Courts and the Civil Code
Commercial disputes are heard by the People's Courts, with jurisdiction allocated by value and by whether a foreign element is present. Proceedings are conducted in Vietnamese and documents require certified translation and, where executed abroad, consular legalisation.
Domestic arbitration through VIAC is well established and generally quicker than the courts. A VIAC award is enforced domestically through the ordinary enforcement authorities.
Three Years, and No Allowance for Negotiation
The Civil Code applies a three-year limitation period to a claim arising from a contract, running from when the claimant knew or should have known that its rights were infringed. Vietnamese courts apply it strictly and do not treat ongoing settlement discussions as a reason to relax it.
For a supplier this creates a specific trap. A Vietnamese customer that responds cooperatively to each reminder while paying nothing can run the clock out entirely within an otherwise normal-looking collections cycle. If a Vietnamese account has been rolling for more than eighteen months, the limitation position should be established before the next call is made.
Plan the Enforcement Route, Not Just the Clause
Vietnam is a party to the New York Convention, and a foreign arbitral award must be taken through a recognition process before the competent People's Court prior to enforcement. That review has historically produced a mixed record, with refusals grounded on procedural and public policy considerations occurring more often than in some regional neighbours.
The practical consequence is not that arbitration should be avoided, but that the clause deserves attention: how the tribunal is constituted, how notice is given and how the proceedings are documented all affect how a later recognition application is received. Where a Vietnamese counterparty is a significant credit exposure, that is a contract-stage decision rather than a dispute-stage one.
How Long Does a Vietnamese Claim Take?
| Stage | Typical Duration | Cost |
|---|---|---|
| Formal demand Written demand in Vietnamese, negotiation | 3–6 weeks | Low |
| People's Court claim First instance, foreign-related | 1–2 years | High |
| VIAC arbitration Domestic institutional arbitration | 8–15 months | High |
| Recognition of a foreign award Court review before enforcement | 6–18 months | Medium |
| Enforcement Civil judgment enforcement authorities | 4–12 months | Medium |
How Does SXB Global Handle a Vietnamese Case?
We establish the limitation position first, because it is short and strictly applied, and we read the dispute resolution clause with the recognition process in mind rather than in the abstract. Contact is conducted in Vietnamese, with documents prepared for legalisation early where proceedings look likely. Where legal proceedings become appropriate, SXB Global coordinates the instruction of appropriately authorised local counsel. Legal services are provided by the relevant independent legal professionals.