RESOLVING LAND DISPUTES BY COMMERCIAL ARBITRATION 2025

RESOLVING LAND DISPUTES BY COMMERCIAL ARBITRATION 2025

RESOLVING LAND DISPUTES BY COMMERCIAL ARBITRATION 2025

RESOLVING LAND DISPUTES BY COMMERCIAL ARBITRATION:

OPPORTUNITIES AND CHALLENGES

Nguyen Nhu Quynh

Do Vu Bao Lam

Hanoi Law University

Abstract: The 2024 Land Law was born, inheriting and supplementing the provisions of the 2013 Land Law and its guiding documents. Among the new points of the Land Law 2024, the addition of the jurisdiction to settle land disputes for commercial arbitration is a prominent new point that brings many new opportunities in judicial reform.

However, the addition of jurisdiction to commercial arbitration also faces many difficulties and challenges. By means of general analysis, the article studies legal provisions and evaluates the opportunities and challenges when applying the method of commercial arbitration in resolving land disputes.

Keywords: Dispute resolution, land, commercial arbitration.

Introduction

Land disputes are unique conflicts that directly pertain to the relationships involved in the use and management of land among different entities. According to the 2013 Law on Land, the methods for resolving land disputes include mediation at the People’s Committee or adjudication at the People’s Court, both of which are authorities with jurisdiction and play a crucial role in resolving land disputes.

In the current economic conditions, land and real estate transactions are closely linked with market commercial activities and often hold significant value. To alleviate the workload pressure on the People’s Committee and the People’s Court from complex and prolonged land disputes, the State has expanded the authority to resolve land disputes to include Commercial Arbitration, an entity specializing in resolving disputes related to commercial activities.

With the aforementioned regulation, land disputes related to commercial activities can be resolved through commercial arbitration if chosen by the parties involved. This regulation presents numerous opportunities, given the vibrant real estate market today and the frequent occurrence of land disputes tied to commercial activities. Adding this method of resolution will facilitate more effective and swift handling of these disputes. However, since this is a newly issued regulation, its application process will encounter numerous obstacles.

Therefore, assessing the opportunities and challenges of resolving land disputes through commercial arbitration is imperative. It holds theoretical and practical significance, contributing to promoting commercial activities related to real estate and aiding in the stable development of the real estate market.

This article examines the provisions of the 2024 Law on Land and relevant legal documents that regulate the method of resolving land disputes through commercial arbitration within the current legal framework of Vietnam. Based on the analyses, the author elucidates the legal regulations regarding the method of resolving land disputes through commercial arbitration and assesses the opportunities and challenges of its application.

This is a prominent new feature of the article, as the issue of resolving land disputes through commercial arbitration is a novel regulation with limited research conducted on it since the 2024 Law on Land took effect.

To achieve these objectives, this study is structured into five parts: (i) introduction; (ii) general overview of resolving land disputes through commercial arbitration; (iii) current legal situation regarding the resolution of land disputes through commercial arbitration; (iv) several solutions to enhance the efficiency of resolving land disputes through commercial arbitration; (v) conclusion.

I. General Overview of Resolving Land Disputes through Commercial Arbitration

Land disputes are prevalent in today’s society as real estate business activities become increasingly vibrant. According to Clause 24, Article 3 of the 2024 Law on Land, land disputes are conflicts regarding the rights and obligations of land users between two or more parties in land relations.

Thus, land disputes can be understood as disagreements, conflicts, and clashes over rights and obligations among entities participating in land legal relations.

To regulate these relationships, the 2024 Law on Land has introduced various methods for resolving land disputes, including administrative procedures, civil litigation procedures, and commercial arbitration.

Commercial arbitration, as defined in Clause 1, Article 3 of the 2010 Law on Commercial Arbitration, is “a method of dispute resolution agreed upon by the parties and conducted according to the provisions of this Law.”

This method is therefore understood to be a legally permitted way of resolving disputes through commercial arbitration institutions, wherein the disputes are resolved by arbitrators acting as independent third parties who issue arbitration awards that the parties must respect and implement.

Resolving land disputes through commercial arbitration involves bringing the disputes to commercial arbitration institutions as agreed upon by the parties to resolve their conflicts. 

This activity has the following characteristics:

– The entities resolving disputes are arbitrators.

