March 17 2025 | Nguyen Trung Nam (Tony) & Dat Phan (2025) – Commercial Mediation in Vietnam:
Legal Framework and Practice, Asian Dispute Review, p.48 – 54. | Lexology
The Article is about “Commercial Mediation in Vietnam: Legal Framework and Practice”. This article provides an overview of the regulation and conduct of international commercial mediation in Vietnam. In particular, it compares salient provisions of Vietnam’s Decree No 22/2017/ND-CP of 24 February 2017 on Commercial Mediation with the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation 2018 (which has not been adopted in Vietnam). It also notes steps aimed at the eventual accession of Vietnam to the United Nations (Singapore) Convention on International Settlement Agreements Resulting from Mediation 2018.
Introduction
Mediation is a preferred commercial dispute resolution method in Vietnam, owing its popularity to a number of advantages that include reasonable cost, speed and confidentiality[1]. This is demonstrated by the practice of the Vietnam International Arbitration Centre (VIAC)[2] between 2007 and 2018 and the Vietnam International Commercial Mediation Center (VMC, or VICMC) since 2018[3]. According to, respectively, the schedules of costs of the VIAC and the VMC, arbitration costs in a dispute worth US$10,000,000 are approximately US$94,000, while the mediation costs of same are US$34,000. Depending on the actual circumstances of each case, the time taken to resolve disputes by mediation, is usually significantly shorter than that for arbitration and court litigation. Commercial mediation is based on the principle of confidentiality [4], in respect of which mediators in Vietnam have a strict duty[5].
The legal framework
The history of commercial mediation’s development in Vietnam dates back to 15 April 2017, when Decree No 22/2017/ND-CP of 24 February 2017 on Commercial Mediation (the 2017 Decree) came into effect.6 This Decree comprehensively governs the applicable scope, principles, procedures and processes for resolving disputes through commercial mediation and makes provision as to commercial mediators, commercial mediation institutions, Vietnam-based foreign commercial mediation institutions and State management of commercial mediation activities. The State has clearly expressed its view thus on the promotion of commercial mediation:
“Encouraging disputing parties to use commercial mediation to resolve disputes in the field of commerce and other disputes that are allowed to be settled through commercial mediation.”[7]
The legal framework for commercial mediation in Vietnam is also influenced by a number of other laws. These include the Civil Code 2015[8], the Code of Civil Procedure 2015 (CPC)[9], the Commercial Law 2005[10], the Law on Investment 2020[11], the Law on Protection of Consumer Rights 2023[12] and the Construction Law 2014, as amended and supplemented in 2020.[13] In addition to independent commercial mediation, Vietnamese law also recognises court-annexed mediation,[14] mediation during litigation proceedings[15] and mediation during arbitral proceedings.[16] Consistent with international practice, Vietnam has both institutional and ad hoc mediation. Mediation centres may be established by arbitration centres[17] or by qualified mediators[18]. According to statistics from the Ministry of Justice, the country currently has 17 commercial mediation centres, 8 arbitration centres conducting mediation activities and over 100 ad hoc commercial mediators[19].
Divergence from the UNCITRAL Model Law on International Commercial Mediation
While Vietnam has not adopted the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation 2018[20] (the Model Law), Vietnamese laws on mediation are generally consistent with it. Thus, there are, understandably, a number of differences between these two systems.
Firstly, the Model Law is clearly intended and designed to govern only “international commercial mediation,”[21] while the 2017 Decree makes no such provision, being applicable only to “commercial mediation” per se. The Decree applies to commercial mediation activities (ad hoc or institutional) carried out by commercial mediation organizations, commercial mediators, foreign mediation organizations in Vietnam, State management authorities responsible for commercial mediation, and any other organizations and individuals engaged in commercial mediation[22]. Conversely, therefore, the Decree does not apply to mediation organizations, mediators, etc., engaged in non-commercial mediation activities.
Secondly, in terms of formalities for enforcing mediated settlement agreements (MSAs), the Model Law allows an enforcing party to rely on an MSA by supplying a copy signed by the parties, together with any evidence that is acceptable to the competent authority of the enforcing State showing that the agreement resulted from mediation[23]. Under the 2017 Decree[24], the parties and the mediator must sign the MSA; the MSA may be granted recognition pursuant to the Civil Procedure Code (CPC)[25].
