by Apra Law

During the course of investment activities in Vietnam, investors may encounter some unnecessary disputes that delay the investment progress or affect their business situation. These disputes can arise in many different aspects. The following article Apra Law sends readers related issues to help investors have an overview of disputes that may arise during the investment process in Vietnam.

Disputes that may arise during investment activities:

Firstly, Disputes in the process of buying and selling shares or contributed capital

Buying shares and contributed capital is very popular nowadays. However, this process contains many factors that can lead to disputes. It can be a dispute related to the payment of money to buy shares or contributed capital, a dispute related to accounting data that is different between the records and the actual later, a dispute in the restructuring of personnel. Disputes related to issues that the parties did not mention when signing a contract to buy and sell shares or contributed capital.

Second, Investor’s internal dispute

During the investment process, there are internal disputes arising from investors such as disputes over capital contribution ratio, appointment of management positions, selection of legal representatives, etc. According to regular legal counsel, in order to avoid this situation, investors should prepare and discuss carefully before deciding or signing internal agreements to create a favorable foundation for investors. investment activities.

Third, Disputes with employees

Labor disputes are disputes arising between employees and enterprises. It may be due to employee fraud, resulting in damage to the enterprise, or because the enterprise disciplines employees in accordance with procedures or requirements as prescribed by law.

Fourth, Disputes with partners

When investing in Vietnam, foreign-owned companies also need to establish business relationships and transactions with partners such as suppliers, distributors, service providers, etc. Like any other type of relationship, there is always a risk of disputes between business partners because both sides are looking for benefits. In order to avoid unfortunate conflicts, the agreements or contracts signed between the parties need to be carefully drafted, balancing the interests to maintain trust and a strong business relationship.

Fifth, Disputes with state agencies

This is a sensitive issue, but it can still happen. For example, between tax authorities and investors, there may be disputes about corporate income tax incentives because each party may have different solutions. To avoid this situation, investors should carefully prepare and learn the relevant legal regulations to ensure their project is legal and the implementation process is smooth.

Current dispute resolution methods: Pursuant to the provisions of the Investment Law 2020, when a dispute occurs in business investment, the parties can resolve the dispute through the following methods:

First, the method of negotiation

According to the provisions of law, in order to resolve disputes arising from business investment, the parties have the right to negotiate with each other on conflicts, conflicts and disagreements in order to reach a compromise in terms of interests between the two parties. the parties on the basis of jointly discussing and solving together. This is the method chosen by the disputing parties first and in practice most disputes in business and commerce are resolved by this method. The State encourages the application of self-negotiation to settle disputes in the spirit of fully respecting the parties’ right to reach agreement.

Second, Mediation method

Mediation is a method of resolving business investment disputes, in which the parties discuss and agree to resolve arising disputes with the support of a third party. It can be an individual or an organization chosen by the parties, the third party only acts as an intermediary to give opinions on the settlement of disputes arising between the parties, and does not have the right to judge and make a final decision. remains with the parties to the dispute. The result of the mediation depends on the goodwill of the disputing parties and the reputation, experience and skills of the mediator. of the disputing parties. This form of settlement is especially effective when resolving business and commercial disputes of a technical nature (construction, finance, etc.).

Third, Arbitration or Court:

Pursuant to the provisions of Clause 2, Article 14 of the Law on Investment 2020, disputes between domestic investors, economic organizations with foreign investment capital or between domestic investors and economic organizations with investment capital. Foreigners with competent state agencies related to investment and business activities in the Vietnamese territory shall be settled through Vietnamese arbitration or Vietnamese courts, unless otherwise provided for by law.

For arbitration:

Dispute settlement by arbitration is an indispensable form of dispute resolution in the market economy and is increasingly favored by businessmen. It is a form of dispute resolution through the operation of an arbitration council or an arbitrator as an independent third party to resolve a dispute by issuing a binding judgment on the parties. must execute. This method has the positive point of being quick (because only through one level of settlement, the decision of the arbitration body will take effect), flexible at the request of the parties, and can ensure information confidentiality. The disadvantage of the arbitration method is that the arbitration fee (the fee for the arbitrators to participate in the dispute resolution) will be much higher than the court fee (which is the fee for dispute settlement by the court method).

For the method of settlement by Court:

Although the cost (court fee) is low, the method of dispute resolution through the court has some disadvantages as follows: the procedure in court is inflexible, lengthy, and must go through two levels of trial. Besides, the principle of open trial of the court may affect the reputation and business secrets of the parties.

Above is the consulting article on “Disputes arise during investment operation process” of Apra Lawfirm. If you still have questions about the above issues and need to be answered, please contact the hotline for advice and support.


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