Contributed By YKVN
Since its independence in 1945, Vietnam has applied a socialist legal system based on civil law. However, there have been major changes in the country in recent years, including the reorganisation and harmonisation of its laws inspired by other jurisdictions, as well as the recognition of some Supreme People’s Court precedents as another source of law. In light of these developments, Vietnam is a peculiar jurisdiction, mixing aspects of socialist law, civil law and common law. Furthermore, Vietnam used to follow an inquisitorial model until the Constitution of 2013 adopted various elements of the adversarial model in the court rooms. Finally, although written submissions and oral arguments may be submitted by parties, written submissions are the primary way to conduct the legal process.
In Vietnam, the judicial system comprises of a four-tier "people’s courts" (which include military courts) over which a Supreme People’s Court presides. The first level is the district-level people’s courts (one for each district), which are the trial courts and have jurisdiction over the majority of cases, except for cases with foreign elements and cases with exceptional circumstances which will fall under the jurisdiction of courts of provincial level. The district-level people’s courts are not organised based on subject-matters.
The second level is the provincial-level people’s courts (63 in the country). The provincial-level people’s courts are mainly the courts of appeal, which hear appeals against district courts’ decisions. However, in addition to appellate proceedings with respect to district courts’ decisions, the provincial-level people’s courts have also jurisdiction to carry out first instance proceedings in some particular circumstances such as, disputes involving foreign elements.
The third level is the high-level people’s courts (three courts across the country, located in Hanoi, Da Nang and Ho Chi Minh City). The high-level people’s courts are the courts of appeal for the provincial courts’ decisions depending on their locations. The provincial-level people’s courts and high-level people’s courts are organised based on the following five subject-matters: civil courts, criminal courts, administrative courts, family and juvenile courts, and labour courts.
Finally, the highest court is the Supreme People’s Court, which is located in Hanoi. The primary power of the Supreme People’s Court is to review, under the supervisory review procedure or retrial procedure, judgments (for civil dispute cases) and decisions (for non-disputed civil matters) that already became effective.
Court filings are not open to the public. However, court decisions can be made publicly available via courts’ websites, if the parties to the case consented to the publication of the decision or judgment.
Court hearings are generally open to the public, unless for circumstances where in-camera hearings are warranted due to national security reasons, the protection of social morals, the rights of the juveniles, trade secrets or privacy of the parties or their families.
We understand that “legal representation” means representation by counsel. Under Vietnamese law, counsel, who wish to represent the interests of the parties must have written appointments from the parties and be registered with the courts for each case where they are appointed to act as such.
In Vietnam, any Vietnamese qualified lawyer would be allowed to exercise rights of audience in all level of courts. Foreign lawyers cannot conduct cases in Vietnamese courts.
To our knowledge, third-party litigation funding does not yet exist in Vietnam. Thus, it is not clear whether third-party litigation funding is permitted or not. However, it can be argued that an agreement between a party to a case and a third-party on litigation funding could be regarded as a civil transaction that is not prohibited by any provision of law nor contrary to social morals. As a result, such an agreement could be deemed valid and enforceable under the Civil Code 2015. We note, however, that a third-party funder may not be allowed to participate in the legal proceedings.
Based on 2.1 Third-Party Litigation Funding, it could be argued that third-party funding could be permitted to all types of lawsuits, as long as a such funding for a particular lawsuit is not viewed as prohibited by a particular provision of law nor contrary to social morals.
Based on 2.1 Third-Party Litigation Funding, it could be argued that third-party funding could be available for both plaintiff and defendant as long as such funding for a particular party is not viewed as prohibited by a particular provision of law nor contrary to social morals.
Since there is no concept of third-party litigation funding in Vietnam, there are no rules nor regulatory provisions governing its minimum and maximum amounts.
There is no concept of third-party litigation funding in Vietnam. It is, therefore, difficult to determine what types of costs a third-party funder will consider funding.
Vietnamese law is silent on contingency fees. However, it seems that contingency fee arrangements are not permitted in criminal cases as there are restrictions in respect of hourly rates applicable to legal representation.
In respect of civil cases, it seems that contingency fee arrangements are valid and enforceable since legal fees are subject to voluntary agreements between parties and counsel, and there are no provisions of law prohibiting for such agreements.
Since there is no concept of third-party litigation funding in Vietnam, there are no rules nor regulatory provisions governing the time limits by when a party to the litigation should obtain third-party funding.
