Scenario: two companies dispute a major contract but neither wants litigation: suits are slow, expensive and destroy a partnership still needed for seasons ahead. Commercial mediation — a neutral third party helping the two sides settle by themselves — is the mechanism designed for exactly this situation. This article presents Vietnam’s commercial mediation framework under Decree 22/2017/ND-CP and how to turn a mediated outcome into an instrument with real enforcement teeth.
The framework: commercial mediation under Decree 22/2017
Decree 22/2017/ND-CP (effective 15 April 2017) is the foundation text for commercial mediation in Vietnam. Core elements: a written mediation agreement — either a mediation clause in the contract or a separate agreement after the dispute arises; mediators chosen by the parties from a commercial mediation organisation’s list or ad hoc mediators registered with the Department of Justice; and voluntariness throughout — nobody is forced to the table, and nobody is forced to accept an outcome.
Alongside this out-of-court channel, Vietnam also has court-annexed mediation and dialogue under the Law on Mediation and Dialogue at Court 26/2020/QH14 for civil and commercial cases already in court; and mediation is a mandatory/preliminary step in certain specific fields (labour, grassroots land disputes). For ordinary B2B contract disputes, this article focuses on out-of-court commercial mediation — the most flexible channel, and the best at protecting business confidentiality.
The course of a commercial mediation
- Step 1 — Trigger the mediation agreement: one party files a mediation request under the clause/agreement; the parties settle on a mediation organisation or ad hoc mediator, the number of mediators, language and venue;
- Step 2 — Appoint the mediator and open sessions: under the organisation’s Mediation Rules (Article 14 of Decree 22/2017: parties may choose the rules and procedure; failing agreement, the mediator proceeds in a suitable manner the parties accept); the mediator may meet each side privately (caucus) and propose solutions at any time;
- Step 3 — Negotiate through the neutral: the mediator decides nothing — they translate «adversarial language» into options: rescheduling, partial write-downs, goods replacement, contract restructuring; nothing said in caucus crosses to the other side without permission;
- Step 4 — Close with a settlement record: if agreement is reached, the parties draw up the written record of successful mediation under Article 15, signed by the parties and the mediator — binding and enforceable between the parties under civil law.
Giving a mediated settlement enforcement teeth: court recognition
The inherent weakness of any voluntary settlement is: what if the other side reneges? Vietnam’s framework has a two-layer answer. Layer one: the settlement record is itself a binding civil agreement — a breaching party is sued on it like a breached contract. Layer two, stronger: under Article 16 of Decree 22/2017, the settlement record may be recognised under civil procedure law — the Court issues a decision recognising the out-of-court mediation result, and that decision is enforceable like a judgment: a non-voluntary performer faces coercive enforcement.
Drafting experience for clauses: write the dispute clause as a «ladder» — negotiation within X days → commercial mediation at a named organisation → arbitration or court. A clear ladder turns mediation into a disciplined mandatory step instead of a polite invitation to ignore; and when drafting the settlement record, write it like a judgment for yourself: amounts, payment schedule, late-payment sanctions, security — because that very document is what will be taken for recognition and enforcement.
Frequently asked questions
What is the legal basis for commercial mediation in Vietnam?
Decree 22/2017/ND-CP on commercial mediation is the main framework for out-of-court mediation: a written mediation agreement, mediators from mediation organisations or ad hoc mediators registered with the Department of Justice, procedure at Article 14 and settlement records at Article 15.
Is a mediated settlement binding and enforceable?
The settlement record is binding and enforceable between the parties under civil law. For direct coercive force, the parties ask the Court to recognise the out-of-court mediation result under Article 16 of Decree 22/2017 and civil procedure law — the recognition decision is enforced like a judgment.
How does mediation differ from arbitration?
A mediator renders no award: they help the parties reach their own settlement, the parties keep decision power and may leave the table anytime. An arbitrator issues a binding award like a judgment. Mediation is faster, cheaper, relationship- and confidentiality-friendly; if it fails, arbitration or court remain open.
If mediation fails, can what I said be used against me?
Mediation confidentiality principles guard this: exchanges in mediation, especially in private caucus with the mediator, are not disclosed to the other side without permission and should not be used as evidence in later proceedings. That is why parties can be candid about real options in the mediation room.
This article has been quality-reviewed by the FLAW AI Legal Council