Litigation 2024 Comparisons

Vietnam’s legal system is influenced by both French civil law and Soviet legal models due to its historical background. As such, the Vietnamese legal system is based on civil law, and mainly established by statutes. In recent years, the legal system of Vietnam has developed case law, but the number of precedents is quite limited and, currently, the total number is under 100 citable cases.

The legal system follows an inquisitorial model, where judges play an active role in investigating cases and gathering evidence. In the last two decades, Vietnam has undertaken legal reforms to introduce elements of an adversarial system – particularly in commercial matters, as part of its efforts to align with international standards and modernise its legal practices. This evolving approach aims to balance the weight of written submissions and oral arguments within the legal process.

While written submissions are integral to legal proceedings, oral arguments also hold significance, often taking place during hearings and trials.

The courts form the judicial branch of the Socialist Republic of Vietnam, exercising judicial power. The courts are responsible for the protection of justice, human rights, citizen rights, the socialist regime, the interests of the state, and the legitimate rights and interests of organisations and individuals.

The Vietnamese court system is comprised of the following four levels:

At the top of the hierarchy is the Supreme Court, which acts as the highest court of appeal and is responsible for:

• reviewing legally effective judgments and decisions of courts which are appealed or protested against, under cessation or re-opening procedures;
• supervising the adjudication of other courts, summarising adjudication practices of all courts,
• ensuring the consistent application of the law in adjudication; and
• providing training and continuing education for judges, assessors, and other court officials.

Subordinate to the Supreme Court, there are regional High Courts (3 High Courts for the North, Centre, and South of Vietnam). Each high court handles appeals trials of cases in which first instance judgments or decisions of the provincial and municipal courts within their territorial jurisdiction, which have not yet taken legal effect, are appealed or protested against.

At the provincial and municipal levels, there are courts responsible for their respective regions. The organisational structure is divided into civil, commercial, labour, criminal, family and juvenile, and administrative courts. These intermediate courts hear both first instance cases and appeals from the district-level courts that have not become legally effective and are appealed or protested against. In addition, they also review legally effective judgments and decisions of the district-level courts, and request the Chief Justice of the High Court or Chief Justice of the Supreme Court to reconsider such judgments if there are violations of the law or new facts.

Below provincial and municipal levels are the district-level courts. These courts conduct first instance trials of cases.

Each court above is also divided into specialised courts to address specific types of cases. For instance, economic courts deal with business disputes, while administrative courts handle matters related to decisions of the bureaucracy and government actions. Labour courts focus on labour disputes and employment-related cases, whereas family and juvenile courts deal with issues like divorce, child custody, and inheritance.

Along with the above courts, there are specialised military courts to hear cases related to the military’s confidential information or damages to the military.

Vietnam’s legal framework reflects a commitment to transparency within its judicial system, ensuring that civil proceedings are held publicly. While this fundamental principle mandates open court hearings, practical constraints may, at times, limit the accessibility of unrelated parties to these proceedings. Although prevailing laws and regulations do not specifically address this issue, these documents are typically only available to the parties directly involved in the legal matter.

However, it is worth noting that the legal system also recognises the significance of preserving sensitive information and individual rights. Therefore, in extraordinary cases involving the protection of state secrets, cultural traditions, minors, or the confidentiality of professional, business, personal, or family matters, the court exercises discretion to decide on the necessity of a private hearing or the non-disclosure of certain documents based on the reasonable request of the litigants.

Normally, the judgments and decisions not falling within these exceptional categories are made publicly available on court websites or within the database of the Supreme Court. At the trial, the trial panel will ask the litigants for their consent to the publishing of such decisions/judgments of the court; however, the decision to disclose such decisions/judgments is ultimately decided by the authorities, not the litigants (with the exception of cases regarding sensitive personal or business secrets as detailed above).

This balanced approach aims to maintain transparency while safeguarding the interests and privacy of the parties when required by exceptional circumstances.

Regarding regulations on legal representatives, Vietnamese law stipulates two cases of legal representation, namely the legal representation of individuals and the legal representation of legal entities.

Legal representatives of individuals include:

• parents for minor children;
• guardians for wards or individuals with cognitive and behavioural difficulties, appointed by the court;
• court-appointed representatives when parents or guardians cannot be identified; and
• court-appointed representatives for individuals with limited civil capacity to act.

Legal representatives of legal entities include:

• individuals appointed by the legal entity according to the charter;
• individuals authorised to represent the entity as prescribed by law; and
• court-appointed representatives during legal proceedings; notably, a legal entity may have multiple legal representatives, each with the right to represent it.

According to the above regulations, these legal representatives will be the natural legal representatives when participating in civil transaction processes as well as participating in and resolving cases in court.

In addition, the Civil Code also provides for authorised representation, meaning that individuals and legal entities can authorise other individuals and legal entities to establish and perform civil transactions. Normally, lawyers can obtain authorisation from their clients to participate in resolving the cases.

However, it should be noted that the rights and obligations of litigants in a case will differ from those of lawyers in a lawsuit. Therefore, once a lawyer has participated in the settlement as an authorised representative, they will not be able to participate in the settlement as a lawyer at the same time.

In addition, the 2015 Civil Procedure Code (CPC) does not allow authorisation to resolve some specific cases, such as divorce cases, in which lawyers are only allowed to participate as advocates.

In any court proceeding, the rights of audience are required to be a licensed attorney-at-law, and lawyers are required to be appointed by the client and registered to the court to participate in the case.

Foreign lawyers do not enjoy automatic rights of audience in Vietnamese courts. However, a foreign lawyer could participate in arbitration as an authorised representative of the involved party or as a lawyer (if a practice certificate in Vietnam is obtained).

