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DISPUTE SETTLEMENT THROUGH NEGOTIATION,

CONCILIATION AND MEDIATION PROCESSES IN VIETNAM

Dr. Trn Vn Qung

I. General concepts of negotiation, conciliation and mediation

processes

1. Grounds of formation of negotiation, conciliation and mediation

processes

In a society, differences, disputes and conflicts of values and interestsare inevitable during the course of ceaseless movement of socio-economicrelations. These differences and conflicts of values and interests may cause

disputes between the owners of those values and interests. This is a regulatoryrule of human society. In order to avoid the negative consequences that mightbe caused to the society by the disputes, dispute settlement mechanisms havebeen forged as an objective requirement. History has seen several methodsformed as to resolve disputes in all aspects of the society such as: government

judicial process, alternative dispute resolutions including mediation,conciliation, negotiation, and arbitration, etc. Therefore, it can be confirmedthat the very first ground for the formation of dispute settlement processes ingeneral and negotiation, conciliation and mediation in particular is the

practical demand of the socio-economic life. In other words, the socio-economic structure is fundamental to the formation of dispute settlementprocesses.

In Vietnam, as well as in many countries all over the world, disputesettlement processes through negotiation, conciliation and mediation wereformed on the bases of socio-economic conditions and deeply influenced by

political, cultural and historical factors of each period. Initially, theseprocesses came into being based on the demand of national unity in thestruggle for existence and development. Blessed with the tradition of

community unity and solidarity which has been forged and preservedthroughout the history of thousands-of-years founding and protecting thecountry, Vietnamese people always hold in high records and give high

prominence to the spirit of mutual affection and care, typically the idea of letthe bygone be bygone. Thus, in the event of dispute, the very first measure to

be applied would be negotiation, conciliation and mediation, through whichany party to the dispute would understand better the other(s) while the disputewould be resolved with the relationship preserved. Another factor that worthsto be mentioned is the cultural values of Vietnamese comportment. Just like in

many other Oriental countries, Vietnamese people believe that a badcompromise is better than a good lawsuit, they normally feel hesitant withlegal proceedings and any reference to a court would be interpreted as a grief.

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From the above, the immediate action to be taken whenever a dispute arises inreal life is not to launch a lawsuit but to settle the dispute through negotiation,conciliation and mediation since these processes are deeply bound with socialand human values.

These processes, which were formed and developed alongside the flowof the national history, have gradually become popular and recognized by law.This is a firm legal basis for these processes to continue their existence anduphold their role as measures to resolve disputes in social life.

2. Some basic concepts and distinction between negotiation,

conciliation and mediation

2.1. Concepts and overall natures

Negotiation: According to the Vietnamese Dictionary, negotiation isdiscussion with an aim to reach an agreement on resolution of a certain issue between the two (Vietnamese Dictionary, Chief editor: Hoang Phe,Lexicographic Centre - Da Nang Publisher, H Ni Nng, 1997).According to the Law Dictionary of the Academy of Laws under the Ministryof Justice, negotiation is a process to resolve economic disputes throughwhich the parties to a dispute discuss the solution to eliminate the disputewithout any intervention or assistance from a third party. The resolutionachieved through negotiation by the parties will be exercised on a voluntary

basis. Besides, there are still other definitions of negotiation in the world.Some people define negotiation as one of the basic alternative disputeresolution (Wikipedia, the free encyclopedia.htm). When conductingnegotiation, each party needs to have a person to represent its organizationwho understands thoroughly the disputed issues and who has negotiative skillsand competences.

Negotiation is a notion which is commonly used in many fieldsincluding business, governmental and non-governmental activites, etc. Themost essential characteristic of negotiation is the absence of a third party

which gives room to the disputants, at their own discretion, to agree on thesolution to their issue.

