Dispute resolution for sale of goods in Ho Chi Minh City

Ho Chi Minh City is the locality with the largest economy in Vietnam. Trading and commercial activities in Ho Chi Minh City always develop strongly and are very vibrant. However, along with the strong development of commercial activities, Ho Chi Minh City is also a place where many disputes arise in commercial business, where there are many arbitration centers as well as commercial mediation centers, where many mediators practice, and where commercial mediation activities are most developed in the country. Therefore, in this article, Viet An Law will provide you with information related to dispute resolution for sale of goods in Ho Chi Minh City.

Legal basis

• Vietnam Civil Code 2015.
• Law on Commercial 2005.
• Law on Commercial Arbitration 2010.
• Decree 22/2017/ND-CP on commercial mediation.

What is a contract for the sale of goods?

Current Vietnamese legal documents currently do not have regulations on contract for the sale of goods, but are based on the general concept of civil contracts, the concept of sale of property contracts in the Civil Code 2015 and the concept of sale of goods in Clause 8, Article 3, Commercial Law 2005, we can introduce the concept of the contract for sale of goods as follows:

A contract for the sale of goods is an agreement between the parties, whereby the seller is obliged to deliver the goods, transfer ownership of the goods to the buyer, and receive payment; then the buyer shall pay the seller, receive the goods, and take ownership of the goods according to the agreement.

What is a sale of goods dispute?

A sale of goods contract establishes the rights and obligations of the parties in a civil transaction. Sale of goods disputes are conflicts and disagreements about the previously determined rights and obligations of the subjects, mainly related to the performance of rights and obligations under the contract. Disputes may arise from the substantial contract, interpretation of the contract, rights, and obligations of the parties in the contract, and liability for compensation for damages due to breach of contract.

Status of dispute resolution for sale of goods in Ho Chi Minh City

Ho Chi Minh City is a dynamic and friendly city and is also an important economic, cultural, educational, scientific, and technological center of the South in particular and Vietnam in general. The strong development of economic activities also leads to an increase in business and commercial disputes in Ho Chi Minh City.

According to a report from the Ministry of Justice summarizing commercial mediation activities in 2020, out of 73 cases resolved by commercial mediation, 70 were in Ho Chi Minh City. In 2021, due to the heavy impact of the Covid-19 pandemic, commercial mediation activities in Ho Chi Minh City in particular and the whole country in general were quieter with only 3/27 cases resolved in Ho Chi Minh City.

Currently, when the economy is gradually stabilizing, sales transactions in Ho Chi Minh City have reaffirmed their position in contributing GDP to the country’s overall economy. However, along with the high intensity of commercial transactions, disputes arise. Therefore, to be able to protect your transactions in Ho Chi Minh City, you should have preliminary knowledge related to resolving disputes arising from goods purchase and sale transactions.

Dispute resolution for sale of goods in Ho Chi Minh City

According to the provisions of the Commercial Law 2005, when a dispute over a sale of goods contract occurs, the parties can resolve it by negotiation or mediation between the parties by an agency, organization, or individual authorized by the parties. The parties agree to choose to act as a mediator, resolve in commercial arbitration, resolve in court, or resolve in arbitration.

Resolve disputes by negotiation

This is a method of resolution by which two parties in commercial activities come together to contact, learn, negotiate, and make concessions to resolve arising disagreements to eliminate disputes without the need for assistance, judgment, or decision of any third party.

This solution is only effective for sales transactions where the parties have sympathy and understanding for each other during the transaction process. For transactions with large differences in benefits, negotiation is unlikely to bring about the desired effect of the parties.

Resolve disputes through mediation

Mediation is a private dispute resolution process in which the mediator is a third party chosen by the parties themselves, helping the disputing parties reach an agreement.

In case a third party is chosen as a mediation center, the procedure will be carried out according to Decree 22/2017/ND-CP dated February 24, 2017, issued by the Government on commercial mediation. However, the mediation center also does not have the jurisdictional function to bind the parties to comply with the mediation settlement agreement.