Thirdly, there are no specific standards for qualifying as a mediator under the Model Law. Under the 2017 Decree, a mediator must have full civil legal capacity under the Civil Code and be of good character and reputation[26]. He or she must also have, as a minimum, a bachelor’s degree and two years’ experience in the discipline(s) in which he or she has trained, along with mediation skills, knowledge of the law and commerce, and related areas[27]. As to the conduct of mediations, the Model Law requires a mediator to treat the parties fairly[28] and to disclose any circumstances that likely to give rise to justifiable doubts as to his or her impartiality or independence[29]. The 2017 Decree requires a mediator to be impartial and independent[30].
Fourthly, a mediator under the Model Law may not act as arbitrator for the same dispute (or another dispute that has arisen from the same contract or legal relationship or any related contract or legal relationship), unless the parties otherwise agree[31]. In Vietnam, a mediator may not, in principle, act as an arbitrator in the same dispute[32]. It is, however, common practice in arbitral proceedings in Vietnam that the tribunal will, wearing the hat of a mediator, organise a mediation session at the beginning of one of the hearings.
Fifthly, under the Model Law, where parties agree to mediate and commit not to start arbitration or court proceedings for a certain period or until a specific event occurs, this commitment must be honoured by the arbitral tribunal or a court[33]. This holds good until the agreed terms are met, unless a party needs to act to protect its rights. Vietnamese laws do not have an equivalent provision.
Sixthly, in terms of enforcement, the Model Law does not address the enforcement of non-international MSAs. In other words, a domestic MSA will be treated and enforced in the same manner as any other binding contracts that have been breached. However, under both the 2017 Decree[34] and the CPC[35], an MSA may be recognised and enforced in summary court proceedings with expedited deadlines[36] and without the need for a full trial (by contrast with cases of ordinary breach of contract).
Finally, recognition and enforcement of an MSA under the Model Law[37] may be refused on a number of grounds: (1) incapacity of a party; (2) that the MSA is null and void, inoperative or incapable of being
performed, or is not final or binding, or has been subsequently modified; (3) that the obligations in the MSA
(i) have been performed, or (ii) are not clear or comprehensible; (4) that granting relief would be contrary to the terms of the MSA; (5) that there was a serious breach by the mediator of applicable standards, without which breach that party would not have entered into the settlement agreement; or (6) that the mediator failed to disclose to the parties circumstances that would have raised justifiable doubts as to his or her impartiality or independence, having a material impact or undue influence upon a party so that, without such failure, a party would not have entered into the settlement agreement; (7) that the MSA is contrary to public policy; and (8) that the subject-matter of the dispute was incapable of settlement by mediation.
In Vietnam, by contrast, the CPC38 provides that enforcement of a MSA may be refused where: (1) either party lacks civil legal capacity; (2) (i) either party does not have rights and/or obligations as stipulated in the MSA, or (ii) the content of the MSA relates to the rights and/or obligations of a third party which did not consent to it; and (3) the content of the MSA (i) is not based on party freedom to contract (party autonomy), or (ii) is prohibited by law, or (iii) violates moral ethics, or (iv) is intended to avoid obligations towards the government or third parties. As may be seen from the above, a number of grounds for refusal of enforcement of a MSA under the Model Law (viz, grounds (3), (4) and (5) above) do not exist under the CPC. Conversely, several grounds under the CPC do not exist under the Model Law (viz, grounds (2) and (3)(iv)).
The current use of commercial mediation
The number of disputes referred to international commercial medation is currently somewhat low. This is partly because commercial mediation is still relatively new in Vietnam[39]. The top two influences on party choice are contractual obligations and external counsel’s advice[40]. There are, however, very few enforecable mediation clauses in contracts, while there is also no significant sign of counsel advocating mediation as a matter of course. As a result, mediation is not a mandatory precondition to litigation or arbitration under current Vietnamese law and practice. A party may therefore omit compliance with a contractual mediation requirement if it so wishes, without fear of any sanction.
Commercial mediators
In addition to general qualification requirements to act as commercial mediators, art 7 of the 2017 Decree requires that candidates must be either (1) qualified by the relevant Department of Justice as an ad hoc mediator, or (2) appointed as an empanelled mediator of a commercial mediation institution regulated by the 2017 Decree, or both[41]. A mediation institution is permitted to (and often does) raise these conditions when accepting mediators in its panel of mediators. A number of mediation institutions have foreign mediators on their panels[42]. With regard to Vietnamese mediators, around 80 people have been accredited by CEDR or other organisations (such as, the CIArb and JAMS), creating the first community of experts professionally trained in commercial mediation in Vietnam. In light of the current case load, it is believed that there are more qualified meditators (both Vietnamese and foreign) than the market demands.