Conciliation: Conciliation is a traditional approach to settle the disputes

in social life; however, there are still many disaccords with regard to the

notion of conciliation. There are many different definitions of conciliation in

the world. In the Blacks Law Dictionary, conciliation is defined as an

intervention, an intermediary process, and an action of a third party in the role

of a mediator between the two disputants with an aim to persuade them tosettle or resolve their dispute. The dispute is resolved through a neutral third

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party (West Pub.Co (1983), Blacks Law Dictionary with pronunciation). In a

French Law Dictionary, conciliation is a dispute settlement process with

assistance from a intermediary third party (conciliator) who help to

recommend amicable resolutions (Press Univ.de France, 2 edition (1990),

Vocubulaire Juridique). Also, there are several definitions of conciliation inVietnam. According to Vietnamese Dictionary, conciliation is to persuade

the parties to agree on an amicable settlement of their conflicts or

disagreements (Vietnamese Dictionary, Chief editor: Hoang Phe,

Lexicographic Centre - Da Nang Publisher, H Ni Nng, 1997). The

Legal Terminology used in the activities of the National Assembly and the

Peoples Council (Nguyn Duy Lam, Chief editor: Dr. Nguyen Thanh,

Judiciary Publisher, 2004) defines conciliation as settlement of disputes,disaccords between two or more parties through arrangement, negotiation

with the involvement of a third party (non-disputants). Article 1 of the

Ordinance on organizing and undertaking conciliation at the ground level in

1998 raised a definition of conciliation at the ground level conciliation at the

ground level is to guide, facilitate and persuade the parties to achieve

agreement on and voluntary resolution of minor breeches of law and disputes

so as to preserve the communal harmony, prevent and limit breeches of law,ensure social order and security of the community. From the conceptions in

the world and in Vietnam, several overall characteristics of conciliation can be

drawn as follows: Firstly, conciliation is a dispute settlement process;

Secondly, the central actor of conciliation is the intermediary party who

facilitates the disputants to achieve mutual accords on dispute resolution;

Thirdly, any adjustment and agreement with regard to dispute resolution must

be decided by the disputants. As such, it can be understood that conciliation isa dispute settlement process, through which, the disputants, with assistance

from an independent third party acting as an intermediary, discuss to resolve

their disputes on a voluntary basis in accordance with laws, tradition and

social ethics. In some practical cases in Vietnam, the term self-conciliation

is mentioned beside conciliation. The distinction between the two notions:

conciliation is always executed with the involvement of an independent third

party while self-conciliation is substantially negotiation between the parties

without the presence of any third party - a characteristic of conciliation.

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Mediation: In Transcultural mediation in the Asia Pacific (Asia

Pacific Organization for mediation, Manila, Philipines, 1988) mediation is

an informal, voluntary and private process in which a mediator selected by

the parties will facilitate the disputants to achieve a solution agreed by the

parties. According to Wikipedia, mediation is a form of alternative disputeresolution (ADR), also refers to appropriate dispute resolution, and aims to

assist two (or more) disputants in reaching an agreement. Whether an

agreement results or not, and whatever the content of that agreement, if any,

the parties themselves determine - rather than accepting something imposed

by a third party. In Vietnam, mediation is defined in Vietnamese Dictionary

as 1) room in the middle with the nature of a transition or a joint between a

pair of something; or 2) in the middle, playing an intermediary role in abilateral relation... From the above, it can be understood that mediation is a

dispute settlement process through a third party who plays an intermediary

role to help the two parties achieve a mutual accord.

However, these conceptions are mainly considered from the angle of

linguistics; however, from the legal point of view, they have not yet been

officially recorded in any legal document.

Based upon the above analyses, the overall characteristics of the three processes: negotiation, conciliation and mediation can be summarized as

follows:

Firstly, dispute settlement processes were formed on the ground of

social relations, the nature of which was established on the bases of equality,

freedom, willingness and agreement between the parties. This is the most

important common characteristic of these processes;

Secondly, these processes can be selected by the parties to resolve theirdisputes and they can substitute judiciary processes;

Thirdly, during the course of dispute settlement, even with the presence

of a third party (as in conciliation and mediation), the parties are placed under

no pressure from any outsider to achieve an agreement. This characteristic

helps distinguish these processes with judiciary processes which will result in

an award binding on the parties.

2.2. Distinction between negotiation, conciliation and mediation

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Despite of several features in common, there are certain differences

between the three processes and it is exceptionally important to clarify these

differences, both theoretically and practically.

Firstly, negotiation is different form conciliation and mediation in the

time of application; negotiation always applies before conciliation ormediation and only when the parties can not successfully negotiate then

intervention from an independent third party will be needed for dispute

settlement.

Secondly, negotiation only involves the disputants without intervention

from an independent third party which is needed in conciliation and

mediation.

The most problematic issue is how to distinguish conciliation andmediation. The difficulty in distinguishing these two terms lies in their

common nature: a third party presents in the process of both conciliation and

mediation and is responsible to identify the disputed issues, recommend the

options for the parties to achieve a resolution which is suitable to both parties.

