MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS COMMERCIAL MEDIATION DEVELOPMENT - INTERNATIONAL EXPERIENCES AND LESSONS FOR VIETNAM Major: Economics Specialization: International Trade Policy and Law Full Name: Phan Thi Phuong Ha Noi, 2019 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS COMMERCIAL MEDIATION DEVELOPMENT - INTERNATIONAL EXPERIENCES AND LESSONS FOR VIETNAM Major: Economics Specialization: International Trade Policy and Law Code: 8310106 Full Name: Phan Thi Phuong Supervisor: Assoc. Nguyen Minh Hang, Ha Noi, 2020 STATEMENT OF ORGINAL AUTHORSHIP I hereby commit that this thesis is my sole work with the best devotion, endeavor and hard-working period given and there is no information used with the unauthorized data source. The research contents in this topic are completely honest and have not been used or published in any form. I guarantee that the master thesis has been carried out in conformity with the thesis writing regulation and process issued by the Foreign Trade University.
I would like to express my sincere and grateful thanks to Doctor. Nguyen Minh Hang, who enthusiastically guided me during my process of completing this study. Student: Phan Thi Phuong ACKNOWLEDGEMENT The process of writing this thesis is the continuous learning and researching process resulting in not only the solutions proposed in chapter 3 of the thesis but also various experiences and knowledge for the author. In completing this thesis, it is undeniable that the author has received recommendations, contributions and significant help from many people.
Foremost, it is the author’s honor and luck to have the guide of Associate Prof. Nguyen Minh Hang, my supervisor at Foreign Trade University who has a broaden knowledge and experiences in the fields of law and dispute settlement and I cannot thank her enough. I could not complete this thesis without her guidance and recommendations. Secondly, I would also like to give my thanks to the authors of the books and articles that I have referred to in this thesis.
My last appreciation is to the Faculty of Graduate Studies of Foreign Trade University for providing us – the after graduated students with helpful master course and the support during learning and writing thesis process Hanoi, February 28th 2020 Phan Thi Phuong TABLE OF CONTENTS STATEMENT OF ORGINAL AUTHORSHIP ACKNOWLEDGEMENT STATEMENT OF ORGINAL AUTHORSHIP .2 STATEMENT OF ORGINAL AUTHORSHIP .3 LIST OF TABLES .7 LIST OF ABBREVIATION .8 SUMMARY OF THESIS RESEARCH RESULT. Scope of study .8 CHAPTER 1: THEORETICAL FRAMEWORK. Overview of commercial disputes. Definition of commercial disputes.
Characteristics of commercial disputes. The definition of commercial disputes resolution. Methods to solve commercial disputes. Characteristics of Negotiation:.
Advantages of negotiation. Disadvantage of negotiation. Characteristic of arbitration. Advantages of arbitration.
Characteristic of litigation. Advantages of Litigation. Disadvantages of Litigation. Rationale of mediation.
Definition and characteristic of mediation. Advantages of mediation. Disadvantages of mediation. Type of mediation.
Commercial mediation process. First step - Agreement to mediate. Second step - Select mediator. Third step - Mediation conducted.
Forth step - Mediation closed. Commercial mediation in the international organization .28 CHAPTER 2: INTERNATIONAL EXPERIENCE ON APPLYING MEDIATION: STUDY OF SINGAPORE AND EU (ITALY). Mediation development over worldwide. On the countries’ aspect.
On the worldwide aspect. Mediation development in Singapore. Rationale for choosing Singapore case to study. Overview of mediation development in Singapore.
Legal frame work for mediation in Singapore. Support from Singapore’s Judiciary. Promotion from Singapore government. Singapore’s organizations for mediation.
Singapore Mediation Centre (SMC). Singapore International Mediation Centre (SIMC). Singapore International Mediation Institute (SIMI). Mediation development in EU.
Rationale for choosing EU case to study. The overview and legal framework for mediation in EU. The Italian Experience — An On/Off Switch. Experiences from Singapore and EU (Italy) .62 CHAPTER 3: RECOMMENDATIONS FOR THE DEVELOPMENT OF MEDIATION IN VIETNAM.
Vietnam’s approach on applying mediation. Vietnam economy review. Legal frame work for mediation. Legal issues arise when developing mediation in Vietnam.
Recommendations for Viet Nam. Developing the commercial legal environment .Forming Working group on commercial mediation .Orientation and improve legal framework on commercial mediation. Improving the mediator’s capacity. Raising public and business ‘s awareness.
For associations and enterprises. The legal affairs improvement. Improvement of information channel to the Government .93 LIST OF TABLES Table 1.1: Comparing ADR and Court Procedure .2: Comparison of 4 method of dispute resolution .1: Mediation legal document in EU .2: Estimated number of mediations per year in the EU in 2018. Mediations in Italy – First Semester 2018.
Number of incoming civil litigious cases in some dispute matters in Italian first instance courts.61 LIST OF FIGURES Figure 1.1: Commercial mediation process .1: Mediation process at SIMC .2: Time and money saving when using mediation compared to litigation .1: Value, growth rate of exports, imports and trade balance in 2011- 2019 period. Number of dispute cases of VIAC from 1993-2017.77 LIST OF ABBREVIATION ADR Alternative Dispute Resolution AFTA Asian Free Trade Agreement ASEAN Association of Southeast Asian Nations CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership EU European Union EVFTA EU-Vietnam Free Trade Agreement ICC International Chamber of Commerce UNCITRAL The United Nations Commission on International Trade Law VIAC Vietnam International Arbitration Center VMC Vietnam Mediation Center SMC Singapore Mediation Center SIMC Singapore International Mediation Center SIMI Singapore International Mediation Institution UN United Nations WB World Bank WTO World Trade Organization SUMMARY OF THESIS RESEARCH RESULT The thesis “Commercial Mediation development: international experiences and lessons for Vietnam” focuses on giving recommendation on how Vietnam can apply the experiences of developed jurisdiction around the world in promoting the Mediation in order to improve the country’s commercial dispute resolution context. Although witnessing the remarkable step forward in promoting alternative dispute resolutions in general and mediation in specific to solve commercial disputes, Vietnam regulation still possessed many drawbacks. From the overview of the mediation development worldwide and focusing on analyzing the cases of Singapore and EU, the thesis provides solutions on the aspect of the Government as well as enterprises to foster the domestic development of mediation in dispute settlement.