There are rules on the parties in relation to pre-action conduct depending on the subject-matter of the dispute. For example, the Law on Land requires that parties to a land dispute to participate in a mediation conducted by the local governmental authority before a legal action can be initiated. Another example is for labour disputes where the parties must first attempt to settle their dispute with a labour mediator (except for disputes:
If the mediation fails, either party may initiate a lawsuit. If certain pre-action conducts are required to be taken, the court must not consider or adjudicate the dispute if such pre-action conducts were not complied with.
In general, the limitation period for initiating civil lawsuits (whether contractual or non-contractual) is three years, counting from the date the plaintiffs knew, or should have known, that their lawful rights and interests were infringed.
Certain disputes, however, are subject to a shorter limitation period, such as:
There are no limitation periods applicable to cases pertaining to the protection of certain personal rights, protection of ownership rights, and disputes over land use rights.
The limitation period shall recommence from the beginning, if and when the obligor has acknowledged or performed part or all of its obligations.
Finally, unless a party raises a limitation period issue, courts are not allowed to consider such issue on their own.
In general, courts shall have jurisdiction over defendants who are individuals/legal entities residing, doing business or have an office in Vietnam or own assets in Vietnam.
Vietnamese courts may also have jurisdiction if:
In Vietnam, the plaintiff must file a statement of claim with the competent court to initiate a lawsuit. The statement of claim must include key information on the parties of the disputes, the particular rights and interests being allegedly infringed, and remedies sought. In addition, the plaintiff must include documents or evidence supporting the right to initiate the lawsuit.
The plaintiffs may amend their statement of claim after it has been filed. Usually, the court will ask if the plaintiffs would like to amend any of their claims at the beginning of the hearing.
Rules of service are provided under Chapter 10 of the Civil Procedure Code 2015. Courts, the Procuracy, the enforcement agency are responsible for service of process of litigation documents. Service of process can be done via various methods, including direct service, courier, by third-party service provider, publication, or notification via mass media. In general, the service of process should be done by hand-delivery. The person who is the subject of the service of process should sign an acknowledgment of receipt. If the service of process is done via courier, it should be done by way of registered mail with acknowledgment of receipt. Other methods of service of process should be done in accordance the law.
Once the plaintiff submits the statement of claim, the plaintiff can inform the adverse party that it has been sued in one or two ways, either sending a copy of the statement of claim to the adverse party or requesting the court to send such a copy.
Where the defendant is outside of Vietnam, Vietnamese courts may serve the defendant via judicial assistance.
The defendant must respond to the statement of claim, with relevant documents, evidence and/or counterclaims and/or independent claims (if any) within 15 days from the date of receipt of the court’s notice of acceptance of the statement of claim.
If the defendant does not provide a response to the statement of claim, the court will proceed to resolve the case in accordance with the procedural law. However, the court does not have the authority to issue a default judgment – it must follow all the procedures prescribed by law, including holding a hearing and render a verdict based on the documents, evidence provided by the plaintiff and/or documents and evidence collected by the court within its jurisdiction.
Vietnamese law does not provide for representative or collective actions.
There is no requirement to provide clients with a cost estimate of the potential litigation at the outset. However, the legal service agreement must identify the legal fees or its method of calculation, together with other related expenses, if any. In practice, clients generally inquire on fee/expenses estimates at the outset.
Before hearing, a party can make an interim application/motion, for examples, to request for dismissal of the case due to the court’s lack of jurisdiction, to challenge any procedural decisions or acts made by the judge in charge of the case, to request the court to temporarily suspend the adjudication of the case to wait for the outcome of another pending relevant case or to collect evidence from authorities, or to request for application of injunctive relief etc. Most of the interim applications/motions are limited to case management issues. For injunctive relief applications, please see 6 Injunctive Relief.
Vietnamese law does not permit a party to apply for early judgment or the other party’s case to be struck-out before trial or substantive hearing of the claim. However, the parties may ask the court to apply an expedited procedure if the case satisfies certain conditions, such as, the case is not complex, documents and evidence are sufficient, the parties’ residencies are undisputed, the defendant has acknowledged its obligations, etc.
Under an expedited procedure, all procedural steps applicable to an ordinary lawsuit are applied, but the time limits for the preparation of the case will be shortened and only one judge will hear the case.
Dispositive motions that are commonly made before trial pertain to challenging the jurisdiction of the court, the plaintiffs’ lack of legal standing or conditions to initiate the lawsuit before the court and the expiry of limitation periods.