In Vietnam, the distinction between mediation and conciliation is not

really clear. Conciliation is the main process and applies frequently while

mediation is not yet utilized or imperceptibly integrated to conciliation into avague expression conciliatory mediation. However, from the practical

application of these processes in Vietnam, we would present several

differences as below:

Firstly, the most remarkable difference between conciliation and

mediation lies in the role of the independent third party in the process of

dispute settlement. During conciliation process, the conciliator is supposed to

meet the parties and bring them to sit with each other in order to jointly definethe disputed or conflicted issues. Also, the conciliator points out the relevance

and irrelevance from the legal point of view thus persuade the disputants to

arrive in an agreed solution. In conciliation at ground level - a typical form of

conciliation in Vietnam - the substantial role of the conciliator is to moderate

or reduce tensions in the disputes, persuade the disputants to restrain

themselves and observe the laws, lead the parties to behave in a cultured and

lawful manner. Whilst, in the mediation process (not yet popular in Vietnam),

in common sense, the third party plays the role of a bridge between the parties

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who have difficulties with direct contact so as to transmit the position and

settlement recommendations of one party to the other and backward, which is

normally referred to as conciliatory mediation. In some exceptional cases,

for instance where a nation mediates the conflict between two other nations in

a process known as shuttle diplomacy, the third party - the mediator -attempts to propose a solution and persuade the parties to accept it following

the consultation with the parties. Also reflecting this notion, the Conciliation

rules of the International Arbitration Centre has referred to the role of the

conciliator as follows:

1. the conciliator, by his own efforts, conducts conciliation on an

independent, impartial and objective basis to help the parties

achieve a conciliation solution to the dispute;2. the conciliator must base the conciliation process on the parties

agreements, the business practices between the parties and the

context of dispute;

3. the conciliator may implement conciliation in a way as he deems fit

to the nature and content of the dispute as well as the parties

expectations.

4. the conciliator may, at any time in the course of conciliation, give arecommendation on settling the dispute. Such recommendation is

not necessarily made in writing or with reasoning.

In summary, it can be concluded that in Vietnam the role of the third

party in conciliation is more proactive and initiative than that of the third

party in mediation. Its because of this difference in activeness of the third

party that people, mentioning mediation, normally think of the independence,

objectivity and neutrality of the third party while a conciliator is usuallyreferred to with his/her role of dispute moderation.

Secondly, the conciliators are practically familiar with the field in

which they undertake conciliation since they can provide recommendations to

the disputes as well as legal consultancy. This is exemplified by the role of

judges, arbitrators or conciliators in the process of conciliation in Vietnam

who assume not only conciliation but also interpretation of laws. Therefore, a

conciliator must have professional expertise and conciliating and consulting

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The above dispute settlement processes can apply to the matter between

the disputants even when the disputes relate to the legal rights and obligations

which must be referred to the court. They do not only enhance the

effectiveness of dispute settlement but also reflect the civilization in social

affairs and help the disputants gain mutual understanding and sympathy. Theycontribute to displaying the tradition of mutual affection and care and restore

and reinforce the harmony among the communities.

Thirdly, conciliation is the dispute settlement process relevant to the

current trend.

Given the conditions of the socialism oriented market economy where

civil and economic exchanges grow increasingly both in types and contents,

interact and interfere each other. The scope of social relations, especially civiland economic ones are no longer limited within families, communities or

nations but expanded to the regional and global range. However, the dark side

of the market economy is producing deep impacts on every aspect of the

society and disputes tend to increase both in number and complexity. It is very

important to maintain and improve the operation of the above dispute

settlement processes in order to amicably resolve disputes and differences,

restore trusts, promote civil and economic exchanges, protect personal basicrights, and preserve peace and security in the relations between nations.

Besides, these processes, with the capacity to substitute adjudicative

processes will display their important effects with regard to disputes in the

fields of commerce and investment including foreign elements where the

parties have many differences in proceedings of dispute settlement.

II. Current conditions of dispute settlement through negotiation,

conciliation and mediation in Vietnam

1. Legal framework for negotiation, conciliation and mediation in

dispute settlement in Vietnam

The system of effecting legal documents includes provisions on dispute

settlement through negotiation and conciliation. For ease of understanding,

these processes can be classified into adjudicatory and non-adjudicatory

negotiation, conciliation and mediation.

