(Luận văn) arbitration med arb model international practice and applicability in viet nam

MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY

ARB-MED-ARB MODEL: INTERNATIONAL PRACTICE AND
APPLICABILITY IN VIETNAM

lu
an
n

va
gh

tn

to
p

ie

Major: Economics

w

do

Specialization: International Trade Policy and Law

d

oa

nl

Code: 8310106

ll

u
nf

va

an

lu
m

oi

Full Name: Le Hong Nhung

z
at
nh

Supervisor: Assoc. Prof, Dr. Nguyen Minh Hang,

z
m
co

l.
ai

gm

@
an
Lu

Ha Noi, 2019

n

va
ac
th
si


STATEMENT OF ORGINAL AUTHORSHIP
The master thesis “Arbitration-Med-Arb model: international practice
and applicability in Viet Nam”, which was completed as a result of the course
named Master of International Trade policy and Law, is the author‘s sole work with
the best devotion, endeavor and hard-working period given. The author guarantee
that the master thesis have been carried out in conformity with the thesis writing
regulation and process issued by the Foreign Trade University

lu
an

n

va
p

ie

gh

tn

to
d

oa

nl

w

do
ll

u
nf

va

an

lu
oi

m
z
at
nh
z
m
co

l.
ai

gm

@
an
Lu
n

va
ac
th
si


ACKNOWLEDGEMENT
This thesis is the result of six months of researching. It is an interesting and
learning experience. In completing this thesis, the author would like to give my

special thanks to many people for their significant help, contribution, and
recommendations during my writing process.
Foremost, special mentions and the most sincere thanks should belong to
Associate Prof. Dr. Nguyen Minh Hang, my supervisor at Foreign Trade University.

lu

With her master knowledge and experiences, she helped me in writing this thesis. I

an

could not complete this thesis without her positive suggestions and guidance.

va
n

Secondly, I would also like to give my thanks to the authors who provided me

My last appreciation is to the Faculty of Graduate Studies of Foreign Trade

p

ie

gh

tn

to

with valuable books for my thesis.

do

University for organizing such a meaningful master course and all the support, my

oa

nl

w

family and my friends for their supports and encouragements.

d

Hanoi, 15th January 2019

va

an

lu
ll

u
nf

Le Hong Nhung

oi

m
z
at
nh
z
m
co

l.
ai

gm

@
an
Lu
n

va
ac
th
si


TABLE OF CONTENTS
STATEMENT OF ORGINAL AUTHORSHIP
ACKNOWLEDGEMENT
LIST OF FIGURES & TABLES

LIST OF ABBREVIATION
SUMMARY OF THESIS RESEARCH RESULT
INTRODUCTION .....................................................................................................1
Rationale .........................................................................................................1

2.

Literature review ............................................................................................2

3.

Research questions .........................................................................................4

4.

Research’s objective .......................................................................................5

5.

Scope of study .................................................................................................6

6.

Methodologies .................................................................................................7

gh

Research disposition ......................................................................................8

lu

1.

an
n

va
tn

to

7.

ie

p

CHAPTER 1: THEORETICAL FRAMEWORK .................................................9

do

nl

w

1.1. Alternative dispute resolutions .....................................................................9

oa

1.1.1. Background ............................................................................................9

d

1.1.2. Definition..............................................................................................11

lu

va

an

1.1.3. Methods and forms of ADR .................................................................13

u
nf

1.1.4. ADR and litigation ...............................................................................13

ll

1.2. Mediation ......................................................................................................16

m

oi

1.2.1. Rationale of mediation .........................................................................17

z
at

nh

1.2.2. Definition and process .........................................................................18
1.2.3. Stages of commercial mediation..........................................................20

z

@

1.2.4. Types of commercial mediation ...........................................................23

l.
ai

gm

1.2.5. International organization’s activities for commercial mediation ....24
1.2.6. Advantages and disadvantages of commercial mediation ..................27

m
co

1.3. Arbitration ....................................................................................................28

an
Lu

1.3.1. Rationale of arbitration .......................................................................28
1.3.2. Definition and process .........................................................................29

n

va
ac
th
si


1.3.3. Stages of commercial arbitration ........................................................31
1.3.4. Arbitration agreement ........................................................................33
1.3.5. Forms of commercial arbitration ........................................................34
1.3.6. Benefits and drawbacks of commercial arbitration ...........................35
1.4. The key differences between mediation and arbitration ..........................36
1.5. The understanding of arb-med-arb model ................................................39
CHAPTER 2: INTERNATIONAL EXPERIENCE ON APPLYING ARBMED-ARB MODEL: STUDY OF SINGAPORE ................................................42
2.1. Singapore’s development in mediation and arbitration ..........................42
2.1.1. Singapore’s development in mediation ...............................................42

