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Comparison of dispute resolution methods by court and arbitration

Dispute resolution by Court and Arbitration are the most popular methods of dispute resolution today. There are certain differences between these two methods, so in order for customers to be able to choose a dispute resolution method that suits their needs, Viet An Law would like to present a comparison of dispute resolution methods by court and arbitration in the article below.

Legal basis

  • Civil Code 2015;
  • Civil Procedure Code 2015;
  • Commercial Law 2005;
  • Law on Commercial Arbitration 2010.

Similarities in commercial dispute resolution by court and arbitration

  • Both are methods of dispute resolution.
  • All have the participation of a third party, which is the court/ arbitration to resolve disputes.
  • The decisions of the court and the arbitration are legally binding on the disputing parties.
  • Whether adjudicating by court or arbitration, they all comply with the principle that the law is agreed upon by the parties and ensure the independence of the jurisdiction.

Differences between court and arbitration dispute resolution

No Criteria Court Referee
         1 Legal basis Civil Code 2015;

Civil Procedure Code 2015.

Law on Commercial Arbitration 2010.
         2 Concept A method of dispute resolution, by which the disputing parties bring the dispute to the court for trial and the final judgment is binding on the disputing parties. A method of dispute resolution, whereby the disputing parties bring the dispute to arbitration for the arbitral tribunal to consider and make a decision binding on the disputing parties.
         3 Legal nature Is a state agency. As a non-governmental organization, social-professional nature
         4 The Value of Judgment The court’s decision may be appealed and retried according to the appellate procedure.

The decision of the court of appeal is final.

The arbitral award is final.
         5 Authorization Whether the disputing parties choose or not choose the court, it does not affect the jurisdiction of the court.

Jurisdiction of the court arises on the basis of provisions of law.

The arbitrator has no automatic jurisdiction over any dispute.

The arbitrator has jurisdiction only when selected by the disputing parties.

         6 Guaranteed secrecy Judgments are often made public Dispute settlement by arbitration is not public, ensuring high confidentiality.
         7 Fee The cost is lower than that of arbitration, because it is a state agency, many costs have been supported. However, if the case is prolonged, the cost will be greatly increased. The cost is higher because the arbitrator is a financially autonomous organization.
         8 Flexibility in adjudication The order and procedures for trial have been strictly regulated by law and cannot be changed. Therefore, the flexibility is not high. The trial procedure is simple and can be changed flexibly based on the agreement of the parties.

Procedures when settling disputes by the court

  • Step 1 (Submit a lawsuit petition): Individuals or organizations make a lawsuit petition and submit it directly at the court or send it through the postal service.
  • Step 2 (Considering the petition): The judge will consider whether the petition is valid or not. After that, the judge will make one of the decisions such as requesting amendments and supplements to the petition; or carry out the procedure for accepting the case; or transfer the petition to a competent Court; or return the petition to the petitioner.
  • Step 3 (Case handling): After reviewing the petition, if the petition is valid and within the jurisdiction of the court, the case will be accepted by the court to begin settlement.
  • Step 4 (Conciliation): The court will conduct conciliation between the parties to the dispute. Conciliation is conducted based on the principle of free will and the content of the agreement does not violate the prohibition of the law and does not violate social ethics.
  • Step 5 (Preparing for the trial of the case): During this preparation period, the disputing parties will prepare documents and evidences related to the case file and submit it to the court.
  • Step 6 (First instance trial): At the first instance court, the parties to the dispute will take turns to present their views. The court will listen to the opinions of the parties and make a decision.
  • Step 7 (Appeal): If one of the parties to the dispute is not satisfied with the outcome given by the First-instance Court, it may submit its appeal request to the court.
  • Step 8 (Appellate Trial): In the appellate hearing, the Court of Appeal will review the issues raised, and then issue a final decision. The decision of the Court of Appeal is a final decision and the parties to the dispute must abide by it.

Procedures when resolving disputes by arbitration

  • Step 1 (Submit a lawsuit petition): The claimant submits the claim to the arbitration center/ arbitration council… to request the dispute settlement by arbitration.
  • Step 2 (Payment of Arbitration Fee) : When the claimant files the claim at Arbitration, the claimant must also pay the arbitration fee.
  • Step 3 (Appointment of Arbitrator): When filing the claim and paying the arbitration fee, the accompanying documents also need to appoint an arbitrator as requested by the claimant.
  • Step 4 (Contemplation of application): After receiving the petition and arbitration fee from the plaintiff, the petition will be screened to see if it is suitable or not and has the correct jurisdiction of the arbitrator.
  • Step 5 (Acceptance of Claims): After the application review process, if the Complaint is valid, it will be accepted, and a notice will be sent to the respondent.
  • Step 6 (Defendant files self-defense): After receiving notice of claim, Defendant must file a self-defense statement stating the defendant’s motion as well as the legal basis for this petition. At the same time, in this defense, the defendant also needs to appoint an arbitrator to participate in the hearing of the case.
  • Step 7 (Establishment of the arbitral tribunal) : If the parties have agreed on the selection of members of the arbitral tribunal, the arbitral tribunal shall be established based on this agreement. In case the parties do not agree, the parties will reach an agreement and appoint one arbitrator for each party, the two arbitrators selected by the parties will elect another arbitrator to be the Chairman. The arbitral tribunal.
  • Step 8 (Carrying out the arbitration process): Once established, the Arbitral Tribunal will study the documents submitted by the parties and summon the parties to a dispute resolution session. During the dispute resolution session, the disputes will present their views and opinions.
  • Step 9 (Decision making): After reviewing documents, evidence and arguments of the parties, the arbitral tribunal will jointly make a final decision. This decision is final and binding on all parties.

It can be seen that there are obvious differences from dispute settlement procedures to competence and costs between dispute settlement by Court and dispute settlement by arbitration. Therefore, before choosing what methods of dispute resolution should be used, you need to look at these methods carefully to see if they are applicable or not.

The above article is information on comparison of dispute resolution methods by court and arbitration. If you have any questions about the methods of dispute resolution by court or arbitration, please contact Viet An Law by phone, Zalo or email for our best support!

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