The solutions which have been found in the thesis resulting from outstanding cases study shall help the government issue more suitable policy and provides the deeper understanding for Vietnam enterprises on using Mediation to settle disputes as well as enhance their competitiveness in the international economy, improves the standard and conduct of mediator, fortify the enforceability of the mediation settled agreement award. Rationale In this era of international economic integration and flat world, all the economic borders are being erased and eliminated day by day which created valuable opportunities for countries and economies to enjoy their comparatives advantages and to do business cross borders. Along with this integration progress, Vietnam has been refocused every efforts to integrate with the worlds, taken part in bilateral and multilateral agreements such as AFTA, ACTA, CPTPP, EVFTA,…to seek for opportunities to strengthen and develop economy. Together with this development of economy and increasing of business opportunities are the rising in number of international commercial contracts between parties.
The diversity of nationality of the parties in a contract from all over the worlds with differences law sources and legal bases required the carefully preparation and discuss of applicable law and a well-written dispute settlement clause in the contract. In those agreements Vietnam has joined in, besides the regulations and detail of tariff, trade remedies, competition policy, and dispute settlement always plays an important part. However, for the developing countries like Vietnam whether the legal framework for commercial dispute resolution still has certain gap compared to developed countries’, the need for reforming and innovating the legal system on dispute resolutions to create a more effective and diverse legal corridor in accordance with international practices is becoming necessary than ever. For example, in the text of the EVFTA between Vietnam and EU there is a whole chapter – Chapter 15 which states about dispute settlement and two annexes about code for conduct for mediator and mediation mechanism which is an unpopular method of resolving dispute in Vietnam.
In the world, in the past, among other disputes settlement measures, mediation, which grown rapidly in many common law jurisdictions such as the US, Australia, England and Wales since the 1970s and 1980s, is relatively unpopular in civil law countries. However, recently, the dispute settlement by mediation is gaining more and more interests and applied in many cases in the European Union and civil law countries because of its undeniable advantages. 2 On August 7th, 2019, delegations from 70 countries, including about 1,600 leaders and government officials, businessmen, judges, lawyers and scholars gathered in Singapore to attend conferences and contract signing ceremony of the Convention. A total of 46 countries have signed in the Convention, including the two largest economies in the world (USA and China); three out of Asia's four largest economies (China, India and South Korea); and five ASEAN countries (Brunei, Malaysia, Laos, Philippines and Singapore).
The Singapore Convention is established to provide an internationally uniform framework to recognize and enforce mediated settlement agreements. In legal documents of Vietnam such as civil code, mediation is referred to as a method of resolving disputes without detail guidance and regulations especially the enforcement when the negotiation and conciliation complete. Due to the absence of a legal corridor, not only does advantages of these methods not being promoted, but also they, sometimes become the problems in the process of solving conflicts between parties, especially damages to those small and inexperienced traders. In recent years, the Government has paid more attention and efforts in promoting legal mechanisms on trade mediation.
In 2015, The National Assembly has promulgated the Civil Procedure Code, including an entire chapter to regulate the procedure for recognizing successful mediation results outside the court. Accordingly, the court will recognize the results of mediation conducted under the mediation procedure. On 24 February 2017, the Government of Vietnam promulgated Decree No.22/2017/ND-CP on Commercial Mediation (the “Decree”). It is the first legislation specifically governing commercial mediation in Vietnam.
This can be considered as a step forward the international trend of Vietnam. However, this is still a new concept and practices in Vietnam and need more studies and experiences from other countries. From 2007 to 2015, statitics of VIAC show that during that period, VIAC only settles 5 mediation cases but in 2019, through the VIAC, there have been 19 cases of disputes resolved by commercial mediation between both domestic and foreign enterprises and the parties continue to maintain trade relations with each other. On the morning of May 29th 2018, the Vietnam International Arbitration 3 Center held a launching ceremony of the Vietnam Mediation Center ("VMC"), under the Vietnam International Arbitration Center in Hanoi.
VMC is the first unit to provide professional commercial mediation services in Vietnam in accordance with Decree 22/2017/ND-CP dated February 24th 2017 on commercial mediation. VMC's Board of Directors includes leading and reputable experts in the business community as well as society. For all above-mentioned reasons, the author would like to look into this new approach of dispute settlement in Vietnam and see what advantages that mediation could have for the parties. Moreover, the author also wants to show the key points for question: “Can and how Vietnam be able to apply this method in practice to resolve the disputes in the future?”.
Consequently, with the desire to devote my knowledge to the better Vietnam’s dispute resolution aspects so as to keep pace with the global standards, the author selected the topic: “Commercial mediation development - international experiences and lessons for Vietnam”. Literature review Although commercial mediation has long developing journey all over the world, Vietnam’s mediation is still inexperienced and the term is new to some extent. As a result, there has not been any same or analogous topic up to the moment that the author has finished the paper.