Third parties have the right to join a lawsuit as persons "with related rights and obligations” when it is found that the resolution of the case has influence and/or relates to their rights or obligations. Such third-party can join, as the case may be, as a co-plaintiff, co-defendant or an independent third party. The court may decide to involve such third party on its own or at the request of the plaintiff, the defendant or the third party.
Under Vietnamese law, a party can apply for an interim relief under which the other party is forced to carry out a certain action. Therefore, in theory, a defendant may apply for an order that the plaintiff must pay a sum of money as security for the defendant’s costs.
There are no court fees regarding interim applications/motions.
The time limit for the court to process an application or motion is usually 15 days from the date of receipt of the application or motion, except for an application for injunctive reliefs, which is usually within three working days from the date of receipt of the application or motion.
The requesting party may request the court to process the application on an urgent basis. However, the court has discretion over whether to accept and consider that the application is urgent.
The concept of “discovery” is not specifically provided under Vietnamese law. However, the Civil Procedure Code 2015 requires that the parties to a civil proceeding provide documents and evidence to support their case and send copy of such documents and evidence to the other parties.
Before trial, the court will convene a meeting with the parties to facilitate the mediation and disclose the documents and evidence of the case. During this session, the parties may supplement other documents or evidence.
The parties may request the court to collect more evidence if the party cannot or is not in position to collect them.
The documents and evidence to be disclosed by the parties in the proceedings include testimonies of the parties, witnesses, assessment conclusions, result of asset evaluation, etc. The evidence can take the form of written documents, audio-visual material, electronic data, etc.
When necessary, it is possible to obtain documents and evidence from third parties not named as either a plaintiff or defendant in the case. The party who needs such documents and evidence from a third party must send a written request to the entity in possession of those documents and evidence (for example, in a dispute over the land use right, the parties may request the land authority to provide records of the land in dispute), in which the requested documents and evidence, and the reason for such request must be clearly stated. The entity must provide the requested documents or evidence within 15 days after receipt of the request or explain in writing the reasons why it could not provide the requested documents or evidence.
If the party could not obtain the requested documents and evidence, such party may request the court to issue an order for the entity in possession of those documents and evidence to provide them. The entity must then provide the requested documents and evidence within 15 days pursuant to the court’s order or explain in writing the reasons why it could not provide the requested documents or evidence.
Finally, the court can summon third parties to testify if deemed necessary or under a request of a party.
The statement of claim must include key information on the parties of the disputes, the particular rights and interests being allegedly infringed, and remedies sought. In addition, the parties must provide the court with evidence to support their case. However, if the parties fail to provide, or fail to provide sufficient, evidence to support their case, the court will resolve the case based on the evidence available.
The court also has the power to collect documents and evidence if and when it considers necessary to do so or under a party’s request.
Please refer to 5.1 Discovery and Civil Cases, 5.2 Discovery and Third Parties and 5.3 Discovery in This Jurisdiction.
Under the Vietnamese lawyer’s code of conduct and the laws on lawyer, lawyers are subject to an obligation to keep information received from clients confidential. As a result, lawyers are not permitted to disclose information about the case and the client obtained during their practice, unless requested by the competent authorities and/or required under applicable legal procedure. Such obligation is applicable to all Vietnamese lawyers, without any distinction whether they are in-house counsel, in private practice or practice law in an individual capacity. In addition, law firms are responsible for ensuring that their employees do not disclose information about the case or the client.
Documents and/or evidence containing sensitive information such as, information pertaining to State secrets, professional or trade secrets, personal secrets, etc, can be exempted from disclosure at the request of a party to the court. The party is not obliged to send such documents or evidence to the other party and likewise, cannot copy or write down documents or evidence containing sensitive information from the other party. The party who is to submit the documents and evidence containing sensitive information must notify the other parties of its decision not to disclose such documents and evidence.
The foregoing obligation to keep documents or evidence containing sensitive information confidential is also applicable to the court and the procuracy. Judgments and decisions of the court containing such sensitive information shall not be disclosed on the court’s website.
The Civil Procedure Code 2015 provides that a party may apply for injunctive reliefs to temporarily resolve the request from a party, prevent threats to life, health, assets of the parties or to collect and protect evidence from irreparable harm, thereby ensuring the adjudication of the case or enforcement of the judgement. There are 16 types of injunctive reliefs available. The injunctive reliefs most commonly sought are the following:
If the request for injunctive relief is submitted to the court before the hearing, the judge must issue a decision within three working days from the date of receipt of the request. If the request is submitted during the hearing, the adjudication panel (generally including a judge and two people’s juror) will consider and issue their decision immediately. The enforcement of injunctive relief is carried out right after the decision is issued.