lu
an

2.1.2. Singapore’s development in arbitration ..............................................45

va

2.2. Singapore's Arb-Med-Arb model ...............................................................50

n
2.2.2. Procedure of Singapore’s Arb - Med - Arb model..............................52
2.2.3. Advantages of Arb - Med – Arb ...........................................................55

p

ie

gh

tn

to

2.2.1. SIAC-SIMC Arb-Med-Arb Protocol ...................................................50

w

do

CHAPTER 3: APPLICABILITY OF AMA MODEL IN VIET NAM AND

oa

nl

RECOMMENDATIONS ........................................................................................60

d

3.1. Vietnam’s approach on applying Arb – Med - Arb model ......................60

lu

an

3.1.1. Vietnam economy review .....................................................................60

u
nf

va

3.1.2. Vietnam development in commercial mediation and arbitration ......63
3.1.3. Arb-Med-Arb applicability in Viet Nam and issues...........................74

ll
oi

m

3.2. Recommendations for Viet Nam .................................................................79

z
at
nh

3.2.1. For Government ...................................................................................79
3.2.2. For associations and enterprises .........................................................89

z

CONCLUSION ........................................................................................................91

@

Conclusions ...................................................................................................91

2.

Limitation of research .................................................................................92

l.
ai

gm

1.

m
co

REFERENCES ........................................................................................................93

an
Lu
n

va
ac
th
si

LIST OF FIGURES & TABLES
Table 1.1: Comparing ADR and Court Procedure ..............................................16
Figure 1.1: Commercial mediation process ..........................................................20
Table 2.1: Circumstances to use commercial mediation .....................................27
Figure 2.1: Commercial arbitration process ........................................................31
Table 2.2: Comparison Between Arbitration & Mediation ................................38
Figure 3.1: Total Number of New Cases Handled by SIAC (2006-2016) ..........46
Firgue 3.2: Procedure of Singapore Arb-Med-Arb model ..................................52

lu

Table 3.1: Advantages of Mediation versus Arbitration .....................................55

an
va

Figure 3.3: Advantages of Arb-Med-Arb .............................................................57

n

Figure 3.4: Newly established enterprises of May from 2014 – 2018 .................61

p

ie

gh

tn

to

Figure 4.1: Viet Nam’s Arb-Med-Arb model (expected).....................................75

d

oa

nl

w

do
ll

u
nf

va

an

lu
oi

m
z
at
nh

z
m
co

l.
ai

gm

@
an
Lu
n

va
ac
th
si


LIST OF ABBREVIATION
ADR

Alternative Dispute Resolution

AMA

Arbitration-Mediation-Arbitration

ARB-MED-ARB Arbitration-Mediation-Arbitration

lu

Community Mediation Centres

FDI

Foreign Direct Investment

HKMAAL

Hong Kong Mediation Accreditation Association Limited

ICC

International Chamber of Commerce

PD

Practice Direction on Mediation

an

CMC

n

va

gh

tn

to

Primary Dispute Resolution Centre

p

ie

PDRC

do

Singapore Mediation Center

d

SIAC

oa

nl

w

SMC

Singapore International Arbitration Center

an

lu
Singapore International Commercial Court

u
nf

va

SICC

Singapore International Mediation Center

SIMI

Singapore International Mediation Institute

TRACENT

Ho Chi Minh City Commercial Arbitration Center

UN

United Nations

UNCITRAL

United Nations Commission on International Trade Law

VIAC

Vietnam International Arbitration Center

ll

SIMC

oi

m
z
at
nh

z
m
co

l.
ai

gm

@
an
Lu
n

va
ac
th
si


VMC

Vietnam Mediation Center
WB

World Bank
WTO

World Trade Organization

lu

an

n
va

p
ie
gh
tn
to

d

oa
nl
w
do

ll
u
nf
va
an
lu

oi
m

z
at
nh

z

m
co

l.
ai

gm

@

an
Lu

n

va

ac
th

si


SUMMARY OF THESIS RESEARCH RESULT
The thesis ―Arb-Med-Arb model: international practice and applicability in
Vietnam‖ focuses on giving recommendation on how Vietnam can apply the
experiences of developed jurisdiction around the world, which in this study are
Hong Kong, US, especialy Singapore in order to improve the country‘s commercial
dispute resolution context. In general, Vietnam‘s alternative dispute resolutions on
commercial dispute in general is still limited. In addition, the commercial mediation
activities is scattered between arbitration center national wide without a uniform
Mediation and Arbitration Act until the recent Decree No. 22/ND-CP about

lu

commercial mediation that have been issued in April 2018 and Law on commercial

an

arbitration issued in June 2010. Despite a remarkable movement, Vietnam

va
n

regulation still possessed many drawback regarding the code of conduct for

tn

to

mediators and arbitrators. The solutions which have been found in the study of the

ie

gh

three developed dispute settlement hubs of the world shall help to attract the interest

p

of Vietnam enterprises on using multitiered-clause Arbitration - Mediation -

do

nl

w

Arbitration to sellte disputes, improving the standard and conduct of mediator and

oa

arbitrator, fortify the enforceability of the mediation settled agreement and

d

arbitration award.

