Both parties want their businesses to operate smoothly – particularly when participating in commercial activities. However, there will be unexpected conflicts resulting in disputes between the parties. So, how are commercial disputes resolved?
1. Commercial Disputes
Commercial activities are activities that generate profits, including the sale and purchase of products, services, investments, commercial promotions, and other activities for turning a profit.
Accordingly, commercial disputes are understood as conflicts (disagreements) between two cooperative parties over rights and obligations in commercial business activities.
2. Forms of Dispute Settlements
4 forms of resolution of commercial disputes are regulated as follows:
2.1. Negotiation
Negotiation is a form of dispute settlement through which both parties voluntarily discuss and resolve disagreements by reaching an agreement without the assistance of any third party (lawyer, court intervention/order, or mediator).
The negotiation process between the parties is not bound by legal regulations on settlement procedures, and the outcome of the negotiation is completely dependent on the voluntary efforts of each party without any legal mechanism to ensure enforcement.
2.2. Conciliation
An agency, an organization or an individual that is chosen as a mediator will decide the form of conciliation between the parties.
Commercial conciliation is a form of dispute settlement which is agreed upon by the parties involved and with the assistance of a commercial mediator acting as an intermediary.
The parties may agree to settle the dispute by mediation prior to the dispute, after the dispute, or at any time during the dispute settlement process.
2.3. Resolution by the Commercial Arbitration
Commercial arbitration is a form of dispute settlement agreed upon by the parties and conducted under the Law on commercial arbitration.
Conditions for dispute settlement by arbitration
A dispute may be settled by arbitration if:
A dispute may be settled by arbitration if the parties have an arbitration agreement. An arbitration agreement may be made either prior to a dispute arising, or after a dispute arises.
When one of the parties - as an individual to an arbitration agreement - dies or loses his/her civil capacity, such arbitration agreement remains valid for his/her heir or representative at law, unless otherwise agreed upon by the parties.
When one of the parties - as an institution to an arbitration agreement - has to terminate its operation, go/becomes bankrupt, or is dissolved, consolidated, merged, divided, split-up, or reorganized, such arbitration agreement remains valid for an institution that takes over the arbitration agreement rights and obligations of the institution, unless otherwise agreed upon by the parties.
2.4. Resolution by the Court
Disputes settled in a court of law:
Disputes arising from business or trade activities among individuals and/or organizations with business registration, all of which are for the process of making a profit.
Disputes over intellectual property rights or technology transfers among individuals or organizations, all of which are for the purpose of making a profit.
Disputes between persons who are non-members of a company but are involved in transactions of transferring capital holding and the company and/or its members.
Disputes between a company and its members; disputes between a limited liability company and its manager, or between a joint-stock company and members of its Board of Directors, its Director or its General Director, or among members of a company regarding the establishment, operation, dissolution, merger, consolidation, separation, division, property transfer and/or organizational transformation of the company.
Other disputes relating to business or trade activities, except for those within the jurisdiction of other agencies and organizations as prescribed by law.
3. Statute of limitations
The statute of limitations for initiating lawsuits – applicable to commercial disputes – is two years from the time of legitimate rights and interests infringed upon, unless after being complained against, the logistics service trader is not notified of lawsuits against them being instituted at arbitrations or courts within nine months from the date of the delivery of goods.