1.1. Adjudicatory negotiation, conciliation and mediation

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Adjudicatory negotiation, conciliation and mediation are known to be

executed at the adjudicatory agencies receiving and resolving a certain dispute

at the request of one or more parties.

First: in civil procedures (Civil Procedural Code in 2005 - the Code in

short)a) Conciliation process:

This process is applied to disputes in civil affairs including marriage,

family, labour, commerce (generally called civil cases). The Code stipulates

that the court is responsible for conducting conciliation and facilitating the

interested parties to discuss and agree on settlement of the dispute in

accordance with this Code (Ar ti cle 10). Also, the following details are

specified:- Conciliation proceedings: within the preparatory period for the first-

instance trial, the court conduct conciliation so that the interested parties

discuss and agree on settlement of dispute, except for the cases which are not

subject to conciliation or cannot be conciliated (Articles 181 and 182 of the

Code). Conciliation is grounded on the following principles: a) Respect of the

willingness of the interested parties, no violence or no threat of violence to

force the parties to reach an agreement against their own will; b) the contentof the parties agreement must not contravene the laws or social ethics.

- Civil cases not subject to conciliation include: claims for

compensation for the damages to the State properties; civil cases arising from

unlawful or unethical transactions.

- Attendants to the conciliation session: a judge to preside the session,

the court registrar to take the minutes of the session; the interested parties or

the legal representatives of the interested parties. In a case involving manyparties, if any party is absent in the conciliation session but the present parties

still agree to proceed conciliation and such conciliation does not affect the

rights and obligations of the absent party then the court conduct conciliation

between the present parties; if the parties suggest to delay the session until all

the parties can attend then the court has to delay the session; Interpreter must

be arranged if any party is not fluent in Vietnamese.

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- Conciliation content: the court advises the parties about the provisions

of the laws related to dispute settlement so that the parties can liaise with their

rights and obligations, analyses the legal consequences of a successful

conciliation so that they voluntarily agree on settlement of the case.

b) Negotiation process:Although the Code does not contain any provision of negotiation as an

independent process, Article 10 stipulates that the court is responsible for

conducting conciliation and facilitating the parties to discuss and agree on

settling the civil case in accordance with this Code. Especially, Paragraph 2

Article 5 specifies that in the settlement process of the civil case, the parties

are entitled to terminate or amend their claim or achieve a mutual agreement

in a voluntary basis which does not undermine the laws and social ethics. Assuch, it is clear that the laws has accepted that the parties have the right to

reach an agreement to settle the civil dispute, which can be logically

interpreted as the right to apply negotiation to settle disputes.

Second: in Arbitration proceedings

These processes are specified in the amended Labour Law and the

Ordinance on Commercial Arbitration in 2003.

a) Conciliation processAr ti cl e 37 of the Ordinance on Commercial Arbitration in 2003

stipulates that the parties may request the Arbitral Tribunal to conciliate. In

case of successful conciliation, the parties may request the Arbitral Tribunal

to prepare the minutes of successful conciliation and issue an award to certify

such successful conciliation. The minutes of successful conciliation must be

signed by the parties and the Arbitrators. The award to certify successful

conciliation by the Arbitral Tribunal is final and must be executed underArticle 57 of the Ordinance.

The amended Labour Law provides in Article 171 that Labour Arbitral

Tribunal expedites conciliation and settle any collective labour dispute not

later than 10 days from the receipt of request. The session to resolve the

collective labour dispute must be attended by the authorized representatives of

the two parties. The Labour Arbitral Tribunal may, if necessary, invite

representatives from trade union at a higher level and from the concerned state

agencies to attend the session. The Labour Arbitral Tribunal will then

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recommend a conciliation measure for the parties consideration. In case of

consent by both parties, the minutes of successful conciliation will be

prepared and signed by the parties to the dispute and the Chairperson of the

Labour Arbitral Tribunal. The parties are obliged to comply with the

agreements recorded in the minutes of successful conciliation. Should theconciliation process fails, the Labour Arbitral Tribunal will handle the dispute

and immediately notify the parties of its decision; such decision will be

automatically enforceable if the parties do not give any feedback.

b) Negotiation

Article 37 of the Ordinance of Commercial Arbitration also stipulates

that the parties may conciliate at their own discretion in the course of

arbitration. In case of successful conciliation, the Arbitral Tribunal will ceaseits proceedings at the request of the parties. Conciliators are not present in

this case so naturally it is a provision of negotiation with view to settle

disputes.

