Commercial Arbitration and Issues Related to E-Commerce

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1.Characteristics of E-Commerce Disputes

E-commerce in Vietnam began to emerge around 1997 with the introduction of the Internet, while the early 2000s marked its rapid development. A notable milestone occurred in 2003, when the Ministry of Trade published the first official report on e-commerce and introduced it into academic curricula. As a relatively new and distinct field, disputes arising from e-commerce transactions exhibit several specific characteristics:

First, e-commerce transactions are highly cross-border in nature and frequently involve foreign elements. Such transactions are not constrained by geographical distance or the need for face-to-face interactions. As long as parties have Internet access, valid business licenses, and comply with tax obligations in the jurisdictions where they operate, they may engage in buying and selling activities regardless of distance. Consequently, disputes arising from e-commerce transactions often raise complex legal issues relating to the determination of the applicable law, dispute resolution forum, and the recognition and enforcement of arbitral awards or judgments.

Second, contracts and evidentiary materials are primarily in electronic form. E-contracts are commonly concluded through click-wrap agreements (online agreements requiring users to actively click or check a box to indicate acceptance of terms and policies), browse-wrap agreements (agreements deemed accepted through mere use or browsing of a website, usually embedded in hidden links or at the bottom of webpages and generally having lower legal enforceability), email communications, or digital platforms. When disputes arise, evidence typically consists of electronic data such as emails, payment histories, electronic invoices, and messages. Accordingly, the collection and legal assessment of electronic evidence must strictly comply with regulations on electronic transactions and procedural law.

“Article 34 – Electronic Contracts

An electronic contract concluded or performed through interaction between an automated information system and a person, or between automated information systems, shall not be denied legal validity solely on the grounds that there is no human review or intervention in each specific action performed by such systems.
(Law on Electronic Transactions 2023)”

“Article 9 – Legal Validity Equivalent to Originals

Electronic documents used in commercial transactions shall have the same legal validity as originals if they satisfy the following conditions:
(a) There is a reliable assurance of the integrity of the information contained in the electronic document from the time it was first created;
(b) The information contained in the electronic document is accessible and usable in a complete form when necessary.

Integrity is assessed on the basis that the information remains complete and unaltered, except for changes in form arising in the course of transmission, storage, or display.

Reliable assurance exists where one of the following measures is applied based on the agreement between the parties:
(a) The electronic document is signed using a digital signature issued by a lawful digital signature certification service provider;
(b) The electronic document is stored in the system of a licensed electronic contract certification service provider agreed upon by the parties;
(c) Assurance is provided by the merchant or infrastructure service provider responsible for creating, transmitting, and storing the electronic document regarding the integrity of the information during transmission and storage;
(d) Other measures mutually agreed upon by the parties.”

Third, the parties to e-commerce disputes are diverse and often involve third parties. In addition to buyers and sellers, disputes may involve intermediaries such as e-commerce platforms, payment service providers, logistics companies, or technology platform providers. This complexity gives rise to issues concerning the legal status, scope of liability, and rights and obligations of each party involved.

Fourth, although the number of e-commerce disputes is high, the value of each individual dispute is often relatively small. Such disputes commonly relate to product quality, delayed delivery, refunds, or violations of information disclosure obligations. Therefore, parties tend to prioritize fast, flexible, and cost-effective dispute resolution mechanisms, such as online negotiation, online mediation, or arbitration.

Fifth, there is a high demand for the protection of information security and personal data. During the dispute resolution process, parties must handle substantial volumes of business data and personal data, requiring strict compliance with legal regulations on data security and privacy protection.

Legal Framework Governing E-Commerce

Article 3 – Definitions

E-commerce activities refer to the conduct of part or the entirety of commercial activities by electronic means connected to the Internet, mobile telecommunications networks, or other open networks.
(Decree No. 52/2013/ND-CP)

In simple terms, e-commerce refers to online business activities conducted through the Internet or other networks, including transactions carried out via e-commerce platforms (such as Shopee, Lazada, TikTok, and Tiki in Vietnam), brand-owned online stores (e.g., Zara, Nike, Samsung, Apple), and application-based services (such as Grab, ShopeeFood, and Baemin).

E-commerce has experienced significant growth following the Fourth Industrial Revolution. According to the Southeast Asia E-Commerce Report 2020 by Google, Temasek, and Bain & Company, Vietnam’s e-commerce market grew by 16% in 2020, reaching a scale of over USD 14 billion. Online retail increased by 46%, ride-hailing and food delivery by 34%, digital media and gaming by 18%, while online travel declined by 28%. The report forecasted an average annual growth rate of 29% from 2020 to 2025, with Vietnam’s e-commerce market expected to reach USD 52 billion by 2025.