In urgent circumstances where there is an immediate need to protect evidence or prevent potential serious consequences, eg, preventing evidence from being destroyed, a plaintiff may submit the request for injunctive relief along with its statement of claim. In such case, the request for injunctive relief will be reported to the chief judge of the court who will then appoint a judge to process the request. The judge shall have 48 hours to issue a decision on the request, even if the request is submitted outside of business hours (including on non-working days).
An injunctive relief may be applied on an ex parte basis (ie, without notice to the other party and without such party being present). However, the party subject to injunctive relief has the right to file an objection to the court within three working days from the date of receipt of the decision awarding the injunctive relief. The court must then review and respond to the objection within three working days after its receipt.
If the injunctive relief was wrongly applied, which causes damages to the other party or a third party, then the applicant shall be responsible to compensate the damages.
The applicant is required to provide security for their application when applying for the following reliefs:
In the above cases, the court will request the applicant to pay into an escrow account an amount equivalent to the potential damages that may be incurred should the relief is later found to be wrongfully applied. Upon lifting the wrongful injunctive relief, the court will use the escrowed amount to pay for the damages caused by the wrongful injunctive relief.
Under Vietnamese law, the injunctive reliefs available to the court include the freezing of assets or bank accounts of the obligor without being subject to any territorial restrictions. Accordingly, in theory, the court may issue a decision awarding injunctive relief pertaining to assets of an obligor located overseas.
Injunctive reliefs may be enforced against third parties. For example, the court has the right to order an injunctive relief preventing a bank, as a third party, from releasing a letter of credit on behalf of a defendant.
If the party against whom the injunctive relief is ordered fails to voluntary comply with the court order, such an order shall be enforced against them by the civil judgment enforcement agency.
Trials are conducted in hearings where oral arguments are directly exchanged between the parties. The parties are permitted to present the details of their case, ask questions to the other party, the witnesses and experts, and argue on the merits of the case and applicable laws.
There are no case management hearings in Vietnam.
Jury trials, as understood in common law systems, are not available in Vietnam. However, in courts of the first instance, an adjudication panel comprises of one judge and two people’s assessors, each of whom has an equal vote.
As stated in 5.3 Discovery in This Jurisdiction, the parties must provide the court with evidence to support their case. However, if the parties fail to provide or fail to provide sufficient evidence to support their case, the court will resolve the case based on the evidence available.
There are however information or events which do not need to be proven by the parties such as information included in a judgment or decision of the court which became effective. Alternatively, if a party acknowledges or does not object to facts, documents, materials or conclusions of an expert presented by the other party, then such facts, documents, materials or conclusions are admitted as evidence, without the requirement of being proven.
Only tangible materials submitted to or collected by the court in accordance with the Civil Procedure Code 2015 may be accepted as evidence. As a result, evidence, which can take the form of oral/visual/readable materials, electronic data, testimony of the parties, witness or expert, result of asset evaluation, etc, must be presented in a form accepted by the court (such as, certified true copy or recorded in audio-visual devices) and/or the collection of which complies with the procedure set out by the law.
The admission of evidence will be determined by the court. As a general rule, the court is obligated to evaluate each evidence to determine the validity, the relevance of each evidence and its materiality.
Expert testimony is permitted at trial in Vietnam. Parties can introduce expert testimony. The court may also, at the request of the parties or at its sole discretion, request for evaluation/opinion from an expert with respect to any issues relating to the dispute. The court may also summon the expert to the hearing to clarify any unclear issues in the expert’s report.
Except for cases involving national security issues, trade secrets or requiring protection of social morals, privacy of the parties and their families, court hearings are generally open to the public. However, transcripts of hearings are only available for review by the prosecutor and other participants in the hearing, usually immediately after the hearing is concluded.
Since the effective date of the new Civil Procedure Code in July 2016, the role of a judge during a hearing has become more passive. Accordingly, the level of intervention by a judge is rather moderate. The judge’s main role is to facilitate the process and raise questions or order clarifications when necessary. The parties (ie, the plaintiff, the defendant and the parties with related interests and obligations) generally take a more active role in presenting their case by performing direct and cross-examinations and arguing with the other parties. The judge can intervene if they deem an argument, a question or a statement to be unclear, irrelevant, repetitive or offensive.
Generally, decisions are required to be given at the end of the hearing and cannot be reserved to a later date, unless it is necessary to have more time for deliberation. In this case, the decisions must be rendered no later than five days after the end of the hearing.
