Alternative Dispute Resolution
Mediation
Culturally, Vietnam is not a litigious society. A large number of disputes are resolved outside of court. Vietnamese laws also highly emphasize the role of mediation. Mediation is a mandatory part of certain litigation procedures such as civil litigations, labour and marriage and family litigations. The State encourages the resolution of civil and family disputes and violations of the law which do not amount to criminal offences by means of mediation. At the local community, groups of non-professional mediators are set up to carry out this mediation mandate.[xvii]
Arbitration
Arbitration is a possible alternative for dispute resolution in Vietnam but restricted for commercial disputes only. Arbitration was not a popular dispute resolution means in Vietnam due to weak enforceability. Since the adoption of the new Ordinance on Commercial Arbitration in 2003, arbitration award given by a Vietnamese arbitration tribunal is automatically enforceable, i.e. the parties do not have to bring the award to courts for a decision for its execution. With the recent reform, it is hoped that Vietnamese arbitration centres are referred to more often and grow more rapidly. The most well-known Vietnamese arbitration organization is the Vietnam International Arbitration Centre at the Vietnam Chamber of Commerce and Industries.
Vietnam has been a member of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Foreign investors tend to refer to foreign arbitration whenever they can due to lack of confidence in the capability and transparency of Vietnamese courts. Until recently, the execution of foreign arbitral awards was troublesome due to the narrow definition of “commercial activities” under Vietnamese law. The New York Convention only guarantees national recognition of foreign arbitral awards on issues considered of commercial nature under the national law. The recent expansion of the “commercial activities” concept was a big step in Vietnamese legal reform.