Implementing Multi-Tiered Dispute Resolution Clauses: Recommendations for Vietnam

In most commercial contracts, the parties often prioritize the application of measures to resolve conflicts in good faith such as dispute resolution board or mediation prior to arbitration (also known as alternative dispute resolution, ADR). Problems occur when one of the parties does not comply with the pre-arbitration proceedings designed in the contract. Currently, the 2010 Law on Commercial Arbitration does not clearly stipulate the validity and enforceability of the multi-tiered clause, leading to different courts making different decisions on the consequences of violating the pre-arbitration agreement. This paper analyzes the practice of the arbitral tribunals and the courts concerning the issue of application of multi-tiered clauses leading to arbitration in order to propose recommendations for amendments to the 2010 Law on Commercial Arbitration.