1.2. Non-adjudication negotiation, conciliation and mediation

Non-adjudication negotiation, conciliation and mediation are

interpreted as the processes to be executed before any judiciary agency handle

the case and the third party is not a judiciary agency.a) Conciliation process

The most popular non-adjudication conciliation process is conciliation

at the ground level as specified in the Ordinance of organizing and

undertaking conciliation at the ground level in 1998. According to this

ordinance, conciliation at the ground level is to guide, facilitate and persuade

the parties to achieve agreement on and voluntary resolution of minor

breeches of law and disputes so as to preserve the communal harmony,prevent and limit breeches of law, ensure social order and security of the

community.

Form of conciliation: conciliation at the ground level is executed by

Conciliation Teams or other suitable organizations of the inhabitants within a

village, a quarter or other forms of community in accordance with the laws,

social ethics, fine customs and habits of the people.

Scope of conciliation: conciliation is applied to minor breeches of laws

and disputes in the communities including: individual conflicts and

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disagreements, disputes over benefits and interests arising from civil relations,

marriage and family relations; other breeches of laws which are not serious

enough to apply criminal or administrative remedies. Meanwhile, the cases

not subject to conciliation are also made clear, which include criminal acts,

save for the cases the victims do not request for criminal sanctions and thecompetent authorities do not apply administrative measures in accordance

with the laws; breeches of laws which are subject to administrative measures

and other disputes identified by the laws as not subject to conciliation. It is

forbidden to make use of conciliation as a way to escape from criminal or

administrative measures.

Principles of conciliation: conciliation process is executed with the

following principles: comply with the orientation and policies of the Party(Vietnam Communist Party), the laws of the state, social ethics and fine

customs and habits of the people; respect the parties willingness, no pressure

to force the parties to conciliate; be objective, impartial, reasonable and

sympathetic; maintain secrecy of the disputants personal information, respect

others lawful rights and benefits; no infringement of the state or public

interests; be timely, proactive and persistent with view to prevent breeches of

laws, limit other potential negative consequences and obtain successfulconciliation.

Conciliation teams: Conciliation teams at the ground level are self-

managed organizations established by the inhabitants of villages, quarters and

other forms of community with an aim to settle or to organize settlement of

minor breeches of laws and disputes in the communities in accordance with

the laws. Each Conciliation team is composed of a team leader and team

members selected and nominated by the Fatherland Front at the communelevel in cooperation with the attached bodies of the Front, elected by the

people and recognized by the Peoples Committee at the same level.

Several cases of other non-adjudication conciliation

The Labour Law in 1994, amended in 2002 and 2007 provides for

conciliation proceedings of the Labour Conciliation Councils at the ground

level or of labour conciliators of labour authorities at the district level, which

are regarded as the competent authorities to handle individual and collective

labour disputes. Article 164 regulates the process of individual dispute

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conciliation as follows: the Labour Conciliation Council at the ground level

expedites conciliation no later than 7 days from the receipt of the request for

conciliation. The conciliation session must be attended by the parties or their

authorized representatives. The Labour Conciliation Council will then

recommend a conciliation measure for the parties consideration. In case ofconsent by both parties, the minutes of successful conciliation will be

prepared and signed by the parties to the dispute and the Chairperson and

Secretary of the Labour Conciliation Council. The parties are obliged to

comply with the agreements recorded in the minutes of successful

conciliation. If the conciliation process fails or either party is absent for the

second time despite valid summons without any reasonable excuses, the

Labour Conciliation Council will prepare the minutes of unsuccessfulconciliation, a copy of which must be sent to the parties within 3 days from

the date of unsuccessful conciliation. Each party is entitled to refer the case to

the Peoples Court for settlement. The claim sent to Peoples Court must be

accompanied by the minutes of unsuccessful conciliation.

Article 170 regulates the process of individual dispute conciliation as

follows: the Labour Conciliation Council at the ground level or labour

conciliator expedites conciliation no later than 7 days from the receipt of therequest for conciliation. The conciliation session must be attended by the

parties or their authorized representatives. The Labour Conciliation Council or

labour conciliator will then recommend a conciliation measure for the parties

consideration. In case of consent by both parties, the minutes of successful

conciliation will be prepared and signed by the parties to the dispute and the

Chairperson and Secretary of the Labour Conciliation Council or labour

conciliator. The parties are obliged to comply with the agreements recorded inthe minutes of successful conciliation. If the conciliation process fails, the

Labour Conciliation Council or labour conciliator will prepare the minutes of

unsuccessful conciliation, recording opinions of the parties, the Chairperson

and Secretary of the Council or labour conciliator; either or both party(ies) has

the right to refer the case to the Labour Arbitration Tribunal at the provincial

level.