Pursuant to Article 2 of Decree No. 52/2013/ND-CP, entities participating in e-commerce include Vietnamese and foreign merchants, organizations, and individuals engaging in e-commerce activities within Vietnam, including foreign entities with a commercial presence through investment, branches, representative offices, or Vietnam-based domain names.

E-commerce websites are required to notify or register with the Ministry of Industry and Trade via the national e-commerce management portal and to publicly disclose information regarding ownership, goods and services, pricing, general transaction conditions, delivery methods, payment methods, and complaint resolution mechanisms.

3.Commercial Arbitration and Online Dispute Resolution

Commercial arbitration is a private dispute resolution mechanism primarily based on the agreement of the parties and governed by the Law on Commercial Arbitration 2010.

Online Dispute Resolution (ODR) refers to the use of information technology platforms to support or replace traditional dispute resolution methods. Currently, Vietnam has not yet enacted specific legislation governing ODR procedures. As a result, ODR generally follows three main stages similar to traditional dispute resolution methods:
(1) negotiation between the disputing parties;
(2) online mediation with the participation of a mediator;
(3) adjudication of the dispute.

In commercial arbitration, ODR may be applied at various stages, including electronic filing of claims and evidence, online exchange of submissions, virtual arbitral hearings, and electronic issuance and service of arbitral awards.

Commercial arbitration is considered the most suitable legal framework for the implementation of ODR due to its procedural flexibility, confidentiality, and independence from rigid court procedures. The combination of arbitration and ODR offers numerous advantages, including time and cost efficiency, suitability for small and medium-sized enterprises, facilitation of cross-border disputes, protection of confidential information, and enhanced access to justice in the digital era.

4.Notable E-Commerce Disputes

In 2019, L’Oréal, a globally renowned cosmetics company, initiated legal action against Shopee, a leading e-commerce platform in Southeast Asia, alleging that Shopee had become a marketplace facilitating the sale of counterfeit and imitation products bearing L’Oréal trademarks.

In 2020, Tri Viet Creative Culture Co., Ltd. (First News) filed a lawsuit against Recess Co., Ltd. (the operator of Lazada Vietnam) concerning the sale of counterfeit books on the platform.

Additionally, numerous disputes have arisen between consumers and online sellers or e-commerce platforms involving incorrect deliveries, wrong sizes, late delivery, or defective products.

5.Protection of Consumer Rights in E-Commerce

While e-commerce facilitates fast and convenient transactions without time and space limitations, consumers are often in a weaker position due to the lack of direct contact, reliance on digital platforms, and information asymmetry.

“Article 4 – Consumer Rights
5. Consumers have the right to request compensation for damages where goods or services are defective, fail to meet quality standards, or do not conform to information disclosed, advertised, or committed to by business entities.
(Law on Protection of Consumer Rights 2023)”

“Article 14 – Principles for the Protection of Legitimate Consumer Interests

Merchants are obliged to provide full and truthful information about the goods and services they supply and bear responsibility for the accuracy of such information.

Merchants must ensure the quality and legality of the goods and services they provide.
(Commercial Law 2005)”

Where e-commerce service providers merely provide information about goods or services, they are considered third parties under consumer protection law and may bear corresponding legal responsibilities pursuant to Decree No. 85/2021/ND-CP.

6.Dispute Resolution at the BIGBOSS International Commercial Arbitration Center

To resolve disputes through arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC), parties may include one of the following clauses in their contracts:

6.1. Model Arbitration Clause

“All disputes arising from or relating to this contract shall be resolved by arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC) in accordance with its Arbitration Rules.”

The parties may further agree on:
(a) the number of arbitrators [one or three];
(b) the place of arbitration [city and/or country];
(c) the governing law of the contract [ ];*
(d) the language of arbitration [ ].**

* Applicable to disputes involving foreign elements
** Applicable to disputes involving foreign elements or where at least one party is a foreign-invested enterprise

6.2. Model Arbitration Clause under the Expedited Procedure

“All disputes arising from or relating to this contract shall be resolved by arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC) in accordance with its Arbitration Rules. The parties agree that the arbitration proceedings shall be conducted under the Expedited Procedure as stipulated in Article 37 of the BBIAC Arbitration Rules.”

Parties may additionally agree on:
(a) the place of arbitration [city and/or country];
(b) the governing law of the contract [ ];*
(c) the language of arbitration [ ].**

For consultation, please contact: +84 979 133 955.

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