Luận văn business to consumer e commerce dispute settlement in vietnam the reality and legal resolutions suggested

Objectives of research The objectives of this thesis is to clarify the basic content of e-commerce, business-to-consumer e-commerce, arising disputes and the enforcement of Taw on dispu

VIETNAM NATIONAL UNIVERSITY, HANOI

Degree program: Full-time

Class of QH-2014-LKD

HANOI, 2018

VIETNAM NATIONAL UNIVERSITY, HANOI

Degree program: Full-time

Class of QH-2014-LKD

SUPERVISOR:

DR PHAN THI THANH THUY

HANOI, 2018

STATUTORY DECLARATION

I herewith formally declare that I have developed and written the submitted Barchclor’s Thesis independently with guidances [ron Dy Phan Thi Thanh Thuy T did not use any outside support except for the quoted Literature and other sources mentioned at the end of this paper This Thesis was not used in the same or in a similar

version to achieve an academic grading or is being published clsewhere

Hanoi, April 20%, 2018 Signature of Bachelor Candidate

Tran Minh Ha

Alternative Dispute Resolution

Asia-Pacific Boonomie Cooperation

Association of Southeast Asian Nations

Lusiness-to-business

Business-to-consumer

Consumer-lo-business Consumer-to-consumer

Comprehonsive and Progressive Agreement for trans-

The Model Law on Flectronice Commerce

Online Dispute Resolutions

Organisation for Economic Co-operation and Development

Trans-Pacific Partnership Agreement

United Nations Commission on International ‘trade Law

Vietnam Intemational Arbitration Center

Very important people

Vietnam Airlines

World Trade Organization

i

1.1.3 Forms o€-conuinerce cò vien iieeriierirrer 13

1.1.4 The corellaien with business-lo-consumer e-commerce 14 1.2 Business-to-consumer (B2C) e-commerce

12.1 Delinuon oi 14

12.2 Features of business-to-consumer e-commerce: - - 16

1.3 Business-to-consumer e-commerce dispute 17

2.1 The Law on business-to-consumer e-commerce dispute settlement 21

21.1 The concept of the Law on business-to-consumer e-commerce dispute

3.1.2 The role of the Law on business-to-consumer ¢-commeree dispute scttlement22

tà 1.3 Principles of business-to-consumer e-commeree dispute settlement 23

3

2.1.4 Tiorms of busiiess-to-consumer e-commeroe đispute resolution

2212 The UNCITRAL Model Law on Electronic Signatures (2001) 29

2.2.1.3 The Trans-Pacific Strategic Economic Partnership Agreement (TPP) 30

221.4 — Thesole of the Organisation for Economic Co-operation and

221.5 UniledNations Convention on the use of electronic communications in

iternational contracts (New York, 2005) seouneenteetveecee „31

23 The reality of applying the Law on business-to-consumer e-commerce

2.3.1 Dispute settlement over business-to-consumer e-commerce contracts 35

23.41 Dispute over the process of entering into business-to-consumer e-

©0rnmerCe CONTACES thằng ước Š 39

2.3.1.2 Dispule over the perfomance of business-lo-consumer e-commerce

2.32 Dispule settlement over the protection of consumers’ persoual data 44

34 Limitations on the application of the Law on business-to-consumer e-

Chapter 3: Legal resolutions suggested for business-to-consumer e-commerce

3.1 ‘The need for improvement in the Law on business-to-consumer e-commerce

3.2 Legal resolutions suggested for business-to-consumer e-commerce dispute 53 3.2.1 Improving regulations on business-to-comumor œ-coHunerce dispute

INTRODUCTION

1 Rationale

Llectronic commerce, commonly referred to as e-commerce, is a new trend in the Industry 1.0 where people are shaped in the manner of shapping for products online The e-commerce market has gained popularity among the western countries, in urope, the United States and is currently penetrating in Asian countries Research has shown

that e-commerce market 1s expected to grow to over $20 billion by the year 2020 F-

commerce in Vietnam is mere developed than some Southest Asian countrics and is

anticipated to expand in the coming years In particular, business-to-consumer e- commerce, one of c-commerce forms, is gaining popularity in Vietnam recent years With the fast growing in this type of commerce comes more legal concerns for dispute

settlement

Disputes in business-to-consumer e-commerce may arise more than in

traditional commerce environment for many reasons That is why it is necessary to

study ard clarify matters surrounding busmess-lo-consumer c-commerce dispute settlement In reality, although many business-to-consumer e-commerce transaction

profecols have been proposed, very few of them have paid cuough attention to the

support of dispute handling Iherefore, the legal framwork of business-to-consumer e-

commerce in Vietnam must be changed to adapt to the world development of dispute sellement

In this thesis, I study the aspects of business-to-consumer e-commerce

transaction relating to dispute settlement 1 also concentrate on different types of

disputes that may occur during business-to-consumer transactions and discuss the

effectiveness of law enforcement in the dispute settlement Tideed, the fast growing in

e-commerce disputes has pushed legislators at national level to adopt new legal

instruments to deal with it and foster the development of business-to-consumer e-

commerce Thus, the thesis will suggest legal resolutions which are more applicable lo handie disputes effectively and enhance the confidence of businesses and consumers in

e-commerce transactions One of the outstanding suggestion for Vietnam is to set up

the Online dispute resolution platform as provided example from the European Union