Mediation proceedings

Article 14 of Decree 22/2017/ND-CP stipulates the proceeding of commercial mediation as follows:

• The parties have the right to choose the Mediation Rules of the commercial mediation center to conduct mediation or agree on the mediation proceeding In case the parties do not have an agreement on the proceeding for mediation, the commercial mediator will conduct mediation according to the order and procedures that the mediator considers appropriate with the circumstances of the case and the wishes of the parties upon approval by the parties.
• The dispute may be conducted by one or more commercial mediators as agreed by the parties.
• At any point during the mediation proceeding, the commercial mediator has the right to make proposals to resolve the dispute.
• The location and time of mediation shall be conducted according to the agreement of the parties or at the choice of the commercial mediator in case the parties do not have an agreement.

Method of conducting at the mediation meeting

• If the parties do not agree on a specific mediation method, the Mediator shall conduct the mediation in the method that the Mediator finds most appropriate.
• In case of a dispute, more than one mediator conducts mediation, the mediators will elect one of them as the Chairman to conduct the mediation sessions.
• The mediator behaves politely and fairly with the parties and creates conditions for the parties to express all opinions.
• At the mediation session as well as at any time during the mediation process, the Mediator can make suggestions and propose solutions to resolve the dispute.
• In case an agreement cannot be reached to resolve the case, the parties shall make a record of unsuccessful mediation to record the incident and jointly decide to terminate the mediation or jointly request the conciliator to organize the next mediation session. The minutes of unsuccessful mediation are signed by the parties and the Mediator.
• In case an agreement is reached to resolve the case, the parties shall prepare a mediation settlement agreement.
• The mediation process ends when the Document on successful mediation results is prepared, signed, and delivered to the parties under the provisions of Article 23 of the Mediation Rules.

Resolve sale of goods disputes by Commercial Arbitration

Implementing Decree No. 22/2017/ND-CP, by the end of 2021, 4 commercial mediation centers have been established in Ho Chi Minh City. Along with that, several arbitration centers have also registered additional commercial mediation activities and established branches in Ho Chi Minh City, typically: Vietnam International Arbitration Center (VIAC) has launched the Vietnam Mediation Center (VMC), headquartered in Hanoi and has a branch in Ho Chi Minh City.

Viet An Law will provide you with information related to resolving goods purchase and sale disputes at the Ho Chi Minh Commercial Arbitration Center.

Ho Chi Minh Commercial Arbitration Center

• Head office: 11th Floor – No. 224 Dien Bien Phu, Vo Thi Sau Ward, District 3, Ho Chi Minh City
• Phone: (028) 3932 0154 – (028) 3932 2072
• Email: info@tracent.com.vn
• Working hours: Monday – Friday: 08:00 – 11:30 & 13:30 – 17:00

Rules applicable to resolving goods purchase and sale disputes at the Ho Chi Minh Commercial Arbitration Center

• The parties have agreed to arbitration before, during, or after a dispute occurs. In cases where the two parties do not have an arbitration agreement or these agreements are invalid, the Court will be the final agency with authority to resolve the dispute in this case.
• If the arbitration agreement falls into cases where it cannot be performed according to the provisions of Article 4 of Resolution 01/2014/NQ-HDTP Guidance on the implementation of several articles of the commercial arbitration law, the Court will have jurisdiction.
• The disputing parties have a mediation agreement and one party submits a mediation request to the Ho Chi Minh City Commercial Arbitration Center (hereinafter referred to as “TRACENT”).
• The disputing parties do not agree on the order and procedures of mediation, nor do they agree to choose the mediation rules of another commercial mediation organization.

Resolve disputes by Court

Section 2 of the Civil Procedure Code 2015 regulates the jurisdiction of Courts at all levels. Accordingly, Point b, Clause 1, Article 35 stipulates that commercial business disputes specified in Clause 1, Article 30 of this Law fall under the jurisdiction of the district people’s court to resolve disputes according to first-instance proceedings.

Thus, the resolution of goods purchase and sale disputes in Ho Chi Minh City will fall under the jurisdiction of the district People’s Court where the dispute occurs.

Clients who need advice or support in dispute resolution for sale of goods in Ho Chi Minh City, please contact Viet An Law for the best support!