ll

u
nf

va

an

lu
oi

m
z
at
nh
z
m
co

l.

ai

gm

@
an
Lu
n

va
ac
th
si


1

INTRODUCTION
1. Rationale
An era of connection and cooperation is the way people usually call the
21st century. An outburst of a smartphone or high-tech computer for instance
would imply that its parts are collected and produced in different countries. These
components are then assembled into the final product and distributed over the
world. That is international trade at its absolute finest.
Powering such international trade are complex technologies which have
reduced the obstacles for global advertising, near-instant global communication,

lu
an

prompt product and services delivery. In conclusion, the term ―globalism‖ has been

n

va

reconceptualized by technology.

tn

to

There are however features of globalism where technology cannot assist (at

ie

gh

least not yet). Since the characteristics of international businesses, the contracts

p

signed between the sides are generally quite sophisticated, consisting of a expansive

w

do

heavily negotiated clauses regarding to each party‘s commercial requirements. In

oa

nl

addition to trade terms, parties‘ awareness of the need to have a well-written dispute

d

settlement clause are increasing .

lu

va

an

Go along with the development of technology, the mechanisms for resolving

u
nf

dispute have not stayed immovable and have gradual developed to dedicate to

ll

globalism as much as achievable. In this field, arbitration has been found an ideal

m

oi

substitute to the traditional court procedures. Generally, arbitrations are supposed

z
at
nh

more efficient and flexible than courts, while the parties are offered confidentiality.
The enforcement is another enormous advantage of arbitration. In particular, an

z

gm

@

arbitration awards are more readily enforceable than judgment from foreign court.
The question that people are finding the key is: are we on the top of the

l.
ai

m
co

progression for dispute settlement clauses? Can arbitration clauses (or any
substitute dispute resolution clauses) still be refined? The Singapore International

an
Lu

Arbitration Centre (SIAC) and Singapore International Mediation Centre (SIMC)

n

va

assuredly realize that fact. Altogether, the SIAC and SIMC have requested to bring

ac
th
si


2

up a nontraditional dispute settlement model compositing the advantages of
arbitration and mediation clauses, whose name is the Singapore Arb-Med-Arb
Protocol (― AMA Protocol‖).
The AMA Clause allows parties to choose to settle disputes by method of
arbitration to deal with their differences or by mediation before reaching arbitration.
A multi-tiered clause is considered as a form of arbitration clause which combines
mediation and arbitration proceedings in order to increase the chance of settling
disputes between the parties via goodwill and positive discussions and to inspire
constructive negotiations before a fully-completed arbitration procedure.

lu

In this thesis, the author would like to look into this new approach to settle disputes

an
va

and see what advantages AMA could have for the parties. Moreover, the author also

n

want to show the key points for question: ―Can Vietnam be able to apply this model

gh

tn

to

to resolve the disputes in the future?‖. Consequently, being a Master student
majoring in International Trade Policy and Law, for the desire to devote my

ie

p

knowledge to the better Vietnam‘s dispute settlement, so as to keep pace with the

do

nl

w

global standards, the author selected the topic: “Arb-Med-Arb model:

d

oa

international practice and applicability in Vietnam”.

lu

va

an

2. Literature review

u
nf

Although commercial mediation and arbitration have long developing journey

ll

all over the world, Vietnam‘s mediation and arbitration is still inexperienced and

m

oi

the term is new to some extent. Especially, Arbitration - Mediation - Arbitration

z
at
nh

model has ever been researched thoroughly as well as applied in Viet Nam. As a
result, the study‘s subject is quite new and there has not been any same or

z

gm

@

analogous topic up to the moment that the author has finished the paper. The author
would like to review some experiential researches from both Vietnamese and

m
co

-

l.
ai

foreign sources as follows:

Nguyen Trung Nam, Trinh Nguyen (2017) – “Mediation – arbitration in

an

Lu

commercial and construction disputes” is a research about the issues in the

n

va

circumtances of construction dispute settlement under Viet Nam‘s laws and

ac
th
si


3

point out some recommendations, composing mediation‘s applying methods,
in the context of Viet Nam, combining the other ADR procedures so as to
require a multi-tiered dispute settlement mechanism, or in the unique form of
Arb-Med-Arb innovated in Singapore, in order to promote the efficiency and
enforceability of the dispute settlement way in construction conflict via the
improvements of commercial mediation, from the past to recent situation.
The major acknowledgement of this paper is the information about the issues
relating to construction disputes in Viet Nam.
Financier Worldwide Magazine (2018) – “Arb-med-arb in cross-border

