Commercial mediation in Vietnam

Mediation is a relatively new method of dispute resolution. There are two types of mediation: (i) court-annexed and (ii) mediations outside of court proceedings. If undertaken, court-annexed mediation is conducted as a pre-trial step and there are certain types of disputes in which mediation is a compulsory step. Failure to mediate does not attract costs sanctions but successful mediation will result in a reduction to the court fee. Mediations are confidential. In court-annexed mediation, if an agreement is reached the judge will issue a decision acknowledging the settlement of the parties, which has legal effect. In the case of mediations outside of court proceedings, settlement agreements can be recognised by the court, in which case they have legal effect.

What is the status of mediation in this jurisdiction?

Mediation, especially in investment and trade areas is quite new in Vietnam.

The Civil Procedure Code 2015 of Vietnam (CPC), which took effect from 1 July 2016, regulates court-annexed mediation between parties to civil litigation. The CPC also provides, for the first time, procedures for the recognition and enforcement of mediated settlements which are reached outside court proceedings such as mediation conducted by arbitrators in accordance with the Law on Commercial Arbitration 2010 or by the authorised mediators in accordance with relevant laws on commercial mediation.

On 24 February 2017, the Government issued Decree 22/2017/ND-CP on Commercial Mediation (Decree 22). Decree 22 is a key legal basis for commercial mediation in Vietnam.

In May 2018, the Vietnam Mediation Centre (VMC) was established and in July 2019, the Vietnam International Commercial Mediation Centre (VICMC) was established. VMC and VICMC are the first prominent commercial mediation centres in Vietnam.

How is a mediation conducted?

For court-annexed mediation, mediation will be conducted by the court as a pre-trial step and the settlement agreement, if any, will be recognised by the court for enforcement.

For mediation during an arbitration, at the parties’ request, mediation will be conducted by the arbitration tribunal and the settlement agreement if any, will be recognised by the tribunal and will have the same validity as an arbitration award.

For commercial mediation, mediation will be conducted by authorised mediators in accordance with procedures under Decree 22 and the rules of the relevant mediation centre. Parties to a commercial dispute may voluntarily select a commercial mediator who will assist the parties to attempt to achieve a resolution to the dispute. For example, under the VMC Rules, the mediator shall conduct the mediation in such a manner as he or she considers appropriate, with the consent of the parties, taking into account the circumstances of the case, the wishes of the parties and the need for a speedy settlement of the dispute; and may make proposals at any stage for the settlement of the dispute. The mediator may hold joint mediation sessions with the parties or private mediation sessions with each party. A party to the mediated settlement agreement may request the court to recognise such settlement agreement in accordance with procedures under the CPC.

Is there any obligation on litigants to mediate?

For certain disputes, mediation is a compulsory step before the concerned party can file a petition with the courts. Compulsory mediation applies to certain labour and real estate disputes. Labour authorities appoint mediators for labour disputes and local people's committees appoint mediators for real estate disputes.

Court-annexed mediation is a compulsory stage in the period of preparation for trial except for cases in which mediation is not allowed or is unable to be carried out.

Does the court have powers to support a mediation?

Under Article 48.7 of the CPC, judges have a duty/power in civil litigation to carry out mediation and to “issue a decision acknowledging the agreement of the concerned parties".

Are mediations confidential?

Information relating to a mediation is confidential unless relevant parties agree otherwise. Mediators are required to keep confidential all matters relating to the mediation proceedings, unless otherwise agreed by the parties in writing. Rules of mediation centres also impose similar confidentiality requirements. The mediated settlement agreements are also kept confidential, unless disclosure is necessary for enforcement.

In addition, parties must agree not to use any documents or information that could only be obtained through mediation “as evidence in subsequent judicial, arbitral or other proceedings".

Does failure to mediate attract adverse cost consequences?

A failure to mediate does not attract adverse cost consequences in Vietnam. However, if the parties reach an agreement on settlement of the case prior to the commencement of the first instance hearing, they will only be liable to pay 50% of the relevant court fee.

For certain disputes where mediation is a compulsory step before the concerned party can file a petition with the courts, the court will reject a petition in cases where the concerned party has failed to go through such compulsory mediation proceedings.

How are settlement agreements enforced?

The CPC sets out rules regarding the recognition and enforcement of settlement agreements reached in both court-annexed mediation and mediated settlements reached outside court proceedings. In court-annexed mediation where the parties reach an agreement on all the matters in the dispute and no party withdraws its consent to the agreement within seven days from the date of preparation of the record of the settlement, the judge presiding over the mediation shall issue a decision acknowledging the settlement of the parties. This decision has legal effect and may not be subject to appeal or protest in accordance with usual appeal provisions.

Mediated settlements reached outside of court proceedings, if recognised by the court, have legal effect and are enforceable by the court. One of the concerned parties may request the relevant court to recognise the mediated settlement.

Where a mediation conducted by an arbitration tribunal under the Law on Commercial Arbitration 2010 results in a settlement, the arbitration tribunal will prepare minutes of the successful mediation to be signed by all parties and the arbitrator and the arbitration tribunal shall issue a decision recognising the agreement of the parties. This decision shall be final and have the same validity as an arbitral award.

Vietnam is not yet a signatory to the United Nations Convention on International Settlement Agreements resulting from Mediation (also known as the "Singapore Convention on Mediation").

Is there a system of accreditation and/or regulatory body for mediators?

There is no formal system of accreditation for mediators in Vietnam.

Each mediation centre must submit a list of mediators to the department of justice in the city or province where it has registered for operation. Any change to the list of mediators must be notified to the department of justice. Ad-hoc mediators must also be registered at the department of justice in the city or province where the mediator resides.