An arbitration panel may consist of a single independent arbitrator or a panel of multiple arbitrators. Arbitrators are selected by the parties involved or appointed by an arbitration center or court according to the provisions of the 2010 Law on Commercial Arbitration.

Arbitration is a non-governmental organization, not part of the state machinery. The arbitrators themselves are not government officials or civil servants.

– Land disputes brought to commercial arbitration must be related to commercial activities.

According to the 2005 Law on Commerce, commercial activities are profit-oriented activities, including the purchase and sale of goods, the provision of services, investment, commercial promotion, and other profit-oriented activities.

Therefore, only land disputes related to activities such as buying, leasing, investing, or profit-making purposes between involved individuals can be brought to commercial arbitration for resolution.

This is one of the regulations ensuring the parties’ right to choose the dispute resolution method and is a notable new feature in the dispute resolution methods of the 2024 Law on Land.

– The arbitration award is the decision of the arbitration panel that resolves all the contents of the dispute and terminates the arbitration proceedings.

The arbitration award is final and effective from the date of issuance, not subject to appeal or protest. In land dispute cases, the parties may choose commercial arbitration as a dispute resolution method to ensure their rights and obligations, and it can be resolved more quickly than through litigation procedures at the People’s Court.

II. Current Legal Situation Regarding the Resolution of Land Disputes through Commercial Arbitration

  1. Legal Provisions on Resolving Land Disputes through Commercial Arbitration

Clause 5, Article 236 of the 2024 Law on Land clearly stipulates: “Disputes between parties arising from commercial activities related to land shall be resolved by the court according to the provisions of civil procedure law or by Vietnamese Commercial Arbitration according to the provisions of the law on commercial arbitration.”

This regulation represents an innovation of the 2024 Law on Land. According to this provision, commercial arbitration has the jurisdiction to resolve disputes arising from commercial activities related to land.

– Regarding the jurisdiction to apply commercial arbitration in resolving land disputes:

The Law on Land provides that “disputes between parties arising from commercial activities related to land” can be resolved through commercial arbitration. This means that not all land disputes can be resolved through commercial arbitration, but only those related to commercial activities.

According to the 2005 Law on Commerce, commercial activities are profit-oriented activities, including the purchase and sale of goods, the provision of services, investment, commercial promotion, and other profit-oriented activities.

  This implies that if a land dispute involves a commercial business organization or has a profit-making purpose, such as capital contribution or investment, it can be resolved through arbitration.

This provision emphasizes the parties’ autonomy and voluntary agreement. The commercial arbitration method creates a new mechanism for resolving land disputes related to commercial activities, ensuring the parties’ autonomy and agreement.

– Regarding the agreement to apply commercial arbitration:

According to current law on commercial arbitration, land disputes can be resolved through arbitration if the parties have an arbitration agreement. This agreement can be established before or after a dispute arises. In reality, many disputing parties do not have an arbitration agreement in their contracts.

When disputes occur, parties may wish to choose arbitration due to its advantages. However, after a dispute arises, it is often difficult for the parties to come together to establish an arbitration agreement, as they tend to be uncooperative.

The Law on Commercial Arbitration should be more flexible, allowing easier access to arbitration. It should be amended to permit that even without an arbitration agreement, if one party files a lawsuit with commercial arbitration and the other party does not object within a specified time, it is considered to have agreed to the jurisdiction of the arbitration.

– Regarding the procedures for resolving land disputes through commercial arbitration:

Resolving disputes through commercial arbitration involves the following steps: Filing a lawsuit and accompanying documents; The respondent submits a defense statement; Establishing the arbitration panel; Holding dispute resolution hearings; Mediation; The arbitration panel issues an award.

With this general procedure, land disputes will be effectively resolved. Specifically, the disputing parties can present their arguments and evidence, and debate their land dispute. Through this, the parties will gain a better understanding of the situation, causes, and consequences of the dispute, thus enabling more efficient resolution without needing numerous procedural steps such as verification, confirmation, and local meetings to record opinions. This creates a swift resolution mechanism and enhances the autonomy and decision-making power of the disputing parties when resolved through commercial arbitration.