The below timeline is provided based on the Civil Procedure Code 2015. However, in practice, these timelines will last much longer.
Once a statement of claim is filed and the court accepts its jurisdiction with respect to the dispute, there are a two-month preparation period for the court to prepare the case. During such period, the court may, for example, conduct its preliminary study of the case, consider if it needs to join any person with related rights and obligations to the proceedings, conduct a mandatory reconciliation meeting between the parties, etc. The preparation period may be extended for one month maximum in case of complex dispute.
After the preparation period and if the court decides to hold a hearing, such hearing must be held within one month from the court’s decision to hold the hearing. Such period may be extended for another month if there is a reasonable cause for delay. There is no fixed time limit for the duration of the hearing. Also, as a general rule, the court is not permitted to limit the hearing period and must allow the parties to present all of their claims and arguments.
The appellate proceedings run a similar course, except that there is no reconciliation meeting.
Under the Civil Procedure Code 2015, there are two types of settlement that the court may consider for recognition. First, a settlement may be conducted via a settlement meeting held by the first instance court, under a structured process. At the end of this process, if the parties can come to an agreement and reach a settlement, under the supervision of the court, the court must issue a decision recognising such settlement, unless certain terms of the settlement violate the law or are contrary to the social morals. However, the court’s supervision coupled with the issuance of the decision recognising the settlement usually imply the court’s approval on the legality and validity of the settlement.
Second, a settlement can be reached out of court, by a mediator or via a mediation centre in accordance with the relevant regulations. In this case, either or both parties must petition for the court’s recognition of such settlement. For the settlement to be recognised, it must be voluntary, not in violation of the law, not contrary to social morals, and not for the purpose of eluding obligations to the State or a third party.
The court’s decision recognising the parties’ settlement will be deemed as a judgment issued by the court and subject to enforcement.
The settlement of a lawsuit can remain confidential if it did not go through the recognition process and is not recognised via a court’s decision.
When the court issues a decision recognising parties’ settlement, such a decision may enter the public domain. However, either party may request that the court does not disclose the court’s decision, recognising the parties’ settlement in cases involving national security issues, trade secrets or requiring protection of social morals, privacy of the parties and their families. If the court considers that such request is reasonable, it will not disclose the decision and inform the parties accordingly.
Settlement agreements which are recognised by the court will be enforced as the court’s own decision. If a party fails to comply with the court’s decision recognising the settlement, the other party may request the civil judgment enforcement agency to enforce it.
Both types of settlement mentioned in 8.1 Court Approval, once recognised by a court’s decision, cannot be appealed by the parties.
However, a settlement conducted via a settlement meeting may be reviewed under the supervisory review procedure if there are grounds to conclude that such a settlement was reached due to mistakes of the parties, fraud, threat, duress or in contravention with the laws or social morals.
With respect to a successful plaintiff, there is only one form of award which is the judgment rendered by the court after the deliberation following the hearing. The main statutory remedies available to successful litigants are:
Under Vietnamese law, damages for which compensation must be made include actual and direct loss, direct loss of profit and reasonable mitigation expenses. The party claiming compensation for damages must prove the breach (in case of contractual claim) or violation of law (in case of non-contractual claim) and its actual and direct damages. Punitive damages are not available under Vietnamese law.
The law also allows the parties to “agree otherwise” with respect to damages. It is not clear how “agree otherwise” would be interpreted, but there may be an argument that the parties may agree to limit the damages for which compensation must be made, provided that the breach of contract/violation of law and damages have been actually incurred and proven. In case of breach of contract, there may be another monetary remedy available which is penalty. In order to request for penalty, such an agreement on penalty must be expressly provided in a contract/agreement. There is a cap of 8% of the value of the breached obligations in case of an agreement on penalty in a commercial relationship. In case of a construction contract which is funded by State capital, the cap increases to 12%.
A successful party may seek late payment interest based on the period before judgment is entered. The late payment interest rate is based on the interest rate pre-agreed by the parties, which cannot exceed 20% per annum. In the absence of such pre-agreement, under the Civil Code 2015, the default late payment interest rate of 10% per annum shall apply. For commercial disputes, the Commercial Law 2005 provides that the late payment interest rate can be equal to the average interest rate applicable to overdue debts in the market at the time of such payment for the delayed period, unless otherwise agreed by the parties.
The foregoing analysis also applies to post-judgment interest.