The 2017 Decree provides for a general code of conduct for mediators[43]; detailed codes may be found in the rules of each mediation institution (that of the VMC is a typical example)[44]. The training of mediators and courses in mediation skills are conducted by mediation insititutions, the Judicial Academy and Bar federations, providing basic knowledge for participants.
Recognition of mediated settlement agreements
Recognition of MSAs is regulated by both the 2017 Decree[45] and the CPC[46]. Conditions for the court to consider a request for recognition of a MSA are simple and easily met by parties[47]. The time limit for such a request is six months from the date of signature of the MSA (inclusive of the required signature of the
mediator). Once the MSA is recoginised, it is enforceable in accordance with civil enforcement laws, unless voluntarily executed by the parties[48].
Vietnam is currently not a Contracting State to the Singapore Convention on Mediation, though accession to it is actively under consideration[49]. There is, therefore, no regulation of enforcement of an international MSA in Vietnam or of a Vietnamese MSA overseas, save in the courts of a State that has acceded to the Convention. One possible pro tem solution is to ultilise an Arb-Med Arb Protocol (for example, that of the VIAC-VMC 2020[50]), whereby an international MSA may acquire the status of an arbitral award and thus be enforceable under the New York Convention 1958[51].
Conclusion
International commercial mediation is still a rather new dispute resolution process in Vietnam, but its use is gradually increasing with growing awareness on the part of the business and legal counsel communities. Once Vietnam has acceded to the Singapore Convention and acquired a greater role in the global economy, the authors believe that mediation will be used much more greatly, in a similar fashion to the history of commercial arbitration’s development in Vietnam.
[1] Singapore International Dispute Resolution Academy (SIDRA) of Singapore Management University, SIDRA International Dispute Resolution Survey, 2024 Final Report, p 35, Exhibit 6.2 (SIDRA Final Report). Editorial note: See the ‘News’ section, infra at p 66.
[2] Vietnam International Arbitration Centre: https://www.viac.vn/en. Established pursuant to Decision No 279/QD-VIAC of 27 April 2018 of the President of VIAC.
[3] Vietnam Mediation Centre, a division of VIAC: https://vmc.org.vn/en. Established pursuant to Government Decree No 22/2017/ND-CP of 24 February 2017 on Commercial Mediation; unofficial English translation available at https://www.academia.edu/63043423/The_Governmental_Decree_no_22_on_commercial_mediation_in_2017 and licensed by the Ministry of Justice on 20 December 2018. Its mediations are governed by the VMC Mediation Rules 2019, which took effect on 6 July 2019, available at https://vicmc.vn/wp-content/uploads/2021/04/vicmc_quytachogia_intoline_vn_en_publication-1.pdf.
[4] Article 4(2) of the 2017 Decree.
[5] Ibid, arts 9(1)(b) and 9(2)(c).
[6] Prior to this, the VIAC had provided mediation services and had handled five commercial mediation cases.
[7] 2017 Decree, art 5.
[8] No 91/2015/QH13 of 24 November 2015.
[9] No 91/2015/QH13 of 24 November 2015.
[10] Law No 36/2005/QH11 of 14 June 2005.
[11] Law No 61/2020/QH14 of 17 June 2020, art 14(1).
[12] Law No 19/2023/QH15 of 20 June 2023, art 54.
[13] Law No 50/2014/QH13 of 18 June 2014, art 146.
[14] Law No 58/2020/QH14 of 16 June 2020 on Mediation and Dialogue at Court.
[15] CCP, art 10.
[16] Law No 54/2010/QH12 of 17 June 2010 on Commercial Arbitration, arts 9 and 58.
[17] 2017 Decree, art 23, as in the case of VIAC and the VMC.
[18] Ibid, art 21.
[19] https://bttp.moj.gov.vn/Pages/hoa-giai-thuong-mai.aspx.
[20] Available at https://uncitral.un.org/sites/uncitral.un.org/files/mediacuments/uncitral/en/2201363_mediation_guide_e_ebook_rev.pdf.
[21] Model Law, arts 1.1 and 3.1. Article 3.2 defines what is meant by ‘international’.
[22] 2017 Decree, art 1.
[23] Model Law, art 18.1, in particular at sub-paras 1(a) and (b)(i).
[24] 2017 Decree, art 15.3.