– Regarding the effectiveness of commercial arbitration awards:

When parties choose to resolve land disputes through commercial arbitration, the arbitration award is final and binding according to the 2010 Law on Commercial Arbitration, meaning the arbitration award is final and carries binding obligations for the involved parties.

The arbitration award can only be annulled by a court if the court receives a request from a related party within 30 days from the date of the arbitration award. The arbitration award is enforced according to the provisions of the law on civil judgment enforcement.

For land disputes, resolution through arbitration will ensure the effectiveness of the awards as in ordinary commercial disputes, and they cannot be appealed or protested, thus can be enforced immediately when the parties agree with the arbitration award.

  1. Opportunities and Challenges in Resolving Land Disputes through Commercial Arbitration

The method of resolving disputes through commercial arbitration is a newly recognized approach in the Law on Land. Given the current fluctuations in the real estate market and the rising value of real estate, applying this method presents both opportunities and challenges.

2.1. Favorable Opportunities

– First, it creates a quick and effective dispute resolution method.

According to Article 203 of the 2015 Civil Procedure Code, the timeframe for resolving a typical land dispute case is 4 months, involving numerous procedures such as mediation, evidence disclosure, verification, and appraisal. In contrast, the procedures for resolution through commercial arbitration have shorter timeframes, simpler procedures, and the arbitration award is not subject to appeal, thus significantly reducing the time required to resolve disputes.

Additionally, the procedure for resolving land disputes through commercial arbitration applies to disputes related to commercial activities. Commercial activities, characterized by cash flow and financial fluctuations, necessitate a swift and effective resolution method to ensure the continuation of related economic activities.

This dispute resolution method opens a new, faster resolution path, allowing the parties to quickly resume related economic activities.

– Second, it reduces the burden on agencies involved in resolving land disputes.

Previously, land disputes were resolved solely by administrative agencies or courts through litigation procedures. Allowing the resolution of land disputes related to commercial activities through commercial arbitration not only alleviates the burden on administrative agencies and courts but also aligns with the commercial nature of these disputes.

Furthermore, the process of verifying evidence and collecting documents at administrative agencies and courts often takes considerable time, causing delays in resolving cases. Granting jurisdiction to commercial arbitration will help shorten the processing time, improve efficiency, and ensure the rights and interests of the parties are quickly and fairly protected.

– Third, this regulation enhances the parties’ autonomy and agreement.

The parties have the freedom to choose the method of resolving land disputes through commercial arbitration. During the resolution process, the parties can actively present their viewpoints, defend their arguments, and debate to clarify related issues. This not only helps the parties better understand the nature of the dispute but also provides a solid foundation for proposing effective dispute resolution solutions.

2.2. Challenges

– First, a lack of guiding legal documents.

The 2024 Law on Land has been in effect since August 1, 2024. As it is newly enacted, the regulations on resolving land disputes through commercial arbitration have not been widely disseminated. Moreover, there are currently no specific documents guiding the procedures for resolving disputes through this method. Therefore, it is necessary to promptly issue detailed regulations on the related procedures.

– Second, difficulties in legal application.

Commercial arbitration only resolves commercial disputes. Therefore, when assigning the authority to commercial arbitration to resolve land disputes, it is crucial to clearly distinguish the disputed subjects as land use relations, not commercial relations. Additionally, there must be plans for training and enhancing the skills of arbitrators to handle such disputes.

– Third, the regulation on applying arbitration when parties have an agreement.

In practice, when parties engage in transactions or commercial activities related to land, it is rare to have an agreement from the outset to use arbitration as a dispute resolution method. When disputes arise, it is challenging for the parties to reach an agreement, especially since land disputes often involve prolonged conflicts. Therefore, more flexible regulations are needed to facilitate the application of commercial arbitration in resolving land disputes.

– Fourth, regarding enforceability.

Although arbitration awards are not subject to appeal or protest, if a dispute arises and one party is uncooperative, they may file a lawsuit and request the court to annul the arbitration award. This can prolong the resolution process and significantly affect the parties’ rights. Therefore, there needs to be coordination between State agencies and commercial arbitration to develop appropriate regulations to address this issue.

– Fifth, the regulation on resolving land disputes through arbitration is not widely known.

Strong propaganda measures are needed to raise awareness among individuals and especially economic organizations. Additionally, mechanisms must be established to ensure the effective application of this dispute resolution method in practice.

