Arbitration is currently one of the popular forms of dispute resolution in the commercial field. In Vietnam, this form is gradually being used more than traditional court litigation. To explain the change in the tendency to choose the form of dispute resolution, this article will make some comparisons between commercial arbitration and the court for readers to have an overview.
Advantages of Arbitration over Litigation
Firstly, the finality of the judgment.
According to Article 4.5 of the Law on Commercial Arbitration 2010, an arbitral award has the quality of being final and impossible to change. This means that an arbitral award is a final document legally binding on all parties, obliging them to perform their obligations. Unless an arbitral award is canceled in accordance with the law, an arbitral award cannot be re-examined by any other agency.
All the while, a court’s decision or judgment can be appealed or protested again and be subject to an appeal hearing or judicial review.
Secondly, dispute resolution by arbitration is more flexible. Specifically, the arbitrator settling the dispute, rules of procedure, place, time, nationality of the arbitrator, etc. shall be freely selected by agreement of the parties. Accordingly, depending on the field of dispute, the parties can choose an arbitrator with appropriate expertise.
Thirdly, the arbitral award can be recognized and enforced in many countries under the Convention on International Commercial Arbitration which has been signed and ratified by many countries such as the New York Convention 1958, the Washington Convention 1965 and the Inter-American Convention on International Commercial Arbitration. Thus, arbitral awards are more widely recognized and easier to enforce than judgment.
Fourthly, the dispute resolution procedure at arbitration is short and fast, saving time and effort.
The procedure of arbitration proceedings
Step 1: Submit the petition and attached documents.
Step 2: Defendant submits a defense.
Step 3: Set up an arbitration council.
Step 4: Mediation.
Step 5: Hold a meeting to resolve the dispute.
Fifthly, dispute settlement by arbitration shall not be executed publicly, unless otherwise agreed by the parties. This helps the parties secure their business information and protect their image in the market. In contrast, disputes resolved by courts are usually conducted on public principles.
Disclaimer: This article is for general information only and is not a substitute for legal advice. Apolat Legal is a Vietnamese law firm with experience and capacity to advise on matters related to Dispute Resolution. Please click here to learn more about our services and contact our lawyers in Vietnam for advice via email email@example.com.