Commercial mediation in Vietnam is a voluntary, confidential process in which a neutral mediator, either from a registered commercial mediation centre or an individual commercial mediator, helps the parties negotiate their own settlement. The mediator cannot impose a decision. If the parties settle, they sign a written settlement, which they can ask a Vietnamese court to recognise so that it becomes enforceable like a judgment.
Mediation has a formal legal framework for business disputes in Vietnam, and several arbitration centres run mediation services alongside arbitration. Foreign companies often underuse it, either because they assume it is a formality or because they fear it signals weakness. Used well, it can settle a dispute in weeks, preserve a supply chain or joint venture, and keep the matter private. This guide explains how it works, what to prepare, and the steps that make a mediated deal stick.
What commercial mediation covers and who the mediators are
Commercial mediation is designed for disputes arising from commercial activities, between parties at least one of which is engaged in business, and for other disputes the law allows to be mediated in this way. Distribution disagreements, unpaid invoices, quality claims, construction delays, licensing disputes and shareholder tensions are typical examples. Family, criminal and administrative matters follow different rules.
Mediators come in two forms. Commercial mediation centres are organisations established under Vietnamese law that keep lists of mediators and administer cases under their own rules. Individual commercial mediators can also be registered and act on a case without an institution. Mediators must meet legal criteria such as relevant qualifications, experience and good standing, and registration is handled through the provincial justice authorities. Foreign commercial mediation organisations may establish a presence in Vietnam under the applicable rules.
Unlike an arbitrator or judge, a mediator has no power to decide. Their job is to structure the conversation, help each party test its own position, carry proposals between the parties when direct discussion stalls, and help put any deal into clear written terms. A good mediator for a cross-border dispute understands both the business context and how each side’s culture approaches negotiation and concession.
How a mediation usually runs
Every centre has its own rules, but the sequence is broadly similar:
- One party proposes mediation, either because the contract requires it or by suggesting it after a dispute arises. The other party must agree; mediation cannot be forced on an unwilling party unless the contract makes it a precondition.
- The parties choose a centre and a mediator, or an individual mediator, and sign a mediation agreement covering confidentiality, fees and the mediator’s role.
- Each party sends a short written summary of the dispute, its interests and key papers. These are often shared only with the mediator unless the party agrees otherwise.
- The mediator holds a joint session where each side presents its view, followed by private sessions with each party separately to explore options frankly.
- Proposals move back and forth, sometimes over several sessions. Either party can end the mediation at any time.
- If agreement is reached, the parties sign a written settlement setting out exactly who does what and by when. If not, the mediator closes the process, and the parties move on to arbitration or court.
Sessions can be held in person in Hanoi, Ho Chi Minh City or elsewhere, or online, which is helpful when the foreign party’s decision makers are abroad. Agree in advance who will attend and make sure someone with authority to settle is present or reachable.
Choosing a mediator and a centre
Because the mediator has no power to decide, their skill is the whole product. Look for experience in your type of dispute, whether that is construction, logistics, franchising or a shareholder disagreement, and for a working command of the language you need. A mediator who can switch between English and Vietnamese, and who understands how decisions are made inside both a foreign head office and a Vietnamese family-run company, can bridge gaps that a purely legal expert might miss.
Ask the centre for short profiles of candidate mediators and, if possible, a brief call before appointing one. Check for conflicts: prior work for the other party, its group, or its lawyers. Agree on whether the mediator will only facilitate the conversation or may, if both parties ask, give a non-binding view on the strengths of each side. Both styles exist, and mixing them without agreement can upset the process.
When choosing a centre, compare its rules on confidentiality, fees, the possibility of online sessions, and how it handles a later arbitration if mediation fails. Using one institution for both steps can keep costs and timelines under control, but it is not required. The contract clause, if it names a centre, prevails over these preferences.
Confidentiality and "without prejudice" thinking
What is said stays in the room. Mediators must keep information confidential, and centre rules generally restrict the use of mediation communications in later proceedings. That allows both sides to discuss options honestly without fear that a concession will be used against them.
Do not assume foreign rules apply. The common law idea of "without prejudice" privilege does not transfer automatically to Vietnamese proceedings. Rely on the confidentiality terms in the mediation agreement and centre rules, and state them clearly in writing.
The mediator should not switch roles. Ethical rules and centre practice generally prevent a mediator from later acting as arbitrator or as a representative of a party in the same dispute, unless the parties agree otherwise. That protects the frankness of private sessions.
Pre-existing evidence remains evidence. A contract or email that exists independently does not become confidential simply because it was shown in mediation. Only what is created for and within the mediation is protected. Mark mediation papers clearly so they are not mixed into later evidence bundles by mistake.
Turning a settlement into something enforceable
A signed settlement agreement is a contract. If one party breaks it, the other can sue on the settlement, but that means starting a new dispute. To avoid that, Vietnamese law offers ways to give the settlement stronger force.
