Dispute resolution methods in commercial business activities are of significant concern to the parties involved as they directly affect their rights and obligations. Resolving disputes by negotiation, and mediation through non-litigation commitments is becoming a trend and is encouraged due to its many benefits.
1. What is the non-litigation commitment?
“A non-litigation commitment” is understood as a commitment of one or related parties not to choose a dispute resolution method in court. Instead, they will opt to resolve disputes through negotiation or mediation.
If this commitment originates from one party, it is considered a unilateral legal act of that party agreeing to waive its right to litigate. On the other hand, if both parties “commit” to non-litigation, it may be seen as an agreement not to choose the dispute resolution method in court, or each party individually commits not to use their litigation rights.
A non-litigation commitment can be viewed as a civil transaction because it generates, changes, or terminates the civil rights and obligations of the parties involved.
In addition, to be legally effective, the commitment must also satisfy the conditions outlined in Article 117 of the Civil Code as follows:
- The parties involved must have the legal capacity and civil act capacity appropriate to the civil transaction established;
- The parties must participate in the civil transaction entirely voluntarily;
- The purpose and content of the civil transaction must not violate any prohibitions under the law and must not be contrary to social ethics.
In the field of commercial business, non-litigation commitments are often recorded in contracts. Please refer to the following sample clause regarding non-litigation commitment:
“The Parties hereto agree and commit that any disputes arising from or in connection with this Contract shall be resolved through negotiation or mediation. Neither party shall exercise the right to litigate in court to seek resolution of such disputes.”
In some cases, non-litigation commitment may be limited to specific conditions as set forth by one or both parties, as in the following instance:
“Party A commits not to initiate legal proceedings in the competent court to request resolution of related disputes with the condition that Party B must engage in good faith negotiation or mediation with Party A within 60 days from the date of Party A’s request.”
Indeed, non-litigation commitments among parties in commercial business relationships may have content adjustments to ensure alignment with the desires and objectives of one or more involved parties.
2. Validity of the non-litigation commitment in practice
Vietnamese law recognizes the right to initiate legal action for individuals and organizations when they perceive their lawful rights and interests are infringed upon. From the perspective of civil law, there is no provision prohibiting parties from agreeing not to initiate legal action or one party committing not to initiate legal action when disputes arise.
However, the Civil Procedure Code 2015 does not contain any provisions regarding the refusal of jurisdiction or the return of the plaintiff’s petition if a non-litigation commitment exists when a dispute arises. Specifically, Article 192 of the Code clarifies cases of returning the plaintiff’s petition do not include cases where a non-litigation commitment exists or conditions precedent are not fulfilled before initiating legal action. Therefore, the question arises: does a non-litigation commitment truly have a binding force on one or more parties in commercial business relationships?
In practice, courts often accept lawsuits even though there was a prior non-litigation commitment. However, they typically encourage parties to resolve disputes through mediation or negotiation. Currently, alternative dispute resolution methods outside of court are highly advisable. However, these methods are implemented based on the voluntary agreement of the parties and are not mandatory. Therefore, it can be seen that a non-litigation commitment does not have binding force on the parties in reality.
In conclusion, non-litigation commitment in commercial business can still be enforced, but primarily rely on the voluntary agreement and goodwill of the parties involved. Enterprises should note that these commitments are not absolute and courts may still have jurisdiction to handle lawsuits to resolve disputes through standard procedures. Therefore, understanding and correctly applying non-litigation commitments according to legal regulations is extremely important.