-

disputes”: in this study, the authors pointed out the simple idea behind

lu
an

multi-tiered dispute resolution is to provide several possible avenues to

va

dispute settlement within one dispute resolution procedure. The result is a

n
tn

to

mechanism that combines various dispute resolution methods, such as

stated some advantages and limitations of the AMA Protocol.

p

ie

gh

mediation and arbitration, in different ways. In addition, the researcher also
Bryan Cave Leighton Paisner team (2015) – “Singapore’s new “Arb-

w

do

-

oa

nl

Med-Arb” protocol: a positive development?” is a sientific article that study

d

how the SIMC - SIAC protocol works and consider the benefits and

an

lu

downsides of attaching one of Singapore‘s newest dispute settlement

-

u
nf

va

methods to commercial contracts.
Anindya Basarkod and Dr. Markus Altenkirch (2018) – “Arb-Med-Arb:

ll
oi

m

what is it and how can it help the parties to solve their disputes

z
at
nh

efficiently?” is a paper looking into Arbitration - Mediation - Arbitration as
a new approach to resolve disputes and show what advantages Arbitration -

z

Mediation - Arbitration could have for the conflict sides.

@

Daniel Chong, Sharon Lin, (2018) - “Arb-Med-Arb: Connecting the

gm

-

l.
ai

Dots between Arbitration and Mediation”: in this study, the authors

m
co

pointed out some key aspects of ―Arb-Med-Arb‖, the differences between

an
Lu

arbitration and mediation. In addition, the reason why people should use

n

va
ac
th
si


4

Arb-Med-Arb to solve the dispute and a sample of Arb-Med-Arb clause are
also mentioned in this research.
My review will not explore all aspects of disputes resolution but focus on the
which main points have been mentioned in the above articles or studies. Most of the
above research define the Arb-Med-Arb model and show some main advantages but
does not mention the method used to apply AMA in Asian country such as Viet
Nam. Although the study named “Mediation – arbitration in commercial and
construction disputes”by Nguyen Trung Nam, Trinh Nguyen (2017) showed the
issues in the circumtances of construction dispute settlement under Viet Nam‘s laws

lu

and point out some recommendations, the definition, characteristics and important

an

advantages of Arb-Med-Arb are not mentioned here.

va
n

In short, up to now, there has not been any comprehensive study researched on

gh

tn

to

all-sided Arb-Med-Arb model and the method that used to apply this multi-tiered
dispute settlement mechanism in Viet Nam. My contribution will highlight the

ie

p

advantages of this dispute resolution method in general (not focus on any specific

do

oa

nl

w

field) and answer the question: ―How can we apply Arb-Med-Arb in Viet Nam?‖.
3. Research questions

d
lu

an

There are some key questions of this study including: ―What is Arb – Med - Arb

u
nf

va

protocol?‖, ―What are the countries applied this clause in the world?‖ and ―What
should Viet Nam act to apply this model in the future‖. In order to find out the

ll
oi

m

answers for such research questions, we need to focus on these sub questions:

z
at
nh

What are the basic principles of arbitration and mediation?

-

What are the differences between arbitration and mediation?

-

How can Arb-Med-Arb help the parties to solve their disputes in

z

-

m
co

l.
ai

gm

@

Singapore?

-

How can Viet Nam apply Arb-Med-Arb model?

-

What are implications for Viet Nam?

n

va

What are the benefits of Arb-Med-Arb model?

an
Lu

-

ac
th
si


5

4. Research’s objective
Arbitration and mediation are applied increasingly in the world to settle the

disputes instead of court. That are very useful alternative dispute resolution,
however, the combination of arbitration and mediation bring the surprising benefit.
International economic integration is one of the main tasks of Viet Nam in
the near future. Therefore, ―Economic integration is central in which the integration
in other areas has to facilitate economic integration and contribute positively to
economic development, defense consolidation, national security and preservation;
and promote cultural identity and promote cultural and social development.

lu

Integration in the different fields must be implemented in a coordinated global

an
va

integration strategy with a roadmap and steps in line with the actual conditions and

n

capabilities of the country" (Resolution No. 22-NQ / TW dated 10 April 2013 on

gh

tn

to

international integration). Up to 2018, Vietnam has negotiated and signed more than
ten regional free trade agreements (FTA), including commitments on technical

ie

p

barriers to trade and will sign some next new FTAs such as: EVFTA, RCEP, ….

do

nl

w

The roadmap for tariff reductions in free trade agreements is committed for a period

d

oa

of ten years for each phase and is specified for each agreement. That is the reason

an

lu

why the amount of international trade transactions and import-export turnover are
increasing drammatically.

