Commercial Mediation in Vietnam: What Practitioners Need to Know

Vietnam’s legal framework on mediation is fragmented and multi-layered, reflecting the country’s ongoing efforts to reform dispute resolution and enhance judicial efficiency. Mediation is recognised and encouraged across a broad range of legislation as a consensual method for resolving disputes, including civil, commercial, labour, land, and family matters, with each category of dispute governed by its own legislative instrument.

Within this broader landscape, commercial mediation occupies a distinct and more narrowly regulated position. It is governed specifically by Decree No. 22/2017/ND-CP, issued by the Vietnamese Government on 24 February 2017, which remains the sole legal instrument regulating commercial mediation activities in Vietnam (“Decree 22”). Article 1 of Decree 22 further delineates its scope by clarifying that self-mediation between parties, or mediation conducted by individuals or organisations that are not recognised commercial mediators or commercial mediation organisations under the Decree, is conducted based on party agreement and applicable laws, but falls outside the regulatory framework of Decree 22.

“Commercial” Disputes Within the Scope of Decree 22

Decree 22 applies exclusively to commercial disputes. To initiate commercial mediation, the parties must have an agreement to mediate, and the dispute must fall within the scope defined in Article 2. Specifically, Article 2 covers three categories of disputes: (i) disputes arising from commercial activities; (ii) disputes in which at least one party engages in commercial activities; and (iii) other disputes that the law expressly allows to be resolved through commercial mediation.

Although Decree 22 does not itself define “commercial activities,”. Interpretative guidance may be drawn from Article 3(1) of the Commercial Law, which characterises such activities as profit-oriented conduct, including the sale and purchase of goods, provision of services, investment, trade promotion, and other transactions undertaken for profit-making purposes. On this basis, disputes falling within the first two categories of Article 2 commonly include disputes arising from sales and service contracts, distribution and construction agreements, corporate internal disputes, and apartment sale contracts between individuals and business entities. The third category is illustrated by statutory provisions such as Articles 54(1)(b) and 63(1)(b) of the Law on Protection of Consumers’ Rights, which allow disputes between consumers and business entities to be resolved through commercial mediation. The notion of “commercial” disputes under Vietnamese arbitration law is discussed elsewhere on the Kluwer Arbitration Blog.

Successful Mediation Outcomes in Vietnam

Article 3(4) of Decree 22 defines a successful mediation outcome as an agreement reached between the disputing parties on the resolution of part or the entirety of the dispute. This formulation reflects a relatively flexible approach when compared with arbitration under the Law on Commercial Arbitration, which requires an arbitral award to finally resolve the whole merits of the dispute and terminate the arbitral proceedings.

Once a successful mediation outcome is reached, the parties are required to record it in a written mediated settlement agreement (“MSA”). Such an agreement is legally binding on the parties and enforceable in accordance with the rules of civil law, if it is signed by both the parties and the commercial mediator. The statutory requirements relating to the qualifications of commercial mediators under Vietnamese law are discussed discussed elsewhere on this Blog.

Where mediation does not result in a successful outcome, the parties remain free to continue mediation or to pursue other dispute resolution avenues, including arbitration or litigation, in accordance with the applicable law.

Recognition and Enforcement of Mediated Settlement Agreements in Vietnam

A MSA may be submitted to a Vietnamese court for recognition in accordance with the Civil Procedure Code (“CPC”). Articles 417 to 419 CPC establish a specific mechanism for the judicial recognition of a MSA reached outside court proceedings. Under Article 417, recognition is subject to several cumulative conditions: the parties must have full civil capacity; they must be the proper holders of the rights and obligations under the settlement (with the consent of any affected third party, where relevant); at least one party must apply for recognition; and the settlement must be entered into voluntarily, without contravening prohibitions of law, social morality, and without being used to evade obligations owed to the State or third parties.

Article 418 CPC governs the application procedure, requiring a request for recognition to be filed within six months from the date on which the successful mediation outcome is reached. The application must include the information prescribed by law, the name and address of the individual or organisation that conducted the mediation, and the content of, and agreement on, the successful mediation outcome for which court recognition is sought. Together with the application, the applicant must submit a MSA. Article 419 CPC provides for an expedited and largely document-based process, under which the court examines the application within prescribed time limits. Where these statutory requirements are met, the court will issue a decision recognising the MSA. Such a decision takes immediate effect, is not subject to appeal to a higher court, and is enforceable under the Law on Civil Judgment Enforcement.

Nevertheless, a refusal to grant recognition does not affect the validity and substantive content of the MSA, as expressly stipulated in Article 419(6) of the CPC.  This is consistent with the contractual nature of an MSA as a purely civil agreement, such that any challenge to its validity must be addressed under the law of contract.

In this context, an MSA is confined to commercial mediation conducted in accordance with Decree 22, as discussed in Article 1 above. While this statutory framework provides much-needed clarity for commercial mediation within Vietnam, it leaves unresolved the question of whether a MSA reached through foreign mediation organisations or under non-Vietnamese institutional rules can be recognised and enforced in Vietnam.

Conclusion

For parties considering mediation in Vietnam, the key issue is not whether mediation is effective, but how it is structured. Only commercial mediation conducted in accordance with Decree 22 benefits from a clear and effective recognition and enforcement mechanism before Vietnamese courts. By contrast, MSAs reached under foreign mediation rules or through overseas mediation organisations where no representative office is registered in Vietnam currently face legal uncertainty at the recognition and enforcement stage in Vietnam.

Against this backdrop, Vietnam’s possible accession to the Singapore Convention has emerged as a timely and much-debated development. As noted in the Ministry of Justice’s Report on Vietnam’s Possibility to Accede to the Singapore Convention, accession would require targeted amendments to domestic legislation to ensure legal compatibility. If pursued, such reforms would significantly enhance the enforceability of international MSAs and mark an important step towards integrating Vietnam into the global mediation framework.