The main route for out-of-court mediation is to ask the competent court to recognise the successful mediation result. The court checks conditions such as the parties’ capacity, that the settlement was voluntary, that it does not violate prohibitions of law or social ethics, and that it does not harm the rights of third parties. If recognised, the decision can be enforced through the civil judgment enforcement system. A time limit applies for making the request after the settlement is signed, so plan for it when signing.
If an arbitration has already started, the parties can instead ask the tribunal to record the settlement in a decision recognising their agreement, which has the effect of an award. For settlements that need to be enforced outside Vietnam, consider whether the relevant countries recognise mediated settlements under their own law, and check the current status of international instruments such as the Singapore Convention on Mediation, which Vietnam had not joined at the time of writing.
Mediation, arbitration and court compared
Mediation is not a replacement for a binding forum; it sits in front of one. The table shows where it fits.
| Feature | Commercial mediation | Arbitration or court |
|---|---|---|
| Who decides | The parties, together | Arbitrators or judges |
| Can it be forced | Only if the contract makes it a precondition | Yes, once validly invoked |
| Confidentiality | High, under the mediation agreement and centre rules | High in arbitration, lower in court |
| Outcome | Settlement contract; enforceable after court recognition or as a consent award | Binding award or judgment |
| Relationship | Often preserved; solutions can be creative, such as new orders or adjusted terms | Often damaged; remedies mostly money or declarations |
Because mediation does not decide anything, it works best when both sides have a reason to settle: cost, time, a continuing relationship, or uncertainty about winning. When one side simply refuses to pay a clear debt, a binding forum may be needed from the start. Mediation can still be attempted in parallel with arbitration or a court case; starting proceedings sometimes brings a reluctant party to the table, and a settlement ends the case.
Getting the most out of a mediation as a foreign party
Prepare as seriously as for a hearing. Know your best realistic outcome if mediation fails, the likely cost and time of arbitration or litigation, and the commercial value of keeping the relationship. Set your authority to settle before the session, and if head office must approve, arrange for decision makers to be available in the right time zone.
Respect the negotiation style. Vietnamese counterparts often value relationship, face and seniority. Direct accusations in a joint session tend to harden positions, while acknowledging the other side’s efforts and saving detailed criticism for private sessions with the mediator usually works better. Bring someone who can read the cultural cues as well as the legal points. Silence or an indirect answer does not always mean refusal; it may mean the person in the room needs to consult someone more senior before moving.
Finally, draft the settlement precisely. Name each payment, delivery or action with dates, state what happens if a deadline is missed, and include a clause on how the settlement itself will be enforced, whether through court recognition or another route. Ensure the Vietnamese and English versions match.
When you need a Vietnamese lawyer
You can mediate without a lawyer, and some parties do. A Vietnamese lawyer becomes valuable before mediation, to assess your legal position realistically and choose a suitable centre and mediator, and at the end, to draft or review the settlement so that it can be recognised by a Vietnamese court. Counsel can also advise whether any part of the settlement, such as transfers of land use rights or changes to a licensed business, needs separate procedures or approvals that the settlement cannot replace.
Counsel can also help you prepare the short position paper for the mediator. A clear, measured summary of the facts and the evidence, without overstatement, helps the mediator test the other side’s assumptions in private sessions, and it is the first sign to the other side that you are prepared for a binding forum if talks fail.
If the dispute involves significant sums, a state-linked counterparty, or several related contracts, bring counsel in from the start. For a first orientation on whether mediation suits your dispute, you can ask a lawyer on AI Co Van (aicovan.com). Check the current rules and fee schedules of mediation centres directly, and confirm the court recognition procedure and time limits with a licensed lawyer.
Frequently asked questions
Is mediation compulsory before arbitration in Vietnam?
Not in general for commercial disputes. It becomes compulsory only if your contract makes it a precondition, for example a clause requiring mediation for a set period before arbitration. Some other kinds of disputes, such as certain labour and land matters, have their own mandatory steps.
Can the mediator decide who is right?
No. A mediator helps the parties reach their own agreement and cannot impose a decision. Some mediators will give a view on strengths and weaknesses if both parties ask, but that view is not binding on anyone.
Is a mediated settlement enforceable in Vietnam?
A signed settlement is binding as a contract. To make it directly enforceable through the civil judgment enforcement system, the parties can ask a competent court to recognise the successful mediation result, within the time limit and conditions set by law.
Can we mediate online with the other party in Vietnam?
Yes. Many centres conduct mediation online or in hybrid form, which suits foreign parties whose decision makers are abroad. Agree on technical arrangements, confidentiality and who will attend before the first session.
How much does commercial mediation cost?
Fees depend on the centre or mediator, the amount in dispute and the time involved, and are generally lower than arbitration. Each centre publishes its own schedule, so check current fees directly. Your own lawyer’s fees are separate.
What if mediation fails?
The parties remain free to use arbitration or court as agreed in their contract. Confidentiality rules generally prevent the other side from using your mediation proposals as evidence, so a failed mediation should not weaken your position later.