Vietnam: New Decree on Commercial Mediation
On 24 February 2017, the Government issued Decree No. 22/2017/ND-CP (Decree No. 22) on commercial mediation, which will come into effect on 15 April 2017. Decree No. 22 provides in detail the principles, conditions, and procedures of commercial mediation as an alternative dispute resolution method, as well as the conditions for establishment of mediation centers in Vietnam. Prior to the introduction of Decree No. 22, mediation was already an integrated part of the dispute resolution process at both courts and arbitration centers in Vietnam. The key points of Decree No. 22 are as follows:
Decree No. 22 provides that commercial mediation is only available as a dispute resolution mechanism for disputes arising from commercial activities, disputes where at least one (1) party is involved with commercial activities, or disputes otherwise specified in other legislations to be resolved by commercial mediation. Dispute resolution through commercial mediation must ensure that the parties voluntarily participate in the mediation process and on equal grounds regarding rights and obligations. The information regarding the mediation must be kept confidential, unless otherwise agreed by the parties or provided under the relevant legislation.
Similar to arbitration, commercial mediation may commence only if the parties have a mediation agreement. Parties may enter into a mediation agreement before or after the dispute has arisen, or at any point during the dispute resolution process. Decree No. 22 provides that a mediation agreement must be in writing, either as a mediation clause in a contract or as a separate agreement.
Commercial mediation services can be provided by mediation centers established under Decree No. 22 or by existing arbitration centers in Vietnam. Foreign mediation centers can also operate in Vietnam by setting up their branch and/or representative office.
The parties to commercial mediation may agree to follow the mediation rules of a commercial mediation center or apply the mediation procedure agreed between themselves. In the absence of an agreement on the commercial mediation procedure, the mediator(s) may apply the procedure that is most appropriate to the nature of the dispute, as long as the procedure is approved by the parties.
Commercial mediation may be conducted by one (1) or more mediators, as agreed by the parties. The mediator(s) has the right to offer proposals on the resolution of the dispute at any time during the dispute resolution process.
When the parties reach a resolution as a result of a successful mediation, they must prepare a written document regarding the successful mediation (i.e., settlement agreement), to be executed the parties and the mediator. This settlement agreement shall be binding on the parties. Moreover, either party shall have the right to request the Vietnamese court to recognize the March 2017 settlement agreement. The procedure for such recognition is provided under Chapter XXXIII of the 2015 Civil Procedure Code. Once recognised by the Vietnamese court, the settlement agreement achieved through a successful mediation shall be enforceable under the Law on Enforcement of Civil Judgment.
Once Decree No. 22 takes effect, commercial mediation will be formally recognized as alternative dispute resolution mechanism in Vietnam in addition to arbitration.