1. What are the main methods of resolving commercial disputes?
In Vietnam, disputes can be settled in court, or out of court via negotiation, mediation or arbitration. In general, disputes are mainly resolved via litigation. For commercial disputes, commercial arbitration is also a significant dispute resolution method.
2. What are the main procedural rules governing commercial litigation?
Litigation proceedings in Vietnam are mainly governed by the Civil Procedure Code ("CPC"). Litigation rules can also be found in some other substantive rules such as the statute of limitations under the Civil Code or the pre-litigation procedures under the Land Law or the Labour Code.
3. What is the structure and organisation of local courts dealing with commercial claims? What is the final court of appeal?
Under Vietnamese law, the highest court in the country is the Supreme People's Court ("Supreme Court"). Below the Supreme Court are three levels of courts, in descending order of hierarchy: High People's Courts ("High Courts"), Provincial People's Courts ("Provincial Courts"), and District People's Courts ("District Courts").
There are three High Courts, based in Hanoi, Da Nang, and Ho Chi Minh City. Each High Court is responsible to generally handle appellate proceedings for the northern, central, and southern region of the country.
Under the CPC, for disputes involving at least one foreign individual/entity, the Provincial Courts will be the courts of first instance, and the High Courts will handle the appellate proceedings. In certain cases, the appeal judgments may be reviewed under the cassation or retrial proceedings if there are firm and sufficient grounds as specified by law.
4. How long does it typically take from commencing proceedings to get to trial?
The compulsory timeframe to prepare for a trial depends on the nature of the case. For a commercial case, the trial must be opened within two months from the date on which the case is accepted by the court, extendable for another month. However, in practice, more often than not, the preparation periods for the trial often last longer than the compulsory timeframes - typically from eight to twelve months.
5. Are hearings held in public and are documents filed at court available to the public? Are there any exceptions?
As one of the fundamental principles of civil proceedings, trials will be held in public. However, in practice, in certain cases, it may not be easy for uninvolved parties to attend the court hearing. Additionally, while the applicable laws and regulations do not address this matter, in practice, documents filed at court may only be available to the involved parties.
In exceptional cases where there is a need to protect state secrets, preserve the people's fine traditions, or protect juveniles, or to protect the professional secrets, business secrets, individual privacy, or family privacy of the involved parties, the court will have the discretion to decide if a private hearing is needed or certain documents may not be disclosed to the involved parties.
Judgments and decisions not containing information in the above listed exceptional cases may be made public on the websites of the courts or the database of the Supreme Court at https://congbobanan.toaan.gov.vn/.
6. What, if any, are the relevant limitation periods?
The statute of limitations for contractual (other than commercial) disputes or compensation claims is three years. For commercial disputes, the applicable statute of limitation is two years. The statute of limitations is triggered on the date on which the plaintiff knows or ought to have known his/her legitimate rights are infringed.
The statute of limitations is not applicable to certain claims or disputes such as claims related to personal non-property rights or protection of ownership, or disputes related to land use rights.
7. What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
Pre-action conduct requirements may only be applied in certain disputes related to labour relationships or land use rights. In particular, it may be required that the parties must undergo a mediation procedure before filing any lawsuit with the court. Failing to meet the pre-action conduct requirements will lead to the court not accepting the lawsuit.
8. How are commercial proceedings commenced? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
In Vietnam, proceedings are commenced when the court accepts the case, which occurs when the court receives the statement of claims and supporting documents of the plaintiff and the evidence of payment of the court fee by the plaintiff. Within three working days from the date of acceptance, the court must issue a notice of acceptance of the case.
The service is required to be done by the court. However, each party is also under the obligation to provide the other party with copies of the statement of claims or supporting documents and evidence, except for documents that the other party already possesses or are exempt from disclosure as listed under the CPC.
9. How does the court determine whether it has jurisdiction over a claim?
Generally, to determine its jurisdiction over a claim, a court needs to assess whether the dispute relates to a subject matter that is under the jurisdiction of the court as provided under the CPC, whether the parties have a valid agreement on the choice of another dispute resolution forum (such as arbitration), and whether the court has jurisdiction over the claim based on rules on the hierarchy of the courts and territorial jurisdiction.
With regard to the hierarchy of the courts, the court will consider if the subject matter falls under the jurisdiction of a District People's Court or that of a Provincial People's Court.
With regard to territorial jurisdiction, in general, a dispute will be handled by the court where the defendant is located, unless the parties have agreed that the dispute will be submitted to the court where the plaintiff is located. For a dispute relating to real estate, the court of jurisdiction is the court where the property is located. Further, the CPC sets out cases where the plaintiff has the right to select the jurisdiction of the court, such as in tort cases or certain types of labour dispute.
10. How does the court determine what law will apply to the claims?
The determination of the law governing the claims is only needed in cases where there are foreign elements (such as when a party to the dispute is a foreigner). The governing law is determined based on international treaties to which Vietnam is a member, or, if there is no applicable international treaty, Vietnamese law or the agreement between the parties (to the extent that such agreement is allowed under Vietnamese law or any international treaty to which Vietnam is a member). If the governing law cannot be determined based on the above grounds, the law having the closest connection to the civil transaction will be the governing law.
11. In what circumstances, if any, can claims be disposed of without a full trial?
The CPC provides some circumstances in which the claims could be disposed of without a full trial. For example, the court decides not to further proceed with the trial because under an involved party's request, the court finds that the statute of limitations of the claims is expired. Such decision to terminate the proceedings could be appealed under appellate proceedings. In another case, if the involved parties are able to reach any agreement to fully settle all claims before the issuance of a judgment, the court must issue a decision recognizing such settlement and will not proceed with the trial. The decision is enforceable and not subject to appellate proceedings.
12. What, if any, are the main types of interim remedies available?
The CPC provides a list of 17 different types of interim remedies, in which the following types are popular in practice: (i) prohibiting/forcing the involved parties from performing/to perform specific acts; (ii) freezing bank accounts and/or assets of the obligor; (iii) prohibiting any transfer or changes of the rights related to the disputed properties; and (iv) prohibiting the obligor from leaving Vietnam.
Originally Published by The Legal 500
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