Vietnamese laws are silent on third-party litigation funding, and it is not a common practice in the country. As such, third-party litigation funding is acceptable as long as it complies with the applicable laws of Vietnam, such as the Civil Code and regulations on funding. The funder is not recognised as a party in the litigation proceedings.

Third-party funding lawsuits are unregulated in Vietnam.

Vietnamese laws are silent on third-party litigation funding. Generally speaking, both parties are considered to have access to third-party funding.

There is no regulatory law governing this practice regarding the minimum or maximum amount of third-party funding.

As Vietnamese laws are silent on third-party litigation funding, the cost shall be subject to the agreement between the funder and litigants.

Contingency fees are treated as a conditional transaction. However, the Law on Lawyers, as well as the Code of Professional Ethics of Lawyers, prohibits the following acts:

• receiving or demanding any additional amount of money, or any other benefits from the client other than the remuneration and costs agreed with the client in the legal service contract; or
• promising or committing to ensuring the outcome of a case beyond the lawyer’s ability and condition to perform.

Therefore, when entering into a legal service contract, lawyers must clarify the terms and conditions related to this fee to avoid violations.

In addition, for civil lawsuits, there is no limitation on the fee amount, but in criminal cases, the fee is limited in proportion to the applicable base salary.

Vietnamese laws are silent on time limits for obtaining third-party litigation funding.

There are pre-action conduct rules applicable in some types of lawsuits concerning labour relationships or land use rights disputes. In specific instances, parties may be obligated to engage in mediation proceedings prior to initiating legal action in court or conduct pre-action steps as stipulated in agreements between the parties. Failure to fulfil these pre-action requirements can result in the court refusing to initiate the lawsuit.

The statute of limitation differs depending on the type of dispute:

• civil contract disputes: three years;
• tort disputes: three years;
• commercial contract disputes: two years;
• disputes with a logistics trader: nine months;
• maritime transport disputes: two years;
• inland waterway transport disputes or compensation for damages; loss of goods according to shipping document in maritime transport; or disputes on refund of compensation in excess of liability in maritime transport: one year;
• railway business contract disputes: two years;
• labour disputes: one year (for some types of labour dispute, the pre-action conduct is mediation – the time limitation for requesting the mediation is six months);
• insurance disputes: three years;
• inheritance disputes: three years, ten years or 30 years, depending on the type of dispute;
• disputes related to transfer instruments: three years;
• claims for damage to passengers, luggage or goods in air transport: two years;
• claims for damages of a third person on the ground in connection with air transport: two years;
• personal injury claims: three years; and
• protection, or land use rights disputes: unlimited.

Generally, the statute of limitation commences from the time the plaintiff becomes aware, or reasonably should have become aware, of the violation of their legitimate rights.

In Vietnam, the determination of a court’s jurisdiction over a case hinges on several critical factors as outlined in the CPC. These factors include subject matter jurisdiction, which ensures that the court has the authority to adjudicate disputes of a particular nature, and the existence of valid agreements designating alternative dispute resolution forums, like arbitration.

Equally vital is the court’s assessment of its jurisdictional competence based on the hierarchical structure of the judicial system and territorial boundaries. When assessing the court hierarchy, it must ascertain whether the case aligns with the jurisdiction of a district court or a provincial court, while territorial jurisdiction traditionally mandates filing the lawsuit in the court associated with the defendant’s place of residence, registered office, or business activities, unless the parties have mutually agreed to an alternative jurisdiction.

In real estate disputes, the court in the locality of the property in question typically assumes jurisdiction.

Furthermore, the CPC provides instances where the plaintiff is entitled to exercise the right to select the court’s jurisdiction, a prerogative notably exercised in tort cases and specific categories of labour disputes.

In Vietnam, the initial document filed to initiate a lawsuit is known as the “petition”. This pivotal document is submitted by the plaintiff, marking the formal commencement of legal proceedings against the defendant.

The petition serves as the foundation of the case and includes critical elements such as the identification of the parties involved, a comprehensive account of the facts underpinning the dispute, the legal basis for the claim, and the specific relief sought from the court. It often features supporting documents and evidence substantiating the claims made.

Importantly, parties are generally permitted to amend the initial complaint, albeit subject to certain conditions and restrictions. Amendments must not substantially alter the nature of the case or unduly prolong the proceedings, and court approval is typically required.

The capacity to amend the complaint provides flexibility for parties to adapt their claims or defences as the case evolves, ensuring that the litigation process remains responsive to changing circumstances while adhering to the relevant procedural rules and court guidelines.

In Vietnam, the rules of service, a fundamental aspect of the civil litigation process, dictate how an adversary is informed of a lawsuit. It is primarily the responsibility of the plaintiff or their legal representative to ensure that the defendant is adequately served with the necessary legal documents.

Several methods of service are available, including personal service, postal service with acknowledgment of receipt, courier services, and, in some cases, electronic means with the defendant’s prior consent. Personal service, where documents are handed directly to the defendant or an authorised representative, is commonly preferred to ensure that the defendant is made aware of the lawsuit.

However, when a party needs to sue someone located outside the jurisdiction, specific procedures come into play. Permission from the court is typically required to serve documents abroad, and this process often involves co-ordination with the central authority of Vietnam. International agreements or treaties may also streamline the service of process with certain countries.

It is worth noting that translations of documents may be necessary when serving documents outside of Vietnam, adhering to the language requirements of the foreign jurisdiction. Effective service of process is essential to uphold due process rights and grant the defendant an opportunity to respond to the lawsuit, making it imperative for parties to navigate these procedures diligently and often with legal guidance.

