First-instance procedure: The first-instance procedure begins when a party files a Statement of Claim to the competent Court and is accepted for settlement by the Court. The first-instance procedure will end with a Court’s first-instance judgment or decision and can be appealed by the involved parties or protested by the Procuracy with the same level and the direct higher level (except for the Decision on recognition of the agreements by the litigants). According to Article 273, 2015 Civil Procedure Code (CPC), the time limit for appealing against the first-instance judgment is 15 days from the date of judgment pronouncement; for a party who was absent from the Court hearing or was absent at the time of pronouncement of the judgment for a plausible reason, the time limit for filing an appeal shall be counted from the date the judgment is handed over to him/her or publicly displayed. According to Article 280 of CPC, the time limit for the same level Procuracy to protest against the first-instance judgment is 15 days and that for the direct higher-level Procuracy is 01 month, counting from the date of pronouncement of the judgment.
The appellate procedure: means the re-trial by the Appellate Court of the case in which the first-instance judgment or decision has not taken legal effect yet and is appealed or protested against. Within 03 working days from the date of acceptance, the Appellate Court must send a written notice on acceptance for settlement of the case to the litigants, authorities, organizations, individuals initiating lawsuits and the same-level Procuracy regarding to the acceptance for settlement of the cases. The appellate judgment shall take legal effect from the date of its pronouncement.
The cassation procedure: means the procedure for reviewing an legally effective judgment or decision protested against for cassation when having one the following grounds:
- Conclusions in the judgment or decision are incompatible with the objective details of the case, causing damage to the legitimate rights and interests of the litigants;
- There is a serious violation against the procedural procedures that make the litigants unable to perform their procedural legitimate rights and obligations, resulting that their legitimate rights and interests are not protected in accordance with laws;
- There is an error regarding the application of law, resulting in the issuance of a wrongful judgment or decision, causing damage to legitimate rights and interests of a litigant, infringing upon public interests, the State’s interests or legitimate rights and interests of a third party.
Persons competent to protest according to cassation procedures are prescribed in Article 331 of CPC, as follows:
- The Chief Justice of the Supreme People’s Court and the Procurator General of the Supreme People’s Procuracy have competence to protest according to cassation procedures against legally effective judgments or decisions of Superior People’s Courts, and legally effective judgments or decisions of other Courts when deeming it necessary, except cassation decisions of the Judicial Council of the Supreme People’s Court.
- The Chief Justice of a Superior People’s Court and the Chief Procurator of a Superior People’s Procuracy have competence to protest according to cassation procedures against legally effective judgments or decisions of Provincial-level and District-level People’s Courts within their territorial jurisdiction.
The reopening trial procedure: means the review of a legally effective judgment or decision which is protested against due to the emergence of newly found details which may basically change the content of the judgment or decision and which were unknown to the Court and the parties when the Court rendered such judgment or decision. According to Article 352 of CPC, a legally effective judgment or decision shall be protested against according to reopening procedures when there is one of the following grounds:
- There are important details of the case have newly been found, which the parties could not know during the settlement of the case;
- There are grounds to prove that the conclusions of an expert witness and verbal translations of an interpreter are untruthful or that evidence was falsified;
- The Judge, People’s Assessor or Procurator intentionally distorted the case file or deliberately made unlawful conclusions; or
- The criminal, administrative, civil, marriage and family, business, commercial or labor decision of the Court or decision of a state agency on which the Court based itself to settle the case has been canceled.
The trial process and the time to settle the case
As stipulated in Article 203.1 of CPC, the time limit for preparation for first-instance trial for civil and marriage-family disputes is 04 – 06 months; for commercial and labor cases, it is 02 – 03 months. However, in fact, the Court is often overloaded when handling cases, and at the same time, the proceedings often take a lot of time in collecting documents and evidence; summoning the parties; serving legal documents; appraising, etc. Therefore, normally for civil cases to be settled at the first-instance procedure, the settlement time will be from 01 year or more; for complicated cases, this time will be longer.
In addition, the Court’s principle of hearings public, although considered progressive and deterrent, is sometimes an obstacle for businesses when business secrets as well as content of disputes will be disclosed that directly affects the business process.
Because of the above disadvantages, the form of dispute resolution by the Court is rarely chosen by businesses. Accordingly, dispute resolution by Court is often considered the last option when the methods of negotiation, mediation and Arbitration are not effective.
Arbitration is a method of dispute resolution agreed by the parties, used as an alternative dispute resolution other than by Court. According to Article 2, 2010 Law on Commercial Arbitration, disputes falling under the arbitration jurisdiction include:
- Disputes among the parties which arise from commercial activities;
- Disputes among the parties at least one of whom conducts commercial activities; and
- Disputes among the parties at least one of whom conducts commercial activities.
Each disputing party can propose and select an Arbitrator to settle the dispute, the selection of an Arbitrator will help the parties find the experts who are expertise in the field of the dispute, for instance: construction, intellectual property, investment cooperation dispute, etc.
Commercial Arbitration has many advantages such as simple and flexible procedures as agreed by the parties to resolve the dispute quickly. The parties can choose the language and the venue for the dispute resolution, in-person or online dispute resolution to create the best conditions for dispute resolution. Compared with the hearings public of the Court, dispute resolution by Arbitration helps the businesses keep confidential information about disputes as well as know-hows, limiting the impact on business operations.
Arbitration is an effective method of dispute resolution. Arbitration decisions or award are final, not subject to appeal or protest, binding the disputing parties without having to go to the Court. The time to resolve by Arbitration will also be faster than by the Court.
Regulated later than Arbitration, on February 24, 2017, the Government issued Decree No. 22/2017/ND-CP regulating commercial mediation (Decree 22). Accordingly, Article 3.1 of Decree 22 defines commercial mediation quite clearly: “Commercial mediation means a method of resolving commercial disputes agreed upon by involved parties with the assistance of a commercial mediator acting as an intermediary in accordance with this Decree”.
Commercial Mediation is understood as a method of resolving disputes outside the Court, not a procedural or adversarial process; a Mediator is a third party supports in resolving commercial disputes between the parties. The role of a Mediator is completely different from the Judge or Arbitrator. The Mediator is not the person who make decisions or judgments on the dispute, instead, the Mediator is the party supports the parties to reach an agreement to resolve the dispute.
However, not all disputes can be resolved through mediation under Decree 22. Article 2 of Decree 22 provides the scope of dispute resolution by mediation as follows:
- Disputes arising from commercial activities;
- Disputes between the parties at least one of them is engaged in commercial activities; and
- Other disputes which are prescribed by law to be resolved through commercial mediation.
After reaching on the successful mediation agreement, the parties need to request the Court to recognize the successful mediation agreement as specified under Chapter XXXIII of CPC.