Vietnamese enterprises need reliable legal services
Mr. Dau Anh Tuan, Chief of the VCCI's Legal Department said that safety and reliability always come at a cost, but Vietnamese enterprises don't have the habit of paying fees for consulting services.
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| Mr. Dau Anh Tuan, Chief of the VCCI's Legal Department. |
International economic integration is an integral part of the reform (Doi Moi) process, and it is one of the major policies of the Party. Now, Viet Nam is in the process of deep economic integration. This reality is opening up multiple opportunities for domestic enterprises, but it also poses challenges to dispute resolution with foreign enterprises. Which legal disputes that Vietnamese businesses usually encounter?
As Viet Nam integrates more deeply with the world, Vietnamese enterprises do business with more partners, into a larger “playing field” and they have to deal with different sets of rules. Therefore, the risk of disputes is also greater and more complicated.
The biggest challenge for Vietnamese enterprises is that, when a dispute occurs, they don't have the much-needed experience on how to prevent and respond to it. Some are not familiar with the business culture of each country, unaccustomed to the system of dispute settlement bodies and procedures. At the same time, many businesses are not familiar with common forms of commercial dispute resolutions like commercial arbitration and mediation. A lot of enterprises don't even use lawyers regularly.
These disputes often come from the partner's contract terms and performance obligations, which sometimes may contain deliberate “hidden” terms that Vietnamese enterprises have not had much experience with. Other times, how the partner drafts the contract, the business often signs it without hesitation.
In addition, some Vietnamese enterprises are not familiar with international and/or domestic business practices. This also makes it easier for them to get into disputes.
Furthermore, disputes from technical barriers to trade, such as anti-dumping and anti-subsidy lawsuits, etc., to protect the market, are becoming increasingly common. Every so often, Vietnamese enterprises do quick business to gain instant profit that they are ready to violate the contract.
The Government has issued several Decree on legal assistance for enterprises, for example, Decree 55/2019/ND-CP. How has this decree impacted them?
Decree No. 55/2019/ND-CP legal assistance for small and medium enterprises was issued by the Government by June 24, 2019, and took effect on August 16, 2019.
The Decree focuses on building and operating a general legal database. It includes not only legal documents but also actual legal problems from businesses.
In my opinion, this is an important program of the Government, to help enterprises improve their legal capacities, minimize damage caused by lack of information and understandings of legal knowledge for business, especially for SMEs.
Through training courses, improving legal knowledge, and skills, information dissemination, etc., this program has had some positive impacts on businesses.
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| Businesses need reliable, convenient, friendly and affordable legal services. |
In your opinion, what are the solutions to make legal support activities for enterprises more effective?
In order to effectively and sustainably provide legal support for businesses, I think it is necessary to create an effective legal service market. There are good, world-class, experienced lawyers to accompany enterprises in large international business deals. There must be lawyers and legal experts who specialize in each industry and each field to be able to give good advice to enterprises.
Also, there should be legal services available for small and young enterprises. They could be law offices that specialize in providing consulting services for enterprises. But the State can also set up or operate consulting service centers, comprising of state-paid public lawyers to assist small enterprises, startups, or enterprises in difficult areas, agricultural enterprises, etc. This model has been successfully implemented in many countries around the world.
To build such a legal service market, the State must be involved in training human resources, building and promoting activities of business and sectoral associations, creating incentive mechanisms for the market to develop.
And what about the wishes of enterprises, how do they expect to receive support?
For enterprises, it is important to have the habit and professionalism in using legal services. They should always hire legal experts and lawyers to help with transactions and commitments, especially with international partners.
If your business is doing well, you must think about risks. Safety and reliability always come at a cost. This is something that seems obvious and simple, but not all Vietnamese enterprises do it because they haven't developed a habit of paying consulting fees.
From a customer's standpoint, I think that businesses need legal services that are reliable, convenient, friendly, and reasonable cost. They also need relevant, reputable agencies, who are willing to advise and introduce good legal services and lawyers.
Besides the support of the Government, in your opinion, what should businesses do to limit disputes while doing business with foreign enterprises?
Direct experiences will help enterprises to learn the best and remember the longest. But in this area, they do not and should not have to pay for such useless expenses.
In my view, enterprises need to learn more from the experience of both those who came before and after, from large enterprises to small businesses. They need to attend training courses on common risks and warnings when doing business with each market, good practices when entering into contracts in each industry...
In addition, business and sectoral associations are often the most effective channels to support their member to limit the risks of disputes.
