The Role of Commercial Arbitration in the Resolution of Economic Disputes

January 14, 2026

1.Benefits of Commercial Arbitration

Commercial arbitration is a dispute resolution mechanism for disputes arising from commercial activities and is established based on the agreement of the disputing parties.

Commercial arbitration offers numerous advantages, including:

– Respect for the parties’ autonomy:
Commercial arbitration has jurisdiction only when there is a valid arbitration agreement, which is formed based on the free will of the contracting parties. During arbitral proceedings, the parties have the right to choose arbitrators, the applicable law, the place of arbitration, and the language used to resolve the dispute. This reflects the principles of freedom and self-determination in dispute resolution proceedings.

– Convenience and efficiency:
Arbitration procedures are simple and flexible. Arbitral awards are final and binding, not subject to appeal or cassation as in court proceedings, thereby expediting dispute resolution and saving time and costs for businesses.

– Protection of business confidentiality:
One of the fundamental principles and notable advantages of commercial arbitration is confidentiality. Arbitration proceedings are generally not conducted in public, which helps protect business secrets as well as the reputation and commercial strategies of enterprises.

– State-backed enforcement:voluntary compliance, the State guarantees the enforcement of arbitral awards in accordance with the Law on Civil Judgment Enforcement and permits coercive enforcement where a party fails to comply.

– Suitability for international disputes: Because arbitration is based on the will of the parties and does not involve the exercise of state authority, it is often chosen for disputes with foreign elements. Moreover, foreign arbitral awards are recognized and enforced in Vietnam and many other countries under the 1958 international convention, facilitating cross-border commercial activities.

2.Arbitration Procedures for Dispute Resolution

Submission of the statement of claim, acceptance, and notification: The claimant must submit a statement of claim to the arbitration center or directly to the respondent. The respondent may file a counterclaim related to the dispute. The statement of claim is sent to the arbitration center, the arbitral tribunal, and the respondent.

Submission of the statement of defense: Unless otherwise agreed by the parties or provided by the arbitration center’s rules, the respondent must submit a statement of defense to the arbitration center, the claimant, and the arbitrator within the statutory time limit. Where the claimant is subject to a counterclaim, the claimant must also submit a statement of defense to the arbitral tribunal, the respondent, and the arbitrator.

Constitution of the Arbitral Tribunal: Within the statutory time limit, each party shall select one arbitrator. If the respondent fails to select an arbitrator within the prescribed period, the President of the arbitration center shall appoint one on its behalf. The two selected arbitrators shall appoint a third arbitrator to act as the presiding arbitrator of the arbitral tribunal. If such appointment cannot be made within the statutory period, the President of the arbitration center shall make the appointment within seven days from the expiration of that period, in accordance with Articles 40 and 41 of the Law on Commercial Arbitration 2010.

Arbitral hearing and issuance of the arbitral award: The parties may attend the hearing in person or through authorized representatives. The arbitral tribunal may conduct the hearing based on available documents and evidence without requiring the parties’ physical presence (Article 56 of the Law on Commercial Arbitration 2010).

If the claimant, without a legitimate reason, fails to attend the hearing after having been duly summoned, or leaves the hearing without the tribunal’s consent, the claimant shall be deemed to have withdrawn the claim. If the respondent, without a legitimate reason, fails to attend the hearing or leaves without approval, the hearing shall proceed based on existing documents and evidence (Article 56 of the Law on Commercial Arbitration 2010).

At the hearing, the parties present their arguments regarding the dispute. The arbitral tribunal clarifies the issues based on the parties’ submissions, evidence in the case file, and witness testimony. For complex cases, the tribunal may organize pre-hearing exchanges. Upon completion of the proceedings, the arbitrators must issue an arbitral award that complies with the substantive and formal requirements stipulated in Clause 1, Article 61 of the Law on Commercial Arbitration 2010.

Once a valid arbitral award is issued, the obligated party must enforce it in accordance with the Law on Civil Judgment Enforcement.

3.Circumstances for the Application of Commercial Arbitration

The application of commercial arbitration is primarily governed by the Law on Commercial Arbitration 2010, particularly Articles 2 and 5. A mandatory condition is that the dispute must be subject to a valid arbitration agreement. For a dispute to be lawfully resolved by arbitration, two key conditions must be noted:

First, commercial arbitration has jurisdiction only over disputes arising from commercial activities and other disputes that are permitted by law to be resolved by arbitration (Article 2 of the Law on Commercial Arbitration 2010). Matters relating to marriage and family, labor, or administrative disputes fall within the jurisdiction of the courts.

Second, commercial arbitration may only resolve disputes that the parties have agreed to submit to arbitration (Article 5 of the Law on Commercial Arbitration 2010), and such disputes must fall within the scope of the arbitration agreement. The agreement must comply with the law and must not fall under circumstances rendering it invalid as stipulated in Article 18 of the Law on Commercial Arbitration 2010.

4.Roles of the Parties in Arbitration

The claimant and the respondent play central roles in arbitral proceedings through the submission of evidence, legal arguments, and participation in the proceedings. The claimant is the party whose legitimate interests are alleged to have been infringed and who initiates arbitration to recover those interests. The respondent is the party alleged to have caused damage to the claimant’s rights and interests and is therefore brought before arbitration. Both parties present arguments and evidence to defend their positions, giving rise to the arbitral process.

Arbitrators play the role of dispute resolvers, guided by principles of independence, impartiality, and professional expertise. The reputation, experience, and competence of arbitrators are decisive factors affecting the quality of arbitral awards. As neutral intermediaries, arbitrators must act fairly, possess a multidimensional perspective, and demonstrate genuine integrity in resolving disputes.

Arbitration centers play a supporting role in terms of organization, procedural administration, and case management, ensuring that dispute resolution proceedings are conducted in compliance with the law and in an efficient manner.

5.Reputable Arbitration Centers in Vietnam

Vietnam International Arbitration Centre (VIAC)

Ho Chi Minh City Commercial Arbitration Centre (TRACENT)

Asia–Pacific International Arbitration Centre (APIAC)

BIGBOSS Commercial Arbitration Center

Commercial arbitration plays an increasingly important role in resolving economic disputes, contributing to a stable, transparent, and efficient business environment. Choosing commercial arbitration is not only an optimal legal solution but also a prudent risk management strategy for enterprises in the context of a market economy and international integration.

6.Methods for Resolving Disputes through the BIGBOSS International Commercial Arbitration Center

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

6.1. Standard Arbitration Clause

“Any dispute arising from or in connection with this contract shall be finally settled by arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC) in accordance with its Arbitration Rules.”

In addition, the parties may agree to specify the following:

(a) The number of arbitrators shall be [one or three].
(b) The seat/place of arbitration shall be [city and/or country].
(c) The governing law of the contract shall be [ ].*
(d) The language of arbitration shall be [ ].**

Notes:
* Applicable only to disputes involving foreign elements.
** Applicable only to disputes involving foreign elements or disputes in which at least one party is a foreign-invested enterprise.

6.2. Model Arbitration Clause under the Expedited Procedure

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

In addition, the parties may agree to specify:

(a) The seat/place of arbitration shall be [city and/or country].
(b) The governing law of the contract shall be [ ].*
(c) The language of arbitration shall be [ ].**