Online dispule resolution will support Allernative dispute resolution (ADR) with online platform, which may act az a lower-cost, time-saving and easily applied dispute resolution for the parties to protect their legitimate rights (lo consumers) and reputations (to businesses) Online Dispute Resolution is a recommended solution in

the world, hence, Vietnam needs to adopt this platform as soon as possible to catch up with the development of c-conuueree trend

2 Objectives of research

The objectives of this thesis is to clarify the basic content of e-commerce, business-to-consumer e-commerce, arising disputes and the enforcement of Taw on dispute resolution in reality ‘The thesis also identifies limitations and its causes in order

to provide new legal solutions that may improve the effectiveness of business-to-

consumer e-commerce dispule settlement

‘Yo achieve the objective of the topic, the research task must satisfy these following points:

rat, some theoretical issues of e-commerce, business-to-consumer e-commerce and its dispute such as the definition and features shall be clarified

Sevond, the reality of applying Law on business-lo-consumer e-commeree dispute settlement shall be analysed with different dispute resolutions and its limitations

Third, legal resolutions are proposed to improve legal provisions on business-to-

consumer dispute sctitement in Vietnam

4 Subjects and scope of research

Subjects of research

Subjects of the thesis are the application of Law on business-to-consumer e-

commerce dispute settlement in reality and legal provisions suggested

Scope af research

Scope of rescarch focuses on mallers arising from business-to-consumer œ- commerce dispute settlement and the application of governing law in reality Based on

that, the thesis will evaluate the limitations, reason the the need for improvement in

legal system and provide officient legal resolutions ww business-lo-consumer c-

commerce dispute

4 Research methodology

The thesis uses the following research methodologies:

Part 1: Synthesis, collection, analytical method to clarify the definition and

feature of e-commerce, business-to-consumer e-commerce, business-to-consumer e-

Chapter 1: Some theorctical issucs of c-commerce, business-to-cansumer c-

commicrce and business-to-consumer ¢c-commerce dispute

1.1 E-commerce and the corelation with business-to-consumer ¢c-commerce 1.1.1) Definition of e-commerce

The origins of commerec can be traced back to the very start of transaction in prelustoric times‘The term “commerce”, according to Black’s Law Dictionary, is

defined as the “Intercourse by way of trade and traffic between different peoples or

states and the citicens or inhabitants” Commercial activities then become popular until the explosion of Intemet and the development of Electronic Data Interchange!

commerce carl be

(FD) that F-conmmerce eventually appeared The beginnings of F

traced to the 1960s and to this day, itcontinues to growwith new technologies, innovations, and thousands of businesses entering online market each year The convenience, safety, and user’s experience of ecommerce has improved exponentially since its inception in the 1970’s

The benefits of e-commerce include its around-the-clock availability, the speed

of ace

„ the wide availability of goods and services for the consumer, easy

accessibility, and intemational reach Its perceived downsides include sometimes- limited customer service, consumers not being able to see or touch a product prior to purchase, and the necessitated wait lime for product shipping

Fecommorce (also wriilen ag eCommerce or similar variants) is the shorten word

for electronic commerce the definition of e-commerce varies in different countries and

regions, yel, 1o some extent, delivers the mutual idea

According to the World Trade Organization (WTO), “ the term ‘electronic commerce! is understood to mean the production, distribution, marketing, sale or

delivery of goods and services by electronic means”

The European Union (EU) defined E-commerce in a narrower scape as “the sale

or private organizations, through electronic transactions conducted via the internet or

other computer-mediated (online communication) networks ”*

Asia-Pacific Economic Cooperation (APEC)defined that “Electronic commerce

is a shorthand term that embraces a complex amalgam of technologies, infrastructures, processes, and products It brings together whole industries and narrow applications,

producers and users, information exchange and economic activity into a global

marketplace called “the Internet”.”|1|

The Organisation or Economie Co-operation and Development (ORCD) added that”4n e-commerce transaction is the sale or purchase of goods or services, conducted aver computer networks by methods specifically designed for the purpose of receiving or placing of orders."

Although not bring out the definition of E-commeree, the UNCITRAL' Model Law on Lilectronic Commerce (1996) noted: “itelationships of a commercial nature include, bul are nol limited to, the folowing bansaelions: any trade lransaction for the supply or exchange of goods or services; distribution agreement; commercial

representation or agency; factoring; leasing; construction of works; consulting:

engineering; licensing; investment; financing, banking; insurance; exploitation agreement oy concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road, "[2] The Model Law also clarificd thai conuncreial activities “cover matlers arising from all relationships of a commercial nature, whether contractual or not”

In Vietnam, the Law on B-transactions (in 2005) did not define E-commerce but

menliomed thal “dn e-transaciion® mecms a transaction implemented by electronic

means” (clause 6, article 4); “An electronic means is a means that operates based on

electric, electronic, digital, magneto, wireless, optical, electro-magnetic technologies

or similar technologies.” (clause 10) Tl can be seen that the governing scope in this

* Durostat Statistic Explained, Gloseary: E-commerce at http://ec.europa.ew'curostat’statistics-

explaiued/index php/Glossary:E-commerce

“ OECD, Glossary of statiatical terms at https:/statz, ceed org/glossary/detail asp%D=4721