va

ll

u
nf

It is clear that at this moment, clear that Viet Nam should act now for the

oi

m

unexpected disputes in businesses and to protect Vietnamese enterprises in
international market. Meanwhile there is not legal framework as well as any clause

z
at
nh

refer to Abitration – Mediation – Arbitration model. Therefore, the content of the

@

Systematize the basic principles of two alternation dispute resolution

gm

-

z

thesis will highlight the objectives:

approaches.

m
co

l.
ai

method: arbitration and mediation and the key differences between these

an
Lu

- Understanding how Arbitration - Mediation – Arbitration model works ;

n

va
ac
th
si


6

- Get deeper understanding on the way Singapore apply this protocol to
resolve conflict in business and the advantages of this model.
- Forecasting the difficulties that Vietnam has to face with when applying
this model, giving suggestion and proposal for Vietnam Government, arbitration

and mediation service providers to facilitate the development of dispute settlement
mechanism
5. Scope of study
There are a number of trade disputes cbalternative dispute settlement, such as
negotiation, arbitration, mediation, or med-arb can be used in various dispute

lu
an

categories ranging from civil, family, commerce. From many studies, it is found

n

va

that, alternative dispute settlement methods give the best answer regarding

tn

to

commercial disputes where the key economic development of the nation rests. This
research focuses on the use of arbitration and mediation, arbitration - mediation -

gh

p

ie

arbitration model to resolve commercial disputes.

w

do

The study specifies the research content on Arb-Med-Arb model of

oa

nl

Singapore. In fact, Arb-Med-Arb model has many advantages, however, this is

d

really new model in dispute resolution, so Singapore is the only country create and

lu

an

allow apply this model. In addition, the thesis also analyzes Vietnam‘s recent

u
nf

va

development on commercial mediation and arbitration such as: legislation,

awareness... In short, the study would do research on the current Vietnam‘s

ll
oi

m

arbitration and commercial mediation situation, which can be enhanced and

z
at
nh

introduce some implications on how to how to apply Arb-Med-Arb model in
Vietnam according to international standard and experiences.

z

@

The research time shall cover the period in the early twenty centuries until

l.
ai

gm

now because Singapore and Viet Nam have a later phase of mediation in
comparison with other developed countries in the world. Moreover, several legal

m
co

documents on commercial mediation and arbitration of international bodies from

an
Lu

the late nineteen to early twenty centuries shall also be included.

n

va
ac
th
si


7

6. Methodologies
This thesis is completed based on the application of theory research method
and practical research method. Theory research method includes analytical method,
synthesis method and reference to the laws and regulations in order to achieve the
requirements set for a research project. Practical research method mostly includes
interview method with experts in the fields of international arbitration and
mediation (as described in the Appendix 1).
Data which is used in the analysis of the thesis is mostly secondary one. The
data is collected, quoted from reports, researches of experiential researchers and

lu

organizations in the field of arbitration and mediation. Primary data for such study

an
va

is hard to conduct since arbitration - mediation - arbitration model is quite new in

n

Vietnam going along with the limitation of capital and time of the author.

gh

tn

to
Theory research method: About analytical and synthesis method, in Chapter 2.

p

ie

Theoretical framework, theoretic and fact, the legal framework related mediation

w

do

and arbitration, in general and internal coordination related to arbitration -

oa

nl

mediation - arbitration model, in particular are deeply analyzed in order to find out
international and domestic practices and show the opportunities to apply arbitration

d
an

lu

- mediation - arbitration clause in Viet Nam. Some arbitration - mediation -

va

arbitration applied cases to settle disputes in Singapore are introduced and analyzed

ll

u
nf

as experiences for Viet Nam to learn in future if Viet Nam involves in same cases.

oi

m

In Chapter 1. International experience on applying arbitration - mediation -

z
at
nh

arbitration model: study of Singapore, the author use synthesis method and
reference to the laws and regulations to show the experiences and find the

z

implications for Viet Nam ...

@

l.
ai

gm

In Chapter 2. Applicability of arbitration - mediation - arbitration model in
Viet Nam and recommendations, the method of reference to the laws and

m
co

regulations is also used so as to figure out some unsuitable points regarding to laws

conclude the thesis and suggest opening the new issues.

an
Lu

and regulations of Viet Nam. Synthesis method will be also used in this chapter to

n

va
ac
th
si


8

Interviews are carried out with some experts and associations to show the
applying method and give recommendations for Chapter 3.
7. Research disposition
Beside the table, chart lists, reference and appendix, the main content of the
thesis includes the followings:

lu
an
n

va

-

Introduction.

