Arbitration could solve disputes fast

14:21 | 23/06/2015 Economy

Businesses and banks in Vietnam still resolve disputes through the courts, even though arbitration and mediation remain the most popular methods throughout the world in dealing with banking disputes.

Arbitration could solve disputes fast

Arbitration in Viet Nam is expected to solve fast disputes in banking and finance areas (Photo

This preference for using courts was discussed by General secretary of the Vietnam Banking Association Tran Thi Hanh at a recent workshop on the Use of Arbitration and Mediation (A&M) in the resolution of banking and financial disputes in Da Nang.

"Vietnam's economics has been deeply integrated into the world and the regional economic community, so banking and financial disputes have rapidly become more complicated. These need a quick, easy procedure in solving disputes for businesses and banks," Hanh said.

"Resolving banking disputes by arbitration and mediation could help businesses and banks deal with arguments and risks in a smooth way," she said, adding that the solution would be an effective way to reduce bad debt in the banking system.

Hanh said the use of arbitration and mediation would be a method to reduce bad debt to under 3 percent in Vietnam.

The general secretary noted that legal proceedings on banking that go before judges often took a long time to resolve due to complicated legal issues.

Lawyer Vu Anh Duong, general secretary of Vietnam International Arbitration Centre (VIAC), said arbitration and mediation had additional advantages over courts in resolving financial or banking disputes, including providing flexibility, sincerity, honesty, fairness and transparency.

"In banking and financial disputes, the state encourages the use of arbitration, as it has a preferred legal framework and operates in accordance with international rules. Procedures at arbitrations are not complicated, as in civil court, and it's very comfortable during arbitrations for communities and businesses," Duong said. "However, the use of arbitration and mediation has yet to be used widely in Vietnam, as people and businesses still are unsure of its legislation and execution," he said.

Pham Chi Dung, deputy head of legal affairs under Bank for Investment and Development of Vietnam (BIDV), said arbitration resolutions in banking and financial disputes offer a less complicated approach for businesses and inpiduals.

He said arbitration could resolve a dispute within a year, using quick and easy procedures, while civil tribunals often take two years.

Vu Ngoc Lan, deputy head of the Legal Affairs Department under the State Bank of Vietnam (SBV), said the use of arbitration is encouraged by banks in dealing with bad debt.

"The SBV creates favourable conditions for banks and credit agencies in the use of arbitration because of its effectiveness and the saving of time. The judgment of arbitration has its prompt validity, while civil courts sometimes have problems with the civil execution law," Lan said.

According to the VIAC, arbitration is conducted in 146 countries, while 124 legal proceedings in Vietnam were resolved by the VIAC between 1993 and 2014. However, banking and financial disputes only account for some 1 percent of the cases resolved, while 64 percent were commodity trade disputes.

Vietnam has 288 arbitrators, along with seven centres in Ho Chi Minh City, Hanoi and Can Tho.

Last month, Vietnam National Oil and Gas Group (PetroVietnam) announced it had won a major tax incentive dispute regarding a production-sharing contract for a Vietnamese offshore oil concession, and the dispute was resolved through international arbitration./.

Source: VNA