SUniled Nations Commission on Intemational ‘Trade Law

*Tilectronic transactions

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Law is fairly wide, covering electronic transactions in both business, commercial, civil

field and the operation management of the state agencies Based on the

UNCITRALModel Law, the Law on E-dansactions (2005) has a sumilar broad-based

approach to the definition of e-commerce Considering e-commerce is the use of electronic means in a broad and open sense in the fulure is ä righ approach This is

because the Internet marketplace and its participants are so numerous and their intricate

relationships are evolving so rapidly, which makes no universal definition of e-

conmncree, Moreover, this approach also preverils businesses aud consumers from

confusion and embarrassment when conducting L-commerce activities Back to the

definition, the Decree No $2/2013/ND-CP on E-commerce also interpreted more

clearly the term “#-commerce activity” as "the conduction of a part or the whole process of commercial activities by electronic means connected to the Internet, mobile

telecommumications network or other open networks.”

To sum up, c-cotmmerce can be understood in the simplest way os a type of

business models, which allows a fim or individual to conduct a part or the whole

process of commercial activities by electronic means, typically the internet

1.1.2 Features of e-commerce

(1) Transaction forms

E-commerce transactions are not conducted through papers but over the network,

whereas traditional commerce oftenrequires parties to meet in person in order to negotiate and sign contracts In this case, electronic means such as telephone, fax,

are used to convey additional data and unimportant information among parluers

However, the main transaction method used in e-commerce is the network, which can allow anybody, even from remote areas to the developed cities, whether Imowing each

olher or nol, to participate in the global market and conduct transactions

(2) Activity scope

Although traditional commerce tends to be conducted within separate nations, L-commerce market is opened globally for every participants In other wards, the

HH

global e-commerce market enables individuals and enterprises to break through borders

and carry out commercial activities with the help of a localized website

(3) Subjects of participation

AL least three subjects of participation are required to make o-commorae transaction Apart from the usual subjects of traditional commerce, e-commerce includes the third party such as online service-providing organizations or authentication agencics This is because ihe third party would acl as an intemediary which supplies the

network services storing and transmitting electronic data among other parties

Moreover, it must play an important part of information security in order to keep the e-

transaction safe and trust-worthy

(4) Tanelimit of transaction

In c-commerce, time of transaction is not limited Transaction are conducted

automatically through the web and the intemet helps businesses run at 24 hours a day

with no additional cost However, this action also depends on the stabilily of tre online

service

(5) information network in e-commerce is the market

Information network helps transmit data in traditional commerce but plays a

more important role in e-commerce It creates the online platform that provides the

market for businessmen lo oper new types of business For example, many websiles like Google, Yahoosupply huge amount of information online, which allows millions

of people acess to the daily news or allai: more knowledge Besides, Amavon or eBay

also opens new market for users to shop online with some clicks ‘this is why information network is highly necessary for e-commerce to develop

(6) commerce depends on the development of technology and users’ level

In order to develop e-commerce, it is necessary to build and continuously improve Iechnical ifrastrusture such as computer network and the conlinuity of

network with global information data Along with the network, e-commerce should have staffs who are not only proficient in technology but also have knowledge and

skills in business management in general and commerec in particular

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1.1.3 Forms of e-commerce

Contemporary electronic commerce can be classified into different categories The first category is business based an types of goods sold The second category

is based on the nature of the parlicipants

The second category will be analyzed further below

E-commier

operates im all four of the major market segments, which are Business to business (2B); Business to consumer (B2C), Consumer to consumer (C2C}; and Consumer to business (C2B)

(1) Business to business (B2B):

Business-to-business (B2B) e-commerce includes all electronic transactions of products or services conducted between companies Producers and traditional commerce wholesalers such as software companies, office furmiture and supply companies, typically operate wath this type of electronic commerce

(2) Business to consumer (B2C)

The Business-to-consumer type of e-commerce is differentiated by the establistunent of electronic business relationships between businesses and final consumers It corresponds to the retail section of e-commerce, where traditional retail trade narmally operates The difference is that B2C: business is conducted online as

opposed to a physical store

(3) Consumer to consumer (C2C)

Created by the rise of the e-commerce sector, Consumer-to-consumer (C2C) lype cucompass

all clectrome Iransactions of goods or servives conducted belwecen

consumers Generally, these transactions are conducted through a third party, which provides the online platform where the transactions are actually carried out

(4) Consumer to business (C23)

In C2B there is a complete reversal of the traditional sense of exchanging goods This type of e-commerce is very common in crowdsourcing-based projects It involves individuals selling producls or services lo businesses, and is roughly equivalent to a

sole proprietorship serving a larger business

Examples of such practices are the sites where designers present several proposals for 2 company logo and where only one of them is selected and effectively purehssed Another platform that is very common in this type of commerce are the markets that sell royalty-free photographs, images, media and design elements

1.1.4 The corellation with business-to-consumer e-commerce

Although e-commerce can he divided into different types, this thesis will focus only

on matters arising from of 32C e-commerce dispute setllement, As described above, B2C e-commerce is a type or a model belonged to e-commerce Because this model involves the participation of businesses and consumers, dispules will frequently arise

