3 years after out-of-court commercial mediation was officially introduced to the public by Decree No. 22/2017/ND-CP (Decree 22), Vietnam took a step further to encourage disputants to settle their disputes amicably through mediation or dialogue before reaching court trial by enacting the Law on Court-Annexed Mediation and Dialogue on 16 June 2020 (the Law). The Law will enter into force on 1 January 2021. Different from out-of-court mediation, court-annexed mediation and dialogue (Court-Annexed Mediation or CAM) is a non-contentious dispute resolution mechanism conducted under the umbrella of courts and is optional to the parties before court trials.
Court-Annexed Mediation is aimed to promote efficiency in resolving parties’ disputes without recourse to a conventional court trial. This mediation is an opt-in solution for the disputants and is available to the disputants only before the competent court issues a notification on handling the lawsuit petition.
Court-Annexed Mediation will have a farther-reaching effect than out-of-court mediation under Decree 22 because it embraces a wide range of disputes such as disputes concerning civil transactions, commerce, labour, marriage and family as well as administrative disputes. Meanwhile, out-of-court mediation under Decree 22 is limited to commercial disputes only.
Once a lawsuit petition is filed to the competent court, the petitioner shall be informed of a Court-Annexed Mediation option and be requested to give a confirmation as to whether he/she would go for the Court-Annexed Mediation. If the answer is yes or there is no answer within the time limit, the court shall assign a judge to administer the contemplated mediation process. The in-charge judge shall then appoint a court-annexed mediator upon the parties’ agreement on the candidate to be mediator or otherwise the in-charge judge will appoint the mediator at its sole discretion.
The standard time limit for a mediation process is 20 days from the date of appointment of the mediator. In some typically complex disputes, the time limit can be 30 days. The time limit can be extended upon the parties’ mutual agreement but shall not exceed 2 months. The Law welcomes the use of technology in conducting mediation sessions (e.g. the parties can choose to organise mediation sessions through in-person or virtual meetings).
During the mediation process, either of the parties can pull out at any time if the party does not wish to continue the settlement with the other side. In case a settlement agreement is reached, the mediator and the in-charge judge will assist the parties record the settlement agreement in writing.
The settlement agreement once recorded in writing will be sent by the mediator to the competent court for its recognition. An official decision on recognition of the settlement agreement shall be issued within 15 days as from the date of the court’s receipt of the settlement agreement, unless the settlement agreement and/or the mediation process have any defects/irregularities affecting the validity of the settlement outcome (e.g. the objective of the settlement agreement is to avoid payment of taxes to the State).
The decision on recognition of the settlement agreement is final and not appealable. However, the settlement decision can be reassessed and revoked by a superior court if the settlement agreement and/or the mediation process have any defects or irregularities as mentioned above.
Someone can only be considered a qualified court-annexed mediator when he/she meets the following requirements:
1. be a Vietnamese citizen, have permanent residence in Vietnam and have civil capacities and good standing morality;
2. be a former or retired judge, a court examiner, a court clerk, a procurator, a prosecutor inspector, a civil judgment executor, an inspector; or have least 10-year practicing experience as a lawyer, an expert, or other professional; or have knowledge of Vietnamese customs and traditions and have earned respect within the community;
3. have experience in mediation and relevant skills;
4. have a good health; and
5. have obtained a court-annexed mediation certificate issued by a certified academy of the Supreme People’s Court of Vietnam (not applicable to certain former or retired judicial officers).
Court-annexed mediators appear to be subject to higher criteria than out-of-court commercial mediators. Persons being former or retired judges, court examiners, court clerks, procurators, prosecutors inspectors, civil judgment executors, inspectors, or lawyers and professionals with at least 10 years of working experience are prioritised to be assigned as a Court-annexed mediator, whereas those who want to become a commercial mediator do not need experience in a judicial profession but only need to have at least 2 years of working experience.
According to the Law, there will be no Court-Annexed Mediation fees for the disputants as these are covered by the State budget, except for disputants in a commercial dispute with a monetary claim. Fees in these commercial disputes mediation shall be calculated based on the dispute value sought by petitioners. To date, there is no further guidance on how to calculate the mediation fees of this type. It is expected that the guidance on calculation of such fees will be provided soon in a guiding decree.
Minh Nguyen / Senior Associate and Head of Dispute Resolution
Truong Le / Associate
This legal update is not an advice and should not be treated as such.
Open in pdf: Law on Court-Annexed Mediation and Dialogue