Business activities are always associated with the risks of arising disputes in the process of performing transactions. Currently, the traditional method of dispute resolution is to sue in court. However, this method does not seem to meet the requirements of the parties in a commercial transaction when going through a lot of legal proceedings, which takes a lot of time, effort, costs, and opportunities for the parties. In order to meet the requirements of reality, the law has now provided for a mediation mechanism to help the issue be resolved quickly and balance the interests of the parties. In this article, we will provide the basic information related to commercial mediation in Vietnam.
1. What is commercial mediation?
According to the provisions of Clause 1, Article 3 of Decree No. 22/2017/ND-CP, commercial mediation is defined as a method of settling commercial disputes agreed upon by the parties and assisted by a commercial mediator to act as the mediator to resolve disputes according to regulations.
It should be noted that this commercial mediation method is independent and different from the mediation method in civil proceedings (according to the Civil Procedure Code) and conciliation and dialogue in court (according to the Law on Mediation, dialogue in court).
2. Advantages of commercial mediation
Commercial mediation method is considered as one of the methods with advantages suitable for fast commercial business activities, which can be mentioned as:
Simple and flexible procedure
The parties have the right to choose the Mediation Rules of the commercial mediation organization to conduct the mediation or agree on the mediation order and procedures themselves. If the parties do not agree on the order and procedures for mediation, the commercial mediator shall conduct the mediation according to the order and procedures which the commercial mediator deems suitable to the circumstances of the case, the wishes of the parties and is accepted by the parties. In addition, the dispute may be conducted by one or more commercial mediators as agreed by the parties. The parties may also agree on a place, time, or the option of the commercial mediator in case the parties do not agree.
Confidentiality of information is one of the basic principles when the parties conduct conciliation, the confidentiality of this information is required for all parties involved. This feature is suitable for commercial transactions or services that require high security and protect the secrets of business value, technology, business plans, etc. In addition, taking the initiative in the selection of mediators and methods of mediation is also one of the ways to limit the disclosure of information in the case.
3. Principles and conditions for settling disputes by commercial mediation
Disputes can only be resolved by commercial mediation when all of the following requirements are met:
- Disputing parties participating in mediation are completely voluntary and equal in terms of rights and obligations;
- Information related to the mediation case must be kept confidential, unless otherwise agreed by the parties in writing or otherwise provided for by law;
- The content of the mediation agreement does not violate the prohibition of the law, is not contrary to social ethics, is not intended to evade obligations, and does not infringe on the rights of a third party.
It can be seen that one of the top factors when implementing this mediation method is that the parties must be “completely voluntary”, this is considered as goodwill to resolve the case when the parties choose this method. The voluntary element is also expressed when the parties agree on the selection of the order and procedures for mediation, the commercial mediator, and the place and time to conduct the mediation. The fact that one of the parties disagrees (objection) will be an important basis for this method to be rejected.
A case is resolved by commercial mediation when:
- The parties have a conciliation agreement; or
- The parties may agree to settle the dispute by mediation in advance, after the dispute, or at any time during the dispute settlement process.
With the commercial mediation method, the current regulations are consistent in respecting the will and agreement of the parties. Therefore, at any stage of the dispute settlement process, the parties can still apply this mediation method.
4. Implementing agency and legal value of commercial mediation
- Organization (center) of commercial mediation; or
- Commercial mediators listed by the Department of Justice.
When a successful conciliation result is achieved, the parties shall make a document on the successful conciliation result. The document on the successful conciliation result is enforceable for the parties in accordance with civil law. In addition, the Court may recognize the successful conciliation results at the request of one of the parties in accordance with the Civil Procedure Code.
In case no successful conciliation is achieved, the parties have the right to continue the conciliation or request the Arbitration or Court to settle the dispute in accordance with the law.
It can be seen that the successful conciliation result must be based on the agreement between the parties in the case, so, when the conciliation results have been agreed upon, the parties must implement based on the recorded agreements, this is a legal institution prescribed in the Civil Code.
5. The role of lawyers in commercial mediation
Although the commercial mediation method is considered to be simplified and does not require as many procedures as traditional litigation methods. However, the participation of Lawyers is indispensable to ensure the rights and interests of their Client. With a commercial mediation case, Lawyers may be involved to perform tasks such as:
Firstly, to evaluate the legal overview of the case and give advice
The fact that the parties arise disputes during the performance of the contract must be caused by the violation of one of the parties or there is a conflict in the interpretation of the contract language, etc. Therefore, the lawyer needs to study the case and evaluate the parties’ rights and obligations, compare it with the contract content and relevant legal provisions to give advice and propose appropriate solutions to minimize risks in the implementation process.
Secondly, to prepare documents and evidence to prove the case
Similar to a case being sued, the parties must provide documents and information to support their arguments. Lawyers with their expertise will guide Clients to prepare appropriate documents and advise on valuable evidence to be collected in accordance with the law and judicial practice.
Thirdly, to ensure the rights of clients in the process of participating in negotiations (mediation)
The lawyer can join the client in mediation sessions. At these sessions, the lawyer can be in a negotiating position (if the client requests) or record information, evaluate the opponent’s request, and give instant advice to customers to make appropriate decisions.
Fourthly, on behalf of the client to mediate
In certain cases such as overseas clients or high level of conflict between parties who still want to conduct conciliation, etc., lawyers can represent clients to participate in mediation sessions, and negotiate under the scope of authorization.
Above are some general contents about the commercial mediation method in Vietnam, if you have any related questions, please contact PLF for support.