Distinguish between commercial mediation and commercial arbitration according to regulations

Commercial mediation and commercial arbitration are two methods of resolving disputes outside of court. These two methods are based on the agreement between the parties to resolve conflicts arising from commercial contracts. Despite similarities, mediation and arbitration still have distinct characteristics, so using professional consulting services is extremely necessary. The article below will detail the differences between these two methods.

Concept of commercial mediation and commercial arbitration

According to Clause 1, Article 3 of Decree 22/2017/ND-CP, commercial mediation is a method of resolving disputes based on the agreement of the parties, with the support of a mediator. Commercial mediation is defined as a process where the parties voluntarily negotiate with the assistance of a mediator. The goal is to reach an agreement to resolve the dispute in a harmonious way, avoiding confrontation.

According to the provisions of Clause 1, Article 3 of the Law on Commercial Arbitration 2010, Commercial Arbitration is a mechanism to resolve conflicts through the arbitrator’s decision. Arbitration is a method by which parties agree to submit a dispute to an arbitrator. The arbitration award has a legal effect and is enforceable for the parties.

Both are alternatives to court, helping businesses resolve conflicts quickly, flexibly and securely. However, each method has its own characteristics in terms of process, authority and legal effect.

Benefits of commercial mediation and commercial arbitration in dispute resolution

Choosing dispute resolution based on commercial mediation and commercial arbitration brings many great benefits to customers, including:

• Brings many benefits in resolving business disputes. These two methods help parties save time and costs compared to court proceedings.
• Create opportunities for parties to dialogue and find mutually beneficial solutions. This process is flexible, and not bound by strict procedures. Mediation results are based on voluntariness, helping to maintain business relationships.
• Allows parties to select arbitrators with appropriate expertise. Arbitration awards have a high legal effect and are enforced like court judgments. The trial process is quicker and more discreet than in court.
• Ensure high security, and avoid affecting business reputation. The parties have the right to decide for themselves the time, place and language of dispute resolution.
• The application of mediation and arbitration contributes to reducing the load on the court system and promoting a healthy business environment. Businesses have more options to resolve disputes effectively, consistent with the specifics of their operations.

Similarities between commercial mediation and commercial arbitration

Commercial mediation and commercial arbitration have some basic similarities. Both are methods of resolving disputes outside of court, based on the agreement of the parties.

• First, mediation and arbitration both come from the free will of the disputing parties. The parties have the right to choose to apply this method instead of suing in court.
• Second, both involve an intermediary third party – a mediator or arbitrator. These people play the role of supporting the parties in resolving conflicts.
• Third, mediation and arbitration both aim to resolve disputes quickly and cost-effectively. This process usually takes place discreetly, ensuring business secrets.
• Fourth, both methods allow the parties to choose the person conducting the process – the conciliator or the arbitrator. Selection is based on criteria of appropriate experience and expertise.
• Fifth, mediation and arbitration can both be applied to resolve all types of commercial and business disputes. The scope of application is quite wide, from contract disputes to investment and international trade.

Other points of commercial mediation and commercial arbitration

Commercial mediation and commercial arbitration have some important differences. These differences are reflected in the role of the third party, the nature of the decision and the legal effect.

Regarding authority:

• Commercial mediation may only be conducted in commercial mediation.
• The arbitration center has the right to both resolve disputes and conduct commercial mediation.

Regarding the role of third parties:

• The mediator plays the role of intermediary, supporting the parties in dialogue. The conciliator has no authority to impose a decision.
• On the contrary, the arbitrator has the authority to make a decision to resolve the dispute.

Regarding experience standards:

• Commercial mediators only need 02 years of professional experience with university training.
• Arbitrators must have 5 years of professional university training experience.

Regarding the decisive nature:

• Mediation results are based on the parties’ voluntary agreement. The parties have the right to accept or reject the mediator’s proposal.
• Meanwhile, the arbitration award is binding on the parties.

Regarding the legal effect:

• The conciliation agreement has only civil binding value. To be effective, it needs to be recognized by the court.
• The arbitrator’s decision is final and binding.

Regarding the proceedings:

• Mediation is often flexible, without rigid procedures.
• Arbitration follows strict procedural rules, including steps such as filing a lawsuit, counterclaiming, adjudication, and making a decision.

Regarding the possibility of appeal:

• Parties cannot appeal the results of mediation.
• With arbitration, the award can be overturned in certain legal cases.

Consulting services to resolve disputes quickly and effectively

Commercial mediation and commercial arbitration are two effective methods for resolving business disputes. With a team of experts with many years of experience in the field of mediation and arbitration, Long Phan provides services including:

• Consulting on choosing appropriate dispute resolution methods;
• Consulting on negotiation and negotiation solutions;
• Assist customers in preparing conciliation documents;
• Support customers in negotiating and working with relevant parties;
• Representing clients in arbitration proceedings;
• Consulting on temporary measures to protect rights;
• Monitor and support during the judgment execution phase.

Each mediation method has its own advantages and disadvantages. Depending on each different need, customers can choose the appropriate method. To choose the optimal method and comply with the legal process, customers can contact Long Phan via Hotline: 0906735386 for detailed advice. We are ready to assist you in resolving disputes quickly and effectively, protecting your legitimate business interests.