When an investment dispute arises, many companies’ first reflex is litigation — arbitration or court. But between bilateral negotiation and “fighting” before an adjudicator lies a lesser-known middle path in Vietnam: commercial mediation under Decree No. 22/2017/ND-CP. For disputes with foreign elements, mediation offers advantages arbitration and courts struggle to match. This article analyzes the mechanism and procedures for mediating investment disputes in Vietnam.
1. What is commercial mediation? The legal framework
Decree No. 22/2017/ND-CP (issued February 24, 2017, effective April 15, 2017) defines commercial mediation as a method by which parties agree to resolve disputes with the assistance of a commercial mediator acting as intermediary (Article 3). Scope (Article 2): disputes arising from commercial activities; disputes where at least one party engages in commercial activities — covering most foreign-element investment and joint-venture disputes.
Mediation’s place on the investment dispute “ladder”: Article 13 of the Law on Investment 2025 (No. 143/2025/QH15, effective March 1, 2026) puts negotiation and mediation before arbitration and courts. Mediation is thus not only a tactical choice but a step aligned with the spirit of current investment law.
A distinction is needed: commercial mediation under Decree 22/2017 differs from court-annexed mediation (under the Civil Procedure Code) and from mediation conducted by an arbitral tribunal during arbitral proceedings. It is an independent, out-of-proceedings procedure the parties voluntarily choose.
2. Who may serve as a commercial mediator?
Not everyone may mediate under Decree 22/2017. Article 8 sets mediator qualifications, including: full civil act capacity; good moral character; a university degree or higher; at least 2 years of work experience; and training in commercial mediation skills. Mediators may practice independently or within commercial mediation organizations and branches of foreign commercial mediation organizations in Vietnam.
For foreign-element investment disputes, choosing a mediator versed in both Vietnamese law and international practice, experienced in the project’s sector (construction, real estate, energy, etc.) and fluent in the parties’ working language is the decisive success factor.
3. The mediation process: 5 steps
Step 1 — Mediation agreement. The parties agree to mediate — under a pre-existing mediation clause or an agreement made after the dispute erupts. The agreement should specify: the mediation organization/mediator, language, venue, time limit and costs.
Step 2 — Appointing the mediator. The parties jointly select one or more mediators. If they cannot agree, the commercial mediation organization assists appointment under its rules.
Step 3 — Preparation. Each side submits its case statement and documents to the mediator. The mediator may meet each party privately (caucus) to understand the real interests behind their positions.
Step 4 — Mediation sessions. The parties may agree on procedure or follow the mediation organization’s rules; absent agreement, the mediator proactively conducts the procedure deemed fit with the parties’ approval. Notably, the mediator may propose settlement options at any time during the process — unlike arbitrators (who render awards) and judges, the mediator is a solution architect, not an imposer.
Step 5 — Outcome. If successful: a written record of successful mediation signed by the parties and the mediator. If not: the parties are free to move to arbitration or court; what was exchanged in mediation remains confidential and may not be used as evidence against the other side in later proceedings (unless otherwise agreed).
4. Legal value of a successful mediation outcome
This point needs correct understanding: the written mediation outcome is a civil agreement binding the parties like a contract — but not automatically enforceable like an arbitral award. If one party does not comply voluntarily, the other may:
- Sue in court to enforce the agreement; or
- Request court recognition of the successful mediation outcome under civil procedures — once recognized, it becomes enforceable like a court decision.
Therefore, upon successful mediation, include sanctions for breach of the settlement (penalties, damages) to strengthen practical binding force.
5. When to choose mediation: pros and cons
Advantages: absolute confidentiality (no publicity as in trials); speed (weeks to months instead of years); far lower cost than international arbitration; preservation of the business relationship — especially vital for joint ventures wishing to continue cooperating; the parties own the solution (they can craft options no tribunal could order, such as restructuring cooperation or cross-offsets).
Disadvantages: entirely voluntary — mediation fails against a party acting in bad faith; outcomes lack direct enforceability; unsuitable where a deterrent, precedential ruling is needed, or where serious fraud has occurred.
Mediate when: disputes concern contract interpretation, schedules, quality, profit sharing — “technical” disputes where parties want to preserve the relationship. Do not when: urgent asset freezing is needed, the counterparty shows signs of dissipating assets, or the dispute turns on a legal principle needing authoritative clarification.
In short, commercial mediation is the missing piece in many FDI enterprises’ investment dispute “toolkit” in Vietnam: fast, confidential, cheap and relationship-preserving. With a complete framework since Decree 22/2017 and a priority position in Article 13 of the Law on Investment 2025, investors should consider multi-tier mediation clauses in contracts — so that when disputes arise, mediation is the first stop, not the last regret.
Prepared by the FLAW AI Legal Council. Content has passed internal QA panel review (Oct 15, 2026) and is pending approval before publication. General information only; not a substitute for legal advice on a specific matter.
