Tag: Dispute Settlement

Which commercial disputes must be resolved by vietnamese court?

Written by TNTP LAW on 29 December, 2025. Posted in Legal newsletter.

In the context of international integration, cross-border commercial activities have developed rapidly, leading to a significant increase in commercial disputes involving foreign elements. These disputes arise from commercial relationships in which at least one foreign element exists as defined under Vietnamese law.

Pursuant to Clause 2 Article 663 of the Civil Code 2015 of Vietnam (“the Civil Code”), a civil relationship involving foreign elements is a relationship in which at least one of the participating parties is a foreign individual or foreign legal entity; or where all participating parties are Vietnamese individuals or Vietnamese legal entities, but the establishment, modification, performance, or termination of such relationship occurs in a foreign country; or where all participating parties are Vietnamese individuals or Vietnamese legal entities, but the subject of the civil relationship is located abroad. Based on this definition, commercial disputes arising from such relationships are identified as commercial disputes involving foreign elements (hereinafter referred to as “disputes”).

In principle, Vietnamese law respects the autonomy of the parties in agreeing on the forum for dispute resolution. However, the Civil Procedure Code 2015 of Vietnam (“the Civil Procedure Code”) provides that for certain specific cases, only Vietnamese courts have the authority to resolve the disputes. This authority is referred to as the exclusive jurisdiction of Vietnamese courts. This article focuses on clarifying the scope and implications of the exclusive jurisdiction of Vietnamese courts in resolving commercial disputes in accordance with current Vietnamese law.

1.Overview of the exclusive jurisdiction of the Vietnamese Courts

Under the Vietnamese civil procedural law, disputes that fall within the exclusive jurisdiction of Vietnamese courts must be examined and resolved by Vietnamese courts in order for the judgments or decisions to be recognized and enforceable in Vietnam. In cases where a dispute falls under the exclusive jurisdiction of Vietnamese courts but is nevertheless resolved by a foreign court, Clause 4 Article 439 and Clause 1 Article 440 of the Civil Procedure Code provide that the judgment or decision rendered by the foreign court shall not be recognized or enforced in Vietnam.

Exclusive jurisdiction must be clearly distinguished from the general jurisdiction of Vietnamese courts. With respect to disputes falling under general jurisdiction, the parties are free to choose between Vietnamese courts and foreign dispute resolution authorities, including foreign courts. When a dispute arises, the parties initiate proceedings before the agreed forum, provided that the agreement on jurisdiction and the dispute resolution process comply with the laws of the country where the selected forum is established.

2.Commercial disputes are subjected to the exclusive jurisdiction of the Vietnamese Courts

Article 470 of the Civil Code determines the exclusive jurisdiction of Vietnamese courts based on territorial factors, the nationality of the parties, and the agreement between the disputing parties. Specifically, for commercial disputes, pursuant to Points a and c Clause 1 Article 470 of the Civil Code, Vietnamese courts have exclusive jurisdiction in the following cases: (i) the dispute relates to rights over immovable property located within the territory of Vietnam; and (ii) the parties to the dispute agree to select Vietnamese courts as the forum for dispute resolution.

Firstly, Vietnamese courts have exclusive jurisdiction over commercial disputes involving rights over real estate located within the territory of Vietnam. Accordingly, any dispute arising from a commercial or relationship that involves land use rights or other rights related to real estate situated in Vietnam must be resolved solely by Vietnamese courts. Under Vietnamese law, real estate includes land, houses, constructions attached to land, and other assets inseparable from land. In practice, foreign-related commercial disputes involving real estate in Vietnam may include disputes arising from capital contribution using land use rights; disputes over capital transfer where the contributed capital is associated with immovable property; disputes related to the lease, sublease, or assignment of land use rights; and disputes arising from investment or cooperation contracts involving real estate development projects in Vietnam. For example, in a case where a Vietnamese enterprise and a foreign enterprise enter into a contract for the sublease of land use rights in an industrial zone located in Vietnam, any dispute arising from such contract must be resolved exclusively by Vietnamese courts. Even if the parties attempt to bring the dispute before a foreign court, any judgment rendered by that foreign court would not be recognized or enforced in Vietnam.

Secondly, Vietnamese courts shall have exclusive jurisdiction over business and commercial disputes where the parties have chosen Vietnamese court for resolution in accordance with Vietnamese law or international treaties to which Vietnam is a party. In this case, the parties’ agreement serves as the legal basis for establishing the exclusive jurisdiction of Vietnamese courts, while simultaneously excluding the jurisdiction of foreign courts. For example, in an international sale of goods contract between a Vietnamese enterprise and a foreign enterprise, the parties may agree on a dispute resolution clause designating Vietnamese courts. When a dispute arises, the parties may only initiate legal proceedings before Vietnamese courts in accordance with such agreement; if one party unilaterally files a lawsuit before a foreign court, the judgment rendered by that foreign court shall not be recognized or enforced in Vietnam.