The defendant’s failure to respond to a lawsuit shall not prevent the court from resolving the matter. To resolve the case, the court will rely on the evidence presented by the litigant and the evidence collected as part of the case file.

When a summons is delivered, and the defendant fails to appear without a valid reason or leaves the courtroom without permission during a hearing, the court may grant a default judgment.

This approach underscores the commitment to due process and the equitable resolution of disputes, even in situations where a defendant is absent from their residence.

Currently, the CPC does not regulate the concept of class actions.

However, the law does allow multiple entities or individuals to join cases against one or more entities or individuals regarding one or more legally related matters to be resolved within the same case. Although the law allows multiple individuals to jointly participate in a lawsuit, the essence of the process is that when individuals perceive their rights or property to be violated, they must directly sign the petitions and independently submit them. Afterward, they can delegate authority to a representative to act on behalf of a group of plaintiffs seeking compensation.

During the jurisdictional process, the court may decide to consolidate separate cases for resolution within the same lawsuit when it determines that there is a common defendant, and the scope of the claims is similar. However, whether multiple cases are consolidated or remain separate is entirely at the court’s discretion and not based on the plaintiffs’ preferences. Even in cases where multiple plaintiffs authorise a single attorney to represent them, each case is typically filed separately, and the court handles them independently.

Vietnam does not have specific requirements mandating lawyers or legal professionals to provide clients with a cost estimate of potential litigation at the outset of a case. However, ethical and professional standards in the legal profession generally encourage transparency in client communication, including discussions about the potential costs associated with legal services.

In Vietnam, it is possible to make interim applications or motions before the trial or substantive hearing of a claim. These interim applications can cover various issues and are not limited to just case management matters. Parties may seek remedies from the court through interim applications to address specific legal issues, protect their rights, or request provisional measures.

Common types of interim applications in Vietnam may include requests for injunctive relief, temporary orders, preservation of evidence, appointment of experts, and other measures to preserve the status quo or prevent irreparable harm until the main trial or substantive hearing takes place.

The ability to make interim applications allows parties to address urgent matters or seek preliminary remedies before the full adjudication of the case, enhancing the flexibility of the legal process and ensuring that parties have access to interim relief when necessary.

In general, the litigants cannot obtain a decision on all or parts of the issues before the case is heard and ruled on by the judge. However, to protect their rights, they can make requests to the court through interim applications/motions when they have valid legal grounds for relief.

In common law systems, dispositive motions are requests seeking an order from the trial court dismissing all or a portion of the claims in favour of the moving party without further trial court proceedings.

The equivalent of dispositive motions does not exist in Vietnamese law. However, the court may refuse to accept the case or dismiss it after it has been accepted, if, upon obtaining the case documents, it determines that the requirements for initiating a lawsuit have not been met. For example, if the case was already resolved by a previous judgment/decision, or the plaintiff fails to proceed with the mediation process as required by laws before they bring the case to court.

In Vietnamese civil lawsuits, interested parties are defined as those who are not directly involved as plaintiffs or defendants, but whose interests and/or obligations are affected by the resolution of the lawsuit. These individuals or entities have the right to participate in the legal proceedings due to their vested interest in the case’s outcome.

Where the resolution of a civil lawsuit is related to an interested party but no one requests to include such party in the proceedings, the court is required to include that party in the proceedings in the capacity of an interested party. 

This is not directly applicable under Vietnamese law. However, if the costs are actual and could be determined, the defendant has the right to counterclaim for such costs and apply for an interim injunction in form of freezing the assets of the plaintiff/claimant to ensure their ability to pay the defendant’s costs.

The applicant/requester shall pay the advance payment of the costs. Depending on the agreement of the parties (if any) or the outcome of the case, the court will decide the actual amount borne by each party. In general, if the interim applications/motions are improper or unreasonable, the court may award costs against the applicant.

The timeframe for a court to deal with an application/motion in Vietnam varies depending on the complexity of the application/motion and the workload of the court.

In general, the court aims to handle applications or motions efficiently to ensure a timely resolution of the dispute. If a party requests that an application/motion be dealt with on an urgent basis, the court will typically consider the seriousness of the matter and the potential harm that may be caused if the application/motion is not dealt with quickly.

In general, within 48 hours or 72 hours from the time of receiving the request, the judge must consider and issue a decision to apply temporary emergency measures; if the request is not accepted, the judge must notify the requester in writing and clearly state the reason.

In Vietnam, the laws do not provide for a discovery mechanism.

In Vietnam, the involved parties are mainly responsible for producing evidence and submitting it to the court. Based on the submitted evidence, the court will resolve the case. Should the court find a need for more evidence, it has the discretion to request the parties to produce supplemental evidence. 

A party should present evidence to either establish or refute the facts upon which its claims are based. If a party fails to provide evidence or if the evidence provided is insufficient to support the purported claims, the party with the burden of proof will bear the adverse consequences.

Before the trial, the court shall hold meeting(s) monitoring the handover, access and disclosure of evidence between the involved parties.

It is possible to obtain evidence from third parties in a legal proceeding who are neither the plaintiff nor defendant. For instance, if for objective reasons the parties are unable to collect certain evidence on their own, they may request that the court assist in the collection of such evidence. The court may then issue an order to mandate the production of such evidence from a third party.

In addition, the court has the discretion to collect evidence from third parties (including relevant entities and individuals) on its own initiative. Failure to comply with such order may result in administrative or criminal sanctions.

Vietnamese law is silent on discovery mechanisms.

