Regulations on settlement of commercial disputes by mediators

The Government on February 24, 2017 issued Decree 22/2017/ND-CP on commercial mediation (Decree 22).

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Question: What are outstanding points on Decree 22?

Answer:

Under Decree 22, the Government encourages parties in a dispute to use commercial mediation, which is a form of dispute settlement administered by a commercial mediator acting as an intermediary.

Conditions to become a commercial mediator

According to this Decree, commercial mediators refer to commercial ad hoc mediators and mediators in commercial mediation organizations selected by the parties or those appointed by commercial mediation organizations at the parties' request to help them settle a commercial dispute.

To become a commercial mediator, the following conditions must be met: (i) have full capacity for civil acts, prestigious, independent, impartial and objective; (ii) be university educated or more, and have at least two years’ experience in the professional sector; (iii) mediation skills; and (iv) has finished registration with the Justice Department of the province or the city under central authority where he/she permanently resides (or temporary residences for foreign registrants).

Persons who can’t be commercial mediators include: those who are the accused, defendants, serving or have served a criminal penalty (and their criminal records have not yet been cleared); people who are subject to an application an administrative penalty and have been required to participate in educational or drug rehabilitation.

Decree 22 especially prohibits mediators from disclosing information regarding their cases and clients during the course of mediation, unless agreed to in writing by the parties in dispute or otherwise regulated by law; receiving or requesting any amounts or benefits other than the agreed remuneration or charges by the parties. Upon any such violation, a mediator may be removed from the list of commercial mediators.

Conditions for settling disputes through commercial mediation

Decree 22 specifically prescribes that a dispute may only be settled by commercial mediation if the parties have a mediation agreement. However, the parties may get an agreement on dispute settlement before or after a dispute arises or any time during the course of a dispute settlement.

The order and procedure for commercial mediation

According to Decree 22, the location and time of mediation will be subject to the agreement between the parties or the mediator's decision in the absence of such an agreement.

The parties may choose the mediation rules of the commercial mediation organization for settling their dispute or agree by themselves on the order and procedure for mediation. If the parties do not have an agreement on the order and procedure for mediation, the mediator will proceed with the rules he/she deems appropriate for the circumstances and which are accepted by the parties. Any time during the course of mediation, commercial mediators have the right to propose solutions for settling disputes.

After completing a mediation process, the parties can record the minutes of the mediation and result. This document becomes valid and binding on the parties as prescribed by civil law. In the case of a request by the parties, this document may be considered for recognition in accordance with the civil procedure law. If a successful mediation result cannot be reached, the parties may continue mediation or request settlement by Arbitration or Court in accordance with law regulations.

The mediation procedure will be terminated when the mediation produces a result and/or the mediator thinks it is not necessary to continue mediation after consultation with the parties and/or at the request by one or more parties in dispute.

Commercial mediation organizations

Commercial mediation organizations include commercial mediation centers which are established and operate under legal regulations, have their own legal entity status, stamps and accounts and which operate not-for-profits, and arbitration centers which are established and operate under the law on commercial arbitration and perform the activities of commercial mediation. This decree took effect as from April 15, 2017./.

(Source:VGP)

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