Businesses and banks in Vietnam still resolve disputes through thecourts, even though arbitration and mediation remain the most popularmethods throughout the world in dealing with banking disputes.
Thispreference for using courts was discussed by General secretary of theVietnam Banking Association Tran Thi Hanh at a recent workshop on theUse of Arbitration and Mediation (A&M) in the resolution of bankingand financial disputes in Da Nang.
"Vietnam's economics has beendeeply integrated into the world and the regional economic community, sobanking and financial disputes have rapidly become more complicated.These need a quick, easy procedure in solving disputes for businessesand banks," Hanh said.
"Resolving banking disputes by arbitrationand mediation could help businesses and banks deal with arguments andrisks in a smooth way," she said, adding that the solution would be aneffective way to reduce bad debt in the banking system.
Hanh said the use of arbitration and mediation would be a method to reduce bad debt to under 3 percent in Vietnam.
Thegeneral secretary noted that legal proceedings on banking that gobefore judges often took a long time to resolve due to complicated legalissues.
Lawyer Vu Anh Duong, general secretary of VietnamInternational Arbitration Centre (VIAC), said arbitration and mediationhad additional advantages over courts in resolving financial or bankingdisputes, including providing flexibility, sincerity, honesty, fairnessand transparency.
"In banking and financial disputes, the stateencourages the use of arbitration, as it has a preferred legal frameworkand operates in accordance with international rules. Procedures atarbitrations are not complicated, as in civil court, and it's verycomfortable during arbitrations for communities and businesses," Duongsaid. "However, the use of arbitration and mediation has yet to be usedwidely in Vietnam, as people and businesses still are unsure of itslegislation and execution," he said.
Pham Chi Dung, deputy headof legal affairs under Bank for Investment and Development of Vietnam(BIDV), said arbitration resolutions in banking and financial disputesoffer a less complicated approach for businesses and individuals.
Hesaid arbitration could resolve a dispute within a year, using quick andeasy procedures, while civil tribunals often take two years.
VuNgoc Lan, deputy head of the Legal Affairs Department under the StateBank of Vietnam (SBV), said the use of arbitration is encouraged bybanks in dealing with bad debt.
"The SBV creates favourableconditions for banks and credit agencies in the use of arbitrationbecause of its effectiveness and the saving of time. The judgment ofarbitration has its prompt validity, while civil courts sometimes haveproblems with the civil execution law," Lan said.
According tothe VIAC, arbitration is conducted in 146 countries, while 124 legalproceedings in Vietnam were resolved by the VIAC between 1993 and 2014.However, banking and financial disputes only account for some 1 percentof the cases resolved, while 64 percent were commodity trade disputes.
Vietnam has 288 arbitrators, along with seven centres in Ho Chi Minh City, Hanoi and Can Tho.
Lastmonth, Vietnam National Oil and Gas Group (PetroVietnam) announced ithad won a major tax incentive dispute regarding a production-sharingcontract for a Vietnamese offshore oil concession, and the dispute wasresolved through international arbitration.-VNA
Thispreference for using courts was discussed by General secretary of theVietnam Banking Association Tran Thi Hanh at a recent workshop on theUse of Arbitration and Mediation (A&M) in the resolution of bankingand financial disputes in Da Nang.
"Vietnam's economics has beendeeply integrated into the world and the regional economic community, sobanking and financial disputes have rapidly become more complicated.These need a quick, easy procedure in solving disputes for businessesand banks," Hanh said.
"Resolving banking disputes by arbitrationand mediation could help businesses and banks deal with arguments andrisks in a smooth way," she said, adding that the solution would be aneffective way to reduce bad debt in the banking system.
Hanh said the use of arbitration and mediation would be a method to reduce bad debt to under 3 percent in Vietnam.
Thegeneral secretary noted that legal proceedings on banking that gobefore judges often took a long time to resolve due to complicated legalissues.
Lawyer Vu Anh Duong, general secretary of VietnamInternational Arbitration Centre (VIAC), said arbitration and mediationhad additional advantages over courts in resolving financial or bankingdisputes, including providing flexibility, sincerity, honesty, fairnessand transparency.
"In banking and financial disputes, the stateencourages the use of arbitration, as it has a preferred legal frameworkand operates in accordance with international rules. Procedures atarbitrations are not complicated, as in civil court, and it's verycomfortable during arbitrations for communities and businesses," Duongsaid. "However, the use of arbitration and mediation has yet to be usedwidely in Vietnam, as people and businesses still are unsure of itslegislation and execution," he said.
Pham Chi Dung, deputy headof legal affairs under Bank for Investment and Development of Vietnam(BIDV), said arbitration resolutions in banking and financial disputesoffer a less complicated approach for businesses and individuals.
Hesaid arbitration could resolve a dispute within a year, using quick andeasy procedures, while civil tribunals often take two years.
VuNgoc Lan, deputy head of the Legal Affairs Department under the StateBank of Vietnam (SBV), said the use of arbitration is encouraged bybanks in dealing with bad debt.
"The SBV creates favourableconditions for banks and credit agencies in the use of arbitrationbecause of its effectiveness and the saving of time. The judgment ofarbitration has its prompt validity, while civil courts sometimes haveproblems with the civil execution law," Lan said.
According tothe VIAC, arbitration is conducted in 146 countries, while 124 legalproceedings in Vietnam were resolved by the VIAC between 1993 and 2014.However, banking and financial disputes only account for some 1 percentof the cases resolved, while 64 percent were commodity trade disputes.
Vietnam has 288 arbitrators, along with seven centres in Ho Chi Minh City, Hanoi and Can Tho.
Lastmonth, Vietnam National Oil and Gas Group (PetroVietnam) announced ithad won a major tax incentive dispute regarding a production-sharingcontract for a Vietnamese offshore oil concession, and the dispute wasresolved through international arbitration.-VNA