The above article entitled “Which commercial disputes must be resolved by Vietnamese court?” provided by TNTP. Should you require further information or wish to discuss any related matters, please contact TNTP for further consultation.

Best regards,

Dispute Settlement Methods in International Sales of Goods Contracts

Written by TNTP LAW on 17 January, 2025. Posted in Dispute settlement, Legal newsletter.

International sales of goods contract disputes are inevitable due to differences in language, culture, or business practices, which may prevent the parties from understanding each other’s goals. Understanding and selecting the appropriate dispute settlement method can help parties settle the dispute promptly, cost-effectively, and efficiently. This article by TNTP introduces some mechanisms for resolving disputes related to international sales of goods contracts.

1. Negotiation

• Negotiation is a consensus-based dispute settlement method where the parties will discuss disagreements or disputes based on good faith to find solutions. The agreements reached through negotiation are not legally binding and rely on the goodwill of the parties for implementation.

• Negotiation is a simple dispute settlement method. It is often prioritized by the parties due to its flexibility as it can occur at any time or place without being constrained by time or space, especially in the day of technological advancements. Moreover, the parties can avoid the costs for any third party and directly communicate themselves to understand each other’s objectives and potentially achieve a win-win solution.

• However, the success of negotiation will largely depend on the good faith of the parties. Since the agreement through negotiation lacks binding value, their implementation will solely be based on the parties’ cooperation. If a party fails to adhere to the agreed-upon solution, the dispute may remain unsettled, and there are no specific sanctions for such non-compliance. Additionally, language, culture, and other differences can impact the results of negotiation, especially with the international nature of the contract.

2. Mediation

• Mediation is a dispute settlement method involving a third party – typically an individual or organization with expertise in the disputed field, known as the mediator. The mediator acts as a “connector” between the parties, listens to their viewpoints, even up the differences in the parties’ understanding, and proposes solutions that address the parties’ needs for their consideration and decision.

• While mediation shares similarities with negotiation, a notable distinction is that the parties seek the assistance of a mediator rather than negotiating directly.

3. Commercial Arbitration

• Commercial arbitration is a dispute settlement method where the parties agree to resolve their disputes by an arbitral tribunal. The tribunal reviews the documents, evidence submitted, and the case’s facts to issue a final and binding Award.

• In international sales of goods contract disputes, arbitration has unique features due to the international nature of the disputes, such as:

– The language used during the settlement process can be mutually agreed upon by the parties, which may be the language of one of the disputing parties or a third language agreed upon. If there is no agreement, the arbitral tribunal has the authority to decide on the language to be used.

– Regarding the applicable law, the parties may choose the national law or international commercial practices.

– A distinctive feature of arbitration in international sales of goods contract disputes is that arbitral awards are not automatically recognized and enforced. Recognizing and enforcing the foreign Arbitral Award will depend on the international treaties to which the relevant country is a party or on the principle of reciprocity. In certain scenarios, the party seeking recognition and enforcement must undergo the procedures for recognition and enforcement in the country of the award debtor’s nationality or where the enforceable assets are located.

4. Litigation

• Litigation is a dispute settlement method based on state authority, wherein disputes are resolved by national courts, acting in the name of state power, to issue judgments and decisions to settle disputes. Litigation is often considered the “last resort” when disputes cannot be resolved through negotiation, mediation, and without an arbitration agreement.

• For international sale contract disputes, selecting the court for dispute settlement does not guarantee the case will be heard in the chosen court. Jurisdiction will be determined based on the conflict-of-law rules stipulated in the law of the selected court’s jurisdiction, international treaties to which the relevant country is a party and other criteria.

• Another issue is determining the applicable law for dispute settlement. While the parties may choose the governing law, in the absence of such an agreement, the court will apply conflict-of-law rules and private international principles as prescribed by the legal system of the country where the court is located.

• Similar to arbitration, recognizing and enforcing the effective judgment/decision need to be done in the country where the assets for enforcement are located or in the country of the judgment debtor’s nationality, subject to the international treaties, reciprocity principles, and the laws of the country where the recognition and enforcement takes place.

This article, “Dispute Settlement Methods in International Sales of Goods Contracts” is presented by TNTP with the hope of providing valuable knowledge to readers.

Sincerely,

Tag: Dispute Settlement

TNTP & ASSOCIATES INTERNATIONAL LAW FIRM

More about TNTP