In Vietnamese civil cases, the emphasis is on the parties presenting their evidence during the trial, rather than extensive pre-trial discovery. Parties are expected to prepare and produce their evidence, including documents and testimonies of witnesses, as part of the trial procedure. There is typically no formal process for deposing witnesses or extensive pre-trial document production.

The responsibility for gathering and presenting evidence primarily lies with the litigants themselves. They are expected to submit the necessary evidence and documents in support of their claims or defences to the court during the trial.

However, in some cases, the court’s involvement in the collection of evidence is available upon the parties’ request, if they are able to show that best efforts were made to collect evidence but failed to do so. This request must identify the issues that need to be proven by the evidence, the relevant evidence to be gathered, and the reasons why the requesting party cannot gather the evidence in question. The court will then decide whether to formally require the individuals or organisations with possession of, or control over, the evidence in question, to provide it to the court.

Vietnamese law does not recognise the concept of legal privilege (attorney-client or work product protection) in the same way that common law jurisdictions do. However, the Law on Lawyers does impose a duty of confidentiality on lawyers. This means that lawyers are prohibited from disclosing information that they obtain in the performance of their professional responsibilities, except where the client agrees in writing to such disclosure or as stipulated by law.

The Law on Lawyers does not distinguish between external and in-house counsel. Therefore, both external and in-house counsel have a duty of confidentiality concerning their clients.

There are a few exceptions to the duty of confidentiality. For example, lawyers are required to disclose information that is necessary to prevent the commission of a crime or to comply with a court order.

The law is silent on situations where a party is allowed to withhold a specific document during the proceedings. In practice, even if the evidence contains state secrets, trade secrets, or private information, it must be presented in court. The court shall have its own discretion to allow a party to not disclose confidential information as specified under the laws.

Vietnam has provisional emergency measures (roughly akin to temporary injunctive relief in certain other jurisdictions). Provisional emergency measures are where courts can temporarily address the urgent requests of the involved parties to preserve the status quo or prevent irreparable harm.

The court may grant the following injunctive relief measures:

• distraining the property in dispute;
• prohibiting any transfer of property rights concerning the property in dispute;
• prohibiting any change in the status quo of the property in dispute;
• permitting the harvest and sale of subsidiary food crops or of other products or commodities;
• freezing accounts at banks, other credit institutions, and the State Treasury and/or freezing property at places of bailment;
• prohibiting a party to the litigation from conducting or compelling a party to conduct certain acts; or
• other injunctive relief measures as stipulated by law.

In Vietnam, provisional emergency measures can be obtained relatively quickly, especially in urgent cases. If the court receives the dossier for the application of provisional emergency measures before the trial session is opened, the judge assigned to resolve the case shall consider the application within three working days from the day the applications are received. If the application is submitted at trial, the trial panels shall consider such motion at the time of adjudication.

Provisional emergency measures can be obtained on an ex parte basis – ie, without notice to the defendant and without the defendant being present.

In Vietnam, an applicant for a provisional emergency measure can be held liable for damage suffered by the respondent if the respondent later successfully discharges the provisional emergency measures. This is because the applicant must ensure that they have a reasonable basis for applying for the provisional emergency measures, and that they have made all reasonable attempts to notify the defendant of the application.

Some injunctive measures, such as freezing or distraining assets, require the applicant to submit a security deposit to the court before the injunction is granted. The amount of the security deposit must be equal to the value of the property subject to the injunction.  It is designed to protect the interests of the person subjected to the injunction order, and to prevent the abuse of injunctive measures by applicants. The security deposit is deposited in an escrow account at a bank within the time limit set by the court.

In Vietnam, injunctive relief is typically granted within the territorial jurisdiction of the Vietnamese courts. This means that any injunctive relief issued by Vietnamese courts generally applies to assets and activities solely within Vietnam. Parties seeking to freeze or restrain the worldwide assets of a defendant would need to pursue legal action in the relevant foreign jurisdictions.

The CPC allows the court to grant provisional emergency measures against any person who is not a party in a legal dispute, but whose actions or conduct are directly connected to the subject matter of the dispute and have a significant impact on the rights or interests of the parties involved.

If a respondent fails to comply with the terms of an injunction in Vietnam, they may be found in contempt of court. Contempt of court is a serious offence and it can result in a fine, imprisonment, or both.

Trials in Vietnam are typically conducted in an oral and adversarial manner. This means that the parties to the case have the opportunity to present their arguments and evidence to the court through oral argument and witness/expert examination.

The trial process begins with the opening statements of the parties. The plaintiff’s attorney will present the plaintiff’s case, the defendant’s attorney will then present the defendant’s case, and the interested parties’ attorney may present an opinion on the case.

After the opening statements, the parties will present their evidence. This may include witness testimony, expert testimony, and documentary evidence. The parties will also have the opportunity to cross-examine each other’s evidence and witnesses.

The court and the procuracy will then cross-examine the litigants.

After the parties have presented their evidence, the attorneys will give their closing arguments. The plaintiff’s attorney will summarise the plaintiff’s case and argue for a favourable judgment. Afterwards, the defendant’s attorney summarises the defendant’s case and argues for a favourable judgment.

Then, the procuracy will give their opinion on the resolution of the case.

The court will then deliberate on the case and issue a judgment. The judgment will be based on the evidence presented at trial and the applicable law.

If a party is dissatisfied with the judgment, they may have the right to appeal to a higher court. The appeals process includes a review of the case record, written arguments, and, in some cases, oral arguments at the appellate level.

Shorter hearings in Vietnam are designed to address specific issues efficiently and effectively, allowing the legal process to move forward while ensuring that parties have an opportunity to present their arguments and seek relief when necessary.