Admittedly, this conciliation process is handled by the Labour

Conciliation Council at the ground level (or labour conciliators under labour

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authorities at the district level) which plays the role of agencies or

organizations authorized to handle individual and collective labour disputes,

yet, we regard this as non-adjudication conciliation because it is substantially

a pre-adjudication procedure - a step to be taken before a case is handled and

resolved by a judiciary body.b) Negotiation process

Article 317 of the Commercial Law in 2005 provides for dispute

settlement through negotiation between the parties.

The amended Labour Law stipulates in Article 158 that labour

disputes are resolved through the following principles: direct negotiation and

private arrangement between the disputants at the place where the dispute

arise...For the time being, mediation process has not yet been provided for in

both adjudication and non-adjudication processes. However, Article 317 of

the Commercial Law in 2005 specifies that conciliation between the parties

is executed by an agency, an organization or an individual appointed as

mediator by the parties. This provision leads to confusion between mediation

and conciliation, which, on the other hand, reflects precisely a reality in

Vietnam - there is not a clear distinction between mediation and conciliation.Both terms are used to refer to conciliation or intermediary conciliation.

Besides, some believe that conciliation also exists in civil judgement

execution. However, we believe that conciliation in this case is conciliation of

disputes arising from execution of judgements, not that of cases resolved by

the court through enforceable judgements.

1.3. The extent of intervention or support from the laws to dispute

settlement through negotiation, conciliation and mediation in Vietnam.Mentioning intervention or support from the laws is referring to the

sense that these processes cannot be detached from the control and

governance of the laws. The matters here are how far the limit of such control

goes and whether the impact from such control is positive or negative.

From the provisions of the laws on dispute settlement through

negotiation, conciliation and mediation, it can be noted that the extent of

intervention or support to each process varies from adjudication to non-

adjudication. It is obvious that adjudication processes are controlled in a

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stricter manner than non-adjudication processes, which is displayed the most

apparently in the results of the processes. The results of adjudication

processes are recognized by a legally valid decision which is binding on the

parties while in non-adjudication processes, for instance conciliation at the

ground level, there are no clear provisions of validity.The extent of intervention or support is reflected in the provisions of

laws on the principles, organization of these dispute settlement processes. As

such, it can be noticed that the effecting laws of Vietnam contains very

rigorous provisions on conciliation, notably adjudication conciliation and rare

provisions on negotiation and mediation. The laws specify the principles of

conducting conciliation (in civil relation, conciliation in accordance with the

laws is encouraged - Article 12, Civil Code in 2005), the content ofconciliation, the cases not subject to conciliation, attendants to a conciliation

session, conciliation proceedings, etc, as well as the principle to secure the

right of the parties to proceed negotiation, conciliation and mediation. Also in

non-adjudication conciliation, the laws provide for principles, scope, content

and the cases not subject to conciliation in a very detailed manner (for

example in conciliation at the ground level).

Therefore, it can be said that the effecting laws of Vietnam impose aclose control on application of negotiation, conciliation and mediation

processes.

2. Paradigms of dispute settlement through negotiation, conciliation

and mediation

From the above analyses of legal provisions, we can draw some

paradigms of dispute settlement through negotiation, conciliation (mediation

has not been clearly defined and normally confused with conciliation asmentioned above) as follows:

2.1. Paradigm of dispute settlement through adjudicatory negotiation,

conciliation

a) In civil procedures

The courts are vested with the authority to conciliate the dispute of the

parties and guarantee compliance with the principles and provisions of laws in

the course of conciliation. The legal basis of court annexed conciliation can befound in the Civil Procedural Code in 2004.

