What is a commercial dispute? Commercial dispute resolution methods

In commercial activities, the occurrence of conflicts and commercial disputes is inevitable. It is considered a legal dispute and needs to be resolved transparently and effectively, ensuring the legitimate rights and interests of the concerned parties in compliance with the law. The following article of LTS LAW will explain in detail what a commercial dispute is, its characteristics, and methods of dispute resolution.

Commercial dispute

What is a commercial dispute?

Commercial or business disputes are understood as conflicts (disagreements or contradictions) over the rights and obligations between parties in commercial activities.

Conflicts arising from everyday business activities such as breach of contract and violation of contract regulations of a party during the performance of commercial and business agreements affect the legitimate rights and interests of the other party. Most commercial disputes arise from traders (legal entities, business individuals, companies) engaged in investment and business activities.

Characteristics of commercial disputes

Subjects of commercial disputes

The subjects of commercial disputes are mainly between traders or between traders and non-traders. Accordingly, a dispute is considered a commercial dispute when at least one party is a trader. However, there are also specific cases where other individuals and organizations may become subjects of commercial disputes. For instance, disputes between a company and its shareholders or company members in a company, those between shareholders or company members of a company related to the establishment, operation, merger, and dissolution thereof.

Areas of arising commercial disputes

Commercial disputes are disputes arising from commercial activities. According to the 2005 Commercial Law, commercial activities are for profit-making purposes, including the purchase and sale of goods, provision of investment services, business promotion services, and many other profitable activities.

Characteristics of commercial disputes
Characteristics of commercial disputes

Content of commercial disputes

In many cases, the basis for arising a commercial dispute is that one of the parties violates the agreed-upon commercial contract and infringes on the other’s legitimate rights and interests. However, it is also possible that there are violations infringing on the legitimate rights and interests of a party, but they do not cause any disputes.

Commercial disputes often involvere often conflicts of rights, obligations, and interests of the concerned parties in commercial activities. Most commercial relations are property-related relations by nature, therefore the disputes’ contents often impact the parties’ economic interests.

Common types of commercial disputes

Based on different legal bases, the types of commercial disputes are divided as follows:

Based on foreign elements of disputes

In this regard, commercial disputes include domestic, commercial disputes, and foreign-related commercial disputes.

Based on the number of disputing parties

Based on the number of disputing parties, commercial disputes are divided into two-party and multi-party disputes.

Types of disputes in commercial and business activities
Types of disputes in commercial and business activities

Based on the field of disputes

Based on the field of disputes, commercial disputes include disputes over trading, intellectual property, investment, and finance,…

What is commercial dispute resolution?

Commercial dispute resolution is a process by which the disputing parties, through appropriate forms and procedures, take necessary steps to eliminate economic contradictions and conflicts, thereby protecting their legitimate rights and interests.

Or in simple terms, commercial dispute resolution is a process to clarify the legitimate rights and obligations of the business parties, forcing the breaching party to perform its responsibilities as stated in the agreed-upon contracts or the law towards the affected party.

Commercial disputes resolution methods

According to the law, there are currently four (4) methods of dispute resolution available, including: negotiation, conciliation, court and arbitration. The specific characteristics of each method of commercial dispute resolution are as follows:

Negotiation

This method is carried out through amicable discussion, self-arrangement, and removal of disagreements arising between the parties to eliminate disputes without the assistance or judgment of any other third party.

The process of negotiation and resolution of disputes between the parties under this method is not legally bound according to the provisions of the law on the order and procedures for dispute resolution.

Resolution of commercial disputes by negotiation
Resolution of commercial disputes by negotiation

Negotiation results reached under this method depend entirely on the voluntariness of the disputing parties, without any legal mechanism to ensure the concerned parties’ performance of the reached agreements.

Conciliation

This commercial dispute resolution method involves a third party acting as an intermediary to help find a suitable solution to the dispute.

The conciliation process between the disputing parties is not governed by the mandatory and stereotyped provisions of the law on conciliation procedures.

Resolution of commercial disputes by conciliation
Resolution of commercial disputes by conciliation

Similar to the negotiation method, the conciliation results will depend entirely on the voluntariness of the disputing parties, completely without any legal mechanism to ensure the performance of the reached agreements.

Court

Features of the commercial dispute resolution method by court is that:

  • The court only proceeds resolution of commercial disputes at the request of the disputing parties, and at the same time, the dispute must fall under the jurisdiction of the court.
  • The process of conciliation through the court is recorded by judgments and decisions in the State’s name and is guaranteed to be enforced by the State’s
  • The dispute resolution process takes place in strict order and procedures through two (2) trial levels.
Commercial Dispute Resolution By Court
Commercial Dispute Resolution By Court

Arbitration

The method of commercial dispute resolution by arbitration has the following characteristics:

  • It is conducted at the request of the disputing parties, and at the same time, the dispute must fall under the jurisdiction of arbitration.
  • The persons in charge of resolving commercial disputes are arbitrators of an arbitration center.
  • This method ensures the highest right of self-determination between the disputing parties when the parties can reach an agreement on selecting an arbitration center, the number of arbitrators, the venue for arbitration, and applicable law.
  • Dispute resolution by arbitration is often kept private and confidential.
Commercial Dispute Resolution by Arbitration
Commercial Dispute Resolution by Arbitration

Requirements when resolving commercial disputes

Commercial disputes are considered an inevitable and objective phenomenon of a market economy. When a commercial dispute arises, it must be resolved transparently and effectively, ensuring the legitimate rights and interests of business entities and contributing to preventing violations of the law in commercial and business activities. Accordingly, the resolution of commercial disputes should meet fundamental requirements as follows:

  • The resolution process is quick and convenient without affecting commercial activities.
  • After resolving the dispute, it is necessary to ensure the restoration and maintenance of cooperative and trusting relationships between the concerned
  • Keep business secrets and the reputation of the
  • Dispute resolution options ensure economic (least expensive).

Introducing LTS LAWs commercial dispute resolution service

A commercial dispute is an issue that no one wants in commercial practice. However, in a dispute, a satisfactory solution must be found. LTS LAW’s commercial dispute resolution service will help you provide the most appropriate and effective dispute resolution solutions.

  • Advising on the rights and obligations between the parties in the business and commercial cooperation relationship.
  • Advising on determining the basis for resolving disputes and the legal basis for the commercial dispute resolution
  • Advising, preparing to contact, and negotiating with related parties in the dispute resolution
  • Conducting negotiations and conciliation between the parties in the dispute, representing the clients to negotiate and conciliate with their business partners.
  • Exchanging and guiding clients to collect evidence-related documents, providing information for the dispute resolution
  • Appointing authorized lawyers to meet and discuss with arbitration agencies, courts, and judgment enforcement agencies to protect clients’ legitimate
LTS LAW provides consulting services and supports to resolve commercial disputes
LTS LAW provides consulting services and supports to resolve commercial disputes

Thus, detailed information on commercial disputes has been updated in detail in the above article. If you have any difficulties or problems related to commercial dispute resolution, please contact LTS LAW immediately for advice on practical, fast, and accurate solutions.

Contact LTS LAW immediately for the most detailed advice:

LTS LAW    

Address: Room 602, Floor 6, 520 CMT8, Ward 11, District 3, HCMC, Vietnam

Email: contact@lts.com.vn

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