Civil litigation in Vietnam

Overview of Court Litigation in Vietnam

When considering whether to pursue litigation, parties must evaluate several factors, including the timing and anticipated duration of the process, associated costs, the feasibility of enforcing any judgment, and other relevant circumstances. The Vietnamese legal framework operates under a civil law system influenced by French civil law and communist legal theory. Laws are enacted by the National Assembly, which serves as the country's legislative authority.

Vietnamese Courts

The Supreme People's Court stands as the highest judicial authority in the country, overseeing three High (or Superior) People's Courts, 63 Provincial or Centrally Run Cities People's Courts (collectively known as Provincial People's Courts), and 710 District People's Courts.

• Supreme People's Court: As the apex court, it reviews judgments and decisions made by lower courts. It also submits draft laws and resolutions to the National Assembly and its Standing Committee.
• High People's Courts: These courts handle appeals against first-instance judgments or decisions from Provincial People's Courts that have yet to take legal effect and manage cassation or reopening procedures for legally effective judgments from various lower courts within their jurisdiction.
• Provincial People's Courts: They have the authority to hear appeals from first-instance judgments or decisions made by rural and urban district people's courts that have not yet taken legal effect, as well as certain first-instance cases involving foreign elements as specified by law.
• District People's Courts: These courts conduct first-instance trials and address other matters as prescribed by law.
• Specialized Courts: Recent proposals have led to the establishment of specialized courts in Vietnam, as outlined in the new 2024 Law on the Organization of People's Courts, effective January 1, 2025. These courts, such as those focused on intellectual property or bankruptcy, will operate as divisions within the broader court system, staffed by experts in these fields to enhance the resolution of complex disputes.

Length of Trials

Typically, civil litigation lasts between 12 to 18 months from the initiation of an action until a judgment is rendered by the court of first instance. Appeals in the Courts of Appeal usually require an additional 10 to 14 months, with a similar timeframe for appeals to the Supreme Court.

Amount of Claims

Vietnamese law imposes no limits on the amount of claims that can be presented in court. However, due to the significant time and expense involved, pursuing a civil suit in Vietnam may not be worthwhile for claims below VND 100,000,000 (approximately USD 4,000).

Court Costs

A plaintiff is required to pay a court filing fee upon submitting a case. This fee is calculated proportionately based on the disputed value or claim amount. After filing a lawsuit, the plaintiff must advance part of the estimated court fee, which will be finalized in the court's judgment.

Appeals

In civil cases, appeals must be lodged within 15 days following the reading of the judgment. At the appellate level, the appealing party must also deposit additional court costs of VND 300,000 (approximately USD 12) for civil disputes and VND 2,000,000 (approximately USD 80) for commercial disputes.

Power of Attorney

If any party wishes to engage a lawyer, they must execute a power of attorney authorizing one or more attorneys to represent them in the suit.

Plaintiff/Defendant

For legal entities, all submissions must be executed (signed in wet ink) by the company's legal representative (such as the CEO or director) and bear the company seal. The company may authorize other personnel or counsel to submit documents on its behalf, but the Statement of Claims must be signed personally by the company's representative.

Language of Documents

All documents submitted to Vietnamese courts must be in Vietnamese. Foreign documents must be originals or certified copies, notarized, and authenticated/legalized by a Vietnamese consulate authority. A certified translation into Vietnamese is also required for submission. Tilleke & Gibbins has a dedicated team of certified translators who can assist with translations and notarization/authentication.

Evidence Disclosure

The evidence disclosure process in Vietnamese civil litigation is less formalized than in common law systems, with no recognized concept of privilege. Parties are generally not obligated to disclose all relevant documents unless specifically requested by the court. If the court requests evidence, compliance is theoretically required; however, there are no penalties specified for non-compliance, and the court typically proceeds based on available documents.

Statute of Limitations

The general statute of limitations for non-contractual civil disputes (e.g., property or family disputes) is three years from when the aggrieved party becomes aware of the infringement of their rights. For commercial disputes (e.g., contractual disputes), the limitation period is two years from the infringement of legitimate rights. Specific provisions exist regarding the statute of limitations for certain dispute types, such as construction and insurance disputes.

Litigation Process and Procedures

Litigation commences when an aggrieved party, the plaintiff, files a lawsuit dossier detailing the facts and allegations supporting their claim with the appropriate court. Below are the primary steps in the litigation process.

Filing of Petition

Agencies, organizations, and individuals initiating a lawsuit must file a petition directly with the court or send it via postal service. The petition must include documents and evidence demonstrating that the plaintiff's legitimate rights have been violated. The plaintiff may need to provide additional documentation as requested by the court during the case resolution process.

Acceptance of the Lawsuit Petition

Within three working days of receiving the petition, the chief justice assigns a judge to review it. Within five working days of assignment, the judge must decide to either request amendments to the petition, accept the case through normal or simplified procedures, transfer the petition to a competent court, or return the petition if it falls outside the court's jurisdiction. If accepted, the court will issue a request for the advance court fee, which the plaintiff must pay to the Civil Judgment Enforcement Agency (CJEA) and then submit the payment receipt back to the court. Processing paperwork may take the court up to a month or longer.

Notice of Lawsuit to Defendant

The Civil Procedure Code mandates that the plaintiff serve a copy of the lawsuit petition to the defendant, although there are no penalties for failing to do so. Consequently, defendants often learn of the lawsuit only upon receiving the court's notice of acceptance.

