Transaction at VPBank Ha Thanh office in Hanoi (Source: VNA)The conference, named ‘Benefits and Challenges of Using ADR for BankingDisputes’, focused on the principles, conditions and procedures of commercialmediation as an ADR method, as well as the conditions for establishment ofmediation centres in Vietnam and the implementation of Decree 22 on commercialmediation, which has been in effect since April 15, 2017.
According to the decree, the settlement of disputes via trade reconciliationmust ensure the principle of voluntarism and equality in terms of rights andduties between parties to the disputes who participate in reconciliation, said NguyenThi Mai, Deputy Head of the Justice Support Department.
Inrecent years, global banks and financial institutions have considered many ADRmethods like Meditation and Arbitration as an effective way to solvedisagreements. According to Tran Huu Huynh, VIAC’s Chairman, this trend arosedue to the need for a customised dispute resolution mechanism for the financialsector which must also ensure efficiency and promptness.
TruongThanh Duc, Chairman of the Legal Club Bank of the Vietnam Bank Association,agreed with Huynh, saying that on average, a financial or credit dispute takesthe litigation court two to three years to reach a final ruling. An arbitrationcourt should take only five to six months. And even at a normally higher legalfee, arbitration methods have proved more effective and specialised than thetraditional court, particularly in cases involving foreign entities.
Nina Mocheva, a World Bank Dispute Resolution Specialist, said at theconference that World Bank had been working closely with Vietnam and the VIACsince 2013, and that they are deeply impressed by the country’s arbitrationmodernisation.
However,Mocheva also raised her concern over the temporary lack of legal framework andpractical application of ADR methods in Vietnam.
In response to Mocheva’s insight, Mai suggesteda number of possible improvements, such as the Supreme People’s Court ofVietnam taking responsibility in encouraging firms and organisations working inthe financial dispute resolution field to popularise ADR methods, and theMinistry of Justice proactively completing an absolute and uniform tradedispute resolution legal framework. She was also in favour of involved partiessolving disputes through negotiation and appeasement before taking matters tocourt.
Similar to arbitration, commercial mediation is only applicable when concernedparties have entered a mediation agreement before or after the dispute hasarisen, or at any point during the dispute resolution process.
The conference included two discussion panels in which representatives fromcommercial banks, credit organisations and legal firms discussed the future ofADR methods in Vietnam with the speakers.
Michael Hwang, member of the Chartered Institute of Arbitrators, proposed acomprehensive approach to ADR, with trade mediation support from both theVietnamese government and courts.
Hwang recommended ADR methods in commercial arbitration on the ground of bothparties being able to employ lawyers of choice, which proves effective for bothfinancial institutions and financial service users.
At the conference, VIAC’s Deputy Secretary General Phan Trong Dat also introduceda model arbitration clause reserved for the banking and credit sectors, dividedinto two categories for credit contracts and contracts of guarantee in order tocover all credit activities.-VNA
VNA