[25] Ibid, art 16. See ‘Recognition of mediated settlement agreements’, infra.
[26] Ibid, art 7.1(a).
[27] Ibid, art 7.1(b) and (c).
[28] Model Law, art 7.3, fairness embracing impartiality and independence: ibid, art 6.4.
[29] Model Law, art 6.5.
[30] 2017 Decree, art 7.1(a).
[31] Model Law, art 13.
[32] VIAC Rules of Arbitration 2018, art 16(3)(d). Editorial note: Under statute law, by contrast, there is no equivalent provision in art 20(2) of the Law on Commercial Arbitration 2010 excluding mediators from acting as arbitrators.
[33] Model Law, art 14.
[34] 2017 Decree, art 16.
[35] Chapter XXXIII of the CPC deals with the procedure for recognition and enforcement of a MSA.
[36] For example, under art 419.2 of the CPC the court must review the application within 15 days. The application must then be listed for hearing within 10 days from expiry of the 15-day period.
[37] Model Law, art 19.
[38] CPC, art 417.
[39] VMC, Annual Report 2022 (2023), available in English at https://vmc.org.vn/en/annual-report.html.
[40] SIDRA Final Report (supra, note 1), p 35.
[41] Article 7 of the 2017 Decree provides (in the authors’ free English translation):
“Article 7. Qualifications of commercial mediators:
1, A person can fully satisfy the following criteria may act as a commercial mediator:
A. Having full civil act capacity as prescribed by the Civil Code; having good moral qualities and prestige, and working in an independent, impartial and objective manner;
B. Possessing a university or higher degree and having at least 2 years’ working experience in the discipline he/she has studied;
C. Having mediation skills and knowledge about law, business and commercial practices and relevant issues.
2, A commercial mediator may conduct commercial mediation in the capacity as [sic] an ad hoc commercial mediator or a commercial mediator of a commercial mediation institution in accordance with this Decree.
3, A commercial mediation institution may set criteria for its commercial mediators which are higher than those prescribed in Clause 1 of this Article.
4, The accused or defendants or those who are serving criminal sentences or have not had their criminal records expunged or are serving the administrative measure of sending to a compulsory education institution or compulsory detoxification establishment may not act as commercial mediators.”
[42] Available at https://vmc.org.vn/en/list-of-mediators.
[43] 2017 Decree, art 10.1.
[44] VMC, Code of Professional conduct and ethics for mediators (2020), available at https://vmc.org.vn/en/code-of-conduct-for-mediators.
[45] 2017 Decree, arts 13(2)(b) and 16.
[46] CPC, Chapter XXXIII (in official English translation).
[47] Article 417 of the CPC provides:
“Conditions for recognition of successful out-of-Court mediation result
1, Parties of [sic] the mediation agreement have sufficient civil act capacity.
2, Parties of [sic] the mediation agreement are persons who have rights and obligations towards the mediation contents. If the successful mediation contents are related to rights and obligations of a third party, such mediation must be agreed by such party.
3, Either or both parties file application to the Court for recognition of the mediation.
4, Contents of the successful mediation are totally voluntary and are not contrary to law, not contrary to social ethics nor for evasion of obligations towards the State or the third party.”
[48] CPC, art 419(9).
[49] United Nations (Singapore) Convention on International Settlement Agreements Resulting from Mediation 2018 (2020 UNTS 3360), available at https://uncitral.un.org/sites/uncitral.un.org/files/singapore_convention_eng.pdf. Editorial note: MSAs concluded between Vietnamese and foreign parties on or after 12 September 2020 (the date on which the Convention came into force) are, therefore, currently enforceable under the Convention only in the courts of foreign parties’ home States that have acceded to it. Vietnam is currently considering whether to accede to the Convention; pursuant to recommendations made to the Vietnamese government by a panel of independent experts: see Report on Viet Nam’s Possibility to [sic] Accede to the United Nations Convention on International Settlement Agreements Resulting from Mediation (Hanoi, 2021), available at https://moj.gov.vn/tttp/ttntuc/Lists/NghienCuuTraoDoi/Attachments/68/Report%20on%20the%20Possibility%20of%20Acceding%20to%20the%20Singapore%20Convention.pdf.
[50] VIAC/VMC, Arb-Med-Arb Protocol 2020, available at https://www.viac.vn/en/arb-med-arb-protocol.
[51] United Nations (New York) Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (1959 330 UNTS 3).
Source: Commercial mediation in Vietnam: legal framework and practice – Lexology