Court-Annexed Mediation

Under the Civil Procedure Code and the 2020 Law on Mediation and Dialogue at court, courts are required to promote mediation before proceeding with litigation. Mediators, who may be judges or trained professionals, facilitate this process. Parties can opt out of mediation and proceed with litigation, though many choose to continue negotiations during the litigation phase. Any settlement reached can still be recognized by the judge.

Meeting to Review Submission, Access, Disclosure of Evidence, and Reconciliation

Judges are required to hold meetings to examine submissions, access, disclose evidence, and encourage reconciliation. During these meetings, judges listen to the parties' opinions, promote negotiation, and allow parties to review each other's submissions.

Preliminary Injunctions

This legal mechanism is available from the filing of the petition until the entry of judgment. Parties may request the court to impose a preliminary injunction, but such requests are rarely granted unless they are well-founded and address urgent needs related to life, health, property preservation, or preventing irreparable harm.

Trials

Trials must be oral and conducted in a courtroom. The court directly assesses the case's circumstances by questioning the plaintiff, defendant, and relevant parties, reviewing collected documents and evidence, and listening to debates between the parties.

Judgment

After deliberation, the trial panel reads the judgment in the presence of the parties. In complex cases, the panel may announce a longer deliberation period of 5-10 days before issuing the official written judgment.

Procedures After Trial

Execution of Judgment Against a Defaulting Party

Judgments from first-instance courts are not immediately final. If no appeal is filed within 15 days of the judgment announcement, the judgment becomes legally effective and enforceable. Should the judgment debtor fail to comply voluntarily, the creditor may request the CJEA to enforce the judgment coercively, with enforcement costs charged on a pro-rata basis.

Application for Appellate Trial

The party seeking an appellate trial must submit the application to the first-instance court or through authorized representatives, including necessary details and evidentiary materials. The appellate court may uphold, revise, or annul the first-instance judgment and remand the case for retrial.

Cassation/Retrial

Cassation and retrial are extraordinary remedies in Vietnam for reviewing legally effective court judgments. The Supreme People's Court oversees these processes, particularly for significant or complex cases. Cassation involves reviewing judgments issued with serious legal violations, with a three-year appeal limit. Retrial occurs when new crucial evidence emerges, requiring a request within one year of discovery.

Recognition of Foreign Judgments or Arbitral Awards

Vietnam recognizes foreign court judgments or arbitral awards based on international treaties or reciprocity principles. The statute of limitations for recognition and enforcement is three years from the judgment's legal effect date. Vietnam is a member of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Enforcing a foreign judgment requires recognition by a competent court and enforcement by the CJEA, with total durations varying from 18 months to three years depending on complexity and cooperation levels. From January 1, 2012, to September 30, 2019, the success rate for recognizing and enforcing foreign arbitral awards was 49%, while for foreign judgments, it was around 46%.

Key Takeaways of Court Litigation in Vietnam

• Prior to initiating court litigation (also applicable to arbitration), plaintiffs should thoroughly investigate the nature and extent of the defendant's assets in Vietnam, as a monetary judgment may hold limited value if recoverable assets are scarce. Information about the opposing party should be evaluated early in the case. Although there is no public database for tracking assets, Tilleke & Gibbins has a team of investigators capable of gathering pertinent financial information.
• Vietnam's court system is hierarchical, with People's Courts at district, provincial, and Supreme levels. Cases involving foreign elements typically commence at the provincial level.
• While the Civil Procedure Code specifies processing timeframes, delays are common due to court backlogs.
• Foreign documents must be notarized, legalized, and translated into Vietnamese, which can be time-consuming and costly for complex disputes with extensive documentation.
• Verifying the assets of judgment debtors during enforcement can be challenging, as the CJEA often relies on cooperation from other regulatory authorities, leading to potential delays.
• Generally, foreign partial judgments/awards or non-final foreign preliminary injunctions cannot be recognized or enforced in Vietnam.
• Statutes of limitation are applied based on requests made by one or multiple parties before the first-instance court issues a judgment.

Arbitration and Alternative Dispute Resolution

In addition to court proceedings, civil disputes in Vietnam may be resolved through alternative means, including:

Commercial Mediation

Commercial mediation offers a voluntary dispute resolution mechanism allowing parties to amicably resolve conflicts with the help of a neutral mediator without resorting to formal litigation or arbitration. This approach is particularly beneficial for commercial disputes where preserving business relationships is paramount. A mediated settlement agreement can be recognized by the court, rendering it binding and enforceable.

Arbitration

Arbitration is the second most utilized dispute resolution method in Vietnam after court litigation, valued for its flexibility and efficiency. The Vietnam International Arbitration Centre (VIAC) is a frequently chosen venue for arbitration in the country. An arbitral award is final and enforceable upon issuance.

Cancellation of Arbitral Award

Although an arbitral award is final and enforceable upon issuance, parties may seek to cancel (or set aside) the award within 30 days of receipt. If canceled, parties may either agree to re-arbitrate or initiate a lawsuit. Grounds for cancellation include the absence of a valid arbitration agreement, procedural non-compliance, disputes falling outside the tribunal's jurisdiction, reliance on forged evidence, or contravention of fundamental principles of Vietnamese law. However, the interpretation of what constitutes these principles lacks explicit guidance, leading to inconsistencies among courts.

For foreign parties involved in arbitration, key documents such as the Power of Attorney for local counsel should be duly notarized and legalized. There have been instances where awards were canceled due to issues with these documents, despite the 2010 Law on Commercial Arbitration not explicitly requiring such actions.

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