The court will typically begin by hearing from the attorneys for the parties. The attorneys will present their arguments for or against a motion or application. The court may then ask questions of the attorneys.

If the court determines that a hearing is necessary, the parties will be allowed to present witnesses and evidence. However, the court may limit the scope of the hearing to the specific issue that is being considered.

After the parties have presented their evidence, the attorneys will have an opportunity to make closing arguments. The court will then deliberate on the motion or application and issue a ruling.

Case management hearings are typically held before more complex trials or hearings to help the court manage the timetable leading up to the hearing or trial. These hearings can be held at any time during the pre-trial process, but they are most common in cases where there are many complex issues to be addressed.

The purpose of a case management hearing is to:

• identify the key issues in the case;
• set a timetable for the discovery process;
• schedule pre-trial conferences and hearings; and
• address any other issues that may arise before the trial or hearing.

Case management hearings are an important tool for the court to help ensure that complex trials and hearings are conducted efficiently and fairly. Here are some specific examples of circumstances in which the court may hold a case management hearing:

• the case involves many complex issues;
• the parties have a history of difficulty communicating with each other;
• the parties have different expectations for the trial or hearing; or
• the case is expected to be lengthy and expensive.

There are no jury trials in Vietnam. However, at the first instance trial, there are People’s Assessors who are elected by the People’s Council upon the recommendation of the Vietnam Fatherland Front Central Committee of the same level, to participate in hearing the case. 

The trial panel in a first instance trial consists of two People’s Assessors and one judge.  When voting on decisions regarding the settlement of civil lawsuits, the vote of the People’s Assessors has equal weight to that of the judge.

In Vietnam, the admission of evidence at trial is governed by a set of rules and procedures designed to ensure fairness and the presentation of reliable evidence.

• Objectivity: Evidence is only admissible if it is factual.
• Relevancy: Evidence is only admissible if it is relevant to the issues at trial.
• Legality: Evidence is only admissible in the forms prescribed by the law, and only if duly submitted to the court, including:
1. readable, audible or visible material, and electronic data;
2. exhibits;
3. involved parties’ testimonies;
4. witness testimonies;
5. expert conclusions;
6. on-site appraisal minutes;
7. property evaluation and price appraisal results;
8. written records of legal facts or acts that are formulated by official functionaries;
9. notarised/authenticated documents. 

Normally, only the litigants or their legal/authorised representatives and lawyers can access the evidence in the court’s case files. Copying and photocopying documents must be approved by the court.

The CPC does not provide specifically for expert testimony at the trial.

However, the CPC recognises expert appraisals as evidence. At the request of one party, or at the discretion of the court, the court may appoint an appraiser. If a party contests the appraiser’s opinion or the court deems it necessary, the appraiser is required to testify in court.

For example, if the expert testimony is incomplete, unclear or violates the law, at the request of a litigant or when deemed necessary, the court will request the expert to explain the assessment conclusion and summon the expert to the trial or session to directly present testimony or evidence to support their conclusion.

The Vietnamese CPC states that hearings and transcripts of hearings are open to the public unless the court orders otherwise. The court may order a hearing to be closed to the public if it determines that there is a compelling reason to do so, such as:

• to protect the privacy of a child or other vulnerable person;
• to protect the confidentiality of a trade secret or other confidential information; or
• cases involving state secrets.

The level of intervention by a judge during a hearing or trial in Vietnam varies depending on the judge and the case. Generally, the judge retains complete control over the proceedings, and the litigants are only permitted to speak at the hearing if they are allowed.

In some cases, the judge may issue a judgment or make decisions at the hearing. This is more likely to happen in cases where the evidence is clear and there are no complex legal issues to be resolved. For example, the judge may issue a judgment at the hearing in a case where:

• the defendant admits liability;
• the parties have reached a settlement agreement; or
• the court has all of the evidence it needs to make a decision.

In other cases, the judge may reserve judgment for a later date. This is more likely to happen in cases where the evidence is complex or there are difficult legal issues to be resolved. For example, the judge may reserve judgment for a later date in a case where:

• the parties have not reached a settlement agreement;
• the court needs to obtain additional evidence; or
• the court needs to consider complex legal issues.

Under Vietnamese law, the timeframe for proceedings from the commencement of claim through to trial is four months.

However, in reality, the timeframe for proceedings from commencement of the claim to trial, and the typical duration of trials for commercial disputes in Vietnam, can vary depending on the complexity of the case and the workload of the court. Accordingly, the process from filing a claim to the issuance of a first instance judgment in a commercial dispute can typically take anywhere from several months to a few years.

The parties to a lawsuit have the right to reach a settlement without court approval. In these cases, the parties will withdraw their claims against each other.

If the parties desire to reach a settlement agreement during the proceedings with the court’s approval, at the request of the parties the court will issue the minutes of a successful mediation and decisions to recognise the involved parties’ agreement. The decisions to recognise the involved parties’ agreements shall take effect immediately after they are issued and are not eligible for appeal under the appellate procedures. 

Out-of-court Settlement

In the event of an out-of-court settlement, which is usually followed by the withdrawal of the lawsuit, only the withdrawal is made public. Consequently, an out-of-court settlement can remain confidential.

Judicial Settlement

As set forth in 1.3 court Filings and Proceedings, in Vietnam, except for cases regarding confidential information (ie, regarding state secrets, cultural traditions, minors, or professional, business, personal, or family matters), judgments and decisions may be publicly available via court-related websites. As such, the content of the settlement is likely to be made public, with the details of the involved parties being encrypted.

