Commercial mediation: An optimal solution for commercial disputes in Viet Nam

In the context of increasingly developing cross-border commercial transactions, commercial disputes are inevitable. Effectively resolving disputes not only helps businesses protect their legitimate rights and interests but also maintains partnerships and reputation in the market. Alongside traditional dispute resolution methods such as negotiation, arbitration, or court litigation, commercial mediation is gradually becoming an effective, flexible, and optimal trend in out-of-court dispute resolution. This article will provide readers with an overview of dispute resolution through commercial mediation. 

1. Definition and features of commercial mediation 

Commercial mediation, an out-of-court dispute resolution method, is recognized and encouraged by Vietnamese law for parties to resolve disputes arising from commercial and business activities. Pursuant to Clause 1, Article 3 of Decree 22/2017/ND-CP dated February 24, 2017, commercial mediation is understood as a method of commercial dispute resolution agreed upon by the parties and facilitated by a commercial mediator to assist in resolving disputes in accordance with the provisions of this Decree. 

Based on the definition mentioned above, commercial mediation has the following features: 

1. By nature, resolving commercial disputes through mediation is independent, elective, and non-litigious. 
2. Acting as a bridge, the third party chosen by the parties to serve as a mediation intermediary, namely the commercial mediator, plays a crucial and central role in the mediation process. Nevertheless, the final resolution outcome still depends on the will and aspirations of the parties.
3. The mediation process of the disputing parties is not governed by rigid, mandatory legal provisions regarding mediation procedures. 
4. Commercial mediation is a dispute resolution method that saves time, costs, and ensures confidentiality for participating parties. 
5. The outcome of commercial mediation is not coercively enforceable and depends on the good faith of the parties. To ensure that parties are obliged to comply with the agreed contents, the successful commercial mediation outcome may be requested by one of the parties for recognition and enforcement by the competent People’s Court in accordance with the provisions of Chapter XXXIII of The Civil Procedure Law 2015, from Article 416 to Article 419. 

2. Principles of commercial mediation for dispute resolution and scope of application 

According to Decree 22/2017/ND-CP, the principles for resolving disputes through commercial mediation are stipulated as follows: 

1. Voluntariness and equality: Parties participate in commercial mediation for dispute resolution based on consensus. Parties must mutually agree to choose commercial mediation as the dispute resolution method on a voluntary basis.
2. Confidentiality: All information related to the mediation case must be kept confidential, unless the parties have a written agreement to the contrary or the law provides otherwise. This is a characteristic feature of commercial mediation that helps parties protect each other’s reputation in business activities, encouraging them to be open, share candidly, and work towards an effective solution for both sides. 
3. Neutrality and objectivity: Commercial mediators adhere to the principles of independence, impartiality, objectivity, and honesty throughout the dispute resolution process between the parties. 
4. Flexibility of agreement: Disputes are resolved through commercial mediation if the parties have a mediation agreement. Parties may agree to resolve disputes through mediation before or after a dispute arises, or at any time during the dispute resolution process.

3. Scope of Application and Conditions for Resolving Disputes through Commercial Mediation 

Pursuant to Article 2 of Decree 22/2017/ND-CP, the method of dispute resolution through commercial mediation applies to the following disputes: 

1. Disputes between parties arising from commercial activities. 
2. Disputes between parties where at least one party engages in commercial activity. 
3. Other disputes between parties that the law stipulates may be resolved through commercial mediation. 

Accordingly, for parties to commence dispute resolution through commercial mediation, a mandatory condition is to establish an agreement on choosing commercial mediation as the dispute resolution method. As stated above, the mediation agreement can be flexibly established by the parties at any time during the dispute resolution process. It is important to note that the mediation agreement must be established in written form. 

4. Meaning and advantages of commercial mediation 

Firstly, the goal of mediation is not to determine who is right or wrong, but for the parties to jointly find a resolution plan and “look to the future”. Concurrently, based on the principle of confidentiality, the disputing parties can fully ensure their reputation in the business market, continuing to maintain cooperative and developmental relationships with each other. 

Secondly, a key advantage of commercial mediation is its speed and time efficiency. Time is a constant concern for commercial entities when resolving disputes, especially under litigation procedures at Vietnamese Courts. However, with commercial mediation, depending on the goodwill between the parties, a case can typically be successfully mediated within approximately 02 to 03 months. 

Finally, choosing to resolve disputes through commercial mediation will help parties maximize cost savings for dispute resolution. It is estimated that, on average, commercial mediation fees are approximately half the cost of resolving disputes through commercial arbitration. (Please refer to the fee comparison table between the two dispute resolution methods below) 

 Date Written: 25/07/2025

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