If a domestic judgement is not voluntarily complied with by the judgment debtor, the judgement creditor may apply for enforcement to the civil judgement enforcement agency. The civil judgement enforcement agency will then issue a decision to enforce the judgement, except in some limited circumstances, eg, the limitation period for enforcement has lapsed.
Thereafter, the civil judgement enforcement agency will verify the judgement debtor’s conditions to determine whether the judgment is enforceable, eg, the availability of his/her assets and other conditions for enforcement. If the agency determines that the judgement debtor’s conditions do not warrant enforcement, the agency must carry out certain attempts to re-verify the judgement debtor’s conditions in accordance with the Law on Civil Judgment Enforcement 2008 (as amended in 2014).
Under the Law on Civil Judgment Enforcement 2008, measures to secure the enforcement of judgments include blocking bank accounts, seizing assets and documents and suspending registration, transfer or change in the current state of assets.
Measures to coerce the enforcement of judgments include:
A foreign judgement is enforced in Vietnam only if a Vietnamese court has recognised and permitted such enforcement. Vietnamese courts accept requests for recognition and enforcement of foreign judgements based on the following principles:
With respect to the second bullet point above, in 2016, the Ho Chi Minh City People’s Court issued a decision to recognise a judgement of the High Court of Singapore for enforcement in Vietnam. The Ho Chi Minh City People’s Court relied on the principle of reciprocity in the absence of any bilateral agreement between Vietnam and Singapore. On appeal, the Vietnamese Court of Appeal affirmed this decision (DBS Bank Limited v Ms Vu Thi Bich Loan No 1186/2016/QDST_DS).
For a foreign judgement to be recognised and permitted to be enforced in Vietnam, the judgement creditor must apply for recognition and enforcement to the Ministry of Justice of Vietnam or to the competent court.
Under the Civil Procedure Code 2015, a foreign judgement will not, however, be recognised and permitted for enforcement in Vietnam if:
Once the foreign judgement is recognised and permitted for enforcement by a Vietnamese court, it will be effective as any judgement issued by a Vietnamese court. The procedure for enforcing such foreign judgement is similar to the one of a domestic judgement, as described in 9.4 Enforcement Mechanisms of a Domestic Judgment.
A party, as a matter of statutory right, can always appeal judgments of first-instance courts. The prosecutor’s office can also, on its own initiative, protest against judgments of first-instance courts. Accordingly, the appellate court must accept to hear the case.
Once the appellate judgement is issued, the Chief Justice of the High-Level People’s Court, the Head of the High-Level People’s Procuracy, the Chief Justice of the Supreme People’s Court or the Head of the Supreme People’s Procuracy may, on their own initiative or upon a party’s request, apply for a supervisory review or a retrial of the appellate judgment.
As stated in 10.1 Levels of Appeal or Review to a Litigation, a party, as a matter of statutory right, can always appeal judgments of first-instance courts.
However, supervisory reviews will be granted based on the following grounds:
Retrials will be granted when there are newly discovered facts that may substantially change the contents of the court’s judgment or decision, which the parties could not have been aware of during the proceedings, in one of the following circumstances:
A party will have 15 days to file an appeal against the first-instance judgement. This time period will start from the date the court announces the judgment or, if the party did not attend the hearing, from its receipt of the judgement.
An appellate judgment can be subject to a judicial review or retrial within the first three years from the date such appellate judgement is issued.
The review of appellate courts depends on the part(s) that are appealed by a party or protested by the procuracy. Accordingly, any issues which are not appealed by a party or protested by the procuracy will not be reviewed by the appellate court. The appellate court has the power to consider questions of law as well as questions of fact.
An appeal of a first-instance judgment will be granted if it meets the following two conditions, that the appeal is timely made and that the applicant has paid the advance court fee, amounting to VND300,000 (approximately USD12.7).
With respect to appellate judgements, the High-Level People’s Court or the Supreme People’s Court will carry out their review if the Chief Justice of the High-Level People’s Court, the Head of the High-Level People’s Procuracy, the Chief Justice of the Supreme People’s Court or the Head of the Supreme People’s Procuracy, on their own initiative or upon a party’s request, applies for a supervisory review with the High-Level People’s Court (in case of appellate judgments issued by the provincial-level people’s courts), or the Supreme People’s Court (in case of appellate judgments issued by the High-Level People’s Courts).
After an appeal hearing, the appellate court has the following powers:
Upon filing its statement of claim to initiate the lawsuit, the plaintiff must make an advance payment of 50% of the court fees which are determined based on the value of its claim(s). If the defendant has counterclaim(s) against the plaintiff, the defendant will also be responsible to advance 50% of the court fees based on the value of its counterclaim(s). During the litigation, if there are other expenses, for example, expenses for evaluation/valuation of assets in dispute, expenses for assessment of any technical issues in dispute by an expert, such expenses shall be borne by the party who requests for such evaluation or assessment.
