Consulting on choosing methods to resolve commercial disputes

Article overview

Methods of resolving commercial disputes suitability is a factor that contributes to ensuring the legitimate rights and interests of the parties. Choosing the optimal method not only helps resolve disputes quickly and effectively but also saves time and costs. This article will provide information about popular commercial dispute resolution methods, as well as factors to consider to choose the most suitable method.

Choose a method to resolve commercial disputes
Choose a method to resolve commercial disputes

What are commercial disputes?

Commercial disputes are conflicts and disagreements that arise between parties participating in commercial activities, affecting the legitimate rights and interests of the parties. According to the provisions of Clause 1, Article 3 of the Law on Commercial 2005:

“Commercial activities are activities aimed at making a profit, including buying and selling goods; providing services; investing; trade promotion and other activities for profit purposes.”

Thus, commercial disputes include disputes arising from activities of buying and selling goods, providing services, investing, promoting trade… in which at least one party in the dispute is a trader or other organizations and individuals involved in commercial activities.

Methods of resolving commercial disputes

Negotiate

Negotiation is a dispute resolution method in which the parties directly meet, discuss, and agree with each other to resolve the dispute themselves. This method has the following advantages and disadvantages:

Advantage:

  • Savings: Negotiation helps parties save costs and time compared to other methods such as arbitration or court litigation.
  • Flexibility: The parties can freely agree on the content, time, and place of negotiation without being bound by any legal regulations on order and procedures.
  • Confidentiality: Information about the dispute is kept confidential between the parties, avoiding affecting the reputation and image of the business.
  • Maintain relationships: Negotiation helps parties maintain business cooperation, avoiding damage to long-term relationships.

Disadvantages:

  • Depends on goodwill: The effectiveness of negotiation depends on the willingness of the parties to cooperate. If one side does not have good will, negotiations will be difficult to achieve results.
  • Non-binding: Agreements reached by negotiation are not legally binding. If one party does not voluntarily perform, the other party will have difficulty requesting enforcement.
  • Disadvantage for the weaker party: In some cases, the party with stronger economic potential can put pressure on the weaker party.

Commercial mediation

Commercial mediation is a dispute resolution method in which the parties rely on a neutral third party (mediator) to assist the parties in finding solutions, negotiating and reaching a mutual agreement. The mediator acts as a mediator, encouraging the parties to dialogue and find mutually beneficial solutions.

Advantage:

  • Fast and economical: Conciliation procedures are simple, fast, and cost-effective.
  • Flexibility: The parties can proactively agree on the time, place, and order of mediation.
  • Confidentiality: The mediation process is confidential, information about the dispute is not made public.
  • Maintaining the relationship: Mediation helps parties maintain a cooperative business relationship.

Disadvantages:

  • Depends on goodwill: The effectiveness of mediation depends on the willingness of the parties to cooperate.
  • Non-binding: The mediation agreement is not as legally binding as a court judgment or decision.

Referee

Commercial arbitration is a dispute resolution method chosen by the parties, conducted by the Arbitration Council according to the provisions of the Law on Commercial Arbitration 2010. The parties have the right to choose the arbitrator, the place of arbitration and the applicable law. The arbitral award is as binding as a court judgment.

Advantage:

  • Professional and flexible in the process.
  • No territorial restrictions.
  • High information security.

The decision is binding and cannot be appealed.

Disadvantages:

  • Arbitration costs can be high.
  • Arbitral awards may be required to be reviewed by the Court in certain circumstances.
  • Arbitrators may have difficulty resolving complex cases.
Mediation of commercial disputes
Mediation of commercial disputes

File a lawsuit in Court

The Court is the State’s judicial agency, with authority to resolve commercial disputes at the request of the parties. The Court’s ruling (judgment, decision) has the highest legal effect and is guaranteed to be enforced.

Advantage:

  • The Court’s ruling is highly coercive.
  • Ensure fairness and objectivity.
  • Court costs are cheaper than Arbitration.

Disadvantages:

  • The proceedings at Court are inflexible and complicated.
  • The principle of public trial can affect corporate reputation.
  • The proceedings may be prolonged due to appeals and protests.

Factors to consider to choose an appropriate dispute resolution method

To choose the appropriate commercial dispute resolution method, customers need to consider the following factors:

  • Nature and nature of the dispute: Whether the dispute is simple or complex, whether the value of the dispute is large or small, whether it is related to business secrets or not.
  • Relationship between parties: Long-term cooperative relationship or just a single transaction.
  • Time and cost: How long does the customer want to resolve the dispute and how much is the budget for dispute resolution?
  • Level of desire to control the resolution process: Customers want to be proactive in negotiating, or want the intervention of a third party.
  • Enforcement effect of the decision: Customers want the dispute resolution decision to be coercive or depend on good faith on the basis of the agreement agreed between the parties.

Thus, based on the advantages and disadvantages of the methods as well as the factors to consider that we have informed above, customers can choose the appropriate and effective method of resolving commercial disputes.

Consulting services and support for effective commercial dispute resolution

Long Phan provides professional and effective commercial dispute resolution support and consulting services, including:

  • Analyze, evaluate situations and provide advice on customer disputes;
  • Consulting on choosing appropriate dispute resolution methods;
  • Instructions for resolving disputes by each method;
  • Consulting and planning specific dispute resolution;
  • Drafting documents and records related to disputes;
  • Representing participants in negotiations, negotiations and conciliation;
  • Representing participants in proceedings at Arbitration or Court to protect customers’ rights;
  • Consulting and answering other related issues when encountering commercial disputes.
Consulting on effective and reputable commercial dispute resolution
Consulting on effective and reputable commercial dispute resolution

Choosing the appropriate commercial dispute resolution method is very important, directly affecting the rights and interests of the disputing parties. Customers need to carefully consider relevant factors to choose the most optimal method. If you need detailed advice, please contact the hotline: 0906735386 to get the best support from Long Phan.