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b) In arbitration procedures

Arbitral Tribunals under Commercial Arbitration Centre or Labour

Arbitral Tribunal are vested with the authority to conciliate the disputes of the

interested parties and guarantee compliance with the principles and provisions

of laws in the course of conciliation.In respect to organizing conciliation in commercial arbitration, the

paradigm of Vietnamese International Arbitration Centre (VIAC) is worth

studying. The Centre has issued its own conciliation rules to apply in case of

request for conciliation by the Centre. According to these rules, either party

can initiate the conciliation process at the Centre by sending a request for

conciliation to VIAC in which he describe the content of dispute and his

claims; within 5 working days for the receipt of the request for conciliationand advance payment of conciliation fee, VIAC will notify the other party of

the content of conciliation, the schedule of conciliation fee and require

advance payment of conciliation fee. Within 15 days from the receipt of such

notification, the respondent must notify VIAC of his decision whether to

accept or not to accept conciliation. If VIAC receives a reply as not to accept

conciliation or no reply upon expiration of the above period then the request

for conciliation will be deemed rejected and VIAC will notify the claimant ofsuch rejection. Conciliation process will start when VIAC receives a written

notice of acceptance and advance payment of the conciliation fee from the

respondent. Any acceptance of conciliation must be made in writing or in any

other equivalent forms such as telegram, telex, fax, data messages and other

forms in accordance with the laws. In case both parties file requests for

conciliation, the process will start from the time VIAC receives the requests

and advance payments.The role of the conciliator is reflected through:

- the conciliator, by his own efforts, conducts conciliation on an

independent, impartial and objective basis to help the parties achieve a

conciliation solution to the dispute;

- the conciliator must base the conciliation process on the parties

agreements, the business practices between the parties and the context of

dispute;

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- the conciliator may implement conciliation in a way as he deems fit to

the nature and content of the dispute as well as the parties expectations.

- the conciliator may, at any time in the course of conciliation, give a

recommendation on settling the dispute. Such recommendation is not

necessarily made in writing or with reasoning.Significance of the conciliation accords: when possibilities of dispute

resolution acceptable to both parties arise, the conciliator will prepare or

facilitate the parties to prepare the conciliation accords. By signing on such

conciliation accords, the parties eliminate the dispute and are bound by the

conciliation accords in accordance with civil laws.

The alternative nature of conciliation is clearly shown in the principle:

in the course of conciliation, the parties are committed not to engage anyarbitration or litigation proceedings on the dispute to which conciliation is

being applied. In the course of conciliation, if one or both party(ies) refers the

dispute being object of conciliation to an arbitral tribunal or a court, the

conciliation process is tacitly deemed terminated.

2.2. Paradigm of non-adjudication dispute settlement through

negotiation, conciliation

For conciliation at the ground level: Conciliation Teams conductconciliation. They are self-managed organizations established by the

inhabitants of villages, quarters and other forms of community. Each

Conciliation team is composed of a team leader and team members selected

and nominated by the Fatherland Front at the commune level in cooperation

with the attached bodies of the Front, elected by the people and recognized by

the Peoples Committee at the same level. Conciliation Teams conduct

conciliation in accordance with the Ordinance on organising andimplementing conciliation at the ground level and its guiding documents.

For labour disputes, the Labour Conciliation Council at the ground

level of labour conciliators under labour authorities at the district level are

capable of conducting conciliation.

As for negotiation, the parties perform the process at their own

discretion and comply with the achieved agreement in accordance with the

laws and social ethics.

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3. A brief review of the practices and roles of dispute settlement

through negotiation, conciliation and mediation

The role and effects of dispute settlement through negotiation,

conciliation and mediation are displayed in practical application but mainly

through conciliation process.

For conciliation in civil procedures, according to the Summary Report

of the Year 2005 and Orientation in 2006 of the Peoples Court issued by the

Supreme Court, the rate of successful conciliation in the entire system is 40%,

in which many courts achieve 50%-60% of cases successfully conciliated.

According to an unofficial statistics, the number of economic disputes settled

through conciliation each year in accounts for approximately 50% of the

number of cases resolved by the courts.In non-adjudication conciliation, the achieved results mainly come form

the operation of conciliation at the ground level. The rate of successful

conciliation at the ground level is increasing due to high quality of

conciliation teams. Some places such as Khanh Hoa achieve up to 95%

successful conciliation. Ha Giang and Thanh Hoa achieve 90% (figures of

2007, extracted form the Preliminary Report of 3 years of implantation of

Directive No. 32 CT/TW dated Dec. 9 2003 by the Secretariat of the CentralCommunist Party Session IX). Especially, conciliation at the ground level is

not only a dispute settlement process but also a form of legal propaganda and

education which disseminate legal information to the people. The conciliator,

in the course of conciliation, has raised the peoples awareness of laws, thus

limit disputes and breeches of laws in practice. Conciliation of collective

labour disputes has not yet shown its effectiveness with the number of strikes

tends to increase, especially in foreign invested areas. As for commercialarbitration, the results stay modest as there are few cases handled by the

commercial arbitral tribunal. As we all know, dispute settlement through

arbitration is a popular process which is favoured by the market economy.

