dispute resolution, page 1

Successful dispute resolution in Vietnam requires legal expertise, but equally importantly, an understanding of the cultural issues involved in successfully resolving disputes.

Vietnam’s court system is still a difficult forum through which to resolve commercial and other disputes, due to its nascent nature, and the guidance of a strong legal team is essential.

International arbitration conducted in Vietnam remains equally problematic for similar reasons, and enforcement of both court judgments and arbitration awards is a difficult and time consuming process, through which clients need proper guidance and assistance.

LWA has considerable expertise in this field, and has advised on all manner of disputes, including in relation to intellectual property, labour, finance, foreign investment and general commercial matters in most areas.

LWA is recognised as a leader in this field and writes for the Vietnam section of the annual publication "Guide to dispute resolution in Asia" of Herbert Smith, one of the world's leading international law firms. Below you find our most recent contribution for the 2005 edition.

ARTICLE ON LITIGATION IN VIETNAM

1. What is the structure of the legal profession?

The legal profession in Vietnam comprises a legally trained judiciary and lawyers. Under the Law on Organisation of the People’s Court dated 2nd April 2002 the judiciary of the Supreme People’s Court is appointed by the President of the Socialist Republic of Vietnam and the judiciary of District & Provincial People’s Courts are appointed by the Chief Judge of the Supreme People’s Court based on proposals by the Committee for Selection of Judges. Candidates must be Vietnamese citizens and, to be selected as a judge of a District People’s Court, must have at least four years’ legal experience.

To be selected as a judge of a Provincial People’s Court, at least five years’ experience as a judge of a District People’s Court is needed, or at least ten years’ legal experience. To be selected as a judge of the Supreme People’s Court a candidate must have at least five years’ experience as a judge of a Provincial People’s Court or at least fifteen years’ legal experience. Judges are appointed for terms of five years and thereafter are subject to re-selection by the Committee for Selection of Judges and by the President (for Supreme People’s Court judges) or by the Chief Judge of the Supreme People’s Court (for Provincial or District People’s Courts judges).

To become a lawyer, an individual must achieve various academic and professional training and qualification requirements. Once qualified, a lawyer may establish his/her own law office or may join a Vietnamese law office, a Vietnamese law partnership company or a foreign law firm.

A Vietnamese law office may have one or more Vietnamese-qualified lawyers, whereas a law partnership company must have at least two Vietnamese-qualified lawyers. A foreign law firm may establish a presence in Vietnam through a branch, a 100% foreign-owned company or a partnership with a Vietnamese law partnership company (collectively referred to as “foreign law firm”) but can only advise on Vietnamese laws if it employs Vietnamese-qualified lawyers. Vietnamese lawyers working for a Vietnamese law office may participate, and represent clients of the law office, in legal proceedings before Vietnamese Courts but lawyers working for a Vietnamese law partnership company or a foreign law firm may not.

2. What is the structure of the Court system?

The Court system in Vietnam comprises District, Provincial and Supreme People's Courts.

The Civil Procedure Code (CPC¹) which consolidates into one legal document many of the provisions of the previous laws on civil Court procedures, economic Court procedures, labour Court procedures and procedures on recognition and enforcement of foreign judgments and foreign arbitral awards was passed by the National Assembly of Vietnam at its 5th Meeting on 15 June 2004, and became effective on 1 January 2005.

Under the CPC, District People’s Courts can, subject to a few exceptions involving foreign parties, hear all civil, marital and family disputes; most cases involving civil, marital and family issues; most economic disputes² and all labour disputes between an individual employee and an employer.

The Provincial People’s Court and the Supreme People's Court are themselves divided into specialist Courts, which deal with specific criminal, civil, economic, labour and administrative disputes. Provincial People’s Courts hear all cases not under the jurisdiction of District People’s Courts and any cases which it requires the District People’s Court to transfer to it. Generally, proceedings must be commenced in the Court of the province or district where the defendant resides or works or has its head office, or where the performance of a contract was to take place.

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¹The CPC distinguishes between “disputes” and “issues”, and provides detailed examples of each.

²Except for those relating to air or sea transportation of passengers and cargo; sale and purchase of shares, bonds or valuable papers; investment, finance, banking; insurance; exploitation, exploration; disputes on intellectual property rights, technology transfer for profitable purposes; and disputes between a company and its shareholders or between shareholders of a company.