In business investment activities, it is difficult to avoid the disputes. So how is the settlement of disputes in business investment activities regulated? What regulations on disputes in business investment activities are? Let's learn about this together with NPLaw.
I. Disputes in business investment activities in current
Disputes and conflicts between shareholders and enterprises have been going on, which negatively affect not only the interests of parties but also the operation of the business. Why is this situation increasingly common and serious?
We will look at this problem to find the most effective method of limiting it so that enterprises can increasingly grow.
II. Regulations on disputes in business investment activities
1. What is a business investment activity?
Business investment is the expenditure of capital to perform business activities through the establishment of an economic organization; investments and capital contributions, and the purchases of shares and contributed capital in economic organizations; investments in the form of contracts; or the implementation of investment projects.
Investment activities are considered the foundation for performing other business and commercial activities. Business investment activities are operated only in the forms permitted by law.
2. What measures for dispute resolutions are there in business investment activities in Vietnam?
Measures for solving disputes in business investment activities in Vietnam have the following forms: negotiation, mediation, arbitration and court, as specified:
- Negotiation: a measure for disputes in business investment without the need for the third party's role. When there is a dispute, the parties will come together to discuss the issue and agree to resolve it themselves. Or the parties seek solutions to eliminate potential disputes that have arisen.
- Commercial mediation: a method for trade disputes agreed upon by the parties and is supported by commercial mediators to resolve disputes (Clause 1 Article 3 of Decree 22/2017 / ND-CP).
- Arbitration: It is agreed upon by the parties and is executed consistent with the Law on Commercial Arbitration 2010. (Clause 1 Article 3 Law on Commercial Arbitration 2010).
- Court: A measure for disputes in the judicial bodies in the name of State power is executed in strict, rigorous orders and procedures, or according to Court’s judgment or decision on disputes that will be guaranteed to be enforced by the coercive power of the State if there is no voluntary compliance.
III. Some common dispute relationships in business investment activities and their settlement measures
1. Disputes between domestic investors and economic organizations with foreign capital, or between domestic investors, economic organizations with foreign capital and State authorities
Pursuant to Clause 2, Article 14 of the Law on Investment 2020, disputes between domestic investors and economic organizations with foreign capital, or between domestic investors, economic organizations with foreign capital and State authorities related to business investment activities within Vietnam's territory are resolved through Vietnamese arbitration or the Vietnamese Court unless otherwise provided for by law.
2. Disputes among investors, wherein at least one party is a foreign investor
Clause 1, Article 23 of the Law on Investment 2020 stipulates: Investors in which at least one party is a foreign investor or economic organization must meet conditions and implement investment procedures for foreign investors as prescribed in the law when investing in the establishment of other economic organizations; investing in capital contributions, and purchasing stocks and contributed capital of other economic organizations; investing in the form of BCC contracts if such economic organizations falls under one of the following circumstances:
- Having foreign investors holding more than 50% of charter capital, or in case of a partnership, the majority of its general members are foreigners;
- Having economic organizations specified in point a of this clause holding more than 50% of charter capital;
- Having foreign investors and economic organizations specified in point a of this clause holding more than 50% of charter capital.
Pursuant to Clause 3, Article 14 of the Law on Investment 2020, Disputes between investors, wherein at least one party is a foreign investor or an economic organization specified or Points a, b and c, Clause 1, Article 23 of this law, are resolved through one of the following authorities and organizations:
- Vietnamese court;
- Vietnamese arbitration;
- Foreign arbitration;
- International arbitration;
- Arbitration established by the parties reaching an agreement.
3. Dispute between foreign investors and competent State authorities
Pursuant to Clause 4, Article 14 of the Law on Investment 2020, disputes between foreign investors and competent State authorities related to business investment activities within Vietnam's territory are resolved through Vietnamese arbitration or Vietnamese court, unless otherwise agreed under contracts or unless international treaties to which the Socialist Republic of Vietnam is a member otherwise provides.
