Choosing the Right Tool for Dispute Resolution
For foreign companies doing business in Vietnam, disputes can arise even when contracts are carefully drafted and relationships are strong.
When that happens, the key question is not only who is right, but what is the best way forward?
Litigation and growing arbitration are familiar tools, but they are not always the most efficient or relationship friendly. An increasingly relevant alternative is commercial mediation in Vietnam, a voluntary, confidential process that allows parties to seek practical solutions with the assistance of a neutral mediator.
From our experience advising foreign clients, mediation is not a cure all, but it is often a valuable step worth trying before entering lengthy litigation or arbitration if contract agrees.
Reason 1: Mediation Strengthens Strategy and Preserves Control
When a dispute arises in Vietnam, foreign investors often find that formal proceedings can be time-consuming, highly procedural, and unpredictable.
Commercial mediation in Vietnam allows parties to regain control, not through confrontation, but through structure and dialogue.
Strategic Flexibility
In mediation, parties decide the process: the choice of mediator, the schedule, the language, and even the confidentiality terms. This flexibility allows businesses to address commercial realities, not just legal arguments.
For example, in a supply chain dispute between a foreign manufacturer and a Vietnamese distributor, both parties may face economic pressure to continue working together.
Through mediation, they can discuss revised payment terms, partial deliveries, or joint logistics planning, outcomes that a court or arbitrator could not impose.
Advocacy, Not Surrender
For counsel, mediation is not about giving up leverage. It is about using advocacy differently.
A well prepared mediation brief, clear presentation of interests, and respectful negotiation can yield outcomes that protect both reputation and relationship.
In this way, commercial mediation in Vietnam strengthens the overall dispute resolution strategy, enabling companies to protect their commercial interests without losing control to formal procedures.
Reason 2: Mediation Fits Vietnam’s Business Culture and Improves Efficiency
Vietnam’s commercial environment operates on trust, long term relationships, and respect.
Businesspeople often prefer direct dialogue and pragmatic compromise. That makes commercial mediation in Vietnam culturally compatible and effective.
Cultural Alignment
In Vietnamese culture, preserving harmony and “face” often takes precedence over proving legal right or wrong. Mediation provides a respectful setting for dialogue, helping parties communicate through neutral facilitation rather than confrontation.
A well managed mediation session helps both sides express concerns, clarify misunderstandings, and rebuild mutual confidence, something that formal proceedings, conducted through documents and written submissions, rarely achieve.
Time and Cost Savings
Compared with litigation or arbitration, mediation usually takes weeks not years.
While cost is not always the main driver for foreign investors, the ability to resolve disputes swiftly can be decisive when operations or supply contracts depend on continuity.
Even when mediation does not fully settle the matter, it often narrows the points in dispute, reducing the scope, time, and cost of subsequent arbitration or court cases.
In short, mediation supports efficiency and business continuity, two priorities for any investor operating in Vietnam’s fast paced economy.
Reason 3: Mediation Complements, Not Replaces, Other Legal Mechanisms
Experienced investors know that commercial mediation in Vietnam is not a substitute for all other forms of dispute resolution.
There are cases where arbitration or court action remains necessary, for example, when one party refuses to participate, evidence must be preserved, or urgent enforcement is required.
But mediation works best as part of a broader strategy, not as an isolated step.
A Cooperative First Stage
In many contracts, mediation is included as the first tier in a “multi-step” clause:
negotiation, mediation, arbitration (or litigation).
This structure reflects a pragmatic reality, it gives parties a chance to resolve matters amicably before escalating to formal proceedings.
Legal Recognition and Enforceability
Vietnam laws recognize commercial mediation. A settlement agreement reached through mediation can be recognized by Vietnamese courts, giving it legal enforceability.
This means mediation is not just a handshake or informal understanding; it is a process supported by law and consistent with international frameworks such as the Singapore Convention on Mediation.
By viewing mediation as complementary rather than alternative, foreign investors gain an additional layer of protection, one that balances flexibility with enforceability.
6 Step-by-Step Overview of Mediation in Vietnam
Step 1: Agreement to Mediate: Either included in the contract or decided upon when a dispute arises.
Step 2: Mediator Appointment: Parties select a neutral mediator with suitable experience.
Step 3: Exchange of Briefs: Each party submits a short summary of facts, issues, and desired outcomes.
Step 4: Joint Session: The mediator facilitates open discussion to identify key interests.
Step 5: Private Meetings: The mediator meets each side separately to explore settlement options.
Step 6: Agreement and Closure: If consensus is reached, a written settlement is signed and may be recognized by the court.
The process is voluntary, confidential, and designed to encourage constructive dialogue.
Frequently Asked Questions
Q1. Is mediation binding?
A mediated settlement becomes binding once both parties sign. It can be recognized by the Vietnamese court for enforcement.
Q2. Can foreign mediators be used?
Yes, as long as both parties agree and local procedural rules are observed.
Q3. How long does mediation take?
Typically several weeks, depending on the complexity of the case and the parties’ availability.
Q4. Does participating in mediation affect arbitration or litigation rights?
No. Parties may still proceed to arbitration or court if mediation does not succeed.
A Balanced and Practical Choice
Commercial mediation in Vietnam is not a perfect solution, and it is not meant to be.
But it is a constructive, legally supported, and culturally aligned process that deserves consideration in every cross-border business strategy.
For foreign investors, mediation is an opportunity to resolve disputes without losing time, control, or partnership. For counsel, it is a strategic tool, one that complements negotiation, arbitration, and litigation in a balanced dispute resolution framework.
Trying mediation is not a sign of weakness. It is a mark of maturity, an acknowledgment that in Vietnam’s evolving commercial environment, the best outcomes often come not from winning a case, but from preserving a business.
About ANT Lawyers, a Law Firm in Vietnam
We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.
Source: https://antlawyers.vn/library/commercial-mediation-in-vietnam-3-reasons.html
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