In Vietnam, this business mode! is booming recently with thousands of consumers shopping for products and services online As a resull, disputes belween companies and consumors occur frequently but have not yct been settled with satisfaction Therefore, the B2C disputes need carefully handling as this may affect consumers’ confidence in

acronym B2C to mean “business to (end) consumer” trading Further, such “end

consumption’ means that the goods or services do not contribute directly to the factors

of production for olber goods aud services

Oracle”, in their “Application Developer’s Guide”, (Oracle, 2000) define business-to-consumer as “a term describing the communication between businesses

and consumers in the selling of gonds and services” Using a similar idea, their

“Glossary of Industry-Spectfic Abbreviations, Acronyms and ‘Ierms” interpret

business-to-consumer as “the ability of companies to deliver products, services, support,

und information over the Internet directly to indwidual consumers” While TBM®

(IBM,2001) offers a similar viewpomtwhich defines business-to-consumer as “the use

of Web-based lechnologies lo sell goods or services to an end-consumer” These three similar definitions referring to B2C in terms of “communication between”, “ability of,

and “use of”, contrasts with more popularly implied interpretations describing business-lo-consumer (B2C) as refering to simply “the sale of goods, products or

services between a business and consumer” (Smart Computing Dictionary, 2001) B2C

e-commerce involves goods, products and services but also inherently involves the two-way exchange of information between the user (consumer) ønd the sysiem (business)

1B2C e-commerce may therefore be defined as an exchange between producers

and end consumers of gonds, services and explicit knowledge about goods and services {or information about consumers) for available consumption in retum for the actua] or

potential payment of monies

To personal point of view, B2C e-commerce can be understood to be the direct

exchange of goods or services over the internet between ouline stores and individual

customers Usually, 32C e-commerce web shops have an open access for any visitor,

acle Corporation is an American multinalional computer technology corporation, headquartered

in Redwood Shores, California, The company specializes primarily in developing and marketing database

software and technology, cloud engineered systems and enterprise software products particularly its own

brands of database management systems "Wikipedia, Oracie Corporation at

hitps./en.wikipedia.org/wiki/Oracle_Cosporation

118M (International Business Machines Corporation’ is an Asucrican multinational \cchnology company

headquartered in Armonk, New York, United States ” Wikipedia, [BM at https://en wikipedia org/wikiTBM

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meaning that there is no need for a person to login in order to make any product related enquiry

Examples of B2C' businesses includes global names like Staples, Wal-Mart REL or domestic names like ‘iki, Sendo, Adayroi, in Vietnam

1.2.2 Features of business-to-consumer e-commerce:

The B2C e-commerce model is very familiar and popular all over the world including Vietnam, yel, iL is still growing and has enjoyed a boom recenily

The B2C model may be the casicst and most dynamic to operate, but also more sporadic or discontinued ‘his type of commerce has developed greatly, due to the

imtroduction of the web, and there are already many virtual slores and alls on the

Internet, which sell all kinds of consumer goods, such as computers, software, books, shoes, cars, food, financial products, digital publications, etc

Whon compared to buying retail in traditional commerce, the B2C model provides consumers with more information available in terms of informative content and there is also a widespread idea that consumers will be buying cheaper, without jeopardizing an vqually personalized customer service, as well as ensuring quick processing and delivery of orders

In addition, the more distinct characteristic of the B2C model is the diversity of markets and suppliers since any supplier can open a website or transaction channel in which they publish information about their products and services As diversedl as it may seems, this model also creates competitive environment, which in tun makes it harder for companies to attract loyal customers as more and mare options of products and

services are available lo every customer

Another features of B2C e-commerce is that this model help businesses reduce production, labour and communication cost Companies which operate ibis Lype of business may minimize the cost of materials, printing, information sharing and

communications In reality, they still eams more profit than using traditional model

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Moreover, B2C model can improve distribution system because the showcase system is then replaced or supported by the online showroom,

1.3 Business-to-consumer e-commerce dispute

1.3.1 General concept

Disputes is an inherent part in business In e-commerce environment, disputes may occur more than usual since transactions are conducted without face-to-face meetings To clarily what is B2C E-commerce disputes, we must define the ton

“dispute” first

‘The Black’s Law Dictionary explained “dispute” as “ an assertion of aright, claim, or demand on one side, met by contrary claims or allegations on the other "In general, most should agree that the legal tenn “dispute” shall be construed as the dissent, inconsistencies or conflicts of interests, rights and obligations between the parties in the cconomic relations at different levels, Normally, disputes are rclated to the economic interests of the parties, hence, they may be called economic disputes in the broad sense However, there is a significant feature of economic disputes in the

broad sense that (he subjecls involved in the relationship are nol always sooking profit

Commercial dispule is evidoritly a small parl of caomomic disputes The concep

ofwade dispute was brought out by the WTO as in the following line:

“A dispute arises when one member countryadopts a trade policy measure or

takes seme action thal one or more fellow members considers to a breach of WTO

agreements or to be a failure to live up to obligations”®

As can be seen above, trade disputes, according to the WTO, are international but occur only among WTO members The object of the dispute is related to the

exercise of righls and obligations under the WTO agreements In Vietnam, the

definition of “commercial dispute” was first introduced in the Commercial Code

# World Trade Organization, Understanding the WTO: Scilling dispules: A unique contribution al

hitps:finww-swte.orgfenglishithewta etwhatis etif e/disp! e htm

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(1997) Article 238 said that“4 commercial dispute is a dispute arising from the non-

performance or defective performance of a contract in the course of commercial

transactions "Bolh explanalious above, though expressed the term differently, had the same notion that “commercial dispute” happens when the parties, for their own sake,

whether or nol Lake actions thal may violate the contract or agreement,

Although Uhis term was not included m the recent Cormmervial Taw (2005), T

agree that “commercial dispute” should be understood as contradictions (disagreements

or conflicts) about the rights and obligations between the parties in commercial

activitics

Back to disputes arismg from B2C c-eommerce environment, Vielnars

lawmakers did not consider adding a definition of this issue Ilowever,Article 5] of the