However, this process has not yet been applied frequently in Vietnam and the

operation of commercial arbitration in Vietnam is still ineffective. Vietnamese

enterprises normally refer their disputes as may arise to the court.

It is difficult to have an accurate evaluation of the effectiveness ofnegotiation. This process applies mainly in settlement of labour and

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commercial disputes, notably in case of strikes. Negotiation is regarded as an

useful measure which helps the parties eliminate their disputes through

dialogue, reception of the parties demands to adjust policies of salary and

working hours

Executors of these processes are mainly adjudicators (judges andarbitrators) labour conciliators, conciliators at the ground level. Among them,

conciliators at the ground level constitute the biggest force with 119,122

conciliation teams involving 540,940 conciliators (statistics in 2007). The

minimum standard and skills of these executors vary from group: the required

qualifications of adjudicators are higher than those of labour conciliators and

conciliators at ground level so their practical achievements are better,

however, to date there are still no specific requirement of skills andprofessional expertise when conducting conciliation.

Several constraints (mainly of conciliation) can be noticed such as the

imperfection of the institutions for these processes, deficient human resources

both in quantity and quality. Adjudicators have relatively high-level expertise

but have not received much training in conciliation skills, which affects the

efficiency of these processes. As for negotiation, there is still no specific

provisions on the legal validity of the negotiation outcomes so theeffectiveness of the practical application is still low.

III. Directions and measures as to improve the role of negotiation,

conciliation and mediation in dispute settlement in Vietnam

1. Institutions

General direction: in order to facilitate the parties to make their choice,

and at the same time enhance the nature as substitutes for adjudication

proceedings, the laws should provide for legal frameworks and principles for

these processes, especially those concerning the legal validity of their results;

implementation principles, minimum standards and skills of the executors of

dispute settlement through negotiation, conciliation and mediation.

The distinction between mediation and conciliation should be clarified

in the provisions of the laws and mediation process should be specified on the

ground of the basic difference from conciliation (the role of the independent

third party in the relations with the parties).

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The provisions of the laws on these processes, especially conciliation

should be refined. Conciliation in civil procedures should be specifically

provided for in the stage of judicial review and retrial. Conciliation at the

ground level should be continuously heightened as to resolve minor disputes

and conflicts in the communities through the establishment of the law onconciliation at the ground level.

Negotiation should be clearly defined as a dispute settlement process;

which should be, however, executed within the limit of the laws and social

ethics. In the mean time, a regime to guarantee the legal validity of negation

should be established (for example, negotiation outcomes should be

recognised and enforced by a certain competent authority...).

The courts and arbitration centres should receive institutionalstrengthening so as to improve their capacity in execution of conciliation and

mediation in dispute settlement.

Finally, the above institutional building measures will contribute to the

official reaffirmation of the position of these processes in dispute settlement.

As of now, enterprises still resolve their disputes between themselves. In

many cases, they lean on the police (to collect debts on their behalf). Besides,

they can confide in credible mediators or conciliators. Also, the LegalDepartment and Arbitration Centre under VCCI often receive requests for

support in conciliating the disputes between enterprises. Recognition of

conciliation as an official dispute settlement process will facilitate enterprises

to resolve the disputes which are not too complicated.

2. Training of human resources

At first, it is necessary to refine the minimum standards and skills of the

executors of dispute settlement through negotiation, conciliation andmediation specifically conciliators, judges, arbitrators. Though judges and

arbitrators have professional expertise in legal field, a training course on

conciliation skills and knowledge is required, and this, if provided, will be

very significant in legal point of view. For conciliators, standards of

conciliation skills and expertises are also needed to improve the conciliation

quality.

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Continue reinforcement in term of quantity, especially of labour

conciliators, guarantee the establishment of labour conciliation councils at the

ground level of enterprises, notably foreign invested enterprises.

Organise training courses for and foster the professional ability of the

executors of the above processes.

For negotiation, qualified lawyers must be attracted to engage because

the recent practices in Vietnam have revealed that more and more enterprises

assume lawyers service of representing them in negotiating their disputes.

Therefore, we should also pay attention to training of negotiation skills in

dispute settlement for lawyers in general curriculum./.

08 04 18- Hòa giải-TranVanQuang- En

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