For out-of-court settlement agreements, such as when the litigant withdraws the case, the enforcement agency cannot directly enforce the settlement agreement. In the event of a violation, the party must file a claim for breach of contract with the appropriate court to obtain a judgment that is enforceable.

However, judicial settlement agreements shall have the same effect as a final and binding judgment. If a party fails to fulfill their obligations under the settlement agreement, the other party may initiate legal action to enforce the agreement, namely requesting the enforcement agency to enforce the judgment/decision.

Out-of-court Settlement Agreements

These are binding agreements between the parties, which can only be revoked if one party requests the court to nullify such settlement agreement. In such cases, parties can invoke a justification provided by the Civil Code, such as lack of civil capacity, misunderstanding, fraud, or coercion.

Judicial Settlement Agreements

They can only be set aside according to the cassation procedures and only if there are grounds to believe that such agreement was reached as a result of mistake, deception, intimidation, force or if it contravenes the law or social ethics.

The forms of award available to a successful litigant in Vietnam vary depending on the type of case and the relief sought by the litigant. However, some of the most common forms of award include:

• Damages: Damages are a monetary award that is intended to compensate a litigant for the losses that they have suffered as a result of the defendant’s wrongful conduct. Damages can be awarded for both economic losses (such as lost profits or medical expenses) and non-economic losses (such as pain and suffering or emotional distress).
• Specific performance: Specific performance is an order that requires the defendant to perform a specific act, such as returning property to the plaintiff or performing a contract. Specific performance is typically only awarded in cases where monetary damages would be an inadequate remedy.
• Injunction: An injunction is an order that prohibits the defendant from engaging in certain conduct. Injunctions are typically awarded in cases where the defendant’s conduct is causing or is likely to cause harm to the plaintiff.
• Declaratory relief: Declaratory relief is an order that declares the rights of the parties or the legal relationship between the parties. Declaratory relief is typically awarded in cases where there is a dispute about the parties’ rights or obligations.
• Costs: Costs are the expenses that a litigant incurs in bringing or defending a lawsuit. Costs can include filing fees, legal fees, and expert witness fees. The losing party may be ordered to pay all of the successful party’s court costs.

In addition to these common forms of award, attorney fees may be awarded to the prevailing party if there is a prior agreement, or the dispute relates to intellectual property rights.

There are a number of key rules regarding damages:

• A causal relationship must exist between the acts and the damage that occurs.
• Actual damage must be compensated in full and in a timely manner.
• The aggrieved party must adopt necessary and reasonable measures to prevent or mitigate its damages.
• Damages are paid in correspondence to the degree of fault. The defendant may be discharged from the duty to compensate should the damage be entirely due to the fault of the aggrieved party or due to a force majeure event.

Vietnamese law does not have a concept of punitive damages for compensation, but it may impose a “penalty” as a punishment on the breaching party in a contractual relationship. For a civil contract, the party may set an unlimited penalty but in some cases the court will often limit the penalty to a reasonable amount. For a commercial contract dispute, the amount of the penalty shall be agreed upon between the parties but shall not exceed 8% of the value of the breached portion of the contract (or 12% of the value of the breached portion of a construction contract in certain circumstances).

Pre-judgment Interest

The prevailing party may request and be awarded pre-judgment interest, with the interest rate based on the parties’ agreements if available. Parties may agree on the applicable interest but it should not be higher than 20%/year. In case there is no agreement on the applicable interest, the claiming party may apply interest at 10%/year. 

Post-judgment Interest

After the first instance judgment is rendered, the interest shall continue to be calculated from the next day until the actual payment day if so requested by the prevailing party. In practice, the involved parties should clearly request this amount so that such claim will be included in the judgment to ensure enforceability at the enforcement stage.

The prevailing party may request that the enforcement agency enforce the judgment. The judgment debtor will then receive a notice with a compliance deadline from the enforcement agency. The enforcement agency may seize, suspend, transfer, or sell the judgment debtor’s property if such party fails to comply with the obligations specified in the notice.

Additionally, if a judgment debtor refuses to perform the acts specified in the judgment, the enforcement agency may compel the judgment debtor to perform the act and the judgment debtor will be responsible for the costs associated with the compulsion.

In addition, the enforcement agency may issue orders limiting the judgment debtor’s spending to the amount necessary to maintain a reasonable standard of living. If the judgment debtor evades enforcement on purpose, they may face judicial detention or even criminal liability.

To have a foreign judgment recognised and enforced in Vietnam, a letter of request must be sent to the Ministry of Justice of Vietnam (MOJ) or to the competent court, depending on the requirements of the international treaty (to which both Vietnam and the country that renders the judgments are members). In the case of submitting the dossiers to the MOJ, the MOJ will forward the letter, along with any attached documents, to a competent court within seven days. The court will then notify the procuracy at the same level within three working days. Within four months, the court must decide whether to reject the request for recognition or open a court meeting to consider the case. If necessary, this period may be extended by two months for further clarification from the involved parties.

The court will not review the merits of the foreign judgment, and will grant the execution judgment if:

• the foreign judgment is final and conclusive;
• the jurisdiction of the foreign court is recognised by laws, regulations, conventions, or treaties;
• the party that has lost the case has been properly served or has appeared without being properly served;
• the content of the judgment and the litigation proceedings do not violate public policy; and
• there is a guarantee of reciprocity.

Once the foreign judgment has been recognised and accepted to be enforced by the court, it is as final and binding as a domestic judgment.

Any litigants dissatisfied with the decision of the court of first instance can bring an appeal to the court of appeals. The appellate court is an immediate court at a higher level than the first instance court in the hierarchy of the court system. In Vietnam, the first instance court can only be the district or provincial level court; meaning, the appellate court will be the provincial level court or the high court, respectively.