Law on E-transaction (2005) mentioned that “Disputes in e-transactions are disputes

arising in the course of transaction by electronic means” 1 is clearly that this explanation merely provided a general definition which involves both commercial and

non-commercial aclivilies, whereas B2C ¢-commerce in particular and ¢-commicree in

generalare both small parts of commeree in general Although Vietnamese law has not piven full explanation to this, it should be widely known that B2C e-commerce disputes are interpreted as the dissent, inconsistencies or conflicts of interests, rights and obligations between the businesses and consumers when implementing 132C e- commerce activities

1.3.2 Features of business-to-consumer ¢-commerce dispute

Some features of B2C disputes are similar wath those of commercial disputes

The furst feature is about the disputing subjects, one of whom must be traders In

B°C e-commerce the remaining subjects are obviously consumers who may be

individuals or organizalions Dispuics may arise when consumers make online purchase of products or services

Another feature is thal the ground of dispute must be the breach of contract, which one party fails to fulfill his or her obligation as deseribed in the contract, or

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expresses an intent to fail the obligation or otherwise appears not to be able to perform

his or her obligation under the contract The breach will then cause the parties to confhet with cach other for economic reasons In B2C e-commerce, disputes must arise

from the contradictions of rights and obligations in e-contract between parties from aclivitics for profit purpose, including goods purchase and service provision (hrough

the network

The third feature shows that in B2C e-commerce environment, there is always a

third party involved As ientioned, the third parly can be online servico-providing organizations or the authentication agencies wha open an online platform for e-

transactions

Lastly, data message in 32C e-commerce is considered to be “as valid as

evidence” (Arlicle 14, Law on E-ransachiou in 2005) Dala message here means

information generated, sent, received or stored by electronic, optical or similar means

including, but not limited to, EDT, electrome mail, telegram, telex or telecopy When

data message is transmitted and certificated by the third party, they can be used as

legitimate evidence

In conclusion, disputes arising from B2C e-commerce in particular and commerce in general arc indispensable phenomerion of the markel economy However, disputes must be resolved in a transparent and effective manner in order to protect the legitimate rights and interests of the subjects, prevent law violations in commercial activities and cusure social order.

CHAPTER 1 CONCLUSION Chapter 1 inchides some theoretical issues of e-commerce, B2C e-commerce

and B2C e-commerce dispute The thesis has clarified the definition and characteristics

of e-commerce, B2C e-commerce and its dispule TL then differentiates B2C e-

commerce with other e-commerce models 32C! e-commerce dispute has been analyzed

with explanation and the need to provide legal framework for its settlement in Vietnam

The review of the research enables the author to identify the is 3 arising from the settlement of B2C e-commerce disputes and raise questions to be resolved in the next chapter.

Chapter 2: The rcality of applying the Law an busincss-tn-consumer c-

commicrce dispute settlement

2.1 The Law on business-to-consumer ¢-commerce dispute settlement

2.1.1 The concept of thel.aw on business-to-consumer ecommerce dispute

settlement

Due to the increasing use of the Intemet worldwide, the number of disputes

arising from Intemet commerce is on the rise The explosive expansion of the use of the

Internet makes it possible for businesses to expand their markets and render services to large groups of e-consumers While off-line transactions can lead to problems and

disputes, the same is true for online transactions In other words: e-commerce

transactions will without a doubt result in electronic disputes, To ensure that all parties

concerned will feel they can safely participate in e-commerce transactions, it is

imperative thal e-disputes are resolved adequately because uncertainty over the Tegal

framework may inhibit both consumers from purchasing products or services over the

Internet, and companies from entering into the electronic market place

The importance of making e-commerce a safe market for both consumers and

companies lead to the need of a strong and complete legal system in a national scope

In Vietnam nowadays, it is more important than ever to develop the legal system of

settling B2C e-commerce dispute so as to quickly resolve cantemporary issues When

The Law on B2C e-commerce dispute selilement should be understood as a

comprehensive legal frameworkexpressed in legal documents and promulgated by competent state agencies in order to repulate the process of settling disputes betweens companies and consumers, including the processes from the beginningof dispute until when dispute is resolved

