In the context of global economic integration, commercial activities have become increasingly diverse and complex, resulting in a sharp rise in commercial disputes. Recognizing this importance, Vietnamese law has promulgated specific provisions to establish a solid legal framework for resolving disputes in commercial litigation. In this article, NPLaw provides an in-depth analysis of the key regulations, offering a comprehensive perspective on procedures and dispute resolution mechanisms under the prevailing legal framework.

I. Current situation of commercial litigation in Vietnam

In 2023, Vietnamese courts received more than 400,000 civil or commercial cases annually, yet only about 61% were resolved, leaving 1,021,783 enforcement dossiers pending, of which only 620,657 were successfully enforced. Meanwhile, commercial arbitration administered by VIAC has shown strong growth, with 424 new cases in 2023, marking a 46.2% increase compared to 2022 (292 cases), and reaching the highest level to date. Of these, 26.2% concerned real estate, 21.2% involved goods sales, and 18.6% related to construction. At the same time, the arbitration system has been expanding, with 49 arbitration centers and more than 700 arbitrators nationwide.

Accordingly, while ADR mechanisms are increasingly prevalent, the severe backlog in courts and the high annulment rate of arbitral awards continue to make dispute resolution in Vietnam a significant challenge.

II. What constitutes a dispute in commercial litigation?

1. Definition of commercial litigation disputes

Commercial litigation disputes are conflicts and disagreements arising between parties engaged in commercial business relations, such as disputes concerning contracts for the sale of goods, service supply, construction, distribution, agency, transportation, insurance, or investment. Where self-settlement is not possible, one or more parties may initiate proceedings before a court or opt for arbitration to seek adjudication and protection of their legitimate rights and interests.

2. Common types of commercial litigation disputes in Vietnam

Typical disputes in commercial litigation in Vietnam include:

  • Disputes over contracts for the sale of goods (quantity, quality, delivery schedule, payment terms);
  • Disputes over service contracts (construction, transportation, insurance, logistics);
  • Disputes concerning payment and commercial credit (delayed payment, refusal of payment, penalties for breach);
  • Disputes involving intellectual property rights (infringement of trademarks, patents, copyrights, trade secrets);
  • Disputes over joint ventures, capital contributions, or transfer of equity interests among investors;
  • Disputes arising in the performance of construction contracts;
  • Disputes concerning distribution, agency, and franchise agreements;
  • Disputes over lease of commercial premises or real estate serving business operations. 

Therefore, a clear understanding of legal provisions and precise contractual arrangements will help enterprises mitigate risks and better protect their interests.

3. Authorities with jurisdiction to resolve commercial litigation disputes

In practice, when a commercial dispute arises, the parties may submit their case to the following authorities:

  • Under Article 2 of the Law on Commercial Arbitration 2010, arbitral tribunals have jurisdiction over:
  • Disputes arising from commercial activities between parties;
  • Disputes where at least one party engages in commercial activities;
  • Other disputes prescribed by law are subject to arbitration.
  • Meanwhile, Article 31 of the Civil Procedure Code 2015 grants People’s Courts jurisdiction over requests in business and commercial matters, including:
  • Annulment of resolutions of the General Meeting of Shareholders or Members’ Council under the Law on Enterprises;
  • Requests concerning the operations of Vietnamese arbitral tribunals;
  • Requests for seizure of aircraft or seagoing vessels as provided by aviation and maritime laws (except where serving as interim measures in a case);
  • Recognition and enforcement (or refusal thereof) of foreign court judgments or commercial decisions;
  • Recognition and enforcement of foreign arbitral awards in Vietnam;

Other commercial matters not falling under the jurisdiction of other authorities as provided by law.

Thus, the choice of adjudicating body in commercial litigation depends on the parties’ agreement as well as the nature of the dispute, ensuring lawful protection of business rights and interests.

III. Legal framework governing commercial litigation disputes

1. Relevant legal provisions

When resolving commercial disputes, the following legal instruments must be observed:

  • Civil Procedure Code 2015: Governs procedures for filing lawsuits and resolving disputes at court;
  • Law on Commercial Arbitration 2010: Regulates arbitration proceedings where a valid arbitration agreement exists;
  • Law on Enterprises 2020: Applicable to internal corporate disputes, such as among shareholders, members, or between the company and its managers;
  • Decree 22/2017/ND-CP: Provides detailed guidance on the organization and operation of commercial arbitration in Vietnam, including establishment of arbitration centers, qualifications of arbitrators, and rights and obligations of parties.

For disputes involving foreign elements, the 1958 New York Convention of which Vietnam is a signatory must be observed, providing the basis for recognition and enforcement of foreign arbitral awards in Vietnam.