At the end of the proceedings, the court shall determine on the allocation of fees and expenses based on the principle of the “loser pays”.
With respect to translation/interpretation costs and attorney’s fees, each party will bear its own costs and fees.
See 11.1 Responsibility for Paying the Costs of Litigation.
Costs are subject to late payment interest at a rate of 10% per annum for the period from the date of judgement to the date of enforcement.
Amicable settlement and mediation are the most popular forms of alternative dispute resolution (ADR) in Vietnam.
In 2017, the Government of Vietnam promulgated Decree 22/2017/ND-CP providing for commercial mediation, establishment of commercial arbitration centres and registration of commercial mediators to promote and facilitate mediation in commercial disputes. There are also special regulations governing the mediation of small disputes. For example, in case of labour dispute, such dispute must be mediated by a labour mediator before initiating a lawsuit, except for some special cases, such as compensation for damages due to unlawful termination of labour contracts.
Vietnamese legal system has increasingly encouraged the use of ADR. In fact, the Political Bureau of the Communist Party of Vietnam (the highest authority of the Party, which has the power to issue policies, including judicial policies) issued a resolution (Resolution No 48-NQ/TW) providing for a “Judicial Reform Strategy of Vietnam” for the period up until 2020, in which the enhancement of amicable settlement, mediation and arbitration as ADR is clearly provided. Most recently, the Supreme People’s Court has issued a project pilot imposing the parties to go through mediation right after the acceptance of a lawsuit by a court.
The Civil Procedure Code 2015 includes a chapter on amicable settlement and imposes it as a mandatory step for most of the disputes before a lawsuit can proceed further.
There are two types of settlement and mediation: pre-litigation settlement and mediation and settlement and mediation in the court room.
Pre-litigation settlement and mediation is not mandatory, except for certain cases such as, land and labour disputes. Settlement agreements are valid, binding and enforceable between the parties. However, if either party dishonours the settlement agreement, the other party must initiate a lawsuit to enforce the settlement agreement. Any settlement agreement reached between the parties with the support from a mediator/mediation centre in accordance with the Decree on Commercial Mediation mentioned in 12.1 Views of Alternative Dispute Resolution, will be enforced after verification and registration with a competent court.
During court’s proceedings, settlement meetings are mandatory for all disputes. The judge must summon the parties to a meeting and facilitate the settlement discussions between the parties before deciding to hold a hearing. If the parties reach a settlement agreement, the judge will issue a decision recognising such agreement which is subject to enforcement (see 8.3 Enforcement of Settlement Agreements).
Under the project pilot of the Supreme People’s Court mentioned above (which has been implemented in 16 provinces of Vietnam), right after the court has accepted its jurisdiction, the court has to refer the case to a mediation centre attached to the Court so that the mediators can mediate the dispute between the parties before the court proceeds further with its adjudication.
There are two types of ADR institutions in Vietnam: commercial arbitration centres and commercial mediation centres.
Commercial arbitration centres are established under the Law on Commercial Arbitration 2010. As of the date of this chapter, there are 23 commercial arbitration centres, among which the Vietnam International Arbitration Centre at the Vietnam Chamber of Commerce and Industry (VIAC) is the most popular and largest one, administrating a total of 180 cases for 2018.
Commercial mediation centres are established under the Decree on Commercial Mediation mentioned in 12.1 Views of Alternative Dispute Resolution. As of the date of this chapter, the Ministry of Justice has approved the establishment of around ten commercial mediation centres in Vietnam.
The Law on Commercial Arbitration No 54/2010/QH12, dated 17 June 2010, governs arbitral proceedings conducted in Vietnam (the LCA). The LCA is supplemented by Decree No 63/2011/ND-CP, dated 28 July 2011, amended by Decree No 124/2018/ND-CP, dated 19 September 2018, which includes implementing regulations on the LCA and Resolution No 01/2014/NQ-HDTP, dated 20 March 2014, which provides further guidance on the implementation of certain provisions of the LCA. Notably, Resolution No 01/2014 clarifies the provisions on the validity of arbitration agreements, the grounds for setting aside arbitral awards, and the supervisory and supporting role of Vietnamese courts and their power over foreign arbitrations seated in Vietnam.