-

Chapter 1: Theoretical framework

-

Chapter 2: International experience on applying arb-med-arb model:
study of Singapore

-

Chapter 3: Recommendations

-

Conclustion

p

ie

gh

tn

to
d

oa

nl

w

do
ll

u
nf

va

an

lu
oi

m
z
at
nh
z
m
co

l.
ai

gm

@
an
Lu
n

va
ac
th
si


9

CHAPTER 1: THEORETICAL FRAMEWORK
In this chapter, it is supposed to be helpful to briefly set out the principles on
arbitration and mediation before analyze the others deeper knowledge of the multitiered arbitration - mediation - arbitration clause and model.
1.1.

Alternative dispute resolutions

1.1.1. Background
According to the report of the World Bank Group, the idea of using ADR
as a method of resolving disputes by consensus rather than confrontation has come
from traditional practices of many countries. In other words, ADR has originated

lu

from the history of many cultures, especially one in Asia where harmonization is

an

always a major criteria (World Bank Group, 2011).

va
n

However, the origin of modern ADR is often accepted is the United States

tn

to

by many studies, the thesis recounts the ADR platform of the USA. Earlier, ADR

ie

gh

was first used to resolve civil rights by using mediation and considering action

p

against overworked and delayed courts. Since then, ADR has developed rapidly, not

do

nl

w

only practical but also institutional with the encouragement of the Government,

oa

legal organizations, academics. For example, in 1990, all federal district courts were

d

required to have a plan to reduce costs and delay in litigation process. Therefore,

lu

va

an

each federal district court developed some form of ADR process. Due to
innovations in ADR, mandatory ADR development in courts, states and federal

u
nf

ll

systems, the growing interest in ADR has made the United States the largest source

m

oi

of knowledge in the court connected ADR (USAID, 1998).

z
at
nh

Later in the 1980s, the demand for commercial ADR in the United States
began to increase because of the desire for a more effective alternative to litigation.

z

gm

@

Therefore, ADR models such as negotiation, mediation and litigation have
developed significantly. The institutionalization of ADR has changed the rules and

l.
ai

resolution have been added to the use of ADR.

m
co

legal practices. US regulations, public consultation and administrative dispute

an
Lu

The United States is always leading in many areas and ADR is not an

n

va

exception. Many countries copy US processes, others try to blend American style

ac
th
si


10

with their own dispute settlement traditions. This process is being used to solve
various problems not only commerce, social, civil, politics. Developing countries
are involved in the implementation of ADR, including Vietnam.
China or Hong Kong in particular are also affected by ADR trend from the
United States. The fire spark of disappointment in litigation and arbitration has
spread from the United States to other jurisdictions followed by China (Zheng
Rungao, 2003). The dispute parties began to criticize the limitations of traditional
dispute resolution that subsequently gave rise to ADR. Besides, China ADR‘s
development can be explained by its special cultural background. The Chinese

lu

prefer a consensus, non-adversarial ways of dispute settlement follow philosophies

an

suchas ―better bend than break‖, ―willows are weak yet they bind others wood‖.

va
n

The reason is that in China, reservation of face and business relationship private is

tn

to

very important. Such platform has contributed to promote the growth of ADR,

ie

gh

especially in the field of trade. While the USA model affects most of the world, the

p

China‘s one in general are powerful for Asia or Southeast Asia in particular.

do

nl

w

Singapore is also affected by ADR trends from the US and is considered a

d

oa

pioneer in Southeast Asia's ADR. The reason for the need of ADR here is also due

an

lu

to the limitation of the litigation. In the early 1990s, Singapore courts were full of
case files. More than 2000 cases are awaiting resolution in the Supreme Court.

va

u
nf

More than 10000 cases are inactive, many of which have been more than 10 years.

ll

The process of starting treatment takes 5-10 years for about 44% of cases. On the

m

oi

other hand, appeals take 2-3 years to be heard. Latency can be calculated as part of

z
at
nh

the life expectancy of the person and the processing time of the judgment has not
been mentioned. Therefore, ADR was implemented by the Singapore judiciary to

z

gm

@

reduce the burden of the court and help desperate claimants (Judith Prakash, 2009).

l.
ai

The thesis summarized the background of ADR, from the country of origin -

m
co

the United States, to countries in the same region and has much influence on
Vietnam such as China and Singapore have the same reasons for developing ADR

an
Lu

due to the limitation of litigation and court‘s proceed. Now the thesis will continue

n

va

and define ADR.

ac
th
si


11

1.1.2. Definition
According to Yona Shamir, ADR is defined as:
“Alternative Dispute Resolution (ADR, sometimes also called
“Appropriate Dispute Resolution”) is a general term, used to define a
set of approaches and techniques aimed at resolving disputes in a
non-confrontational way. It covers a broad spectrum of approaches,
from party-to-party engagement in negotiations as the most direct
way to reach a mutually accepted resolution, to arbitration and
adjudication at the other end, where an external party imposes a

lu

solution. Somewhere along the axis of ADR approaches between these

an
va

two extremes lies “mediation,” a process by which a third party aids

n

the disputants to reach a mutually agreed solution.”