Within three working days from the date of acceptance, the appellate court must send a written notice of acceptance for settlement of the case to the litigants, authorities, organisations, individuals initiating the lawsuit, and the equivalent-level procuracy.

Appeals of judgments in Vietnam are governed by a number of rules:

• Appeals must be filed within a certain period after the decision of the lower court. This period is typically 15 days.
• Appeals must be filed in writing and must include specific grounds for appeal. The grounds for appeal must be based on errors of law or fact in the decision of the lower court.
• The appellate court will review the decision of the lower court based on the written submissions of the parties and on the evidence that was presented in the lower court.
• The appellate court may uphold the decision of the lower court, overturn the decision of the lower court, or order a new trial.

An appeal to a higher court in Vietnam may be granted if the lower court made an error of law, fact, or procedure. Errors of law can include misinterpreting the law or applying the law incorrectly to the facts of the case. Errors of fact can include finding the facts incorrectly or weighing the evidence incorrectly. Errors of procedure can include failing to give the parties a fair hearing or failing to consider all of the evidence.

According to Article 273 of the CPC, the time limit for appealing against the first instance judgment is 15 days from the date of judgment pronouncement; for a party who was absent from the court hearing or was absent at the time of the pronouncement of the judgment for a plausible reason, the time limit for filing an appeal shall be counted from the date the judgment is handed over to him/her or publicly displayed. 

Therefore, to appeal a first instance judgment, the appellant must file an appeal within 15 days of the date of the date of judgment pronouncement. In the appeal, the appellant should specify the grounds for the appeal, outlining the errors or issues in the court’s judgment that warrant review.

After receiving the appeal application, the appellate court must examine its validity as provided for by the CPC. Within three working days from the date of acceptance, the appellate court must send a written notice of acceptance for settlement of the case to the litigants, the authorities, the organisations, the individuals initiating lawsuits, and the equivalent-level procuracy regarding the acceptance for settlement of the case.  The appellate court may uphold the decision of the lower court, overturn the decision of the lower court, or order a new trial.

The triggering event for the appellate procedure is the actual receipt of the written judgment by the appellant. Once the appellant receives the written judgment, the clock starts ticking, and they must file an appeal within the prescribed timeframe if they wish to challenge the first instance judgment.

The appellate court may consider a variety of issues in an appeal, including:

• whether the lower court made an error of law (this could include an error in interpreting the law or applying the law to the facts of the case);
• whether the lower court made an error of fact (this could include an error in finding the facts of the case or in weighing the evidence);
• whether the lower court failed to follow proper procedures (this could include failing to give the parties a fair hearing or failing to consider all of the evidence); and
• whether the lower court’s decision is fair and reasonable (this could include whether the lower court’s decision is consistent with other similar cases or whether the lower court’s decision is in the best interests of the parties involved.

The appellate court may also consider any other issues that are relevant to the case, such as new evidence that has been discovered since the first instance judgment was issued.

The appellate court in Vietnam may also order a rehearing of the case, or it may simply review the first instance decision. The decision of whether to order a re-hearing or simply review the decision is at the discretion of the appellate court.

If the appellate court orders a rehearing, the case will be retried from the beginning. The appellate court may order a rehearing if it believes that the lower court made a serious error in the first trial. If the appellate court simply reviews the first instance decision, it will review the evidence and the findings of fact and law made by the lower court. The appellate court may uphold the decision of the lower court, overturn the decision of the lower court, or order a new trial.

The court in Vietnam can impose conditions on granting an appeal. These conditions may include:

• Payment of court fees: The court may require the appellant to pay any outstanding court fees or costs associated with the first instance proceedings before the appeal is allowed to proceed. Failure to pay these fees may result in the appeal being dismissed.
• Compliance with procedural requirements: The appellant may be required to comply with specific procedural requirements, such as submitting a complete and properly formatted appeal within the prescribed timeframe. Failure to meet these requirements may lead to the rejection of the appeal.

Failure to comply with these conditions may result in the appeal being dismissed.

After hearing an appeal in Vietnam, the appellate court possesses several powers and options, depending on the findings and the circumstances of the case:

• Uphold the decision of the lower court: The appellate court may uphold the decision of the lower court if it finds that the lower court did not make any errors of law or fact.
• Amend the decision of the lower court: The appellate court may amend the decision of the lower court if it finds that it can amend the first instance decision without needing to order a new trial.
• Overturn the decision of the lower court: The appellate court may overturn the decision of the lower court if it finds that the lower court made an error of law or fact.
• Order a new trial: The appellate court may order a new trial if it finds that the lower court made a serious error in the first trial.

The appellate court may also render other orders, such as:

• Granting or denying relief to the parties: The appellate court may grant or deny relief to the parties, such as awarding damages or ordering specific performance.
• Imposing costs on the parties: The appellate court may impose costs on the parties, such as the costs of litigation or the costs of expert witnesses.

In Vietnam, the responsibility for paying the costs of litigation, including court fees and expenses, primarily falls upon the losing party in a legal proceeding. Court fees, which are determined based on the value of the claim, are typically borne by the party initiating the lawsuit, but if the plaintiff prevails, these fees may be recoverable from the defendant. Additionally, expenses related to the litigation, such as witness fees and travel expenses, may also be recoverable by the prevailing party.

However, the recovery of attorney’s fees is not automatic in Vietnam. Generally, each party is responsible for its own attorney’s fees, unless there are specific legal provisions allowing for the recovery of such fees, as is the case in some intellectual property disputes.