In Vietnam, a legal framework for e-commerce has been built since 2005 with a series of documents ranging from laws, decrees, and circulars to regulate different

aspects of e-commerce activities The Law on c-commerce is thon improved and updated but has not been modified recently This shows that the legal framework which

governs ¢-conmmeree is slowing down and cannot catch up with new changes in the 21°

century, especially when regulations of e-commerce dispute settlement seem to be

rather new, incomplete and have not supported consumers and companies much There exisis only traditional methods for dispute sctlement, which m fact are difficult to

carry out and time-consuming in the industry 4.0!°,

In order to resolve electronic disputes, the subjects of participation in B2C e- commerce activities may consider apply: the Commercial Law (in 2005), Law on E- transactions (in 2005), the Civil Code (in 2015), the Code of Civil Procedure (in 2015), etc Morover, ¢-commeree activities and dispute settlement are also regulated by other related legal documents such as: the Law on Information Technology (in 2006), the Taw on Telecommunications (in 2009), the Intellectual Properly Taw (in 2013), the Law on Protection of Consumer Rights (in 2010), etc B2C e-commerce is a part of e- commerce in general, therefore, disputes oovuring in this domain can also apply regulations in the legal documents above

1.12 The role of the Law on busincss-to-consumer e-commerce dispute

settlement

Firstly, the law on dispute settlement in B2C e-commere plays an important role

of providing support for both businesses and consumers in conducting e-transactions

safely It can serve as a legal platform in which parties are able to protect their

legitimate rights and interests This is because when dispute oveur, cach of the partivs may choose an appropriate resolution that the law offers to settle dispute

10 nchestry 4.0 ig a name [tr the current trond of automation and dala exchange in manufacturing icchnologics.” -

Wikipedia, Industry 4.0 at htips://en wikipedia org/wikifindustry 4.0

22

Secondly, the law on dispute settlement in B2C e-commere is built to guarantee

“the right to freedom of enterprise” according to the Constitution of Vietnam This

freedom means thal every party bas the righl to decide which type of resolution he or she may apply to settle any dispute that occurs during B2C e-commerce transactions

The Law here need to provide suilable and renew resolutions in order [or traders Lo

promote a fair and trustworthy business and for consumers to seek a practical remedy

to their problem

Thirdly, the Law on dispute settlement in B2C e-commere can act as a legal

instrumeri, for the competent agencies to apply ila eflective way If lhe Law in this field establishes practical and specific procedures for settling disputes, many competent

agencies will be able to guide both companies and consumers resolve dispules

successfully

2.1.3 Principles of business-tu-consumer e-commerce dispute setilement Based on the right to freedom of enterprise and choice and equality before the law, the process of dispute settlement has to follow these principles:

- Right to self-determination: This principle means that parties have the right

to negotiate the optimal form of dispute resolution without the intervention of the state

agencies Parties can also authorize other person to participate in the settlement process

or else ask lawyers to defend their legitimate rights and interests In addition, when

involved in arbitration or litigation procedure, parties shall have the right to change their requests or voluntarily reach agreement with another, which is not contrary to law

and souial elbics

- Equality before the law: Each party must be treated equally by the law and

receive equal access to justice When resolving disputes, the law must guarantee that no

individual nor group of individuals should be privileged or discriminated agains| by the government, especially when they choose court as resolution

- Meditation/Coneiliation: When resolving dispule, parties are encouraged to choose conciliation before bringing the casc to court When the court handle the vase,

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parties will aslo be encouraged to participate in obligatory conciliation to reach mutual

agreement on the resolution of the cases

- Resolve disputes in a quick and opporlune marmer in order nol to inlorfere

with the business activities: The law here need to offer parties with useful, cost-saving

and minimum-time melhod of sctiling disputes Thal is because the expense and line involved in traditional litigation has become increasingly unattractive (Cortés 2013)[31

Therefore a sound legal framework may support parties to resolve disputes promptly

so that it camot alfeet them bussiness process

‘Thus, when choosing a form of resolution of disputes, parties must comply with both general and particular principles of that form For example, if parties decide arbitration as their resolution, they will have to abide by regulations of Law on commercial arbitration (in 2010); or by the court, they need to follow principles under the provisions of Civil Procedure Code (in 2015); ele

2.1.4 Forms of business-to-consumer e-commerce dispute resolution

Tn Vietnam, forns of dispute resolution is regubated im the Commercial Taw (2005), hence, resolutions for disputes occuring in B2C e-commerce environment will

also he applied according to this Law:

“Article 317.- Forms of resolution of disputes

1 Negotiutions between the parties

2 Conciliation between the parties by a body, organisation or individual

selected by the parties to act as the conciliation mediator

3 Resolution by the Arbitration or the Court

Procedures for resolution of commercial disputes by arbitration or a court shall comply with procedures applicable fo arbitrations or courts provided ”!!

In general, Vietnam’s Law provided 4 types of dispute resolutions, which are: negotiation, conciliation, arbitration, and court Besides, e-commerce dispute in which

UCommarcial Law at

hip:/2svw: moj.gov.vn/vbpn/en/fies/n9420bn9420nhp9420lui/view- đetaiLaspx7ilemid=5497

24

any party violating law on e-transactions is resolved by applying administrative measures Because administrative measures are more frequently used in domain name dispute which docs not occur in B2C e-commerce, this Thesis shall nol mention this method,

The booming of e-commerce and the spreading of the Thlernel, which is having profound changes on almost all aspects of Vietnam’s society and life, lead to constantly increasing e-disputes, hence, this requires people to make lucid decisions for the most applicable and appropiiate type of dispute resolutions

(1) Negotiation

Negotiationis the most common form of dispute resolution It can be explained

as a process by which two or more parties delibrating or discussing, over one or more

issues lo reach a beneficial oulcome without the participation of a third party

Compared with processes involving third parties, generally negotiation allows the

disputants themselves to control the process and the solution This form can be

conducted with case and save cost than other forms of dispute resohution

‘However, negotiation in e-commerce has some other significant features:

