discuss with each other in order to reach certain agreements to resolve conflicts and disagreements in commercial business activities. This is a method of dispute resolution that is recommended to be implemented when the parties can negotiate and without the intervention of a third party, this method is not mandatory before filing a lawsuit to a dispute settlement agency.
• Mediation:
This is a method of resolving commercial disputes through the negotiation of a third party acting as a mediator to help two disputing parties find a solution to end their conflicts and disagreements. In principle, the third party only mediates and does not have the power to make decisions.
• Commercial arbitration:
A form of commercial dispute resolution that the parties choose to settle through an arbitrator or an arbitral tribunal to consider and make a binding judgment on the disputing parties.
• Court:
This is a method of commercial dispute resolution implemented by a state jurisdiction. The parties will bring the dispute to court to ask for settlement in case the methods of negotiation and conciliation fail to be effective and the two parties do not have an arbitration agreement.
Competence to settle civil disputes involving foreign elements
The difference of the settlement of commercial disputes with foreign elements when choosing a settlement method is that the Court compared to ordinary commercial disputes lies in the order of settlement procedures as well as the determination of the agency has the authority to settle and apply the law to solve…
Accordingly, the competence of Vietnamese courts to settle civil cases involving foreign elements is specified in Chapter XXXVIII of the 2015 Civil Procedure Code. Vietnamese courts deal with civil cases involving foreign elements abroad in the following cases:
• The defendant is an individual who resides, does business and lives in Vietnam for a long time;
• Defendant is an agency or organization based in Vietnam or the defendant is an agency or organization with a branch or representative office in Vietnam for cases related to the operation of the branch or representative office of such agency or organization in Vietnam;
• The defendant has assets in the Vietnamese territory;
• A civil relationship case in which the establishment, change or termination of such relationship occurs in Vietnam, the subject matter of which is property in the Vietnamese territory or work performed in the territory. Vietnam;
• A civil relationship case in which the establishment, change or termination of such relationship occurs outside the Vietnamese territory but is related to the rights and obligations of Vietnamese agencies, organizations or individuals or has its head office and residence in Vietnam.
Which country’s law will apply to resolve the dispute?
Pursuant to Article 683 of the 2015 Civil Code stipulating on how to determine the law applicable to contracts with foreign elements as follows:
1. Contracting parties in a contract may agree to select the applied law for the contract, other than regulations of Clauses 4, 5 and 6 of this Article. In case the contracting parties fail to agree the applied law, the law of the country with which such contract closely associates shall apply.
2. The laws of any of the following countries shall be treated as the law of the country with which such contract closely associates:
a) The law of the country where the seller being natural person resides or the seller being juridical person is established in terms of sale contracts;
b) The law of the country where the provider being natural person resides or the provider being juridical person is established in terms of service contracts;
c) The law of the country where the transferee being natural person resides or the seller being juridical person is established in terms of contracts of transferring rights to use or intellectual property rights;
d) The law of the country where employees frequently perform do jobs in terms of labor contracts. If an employee frequently does jobs in multiple countries or the country in which the employee frequently does his/her job is unidentifiable, the law of the country with which his/her labor contract closely associates shall be the law of the country where the employer being natural person resides or the employer being juridical person is established.
dd) The law of the country where consumers resides in terms of consume contract.
3. If there is evident that the law of a country other than the country prescribed in Clause 2 of this Article associates with the contract more closely than the latter, the law of the former country shall prevail.
4. If the object of a contract is an immovable property, the law applied to transfer of its ownership rights and/or other property-related rights, lease of immovable property or using the immovable property as the guarantee for performance of obligations shall be the law of the country where the immovable property is located.
5. If the applied law selected by contracting parties in a labor contract or a consume contract affects adversely minimum interests of employees or consumers as prescribed in the law of Vietnam, the law of Vietnam shall prevail.
6. Contracting parties in a contract may agree to change the applied law provided that such change does not affect adversely lawful rights and interests of a third party before changing, otherwise agreed by the third party.
7. Form of a contract shall be determined in accordance with the law applied to such type of contract. In case where the form of a contract does not comply with the form of the law applied to such contract but it comply with the form of the law of the country where the contract is entered into or the law of Vietnam, such form of contract shall be recognized in Vietnam.
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Frequently asked questions
According to the provisions of Article 3 of Decree No. 22/2017/ND-CP, commercial mediation is a method of resolving commercial disputes agreed upon by the parties and supported by a commercial mediator acting as a mediator. settle disputes under the provisions of this Decree. There are currently two types of mediation:
Regulatory commercial mediation is a form of dispute resolution at a commercial mediation organization in accordance with the provisions of Decree No. 22/2017/ND-CP and its Mediation Rules.
Ad hoc commercial mediation is a form of dispute resolution conducted by ad hoc commercial mediators selected by the parties in accordance with the provisions of Decree No. 22/2017/ND-CP and the agreement of the parties.
Step 1: Plaintiff prepares a complete lawsuit file, then submits the file at the provincial People’s Court.
Step 2: Within 03 working days from the date of receiving the lawsuit petition, the Chief Justice of the Court shall assign a judge to consider the petition. Within 05 working days from the date of assignment, the judge must consider the petition and make one of the following decisions:
• If the lawsuit petition is valid, proceed with the procedure for accepting the case according to the normal procedure or according to the summary procedure if the case is eligible for settlement according to the summary procedure specified in Clause 1, Article 317 of this Law. This Code.
• If the petition is incomplete, request amendments and supplements to the petition
• If the case falls under the jurisdiction of another Court, transfer the lawsuit petition to the competent Court and notify the petitioner.
• The case is not under the jurisdiction of the Court, return the lawsuit petition to the petitioner
Step 3: When deeming that the case falls under the jurisdiction of the Court, the Judge must immediately notify the petitioner so that they can go to the Court to carry out procedures to pay the fee advance in case they have to pay the advance. court fees.
Step 4: Within 03 working days, the judge must notify in writing the involved parties, organizations and individuals with interests and obligations related to the settlement of the case, to the procuracies of the same level.
Step 1: The plaintiff makes a petition and sends it to the Arbitration Center when it considers that the statute of limitations still exists (the statute of limitations for initiating a lawsuit is specified in Article 33 of the Law on Commercial Arbitration 2010). Where a dispute is settled by ad hoc arbitration, the plaintiff must make a petition and send it to the respondent.
Step 2: Within 10 days from the date of receipt of the lawsuit petition, the arbitration center must send to the respondent a copy of the plaintiff’s lawsuit petition and the documents specified in Clause 3, Article 30 of this Law. .
Step 3: The arbitration center establishes an arbitration council
• In case the parties can mutually agree to terminate the dispute settlement, they have the right to request the President of the arbitration center to issue a decision to suspend the dispute settlement.
• In case the parties cannot agree to terminate the dispute settlement, an arbitration council shall be established to settle the dispute.
Step 4: Open a dispute resolution meeting with the participation of the parties
Step 5: The arbitral tribunal shall issue its award by majority vote
Conclusion: So the above is Commercial dispute with foreign elements in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