Parties do have the option to challenge the amount of costs awarded by the court if they believe it is insufficient or unjust. The court will revise its decision if it makes errors in distributing court costs between the parties.

In general, the losing party will bear the court cost. In some situations, if the losing parties are elderly, employees, or a specified person under the law, court costs may be waived.

The laws are silent concerning the interest on court costs. However, the prevailing party may specifically request the court to impose interest on court costs.

Alternative dispute resolution (ADR) is increasingly being used in Vietnam as a way to resolve commercial disputes. ADR methods such as mediation and arbitration play a valuable role in dispute resolution by offering parties more flexible, efficient, and collaborative avenues to resolve their conflicts.

Arbitration is the most popular ADR, particularly in international commercial disputes. Vietnam has several arbitration centres, including the Vietnam International Arbitration Center (VIAC), which provides a platform for resolving disputes through arbitration.

Mediation is also a frequently selected ADR method in Vietnam, commonly used in both civil and commercial disputes. Many Vietnamese businesses and organisations have recognised its advantages and have incorporated mediation clauses into their contracts.

The Vietnamese legal system promotes ADR in several ways.

First, the Law on Commercial Arbitration (LCA) provides a comprehensive framework for the use of arbitration in Vietnam. In principle, the parties may freely choose ADR as their dispute resolution method.

Second, the Vietnamese government has issued a number of decrees and circulars that promote the use of ADR. For example, Decree No 22/2017/ND-CP provides a framework for the use of mediation in Vietnam, as well as the regulations for establishing mediation centres.

ADR is completely voluntary, and no sanction will be imposed if a party refuses to resolve their case by ADR.

In Vietnam, institutions offering and promoting Alternative Dispute Resolution (ADR) are relatively well-organised and have made significant strides in recent years. Here is an overview of the organisation and functioning of these institutions:

• The Vietnam Mediation Center (VMC): The VMC is a non-profit organisation that is responsible for promoting and supporting the use of mediation in Vietnam. The VMC provides mediation services to businesses and individuals, and it also offers training and support to ADR practitioners.
• The Vietnam Arbitration Center (VAC): The VAC is a non-profit organisation that provides arbitration services to businesses and individuals. The VAC also offers training and support to ADR practitioners.
• The Vietnam International Arbitration Center (VIAC): The VIAC is a non-profit organisation that provides international arbitration services to businesses and individuals. The VIAC also offers training and support to ADR practitioners.

The law that governs the conduct of arbitrations and the recognition and enforcement of arbitral awards in Vietnamese courts is the 2010 Law on Commercial Arbitration (LCA). The LCA provides a comprehensive framework for commercial arbitration in Vietnam, including rules on the composition of arbitral tribunals, the conduct of arbitral proceedings, and the recognition and enforcement of arbitral awards. For more detailed instructions, Resolution No 01/2014/NQ-HDTP of the Council of Judges of the Supreme Court provides further guidelines for the LCA regarding the conduct of arbitrations.

In addition, the enforcement of arbitral awards is subject to the provisions of the Vietnamese laws on civil judgment enforcement.

The recognition and enforcement of foreign arbitral awards in Vietnam is currently governed by the CPC.

Article 2 of the LCA sets forth the subject matters that fall under the jurisdiction of arbitration, which are:

• disputes between parties that arise from commercial activities;
• disputes between parties, in which at least one party conducts commercial activities; and
• other disputes subject to arbitration by law.

Based on the above regulation, disputes that are not prescribed above may not be referred to arbitration in Vietnam. Generally speaking, non-commercial disputes are not subject to arbitration, which may include: labour, family, marriage, inheritance, criminal, administrative, and environmental matters.

Parties to an arbitration agreement can challenge an arbitral award in Vietnamese courts on a limited number of grounds. These grounds are set out in Article 68.2 of the LCA, including:

• the arbitration agreement is invalid or unenforceable (this may be because the agreement was not in writing, or because it was entered into under duress or fraud);
• the arbitral tribunal was not properly constituted or did not follow the applicable procedural rules (this may include cases where the arbitrators were biased or where the tribunal failed to give the parties a fair hearing);
• the evidence provided by a party on which the arbitral tribunal has relied on to issue the award was falsified;
• an arbitrator has received money, assets, or other material benefits from a party, affecting the objectivity and impartiality of the award; or
• the award contravenes the fundamental principles of Vietnamese law.

A domestic arbitral award, if not overturned by the competent court, may be enforced by applying for enforcement to the enforcement agency, similar to a domestic court’s judgment.

Foreign arbitration awards must additionally go through the procedures for recognition and enforcement of a foreign arbitral award at the competent court before going to the enforcement agency. The application must be accompanied by a copy of the arbitration award, a copy of the arbitration agreement, and a certificate of authenticity of the award if it is in a foreign language. The court will review the application and the supporting documents and may refuse to enforce the award if it finds that the award is not final or binding, the arbitration agreement is invalid or unenforceable, the party seeking enforcement failed to comply with the applicable procedural rules, or the award violates public policy in Vietnam.

In general, the roadmap for reform of dispute resolution in Vietnam, from now to 2030, are:

• clarifying and supplementing the legal system regarding the judiciary, organisation of courts, judges, and assessors;
• clarifying and supplementing the tasks, competence, and organisation of the judicial apparatus;
• renewing the task of promulgating case law and guiding the uniform application of law;
• building an open and transparent trial regime;
• improving the quality of human resources, especially judges;
• ensuring the minimum necessary quantity and appropriate structure of courts;
• obtaining facilities and resources to build modern and effective courts;
• building e-courts, and developing the methods for electronic proceedings; and
• strengthening international co-operation.