L, parties will have the opporlunily to exchange information over the Tiere

This may save time and money for the partics to resolve e-disputes The parties often, use e-mail, organize online meeting or conference when being too distant from other

Neverthel

somelimics any negolialor relying exclusively on c-mail will be engaged

aa time consuming task, since reading many e-mails and composing many e-mails is labor intensive.[4] Another drawback of this form is that because parties exchange

opioon over the network, it would take some line for a reply, which leads to extended

time for a dispute to be completely resolved

Second, information of the discussion will be stored in the database of the two

partis (for example: electronic mail, inbox ) This can help protel the privacy and the data message may be saved as valid evidences in case they want to switch another

fonn of dispute resohution

tạ a

(2) Conoiliation/Meditation

Conciliation is another type of dispute resolution in which a neutral third party

meels with (he dispulanis separately in an effort to establish mutual understanding of the underlying causes of the dispute and thereby promote settlement in a friendly,

unantagonistic manner [5]

Vietnam’s lawmakers did not differentiate between the term “conciliation” and

“meditation” However, according to the explanation in legal documents, meditation is

applicd more commonly in Victnam Decree 22/2017/ND-CP on Commercial meditation of Vietnam explained the term “commercial meditation” as “a method of resolving commercial disputes agreed upon by involved parties with the assistance of a

commercial mediator acting as an intermediary in accordance with this Decree” Uhis

means that the neutral third party will join both parties in order toassist them in

reaching a mutually-acceplable settlememt Uolike a judge or arbitrator, the mediator

who does not play a determinative role will have no power to impose a solution on the

disputants; instead, the mediator assists them in shaping solutions to meet their interests

Conciliation or meditation is voluntarily taken by parlies, therefore, the rosull must be depend on their co-operative attitude in reaching an agreement Here under are

some benefils of concilation/medilation

First, this form of dispute resolution help protect parties’ privacy The third party involved is chosen by disputants and he or she must remain reliable and will not

disclose the ermal imformatian,

Second, parties has the right to choose a third mediator or mediation place

Third, conciliation enables parties to resolve dispute flexibly because of short

and easy procedure in settling disputes

(3) Arbitration

Arbitralion is a long-cstablished procedure in which a dispule is submilied, by agreement of the parties, o one or more chosen impartial arbitrators to whom they

present their dispute for a fiual and legally binding decision Arbilralion is procedually

less formal than court adjudication; procedure rules may be set by the parties

26

This dispute resolution method is regulated in Vietnam’s Law on commercial

arbitration (2010) Therefore, parties who take this method have to comply with the

regulations and provedures in accordance with this law The arbitrator is usually selected by parties from a panel of available arbitrators or may have already been agreed upon in the arbitration clause

‘There are some advantages of this method

- Flexibility: The arbitrator is chosen by the parties or nominated by a trusted

third party

- Professional: ‘fhe arbitrator must be qualified enough and have specialist knowledge of this field to help resolve disputes He or she also has the obligations to maintain confidentiality of the dispute, ensures the impartial, speedy resolution to dispute, and complies with rules on professional ethics

- Tnformality: The process of setthng dispute is less formal than court

- Certainty and finality: ‘he arbitral award is binding, enforceable, final and

cannot be appealed

(4) Court

Court is a iibunal with the authority to adjucheate legal disputes belween parties

and carry out the administration of justice in civil, criminal and administrative matters

in accordance with the rule of law.[6]

Tn Vietnam, commercial disputes are ofien brought to economic court, which is

withm the Provincial People’s Court and the Supreme People’s Court The procedure

of settling dispute is in accordance with Civil Procedure Cade (2015) If parties canmot

sellle their differences through negotiation, conciliation/meditalion, arbitration, they

will have to pursue litigation through the courts

Resolving dispute by court has some advantages:

- The decision of the judge is based on the Jaw TL is final and legally binding Although parties have the right of appeal, it will takes much more time and money to

reach a final judgement The losing party alsa has to pay all the cost

tạ 3

- The court follows the regime of two-level adjudication The courts’ first- instance judgements or decisions can be appealed or protested against This principle enable partics to access Lo an accurate, Lair and objective judgement

- The cost for court is much lower than that for commercial or intemational

zmÙilratlon

However, the court can cause a few drawbacks

- The procedure process is inflexible with strict regulations and time limit Parties must abide by regulations provided in related law Tune of svtlling dispule is prolonged

- Public-court proceedings and records are open This may affect the privacy of parties’ information, reputation and business operation

2.2 The legal system of business-o-consumer e-commerce dispute settlement

2.2.1 International law

Tn the process of international integration, Vietnam has signed a number of

intornational treatics such as the Trans-Pacific Strategic Economic Partnership Agreement (PP) and developed the legal framework for e-commerce based on

principles and basie contents of the UNCITRAT Model Law on Electrome Commerce

(1996) and Electronic Signatures (2001) Vietnam is also considering joining the

United Convention on the Use of Llectronic Transactions

2.2.1.1 The UNCITRAL Model Law on Electronic Commerce (1996)

UNCITRAL (United Nations Commission on Intemational Trade Law) is the

core legal body of the United Nalions sysicm in the field of international trade law

UNCITRAL’s business is the modernization and harmonization of mules on

inilertational busines.4

The Model T.aw ơn Flectronice Commerce (MLEC) was adopted in 1996 for the

purpose of cnabling and faciliatating commerce conducted using clectronic means by

“TPP has been renamed as theComprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

in 2018,

SUNCITRAL, About UNCTTRAL af http-iwww:uncitral.org/uncitraleniabout as htm!

28

providing national legislators with a set of intemationally acceptable rules aimed at

removing legal obstacles and increasing legal predictability for electronic commerce"

The Model Law has uo binding force, yel, it denotes the basis [or regulating ¢-

commerce

‘Vietnam’s law makers has based on the Model Law to create a more secure legal

enviroment, for e-commerce Resides, the legal recogmition of data messages in the

Model Law is another significant point which Vietnam has aquired ‘his means that

information in the form of data message shall not be denied legal effect, validity or

enforceability

2.2.1.2 The NCITRAT, Model Law an Electronic Signatures (2001)

The Model Law on Electronic Signatures was adopted m 2001 by UNCITRAL The aim of this instrument is to faciliatate use of electronic signatures in the context of international commercial activities

The increased use of electronic aulhentication techmgues as substitues for

handwritten signatures and other traditional authentication procedures suggested the need for a specific legal framework to recuuce uncertainty as to the legal effect that may

result from the use of electronic means.4§ The Model Law on Electronic Signatures

includes: legal recognition of electronic signatures; compliance with a requirement for

a signature to be reliable and appropriate; conduct of the signatory and the certification

sevice provider, recognition of forcign certificates and cleetronie signalures; ete [7]

‘This model law is of significant assistance in enabling the use of e-commerce as

well as the miversal recognition as an essential reference in the field of e-commerce It ako help make electronic transactions and commercial contracts successfully

conducted

UNCITRAL, UNCINTRAL Model Law on Electronic Commerce (1996) at

bitp ‘Ave ancitralorg/nncitraV/en/uncitral_texts‘electronic_conunerce/1996Model html

15 UNCITRAL, UNCITRAL Model Law on Electronic signalurcs (2001) at

bitp:iévww.ancitral.org/uncitral/envuncitral texts/electronic commerce/2001Model_signamres htral

29

2.2.13 The ‘Trans-Pacific Strategic Kconomic Partnership Agreement

CPP}

The Trans-Pacific Partnership (TPP) used ta be a free trade agreement (FTA)

designed to liberalise trade and investment between 12 Pacific-rim countries: New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru,

Singapore, the Uniled States and Vielram.(The Uniled States then Jef the Agreement)

‘The agreement was signed on 4" l'ebruary, 2016in Auckland, New Zealand ‘the ‘IPE

agreement includes 30 chapters in which e-commerce is regulated in chapter 14 The

chapter includes these following contents:

- Recognize and respeel the freedom lo choose clectronic means to varry oul commercial activities

- Recognize the validily of data messages, electronic signatures (e-signatures)

as well as regulations on o-signature certification

- Protect consumers’ right in e-commerce (online consumers) and regulations

on unwarited commercial messages (spam messages)

- Dispute settlement

The highlight of the TPP Agreement on Flectronic commerce is “Each Party

shall maintain a legal framework governing electronic transactions consistent with the

principles of the UNCITRAL Model Law on Electronic Commerce 1996 or the United Nations Convention on the Use of Electronic Communications in International Contracts, done at New York November 23, 2005” and “Each Party shall endeavour to:

(3) avoid any unnecessary regulatory burden on electronic transactions; and (b)

facilitate input by interested persons in the development of us legal framework for

electronic transactions.”

2.2.14 The role of the Organisation for Economic Co-operation and

Development(OECD) in the context of electronic commerce

30

The OBCD's Committee on Consumer Policy represents the main forum for

regulation of e-commerce at global level The OECD produced noteable papers about e-commerce, ihe most sigmificant are: (1) die “OECD Action Plan for Electronic Commerce” (October 1998), which attaches particular importance to OECD work in

numerous areas, espevially the privacy and consumer proicotion, In particular, OECD

Recommendation of Consumer Protection in E-commerce (revised in 2014) pointed out

many benefits brought by e-commerce and related risks for consumers Its

recommendation also include: non-monetary transactions, digital content products: active consumers; mobile devices; privacy and security risks; payment protection;

product safety: etc

Vietnam should take OECD's recommendation as a reference lo prechet (he risks

that may occur to its citizens and provide a better legal sytem with updated and adequate regulations for e-commerce dispute settlement

2.2.15 United Nations Convention om the use of electronic

communications in international contracts (New York, 2005)

The Electronic communications convention which was adopted by UN in 2005

purposed to aid the use of electronic communications in international trade by

“assuring contracts and other communications exchanged electronically are as valid

and enforceable as their traditional paper-hased equivalents” [8]

‘This convention also includes: legal recognition of electronic communications; form requirements; resolutions to error in electronic communications; regulations of

lime and place of dispatch and receipt of electronic commumicalions; elc [9] The

Electronic communications convention is therefore considered as an important legal

instrument to enhance intemational trade based on the advantageous use of global

internet, Vietnam has nol yel signed or acceded to this Convention, however, considers joining may help Vietnam to access to international legal standards and foster the world

ecomomy imfergration

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