Arbitration and Court are two forms of commercial dispute settlement that are often chosen by the parties when negotiations are not possible. Each form has its own characteristics, advantages and limitations. Therefore, in this article, TNTP will clarify the differences, advantages and limitations of these two forms of dispute settlement so that readers have more grounds to choose the most appropriate and optimal form of commercial dispute settlement.
1. Advantages and Disadvantages of Court and Arbitration when commercial dispute settlement
1.1 Advantages and Disadvantages of Court
- Advantages:
– Judgment/Decision is usually more enforceable than an Arbitration Award.
– Court fee/advance fee is lower than Arbitration’s.
– The court advance fee may be partially or fully refunded according to the Court’s Judgment/Decision.
– Public, deterrent trial.
- Disadvantages:
– The trial procedure is not flexible and must comply with the law on civil procedure.
– The selection of the Court to settle the dispute must comply with the provisions of the law on civil procedure.
– Dispute settlement time usually takes longer than Arbitration.
– Public trial shall affect the relationship between the disputing parties, the image, reputation in the market or the business secrets of the disputing parties.
1.2 Advantages and Disadvantages of Arbitration
- Advantages:
– Is a solution of commercial dispute settlement based on the agreement of the parties. The parties can choose ad-hoc arbitration or dispute settlement arbitration center, dispute settlement arbitrator, etc.
– Flexible procedural, quick case settlement time.
– The Arbitration Award is final (ie final and not subject to appeal like a Court’s Judgment/Decision) and has the same validity as a Court’s Judgment/Decision
– Confidentiality of information because commercial dispute settlement by arbitration is not conducted publicly, unless otherwise agreed by the parties.
- Disadvantages:
– Arbitration fees are much higher than the Court’s.
– Investigating, verifying, collecting evidence, applying provisional urgent measures is more time consuming and limited than the Court.
– The Arbitration Award may be considered annulled by the Court upon the request of one party.
– Enforcement of Arbitration Awards is often more complex than enforcement of Court Judgments/Decisions.
2. Differences in commercial dispute settlement at Court and Arbitration
2.1 Dispute settlement at Court
- Competence:
– Has competence in settling civil disputes in general, and commercial disputes settlement in particular.
– Has no settlement competence and must refuse to accept the case when the parties have an arbitration agreement (unless the arbitration agreement is invalid, the arbitration agreement cannot be performed).
- Procedure:
– Some of the most basic steps when settling disputes in Court:
– Plaintiff sues Respondent at a competent court.
– Pre-litigation mediation.
– Session to check the handover, access, disclosure of evidence and conciliation.
- The settlement of disputes at the Court can be done through two levels of trial: first instance and appellate. Court’s Judgments/Decisions that have taken legal validation can also be reviewed according to cassation or retrial
- Validation of the Court’s Judgment/Decision:
Court’s Judgments/Decisions may have to go through two levels of trial, first instance, appellate and may be reviewed according to cassation or retrial procedures, so the Judgment/Decision may be changed.
- Enforcement of the Court’s Judgments/Decisions:
Court judgments/decisions are binding and guaranteed to be enforced by the judgment enforcement agencies.
2.2 Dispute settlement at Arbitration
- Competence:
– Disputes shall be settled by Arbitration when the parties have an arbitration agreement made before or after the dispute occurs.
– Disputes are under the settlement competence of the Arbitration:
– Disputes between parties arise from commercial business.
– Disputes arising between parties in which at least one party has commercial business.
– Other disputes between the parties as prescribed by law shall be settled by Arbitration.
- Procedure:
Some of the most basic steps when settling disputes at the Arbitration Center:
– Plaintiff submits the Complaint to the Arbitration Center.
– Plaintiff and Respondent choose an Arbitrator.
– Investigate, collect documents and evidence.
– The Arbitration Council announces the date of the Dispute Settlement Session.
– Disputing parties participate in Dispute Settlement Session.
– Arbitration Award is issued.
- Validation of the Arbitration Award:
– The Arbitration Award is final, ie the final award binding on the parties.
– However, the Arbitration Award may be annulled by the Court under Articles 68 and 69 of the 2010 Commercial Arbitration Law.
- Enforcement of the Arbitration Award:
– The State encourages the parties to voluntarily implement the Arbitration Award.
– At the expiration of the time limit for enforcement of the Arbitration Award, but the enforced party does not voluntarily enforce it and does not request annulment of the Arbitration Award under Article 69 of the 2010 Commercial Arbitration Law, the enforceable party has the right to make an application of request and send the competent civil judgment enforcement agency to enforce the Arbitration Award.
– For an ad-hoc Arbitration Award, the enforceable party has the right to make an application of request and send to the competent civil judgment enforcement agency to enforce the Arbitration Award after the Award is registered in accordance with Article 62 of the 2010 Commercial Arbitration Law.
– The enforcement of the Arbitration Award is carried out in accordance with the law on civil judgment enforcement.
Thus, depending on the specific case and your needs, individuals and enterprises can choose one of the two forms of commercial dispute settlement mentioned above. Each form has its own characteristics, advantages and limitations, so understanding the properties of each form will help individuals and enterprises make the most appropriate and optimal choice.
Above is the sharing of legal knowledge of TNTP on “Should choose a court or arbitration to settle commercial business disputes?”. Hope this article will be helpful to you.
Sincerely,
