In business operations, enterprises can encounter disputes arising from contracts, commercial relationships, or other issues. To resolve these disputes, various methods can be used, such as court litigation, commercial arbitration, and commercial mediation. This article focuses on commercial mediation and its benefits.
1. Concept of commercial mediation
• According to Clause 1, Article 3 of Decree No. 22/2017/ND-CP, commercial mediation is a method of resolving commercial disputes by agreement between the parties, with the assistance of a commercial mediator acting as an intermediary in accordance with the provisions of this Decree.
• To resolve disputes through commercial mediation, the parties must reach a mediation agreement. This agreement must be in writing and can be established at any time (before, during, or after the dispute arises).
• The result of a successful mediation must be recorded in writing after a successful mediation. This document has legal value and is considered enforceable under civil law, requiring the parties to fulfill the commitments made during the mediation. The content of the mediation document must include the following information:
(i) Grounds for conducting mediation;
(ii) Basic information about the parties;
(iii) Main issue of the dispute;
(iv) Agreement reached and implementation plan;
(v) Other content as agreed by the parties in accordance with the law;
(vi) Signatures of the parties and the commercial mediator.
2. Advantages of commercial mediation
• First, saving time and costs: The mediation process is usually quicker than court litigation or arbitration. Instead of undergoing the complex and lengthy litigation process, parties can reach an agreement after just a few mediation sessions, significantly saving legal and related costs.
• Second, confidentiality: One of the outstanding advantages of commercial mediation is confidentiality, as clearly stated in Clause 3, Article 4 of Decree No. 22/2017/ND-CP. Mediation sessions are not public, and the information exchanged between the parties is kept confidential. This is crucial in business, where protecting trade secrets and reputation is essential.
• Third, flexibility and creativity: During mediation, parties can actively discuss and propose solutions that suit their situation and interests. The mediator, as an intermediary, supports the parties in exchanging information and communicating ideas. Mediators can flexibly meet with each party separately at any location to better understand their perspectives and desires. By offering creative proposals and mediation options, mediators help the parties reach new solutions that they might not have thought of, thereby enhancing the chances of reaching a common agreement. This is a key difference between mediators and judges.
• Fourth, maintaining business relationships: Mediation helps parties maintain and even strengthen business relationships. From a desire to resolve issues peacefully and cooperatively, parties can find mutually beneficial solutions. By collaborating and seeking common solutions, parties can build trust and mutual understanding, creating favorable conditions for future cooperation.
• Fifth, enforceability: This is perhaps the biggest difference between mediation and negotiation. In principle, once a successful mediation result is achieved, the parties can voluntarily implement it without additional procedures. However, if one party does not comply, to ensure obligation fulfillment, the parties can request the court to recognize the result. A successful mediation result recognized by the court can be enforced like an effective judgment. The recognition of the successful mediation result follows the civil procedure law, under the jurisdiction of the court according to Clause 7, Article 27 of the Civil Procedural Code 2015. The district people’s court where the requesting party resides, works, or has its headquarters has jurisdiction. The requesting party can also choose the court where the requested party has assets to resolve the recognition request.
3. Considerations when participating in mediation
• Thorough preparation: Before participating in mediation, parties should thoroughly prepare their documents and arguments. This helps the mediator and the parties have a comprehensive view of the dispute and support the search for solutions.
• Good faith: To achieve the best mediation results, parties need to have a good faith, a cooperative spirit, and be willing to listen. This not only helps the mediation process run smoothly but also facilitates reaching an agreement.
• Choosing a suitable mediator: Selecting an experienced mediator who understands the field of the dispute is crucial. The mediator needs to be capable of handling complex situations and helping the parties find effective solutions.
• Understanding rights and obligations: Parties need to clearly understand their rights and obligations during the mediation process. This helps the parties make reasonable proposals and fulfill commitments fully.
Commercial mediation is an effective and flexible method of resolving disputes, offering many benefits to businesses. With the assistance of mediators, the mediation process not only saves time and costs but also ensures confidentiality, maintains business relationships, and ensures agreement implementation. Businesses should consider using commercial mediation as a useful tool in dispute resolution.
This article “Resolving disputes through commercial mediation” is provided by TNTP to our esteemed readers. TNTP hopes this article is helpful to our readers.
Respectfully,