tn

to
Source: (Yona Shamir, 2003)

ie

gh
p

Alternative dispute resolution is a more common term, however many

w

do

empirical studies and even the author finds the words Dispute Settlement more

oa

nl

appropriate to nature. The purpose of dispute resolution is to make social life better

d

(Park and Burger, 2009). That process will attempt to resolve and consider conflicts

lu

an

that help people and entrepreneurs keep relationships. The Latin word refers to this

u
nf

va

process for the sinner through the unimportant person of the social life and
important to the social order. Lack of dispute resolution will make it difficult for

ll
oi

m

people to go together.

z
at
nh

Or even the Great Gandhi once said:

“I realized that the true function of a lawyer was to unite parties...

z
gm

@

The lesson was so indelibly burnt into me that a large part of my time
during the twenty years of my practice as a lawyer was occupied in

l.
ai

m
co

bringing about private compromise of hundreds of cases. I lost
nothing thereby not even money; certainly not my soul”.

an
Lu

Source: (Azquotes, 2018)

n

va
ac
th
si


12

What the thesis tries to say, all are in the words of the former US Chief
Justice, Warren Burger:
“The obligation of our profession is… to serve as healers of human
conflict. To fulfill our traditional obligation means that we should
provide mechanisms that can produce an acceptable result in the
shortest possible time, with the least possible expense and with
minimum of stress on the participants. This is what justice all about.”
Source: (Chief Justice Warren Burder, 1997)
In conclusion, ADR can be defined as a concept used to refer to different

lu
an

methods of resolving legal disputes. It stems from court delays in handling cases

n

va

timely and reasonably. On the other hand, different regimes can help disputing

tn

to

parties resolve conflicts in a timely and cheap way. However, in essence, ADR is
still complementary to the courts. Nationally and internationally, ADR is

gh

p

ie

increasingly used in the field of law and commerce. ADR can be used in different

w

do

types of disputes, from civil, family and commercial. From many studies, it has

oa

nl

been found that ADR methods provide the best answer regarding trade disputes in
which the important economic development of the country lies (Shodhganga, 2018).

d
lu

u
nf

va

its model:

an

Obviously, ADR is not a new concept, but novelty lies in the proliferation of

ll

“Dispute resolution outside of courts is not new; societies world-over

m

oi

have long used non-judicial, indigenous methods to resolve conflicts.

z
at
nh

What is new is the extensive promotion and proliferation of ADR
models, wider use of court-connected ADR, and the increasing use of

z

l.
ai

gm

disputes.”

@

ADR as a tool to realize goals broader than the settlement of specific

m
co

Source: (USAID, 1998)

an
Lu
n

va
ac
th
si


13

1.1.3. Methods and forms of ADR
ADR systems can often be categorized into negotiation, mediation or
mediation systems and arbitration. According to the USAID study in 1998, the
thesis summarized the following categories:
The negotiation process creates a platform to facilitate the face of negotiations
between the disputing parties, without the presence of a third party. On the other
hand, the mediation and reconciliation systems are similar in that they invite a third
party between the parties, or to reconcile a specific conflict or to reconcile their
relationship. Mediators and mediators can facilitate communication, or can help

lu

direct and structure a settlement, but they do not have the right to resolve. Finally,

an
n

va

the arbitrator authorizes a third party to decide how to resolve the dispute.

tn

to

In addition, it is important to differ between ADR binding and non-binding
forms. The negotiation, mediation and reconciliation systems belong to the non-

gh

p

ie

binding group, they recognize the willingness of the disputing parties to reach

w

do

consensus. The arbitration process can be binding or non-binding. Binding one

oa

nl

creates a third-party decision that the parties will follow even if they disagree with
the conclusion, like a judicial decision. Non-binding one creates a third party

d
an

lu

decision that the disputant may not follow.

u
nf

va

Mandatory processes and voluntary processes also need to be distinguished.
Many legal systems order parties to make negotiations, mediation, mediation or

ll
oi

m

arbitration before going to court. The ADR method may also be required as part of a

z
at
nh

previous contractual agreement between the parties. For a voluntary one, using the
ADR process completely depends on the needs of the dispute parties.

z
gm

@

1.1.4. ADR and litigation

This section examines the advantages and disadvantages of the ADR process

l.
ai

m
co

and compares with litigation. The following knowledge is drawn from the Dispute
Resolution - Master of Policy and International Trade Law course of Prof. Dr.

an
Lu

Wolfgang Wurmnest, LL.M. (Berkeley).

n

va
ac
th
si


14

By negotiation, this process means that the parties try to resolve their dispute
by mutual agreement without trial. The skills needed are at a lower level of legal
nature, rather a question of negotiation tactics and experience. Inexpensive and
amicable agreement allows the parties to continue their business relationships, the
parties may try to include solutions that require cooperation and will not normally
be available in court proceedings. However, negotiation has no coercive power, so
the parties must both agree to negotiate and resolve their dispute, no agreement has
no results.

