Trade dispute


What is trade dispute?

Trade disputes are conflicts of rights and obligations between parties in the course of carrying out commercial activities.

Characteristics of trade disputes

Trade disputes are conflicts of rights and obligations between parties in a specific relationship, which can be mentioned as:

  • Buying and selling goods, providing services; lease, lease purchase; build; freight; buying and selling bonds, stocks; financial investment, banking.
  • Disputes on intellectual property rights and technology transfers between individuals and organizations are for profit purposes.
  • Other business and commercial disputes prescribed by law.

Second, conflicts arising from commercial activities, due to the breach of the contract, the law violation of the parties to the commercial contract relationship, damages the interests of the other party.

Third, commercial disputes are mainly disputes between traders. In addition, other individuals and organizations can also be the subject of commercial disputes when in transactions, the non-profitable party chooses to apply commercial law.

Classification of trade disputes

Trade disputes are divided into the following categories:

  • Based on the territory: domestic commercial disputes and international trade disputes.
  • Based on the number of disputing parties: bilateral commercial disputes and multilateral commercial disputes.
  • Based on the field of dispute: disputes related to contracts, disputes over intellectual property, investment, ...
  • Based on the implementation process: disputes in the process of negotiating, drafting, signing the contract and disputes during the performance of the contract.
  • Based on when the dispute arose: current and future commercial dispute.
Form of trade dispute resolution

Trade dispute resolution form

Currently, according to the law, there are all 4 methods of dispute resolution, they are: Negotiation, Mediation, Court or Arbitration.

  • Negotiation: is a method of resolving disputes through the disputing parties together to discuss, self-mediate, and remove disagreements arising to remove the dispute without the assistance or judgment of the any third party.
  • Mediation: is a method of dispute resolution with the participation of a third party mediate to assist and persuade the disputing parties to seek solutions to eliminate a dispute that has arisen.
  • Settlement of commercial disputes by court: is a method of resolving disputes at the hearing agency in the name of state power, which is done by the court according to a strict and strict order and procedures.
  • Settlement of commercial disputes by commercial arbitration is a method of settlement through arbitration activities with the end result being an arbitral award forcing the parties to respect and comply.

Characteristics of each dispute resolution method

* Negotiation method

  • Is done by a self-resolution mechanism through the disputing parties meeting to discuss and agree to resolve the disagreements without the presence of a third party.
  • The negotiation process between the parties is not bound by the legal provisions on settlement order and procedures.
  • With this method, the implementation of the outcome of the negotiation completely depends on the willingness of each disputing party without any legal mechanism to ensure the enforcement of the agreement of the parties in the negotiation process.

* Mediation method

  • Participating of a third party as an intermediary to seek a dispute resolution;
  • The mediation process of the disputing parties is not governed by the stereotypical and mandatory provisions of the law on mediation procedures.
  • Like the negotiation method, successful mediation results completely depend on the willingness of the disputing parties without any legal mechanism to ensure the implementation of the commitments of the parties in the mediation process

* Settlement of trade disputes by court

  • The court only resolves trade disputes at the request of the disputing parties and the dispute must fall under the jurisdiction of the court.
  • Court rulings by judgments, rulings in the name of the state and guaranteed to be enforced by the power of state power.
  • The settlement follows a strict order and procedures through two levels of adjudication.

* Settlement of trade disputes by arbitration

  • To be conducted at the request of the disputing parties and the dispute must be under the arbitration's jurisdiction.
  • Subjects of trade dispute resolution are arbitrators.
  • A method that ensures the highest self-determination of the parties when the disputing parties can agree, agree on the choice of the arbitration center, arbitrator, place of resolution, applicable law.
  • The settlement is not public, ensuring confidentiality
Commercial sanctions


Commercial sanctions are sanctions resulting from contract breaches in commerce, determining the adverse legal consequences of the party breaching the contract.

The act of breach of contract in commercial trade may be failure to perform the contract, perform incompletely or improperly perform the obligations agreed upon by the parties in the commercial contract or as prescribed by law. .


Trade sanctions are always state-coercive for people who violate commercial laws.

This sanction is shown in legal documents.

As a form of liability of one party in a contractual relationship in trade to the other party of the contract, liability of the violating party to the party breaching the contractual obligations.

Performing the function of impacting property on the breaching party, which means that the violating party will have to bear negative consequences on the property when there is a breach of the contract.


According to the law, trade sanctions are applied when a party in a commercial contract breaches the commercial contract. That can be the acts specified by law or the acts agreed upon by the parties in the contract.

Circumstances do not apply to commercial sanctions

The breaching party is exempt from liability in the following cases:

  • An event of liability exemption as agreed between the parties occurs;
  • A force majeure event occurred;
  • The violation of one party is entirely due to the fault of the other party;
  • The violation of one party due to the implementation of a decision of a competent state agency that the parties could not know about at the time of signing the contract.

The breaching party will be obliged to prove in the above cases.

Types of sanctions in trade

The types of sanctions in trade are specified in Article 292 of the Law on Commercial 2005, including:

  • Forced to comply with the contract.
  • Violations.
  • Forced compensation.
  • Suspension of contract performance.
  • Suspension of contract performance.
  • Cancellation of contract.
  • Other measures agreed upon by the parties that are not contrary to the basic principles of Vietnamese law, international treaties to which the Socialist Republic of Vietnam is a signatory and international trade practices.
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