Webinar | Covid 19 – Construction contract and the ability to use commercial mediation

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Mediation can become an appropriate solution in resolving commercial disputes in general and construction disputes in particular in the context of Covid-19. The parties of the dispute should consider using mediation when one or more of the following elements exist, (i) both sides desire to resolve it quickly but cannot negotiate with one another; (ii) all parties feel that the court is a risky method in the current situation, costly and time-consuming; (iii) the fact that both sides acknowledged the influence of Covid 19 leading to damage that has occurred to one or both parties; (iv) both sides are willing to resolve their disputes in a friendly manner.

“Human history shows that after every human disaster, there is always great progress in three areas: awareness – thinking; mode of operating the socio-economic system and technological capacity”. The Covid-19 pandemic will certainly make drastic changes in all these areas. First of all, we are and will see how communication is changing. Online activities such as working remotely, meeting online have become a popular, if not the main activity in everyday life. And in the legal field, terms like force majeure or hardship are “mentioned” more than ever. After researching, delving deeper into these provisions in resolving commercial disputes arising during the Covid period, we can recognize that these legal buoys, when put into practice, can help the parties deal with issues raised by Covid-19.

On April 25, Vietnam International Commercial Mediation Center (VICMC) and Vietnam Construction and Contracts Law Group (VCCLG) organized an online seminar (Webinar) with the topic: “Construction contract and the ability to use commercial mediation“. Participating in the workshop were Lawyer Nguyen Hung Quang – Chairman of VICMC; the speakers were Assoc. Prof. Dr. Nguyen Minh Hang – General Secretary of VICMC; Lawyer Nguyen Nam Trung – VICMC Mediator and Head of Research Team at VCCLG; Lawyer Le The Hung, VICMC Mediator and Director of CNC COUNSEL; the other VICMC mediators, members of the VICMC Secretariat and members of the VCCLG.

The issues related to force majeure and hardship specified in the field of construction were discussed in Webinar, which provides a specific analysis of what constitutes a situation to be considered as force majeure as that event must be “a risky event”, “occur objectively”, “before signing the contract”, “basically cannot be attributed to the other party” … as specified in the legal documents such as Civil Code 2015, Construction Law 2014, Decree 37/2015 / ND-CP on construction contracts; Form of EPC contract according to Circular 09/2016 / TT-BXD; … and compared with regulations of foreign laws such as France, Italy, China. In addition, similar analyzes were made by the speaker regarding Hardship’s case. Arbitration judgments and judgments related to force majeure and hardship in Vietnam and abroad are also studied and analyzed, according to which, dispute resolution agencies often consider carefully before defining a situation as force majeure or hardship. Mediators and experts, lawyers, and engineers in the field of construction have discussed practical solutions to any disputes arising from Covid-19 such as disputes due to construction progress, lack of materials, human resources of the contractor or the solvency of the investor … Many disputes are in the “dilemma” situation and the “removing” of these situations by mediation is considered.

Mediation can become an appropriate solution in resolving commercial disputes in general and construction disputes in particular in the context of Covid-19. The parties to the dispute should consider using mediation when one or more of the following elements exist:

(i) both sides want to resolve quickly but cannot negotiate with one another;

(ii) all parties feel that the court is a risky method in the current situation, costly and time-consuming;

(iii) the fact that both sides acknowledged the influence of Covid 19 leading to damage that has occurred to one or both parties;

(iv) both sides are willing to resolve their disputes in a friendly manner.

With the help of the mediator, both sides will understand their position and that of their partners, and they may be willing to sit down to share risks, losses, and costs with each other. The fact that there has been a dispute in court for up to ten years, undergoing the procedures of first instance, appellate, cassation, reopening, has not been able to reach a final conclusion while the parties have not reached it any compensation or remedies yet. Therefore, mediation is really a method worth considering for the parties.

 

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