On the other hand, arbitration means that a dispute between the parties is filed

lu

under an agreement with a private third party chosen by the parties (arbitrators or

an

arbitrators) to resolve it in a judicial manner (eg: a third party has the right to make

va
n

binding decisions. Arbitration is an opportunity for parties to present evidence or

- Permitting party autonomy

p

ie

gh

tn

to

submit to support their request. This method has many advantages:

w

do

- Less intrusions by state courts.

oa

nl

- Special expertise of arbitration can be selected by the parties.

d

- Confidentiality proceedings are not open to the public.

an

lu
- Faster and cheaper than court.

u
nf

va
- Almost globally recognized arbitration awards through the United Nations

ll

z
at

nh

York, June 10, 1958).

oi

m

Convention on the Recognition and Enforcement of Foreign Arbitral Rulings (New

On the contrary, there are some disadvantages such as the weak enforcement

z

power of the arbitral tribunal over the parties. In some cases, the support of the

@

gm

courts may be necessary to obtain evidence for temporary or constitutional

m
co

l.
ai

measures of a court. Moreover, there is uncertainty about procedural issues plus the
application of legal rules and issues with third party involvement unless contracted.

an
Lu

Last but not least, mediation is the process by which the parties engage a
neutral third party support to act as a mediator - a facilitating intermediary - without

n

va
ac
th
si


15

giving any binding decision but using a variety of different procedures, techniques
and skills to help the parties resolve their disputes by negotiation agreement without
adjudication. Some notable characteristics are that negotiations are basically
supported by a neutral third party, sometimes mediators have knowledge of
psychology (business psychology). Mediation has the same advantages as
negotiation, plus it looks at ―interests‖, not merely ―rights‖. In addition, mediation
is a bit more expensive than negotiation without mediators, but there may be a
better chance of success. The disadvantage of mediation is the advance agreement
on such amicable dispute settlement and the need of good will during mediation or
it will be a waste of time.

lu
an

The results of the empirical survey indicate that litigation is preferred by

va
n

disputant on not many criteria. The criteria are to minimize costs, speed of the

tn

to

resolution process, privacy, keep relationships, neutral views and precedents setting.

ie

gh

Litigation or adjudication only has a greater advantage than other ADRs is setting

p

precedent. Arbitration is favored by many people of their ability to get neutral

do

nl

w

opinions. The strength of Mediation lies in reasonable prices, the ability to connect

oa

issues, keep business relationships between parties to cooperate in the future and

d

relate to constituencies in the process. In this table, number 3 means highly likely to

lu

va

an

satisfy goal, number 2 means being likely to satisfy the goal, number 1 means being
unable to satisfy the goal and zero equals to highly unlikely to satisfy goals. Now

u
nf

ll

we can see that for what reason ADR is favored by disputant rather than

oi

m

adjudication at the courts.

z
at
nh
z
m
co

l.
ai

gm

@
an
Lu
n

va
ac
th
si


16

Table 1.1: Comparing ADR and Court Procedure
How are they likely to achieve disputants’ goals?
Disputant’s goal

Court’s

ADR’s procedure

procedure

Arbitration

Adjudication

Minimize costs

3

1

0

Resolve quickly

2

3

0

Maintain privacy

2

2

0

Maintain

3

1

0

0

3

3

0

1

3

lu

Mediation

an

n

va
ie

gh

tn

to

relationships

p

Get neutral opinion

do

oa

nl

w

Set precedent

d

Source: (USAID, 1998)

Mediation

u
nf

va

an

lu

1.2.

The most comprehensive and modern definition of mediation is offered by

ll

oi

m

the International Mediation Institution as follows: ―Mediation is negotiation

z
at
nh

facilitated by a trusted neutral person. The role of the neutral - the mediator – is to
help those involved sort out their issues and arrive at a consensus. That might

z

involve helping parties to finalize an agreement, resolve a dispute, develop effective

@

important features of mediation are described below:

m
co

l.
ai

gm

communications, build or improve relationships, or all of these things.‖ Two other

- Confidentiality: mediation is a confidential process where what was

an
Lu

discussed or agreed in private is not disclosed to others without everyone‘s
agreement. In addition, what is discussed in private session with each party shall not

n

va

ac
th
si