Navigating Collision Claims in Vietnam: Strategic Considerations for Settlement

When navigating the legal aftermath of a maritime collision in Vietnam, choosing the right path to resolution is crucial. While it may seem that all roads lead to a settlement, the nuances of the Vietnamese legal system can make a significant difference in how you steer the course. Whether opting for litigation withdrawal, a mediated settlement agreement, or a court hearing, each choice carries its own implications in terms of cost, speed, and finality.

Litigation Withdrawal: The Cost-Efficient But Risk-Prone Option

In Vietnam, withdrawal of a statement of claim (“SoC”) is a straightforward route under Article 217.1(c) of the 2015 Civil Procedure Code (“2015 CPC”). It is an attractive option primarily because it is cost-effective—when the SoC is withdrawn, the advance court fees are typically refunded, as outlined in Article 18.3 of Resolution 326/2016/UBTVQH14. This means your client avoids further financial obligations toward the court, making it a tempting exit from a potentially long and costly legal battle.

However, the simplicity of this option belies its potential pitfalls:

• Lack of Finality: Withdrawal of a SoC does not trigger the principle of Res Judicata, which means the same issue can be brought back to local courts. This leaves your client vulnerable to future claims from the opposing party or, more likely, their insurance company, which could pursue a subrogation claim. In this scenario, what seemed like a clean resolution could result in another round of litigation.
• No Binding Effect on Third Parties: Since a simple withdrawal does not involve a court ruling, it does not bind third parties, such as the insurer of the opposing party, who may seek to recover compensation paid.

Court-Approved Meeting: The Balanced Approach with Legal Finality

 A court-approved meeting offers a more secure but slightly more complex path. This method, detailed in Articles 211 to 213 of the 2015 CPC, involves court-supervised mediation, where the mediated settlement agreement reached is formally recognized by the court.

Key Advantages:

•  Legal Finality: Unlike the litigation withdrawal, a settlement reached in a court-approved meeting invokes Res Judicata, preventing any future lawsuits on the same issue. This provides a significant layer of protection for your client, ensuring that the matter is fully resolved.
• Shared Costs: Although you share the court fees with the opposing party, as per Article 26.7 of Resolution 326/2016/UBTVQH14, the certainty and finality this route offers can be well worth the investment.
• Efficiency with a Catch: The process is faster than full court proceedings but does involve a few additional steps. After the mediated settlement agreement is signed by all parties, the court will issue its decision to recognize the agreement in a form of for example a consent order within seven days thereafter, provided no party changes their position during this period (Article 212.1 of the 2015 CPC). This adds a layer of assurance but requires a short wait before the order/decision becomes legally binding.

The Downside:

•  Procedure Complexity: While faster than a full trial, the mediation process still requires court involvement, making it more procedurally complex than a simple withdrawal of the SoC. However, the trade-off is the legal security and finality it offers, which can be crucial in preventing further litigation.

Settlement at the Court Hearing: The Quickest Path to Finality

If achieving immediate legal closure is your primary objective, opting for a settlement at the court hearing could be the most effective approach. As outlined in Article 246 of the 2015 CPC, this route enables the court to promptly issue a decision in the form of a consent order, without the seven-day waiting period required in a court-approved meeting. However, this option becomes available only if the parties have not successfully reached a settlement during the mediation meeting(s) organized by the court.

Why It Works:

• Immediate Finality: At the hearing, if the parties reach a voluntary and lawful agreement, the court can instantly recognize the settlement, applying Res Judicata on the spot. This eliminates the waiting period required in a court-approved meeting, providing your client with the fastest route to legal closure.
• Certainty and Speed: The court’s immediate issuance of a decision ensures that your client walks out of the hearing with a binding resolution, which can be critical in high-stakes disputes where time and certainty are of the essence.

Considerations:

•  Cost Implications: The court fees are the same as those incurred in a court-approved meeting, the finality offered by a court hearing may justify the expense.
• No Compromise on Legal Security: Like a settlement reached during a court-approved meeting, a decision made at the hearing is protected by Res Judicata, providing the highest level of legal security against future claims.

Conclusion: Choosing the Right Path with Precision

 In Vietnam, the strategy you choose for resolving a collision claim can significantly impact both the immediate outcome and your client’s long-term legal exposure.

• Litigation Withdrawal is a cost-effective option but may leave the door open for future litigation if your settlement agreement is not well prepared.
• Court-Approved Meeting provides a balanced solution by combining shared costs with the assurance of legal finality, though it includes a brief procedural waiting period.
• Settlement at the Court Hearing offers a path to a legally binding resolution when the parties have not successfully settled during prior court-mediated meetings. Unlike settlements reached during mediation meetings, this option does not require an additional 07-day waiting period for the settlement to become effective.

Each option has its merits and challenges, and the right choice depends on the specific circumstances of the case. By carefully navigating these options, you can ensure that your client’s interests are protected, their liabilities minimized, and their path to resolution as smooth as possible.

At ANHISA, our deep expertise in Vietnamese shipping law allows us to guide you through these choices with precision. We are here to work with you in selecting the best strategy, ensuring that your client’s legal journey is not just navigable, but successful.

For more information, please contact:

ANHISA

Mr. Dang Viet Anh

Email: anh@anhisa.com 

T: +84 28 5416 5873

M: +84 983 467070