Regarding the comments on the draft Circular detailing a number of contents on Construction Contracts
With the responsibility of providing comments on the draft legal regulations, the Vietnam International Commercial Mediation Center (VICMC) commented on the draft Circular detailing a number of contents on Construction Contracts (Draft) according to Official Letter No. 1334/BXD-KTXD of the Ministry of Construction dated 20/04/2022. These comments are mainly technical in drafting the legal content without affecting the regulations and policy guidelines of the Draft.
As the first commercial mediation center in Vietnam, VICMC focuses on analyzing and commenting on terms related to dispute settlement in general and the dispute board in particular. See detailed comments on the draft Circular of the Vietnam International Commercial Mediation Center (VICMC) here.
Download the full text of the draft Circular at the following attachment: Draft Circular
About commercial negotiation and mediation
Article 146 of the Law on Construction clearly defines negotiation and mediation as two different dispute resolution methods. Negotiation is a method of dispute resolution conducted by the parties themselves. And mediation is a settlement method with a third party (mediator) participating as an intermediary to assist in the settlement of disputes (see Article 3 of Decree 22/2017/ND-CP on commercial mediation).
With the strong development of construction projects, the increase in construction disputes is inevitable. For construction contracts of great value and long duration, it is essential to maintain a long-term cooperative relationship so that the two parties can continue to complete the project, even if a dispute occurs. Therefore, when a conflict arises, it is important to come up with a solution that satisfies the parties so that an agreement can be reached.
Dispute Board in construction contracts was born for that purpose. The Dispute Board performs the task of reviewing and detecting to handle conflicts and arbitrate disputes. This feature is very consistent with the goal of the mediation method, providing a satisfactory solution for both parties, thereby helping to maintain a long-term cooperative relationship.
The formation and operation of the Dispute Board are specified in Article 45 of Decree 37/2015/ND-CP on construction contracts. According to this provision, the conclusion of the Dispute Resolution Board is the “mediation conclusion”. Thus, the dispute settlement procedure of the Dispute Board can be considered a mediation procedure.
According to the provisions of the Commercial Law, the Construction Law, and other relevant laws, construction is a commercial activity. Therefore, the application of the commercial mediation mechanism for construction disputes is consistent with the provisions of law, especially Decree 22/2017/ND-CP on commercial mediation. The application of the commercial mediation method will help the results of the Dispute Board to be enforced in accordance with the provisions of the Civil Procedure Code.