The LCA refers significantly to the UNCITRAL Model Law and incorporates many important legal concepts, including the tribunal’s ability to summon witnesses and the party’s right to request, and a tribunal’s corresponding ability to grant, interim reliefs.
The recognition and enforcement of arbitration awards varies depending on whether the award is foreign or non-foreign.
With respect to the recognition of arbitration awards, non-foreign arbitration awards are automatically recognised and are, therefore, effective from their date of issuance.
On the other hand, foreign arbitral awards must be formally recognised and held enforceable by the competent provincial People’s Court. In 1995, Vietnam became party to the New York Convention on the recognition and enforcement of foreign arbitral awards (the “New York Convention"). The New York Convention has then been adopted into Vietnamese law through the Civil Procedure Code 2015, which includes a specific procedure for the recognition and enforcement of foreign arbitral awards.
With respect to the enforcement of arbitral awards in Vietnam, the enforcement procedure is the same regardless of whether the award is non-foreign or foreign. The enforcement procedure is governed by the Civil Procedure Code 2015 and the Law on Enforcement of Civil Judgment.
In general, only disputes that are arising out of commercial activities or where one of the parties is engaged in commercial activities may be referred to arbitration in Vietnam.
The Commercial Law 2005 provides that activities are “commercial”, if those activities are “for profit-making purposes comprising the purchase and sale of goods, provision of services, investment, commercial enhancement, and other activities for profit-making purposes”.
In addition, the Civil Procedure Code 2015 specifies that the following disputes are subject to the exclusive jurisdiction of the Vietnamese courts and therefore, may not be referred to arbitration in Vietnam:
The LCA provides that a party may apply to the competent court to set aside an arbitration award within 30 days from the date of receipt of such award. The application must be accompanied by materials and evidence proving that such application has sufficient grounds and is lawful. The LCA further provides that an arbitration award shall be set aside on the following grounds:
The LCA further requires that, with respect to bullet points one to four, the parties bear the burden of bringing the evidence supporting these grounds, and with respect to bullet point five, the court is responsible to verify and collect such evidence in deciding whether to set aside the award.
As stated in 13.1 Laws Regarding the Conduct of Arbitration, foreign arbitral awards must be formally recognised and held enforceable by the competent provincial People’s Court to be enforced in Vietnam. To do so, a party must first file a petition for the recognition and enforcement of the foreign arbitral award with the provincial-level People’s Court, or the Ministry of Justice (the MOJ) if a treaty provides that such a petition must be sent to the MOJ. In the latter circumstance, the MOJ will review the petition and the documents contained therein to ensure their compliance with the procedural requirements and transfers the petition to a competent court. The competent court will then consider if it has jurisdiction to review and resolve the petition. If it does, the court will notify the award debtor and the public prosecutor and the MOJ of the same.
In principle, a foreign arbitral award shall be recognised and enforced in Vietnam if the award is issued in a country party to an international convention on the recognition and enforcement of arbitral awards to which Vietnam is also a party (such as the New York Convention), or on the basis of reciprocity if such country is not party to such convention. Under the Civil Procedure Code 2015, the grounds for refusing the recognition and enforcement are substantially similar to those in Article V of the New York Convention.
Once the foreign arbitral award is recognised and held enforceable by the competent provincial people’s court, the award is legally effective like any decision or judgment of a Vietnamese court.
With respect to the enforcement of arbitral awards in Vietnam, the enforcement procedure is the same regardless of whether the award is non-foreign or foreign and is governed by the Civil Procedure Code 2015 and the Law on Enforcement of Civil Judgments.
If the award debtor fails to comply with a non-foreign arbitral award, and the award is not set aside, the award creditor shall have the right to request the competent civil judgment enforcement agency to enforce it. Likewise, if the award debtor fails to comply with a foreign arbitral award, and the award is recognised and held enforceable, the award creditor shall also be entitled to request the assistance of the competent civil judgment enforcement agency for its enforcement. In both cases, the procedure for the enforcement is the same as described in 9.4 Enforcement Mechanisms of a Domestic Judgment.
It is worth mentioning the peculiar requirement for non-foreign ad hoc arbitral awards. Like non-foreign arbitral awards, non-foreign ad hoc arbitral awards are automatically recognised, and therefore, effective from their date of issuance. If the award debtor does not comply with the award, the award creditor shall also be entitled to request the assistance of the competent civil judgment enforcement agency. However, non-foreign ad hoc arbitral awards are required to be registered within one year of their issuance with the competent provincial people’s court for the enforcement agency to enforce them.