III. Solutions to Enhance the Efficiency of Resolving Land Disputes through Commercial Arbitration

– First, detailed guiding documents for the implementation of resolving land disputes through commercial arbitration are necessary.

Currently, the regulations on resolving land disputes through commercial arbitration are only broadly outlined in the 2024 Law on Land and refer to several provisions in the 2005 Law on Commerce and the 2010 Law on Commercial Arbitration.

Given that the 2024 Law on Land has been in effect since August 1, 2024, it is essential to promptly issue documents detailing issues related to implementation, such as: jurisdiction for resolution, receipt of applications, resolution procedures, enforcement of commercial arbitration awards, etc.

This is crucial to effectively apply this method in practice. Furthermore, having specific policies will encourage the choice of resolving land disputes through commercial arbitration, thus enhancing the effectiveness of the Law on Land’s implementation.

– Second, improving the regulations on the parties’ agreement to apply arbitration.

As analyzed above, stipulating the parties’ agreement when applying the method of resolving land disputes is challenging. Detailed regulatory documents are required to address this issue and should be designed to allow flexibility.

Even if there is no prior arbitration agreement, when one party files a lawsuit with commercial arbitration and the other party does not object to the arbitration’s jurisdiction within a specified time, it should be considered as agreeing to the arbitration’s jurisdiction.

– Third, improving the arbitration law on invalid arbitration agreements.

The Law on Commercial Arbitration should include provisions on the procedure for requesting the court to review the arbitration panel’s decision regarding the invalidity of the arbitration agreement.

Specifically, during the court’s acceptance and review of this issue, the arbitration panel should suspend the proceedings. Continuing the dispute resolution while the court is reviewing the arbitration agreement’s validity may render the arbitration process ineffective since one disputing party has expressed a desire not to continue with arbitration by requesting the court to declare the agreement invalid.

Furthermore, even if a resolution is reached during this period, if the court later declares the arbitration agreement invalid, the arbitration award will be unenforceable, and the disputing parties will prepare to take the case to court.

This is a general rule for arbitration organizations’ activities but significantly impacts resolving land disputes related to commercial activities. Without this regulation, protracted disputes may arise when both sides complicate the dispute resolution process, making it difficult to resolve disputes and enforce the law.

– Fourth, promoting training and enhancing the capacity of arbitrators.

Since this is a new regulation introducing a new method for resolving land disputes, there must be programs to train and enhance arbitrators’ knowledge and skills. This will ensure a qualified workforce to resolve land disputes through commercial arbitration.

Improving quality while increasing the number of arbitrators skilled in professional expertise, ethics, and practical experience will yield the best results for resolving land disputes at commercial arbitration.

Finally, measures to strongly promote legal awareness about the significance of using commercial arbitration as a dispute resolution method are necessary. This will ensure that this method is widely known and effectively applied in practice.

IV. Conclusion

Aligning with our country’s judicial reform strategy, granting the authority to resolve land disputes related to commercial activities to commercial arbitration is a significant innovation. This not only alleviates the burden on State agencies but also leverages the expertise of commercial arbitration in resolving commercial disputes, facilitating the efficient and professional handling of disputes.

References

  1. 2024 Law on Land;
  2. 2005 Law on Commerce;
  3. 2010 Law on Commercial Arbitration;
  4. Dang Thu Huong (2023), Resolving Commercial Disputes through Commercial Arbitration Mechanism in Vietnam in the Current Context, State Management Journal. (https://www.quanlynhanuoc.vn/2023/11/16/giai-quyet-tranh-chap-thuong-mai- bang-co-che-trong-tai-thuong-mai-tai-viet-nam-trong-boi-canh-hien-nay/);
  5. Le Trung Quan (2021), Legal Provisions on Resolving Land Disputes, Bình Thuận Provincial Party Committee Information Portal (https://truongchinhtri.binhthuan.dcs.vn/Tin-tuc/post/210081/quy-dinh-phap-luat- ve-giai-quyet-tranh-chap-dat-dai);
  6. Nguyen Thi Van Anh, MSc. Tran Thi Thanh Thuy (2020), Procedures for Resolving Disputes through Commercial Arbitration – Current Situation and Legal Improvement Directions, Journal of Legal Profession, Issue 12/2020, Pages 8-13.

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