Accordingly, in addition to statutory provisions, parties must also adhere to contractual terms, commercial practices, and industry-specific regulations they have committed to, ensuring objectivity, fairness, and practicality in dispute resolution.

2. Litigation procedure for resolving commercial disputes

The litigation process under the Civil Procedure Code 2015 generally follows these steps:

  • Step 1: Filing of Statement of Claim
  • The claimant submits a petition to the competent court (Articles 189–190), attaching supporting documents and evidence.
  • Step 2: Court Review of Petition
  • Within eight working days, the court examines the petition (Article 191). If valid, the claimant is required to pay a provisional court fee for case acceptance (Article 195).
  • Step 3: Case Acceptance
  • Upon payment of the fee, the court formally accepts the case and notifies relevant parties (Article 197).
  • Step 4: Mediation and Trial Preparation
  • The court verifies facts, collects evidence, and organizes mediation (Articles 205, 208). If unsuccessful, the case proceeds to trial.
  • Step 5: First-Instance Trial
  • The case is heard publicly (unless otherwise provided by law) under Chapter XVIII (Articles 220–243). The judgment takes effect after 15 days if not appealed.
  • Step 6: Appellate Trial (if applicable)
  • If an appeal or protest is filed, the case is reviewed on appeal (Articles 273–297).
  • Step 7: Enforcement
  • Once final, the judgment is executed by the competent enforcement agency.

Where parties opt for arbitration, proceedings follow the Law on Commercial Arbitration 2010 and the rules of the chosen arbitral institution, with basic steps including: submission of request for arbitration, constitution of arbitral tribunal, review of submissions and evidence, arbitral hearing, and issuance of a final and binding award.

In both court and arbitral proceedings, due process must be observed, ensuring protection of the parties’ lawful rights and interests.

3. Consequences of failure to resolve commercial disputes

If unresolved, disputes may cause:

  • Financial losses due to uncollected payments or goods, or increased litigation costs;
  • Disruption of business operations, affecting corporate reputation and goodwill;
  • Escalation of conflicts, leading to further litigation;
  • Obstacles in contract performance or loss of future cooperation opportunities;
  • An unhealthy business environment, undermining market confidence and investor trust.

Accordingly, timely settlement, clear contractual arrangements, or intervention by courts and arbitral institutions are essential to avoid prolonged losses.

IV. Questions on commercial litigation disputes

1. Is witness testimony required in commercial litigation?

Witnesses are not mandatory but may be summoned to clarify facts, substantiate claims, or prove fault or damages. Witnesses may include: direct participants in contract negotiation or performance; employees involved in goods or services delivery; experts with specialized knowledge; or any person or entity possessing relevant information. Their testimony may be considered by courts or arbitral tribunals as evidence to ensure objectivity and fairness.

2. Rights and obligations of parties in commercial litigation

  • Rights: Initiate proceedings, present opinions and evidence, request mediation, file appeals, and seek enforcement of judgments or awards.
  • Obligations: Comply with procedural rules, pay fees, provide truthful evidence, abide by final judgments/awards, and cooperate in enforcement measures.

3. Common faults leading to non-acceptance of cases

Faults include lack of jurisdiction, failure to comply with mandatory pre-litigation mediation, invalid or incomplete claim petition, claimant lacking standing or exceeding limitation period, res judicata, or breach of arbitration agreement (where arbitration was agreed but court proceedings are sought).

4. Enforcement of arbitral awards in Vietnam

Under Article 65 of the Law on Commercial Arbitration 2010, arbitral awards are binding and must be voluntarily executed. If not, the prevailing party may petition a court for recognition and enforcement, after which the award is enforced as a court judgment.

5. When can commercial disputes be resolved by arbitration?

Article 5 of the Law on Commercial Arbitration 2010 provides that disputes may be resolved by arbitration if:

  • The parties have a valid arbitration agreement, whether entered before or after the dispute arises;
  • The arbitration agreement remains effective despite death, incapacity, dissolution, merger, division, or transformation of a party, unless otherwise agreed.

Thus, arbitration is available where a valid agreement exists and the dispute is not subject by law to exclusive court jurisdiction.

V. Why legal counsel is essential in commercial litigation

Engaging an experienced commercial lawyer helps clients navigate procedural requirements, prepare documents, and devise strategies to protect lawful rights and interests. Lawyers also provide contract review, negotiation, and mediation services, minimizing risks and avoiding protracted disputes or unfavorable rulings.

The above represents NPLaw’s legal insights on commercial litigation disputes. For further assistance, please contact us: