Trade disputes: Businesses at a disadvantage
Foreign-related trade disputes have increased in number alongside commercial growth in recent years. Around 14,767 trade disputes were settled in courtrooms in 2013, including 99 at the Vietnam International Arbitration Centre (VIAC), 51% of which are related to foreigners.
The actual number is much higher than reported. Around 15 Vietnamese cases have not been dealt with in the UK, let alone others since early this year, according PhD Tran Thi Lan Anh, from the Leeds University.
Professor Nguyen Trong Dieu, President of the Vietnam Private Business Association (VPBA), says, Vietnamese businesses struggled to survive the economic slowdown in 2013, with more than 60,000 businesses going bankrupt or halting operations, mostly private owned.
Over the years, private businesses have undergone rapid growth due to market volatility, and they have therefore negated major factors for sustainable development, including technology, creativity, management capacity and connectivity. Sectors of Vietnamese strength, such as rice and coffee, have not brought profits for producers.
Private businesses are in danger of losing out to professional rivals when Vietnam is integrating deeper into the global economy, Dieu stresses.
Many other challenges remain, such as complicated legislation, limited expertise, a high expense for lawyers, language barriers, and lack of information about partners and support from State agencies. These challenges put domestic private enterprises at a disadvantage if a trade dispute arises.
Experts needed in international transactions
Ho Quang Minh, former director of the External Economic Department under the Ministry of Planning and Investment, says domestic private enterprises receive almost no support in international transactions. In addition, not all Vietnamese lawyers are capable of being engaged in international disputes.
Currently, 75% of trade disputes of Vietnamese businesses are handled by different methods rather than legal actions. A lot of support systems for businesses have been built but they have not paid off yet. Businesses still need experts and lawyers who directly get involved in their performance, especially in dealing with international transactions.
The fact is that many foreign-related disputes have ended in deadlock due to loopholes in contract terms, partners’ withdrawal or business bankruptcy.
Furthermore, the legal system is too complicated. Domestic businesses do not have qualified experts for international cases while it is quite costly to hire lawyers.
PhD Lan Anh suggests that private businesses should have legal affairs departments and send experts to take part in negotiations or sign contracts. When disputes arise, enterprises should ask for immediate help from legal experts before rivals go bankrupt or withdraw from Vietnam.
-When a dispute erupts overseas, businesses are encouraged to contact Vietnamese diplomatic representative offices in that country to ask for professional or financial support.
The actual number is much higher than reported. Around 15 Vietnamese cases have not been dealt with in the UK, let alone others since early this year, according PhD Tran Thi Lan Anh, from the Leeds University.
Professor Nguyen Trong Dieu, President of the Vietnam Private Business Association (VPBA), says, Vietnamese businesses struggled to survive the economic slowdown in 2013, with more than 60,000 businesses going bankrupt or halting operations, mostly private owned.
Over the years, private businesses have undergone rapid growth due to market volatility, and they have therefore negated major factors for sustainable development, including technology, creativity, management capacity and connectivity. Sectors of Vietnamese strength, such as rice and coffee, have not brought profits for producers.
Private businesses are in danger of losing out to professional rivals when Vietnam is integrating deeper into the global economy, Dieu stresses.
Many other challenges remain, such as complicated legislation, limited expertise, a high expense for lawyers, language barriers, and lack of information about partners and support from State agencies. These challenges put domestic private enterprises at a disadvantage if a trade dispute arises.
Experts needed in international transactions
Ho Quang Minh, former director of the External Economic Department under the Ministry of Planning and Investment, says domestic private enterprises receive almost no support in international transactions. In addition, not all Vietnamese lawyers are capable of being engaged in international disputes.
Currently, 75% of trade disputes of Vietnamese businesses are handled by different methods rather than legal actions. A lot of support systems for businesses have been built but they have not paid off yet. Businesses still need experts and lawyers who directly get involved in their performance, especially in dealing with international transactions.
The fact is that many foreign-related disputes have ended in deadlock due to loopholes in contract terms, partners’ withdrawal or business bankruptcy.
Furthermore, the legal system is too complicated. Domestic businesses do not have qualified experts for international cases while it is quite costly to hire lawyers.
PhD Lan Anh suggests that private businesses should have legal affairs departments and send experts to take part in negotiations or sign contracts. When disputes arise, enterprises should ask for immediate help from legal experts before rivals go bankrupt or withdraw from Vietnam.
-When a dispute erupts overseas, businesses are encouraged to contact Vietnamese diplomatic representative offices in that country to ask for professional or financial support.
