When a commercial contract gives rise to a dispute, if the parties have agreed on a dispute resolution authority, that authority’s jurisdiction takes priority as per the agreement. In the absence of an agreement and when the parties cannot reconcile on their own, the dispute is resolved in a court with jurisdiction. In such cases, the plaintiff needs to understand the legal provisions to file the lawsuit in the appropriate jurisdiction. In this article, TNTP will provide readers with legal knowledge about “Jurisdiction of the Court to Resolve Commercial Contract Disputes.”
1. What is a commercial contract dispute?
Currently, there is no legal definition of a commercial contract dispute. To understand the definition of commercial contract dispute, we need to understand two related concepts: contract dispute and commercial dispute.
• A contract dispute refers to conflicts and disagreements among parties in a contractual relationship, primarily arising from the non-performance or improper performance of rights and obligations specified in the contract.
• Based on Article 3.1 of the 2005 Commercial Law, commercial activities are defined as profit-seeking activities, including the sale of goods, provision of services, investment, commercial promotion, and other profit-seeking activities.
A commercial dispute can be understood as conflicts and disputes related to rights and obligations between entities engaged in commercial activities.
Therefore, based on the above-mentioned concepts of contract dispute and commercial dispute, a commercial contract dispute can be understood as conflicts and disagreements that arise between entities regarding non-performance or improper performance of obligations committed in a commercial contract, directly affecting the legitimate interests of the other party.
2. Jurisdiction to resolve commercial contract disputes in court
The jurisdiction to resolve contract disputes by the court is determined as follows:
• Determining the jurisdiction of the Court based on the specific case
Determining the jurisdiction of the court based on the specific case means determining whether the dispute falls within the jurisdiction of the court. The 2015 Code of Civil Procedure (“CCP 2015”) specifically regulates the jurisdiction to resolve disputes by the court from Article 26 to Article 34. Accordingly, disputes related to business and commercial matters fall within the jurisdiction of the court, as specifically defined in Article 30 of the CCP 2015, including disputes arising from commercial contracts.
Therefore, disputes arising from commercial contracts will fall within the jurisdiction of the court, except in cases where the parties have agreed on a different dispute resolution authority.
• Determining the jurisdiction of the Court based on the level of adjudication
Based on the provision in point b, Clause 1 of Article 35 of the CPC 2015, District-level Courts have jurisdiction to settle commercial disputes as specified in Clause 1 of Article 30 of the CPC 2015. Therefore, District-level Courts have jurisdiction to settle commercial contract disputes between individuals and enterprises or between enterprises with profit-seeking purposes.
However, for other types of commercial contract disputes and disputes arising from the sale and purchase of assets involving parties or assets abroad, or cases that require legal representation by the representative agency of the Socialist Republic of Vietnam abroad, the jurisdiction does not lie with the district-level people’s courts but with the Provincial-level Courts (based on point c, Clause 1 of Article 37 of the CPC 2015).
Based on the above-mentioned provisions, it can be seen that disputes arising from commercial contracts will fall under the jurisdiction of the District-level Courts, except for disputes arising from the sale and purchase of assets involving parties or assets abroad or cases that require legal representation by the representative agency of the Socialist Republic of Vietnam abroad, which fall under the jurisdiction of the Provincial-level people’s Courts.
• Determining the jurisdiction of the Court based on the territory
The jurisdiction of the court to settle disputes arising from commercial contracts based on the territory is determined as follows: The court where the defendant resides or works if the defendant is an individual, or the court where the defendant has its headquarters if the defendant is an entity or organization.
For disputes within commercial contracts, the parties have the right to mutually agree in writing to request the court where the plaintiff resides or works if the plaintiff is an individual, or the court where the plaintiff has its headquarters if the plaintiff is an entity or organization.
Note: If a civil case has been accepted and is being resolved by a court according to the territorial jurisdiction as stipulated in the CPC 2015, then that court must continue to handle the case even if there are changes in the residence, headquarters, or address for conducting transactions of the parties during the resolution process.
• Determining the jurisdiction of the Court based on the choice of the plaintiff
The plaintiff has the right to choose the court to resolve commercial contract disputes in certain cases as stipulated in Clause 1 of Article 40 of the CPC 2015, specifically:
If the plaintiff does not know the residence, workplace, or headquarters of the defendant, the plaintiff may request the Court where the defendant is last known to reside, work, or have its headquarters, or where the defendant has assets to be settled.
If the dispute arises from the activities of a branch organization, the plaintiff may request the court where the organization’s headquarters or where the organization’s branch is located to settle the dispute.
If the defendant does not have a residence, workplace, or headquarters in Vietnam, the plaintiff may request the court where the plaintiff resides, works, or has its headquarters to settle the dispute.
If the dispute relates to compensation for non-contractual damages, the plaintiff may request the court where the plaintiff resides, works, has its headquarters, or where the damage-causing event occurred to settle the dispute.
If the dispute arises from a contractual relationship, the plaintiff may request the court where the contract is performed to settle the dispute.
If the defendants have residences, workplaces, or headquarters in multiple different places, the plaintiff may request the court where one of the defendants resides, works, or has its headquarters to settle the dispute.
Based on the above content, the jurisdiction of the court to resolve commercial contract disputes can be determined based on the plaintiff’s request in certain cases as prescribed by law.
The above is the content and legal sharing of TNTP regarding the jurisdiction of the Court to resolve commercial contract disputes. We hope this article is useful to you.
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