Disputes among shareholders are common issues arising in the process of governance and management of joint-stock companies. Effective resolution of such disputes is essential to ensure the rights of the parties involved and to maintain corporate stability. In the below article, NPLaw shall provide an overview of the relevant legal issues regarding the resolution of shareholder disputes.

I. The need for resolving shareholder disputes

In the operation of a joint-stock company, shareholder disputes are relatively frequent and may arise from various causes such as divergent interests, business strategies, profit distribution, voting rights, share transfers, or control over company management. If left unresolved, these conflicts may seriously affect corporate governance, reputation, and business performance, and in some cases may lead to dissolution or bankruptcy.

Therefore, the resolution of shareholder disputes is critical to safeguard the lawful rights and interests of the parties while maintaining internal stability and transparency. Effective dispute resolution not only protects the company from legal risks but also strengthens investor confidence and secures sustainable business relations. Enterprises should thus proactively establish internal mechanisms for the prevention and lawful handling of disputes.

II. Legal provisions on the resolution of shareholder disputes

1. What is the resolution of shareholder disputes?

Pursuant to Clause 3, Article 4 of the Law on Enterprise 2020, a shareholder is an individual or organization owning at least one share in a joint-stock company.

Accordingly, the resolution of shareholder disputes refers to the process of applying legal mechanisms or negotiated agreements to address conflicts arising between shareholders in relation to capital contribution, management, operation, or distribution of benefits in a joint-stock company.

2. Consequences of failing to resolve shareholder disputes

Failure to resolve shareholder disputes in a timely manner may result in serious legal and operational consequences, including:

  • Corporate paralysis: Main decisions such as appointment of executives, profit distribution, investments, or amendments to the charter may not be passed due to entrenched disagreements, thereby impeding governance and business efficiency.
  • Loss of credibility and confidence: Prolonged or public disputes may cause partners, customers, and investors to doubt the stability of the company, leading to contract cancellations, capital withdrawal, or termination of cooperation.
  • Litigation and proceedings: If disputes cannot be reconciled, shareholders may resort to litigation or arbitration. Such proceedings are costly, time-consuming, and often detrimental to the company’s image and operations.

3. Competent authorities for resolving shareholder disputes

Authorities competent to resolve shareholder disputes in companies include:

  • Commercial Mediation: It is conducted by commercial mediation organizations under Article 2 of Decree No. 22/2017/ND-CP.
  • Commercial Arbitration: It is applicable where an arbitration agreement exists in the charter or shareholders’ agreement, pursuant to Article 2 of Law on Commercial Arbitration 2010.
  • People’s Courts (according to Articles 35 and 37 of the Civil Procedure Code 2015, as amended in 2025):
    + District-level People’s Courts: First-instance jurisdiction over ordinary business and commercial disputes without foreign elements.
    + Provincial-level People’s Courts: Jurisdiction over disputes involving foreign elements (e.g., foreign shareholders), cases requiring judicial entrustment, or where provincial Courts deem it necessary to assume jurisdiction.

According to Article 39 of the Civil Procedure Code, 2015 (as amended in 2025):

  • Jurisdiction belongs to the Court where the defendant is headquartered.
  • If there is a written agreement, the parties may request the Court in which the plaintiff resides or operates business.
  • For petitions to annul resolutions of the General Meeting of Shareholders or the Board of Members, jurisdiction lies with the Court where the company is headquartered.

III. Questions on shareholder dispute resolution

1. Can shareholder disputes result in the dissolution or bankruptcy of a company?

Under Article 207 of the Law on Enterprise 2020, a joint-stock company may only dissolve if:

  • It has fully settled all debts and other property obligations; and
  • It is not subject to ongoing dispute resolution proceedings before Courts or Arbitration.

Accordingly, if shareholder disputes concerning ownership, voting rights, or management are under adjudication, the company cannot be dissolved until the proceedings conclude. If disputes do not affect the company’s operation, assets, or governance, dissolution remains possible provided all other statutory conditions are met.

2. Methods of resolving shareholder disputes

Available mechanisms include:

  • Commercial mediation: Pursuant to Article 2 of Decree No. 22/2017/ND-CP, it is applicable for shareholder disputes regarding commercial activities or other disputes that are considered to be resolved through the mediation.
  • Commercial Arbitration: Pursuant to Article 2 of the Law on Commercial Arbitration 2010, it is applicable where the charter or shareholders’ agreement includes an Arbitration clause.
  • Litigation before People’s Courts: Where mediation or Arbitration fails, parties may institute proceedings under Clause 4, Article 30 of the Civil Procedure Code 2015. 

3. Do shareholders have the right to request the company to redeem their shares?

Under Article 132 of the Law on Enterprise 2020, shareholders are entitled to request the company to redeem their shares if they voted against resolutions of the General Meeting of Shareholders concerning:

  • Reorganization of the company; or
  • Amendments to shareholder rights and obligations under the charter.

The request must be in writing, specifying shareholder name and address, number and type of shares, proposed selling price, and reasons, and must be submitted within 10 days from the resolution’s adoption. The company must redeem within 90 days at market price or as stipulated in the charter. Where no agreement on price is reached, the shareholder may request valuation by an independent appraisal organization.

4. Preventive measures against shareholder disputes

To minimize risks, companies should apply some preventive measures, as follows: 

  • Drafting a comprehensive and detailed charter specifying shareholder rights, obligations, voting principles, and share transfer rules.
  • Concluding a shareholders’ agreement clarifying governance, profit distribution, and dispute resolution mechanisms.
  • Ensuring transparency in financial reporting and business operations.
  • Establishing internal mechanisms for conflict resolution, such as internal mediation committees.
  • Setting up a corporate culture and code of conduct fostering cooperation and minimizing personal conflicts.

5. Can resolving shareholder disputes lead to changes in the shareholder structure?

Dispute resolution may result in shareholders transferring all or part of their shares to others or to third parties. Moreover, under Article 132 of the Law on Enterprise 2020, shareholders may request the company to redeem their shares, thereby altering ownership structure.

6. Legal risks of failing to resolve disputes timely

Unresolved disputes may result in: 

  • Governance paralysis: It is inability to approve main decisions such as director appointments, dividend distribution, or financial statements.
  • Reputation and valuation loss: Prolonged disputes may undermine investor and partner trust, leading to cooperation termination.
  • Financial losses: It affects the progress of business activities of the company, missing business opportunities, breaching contractual obligations, and taking compensation liabilities due to internal deadlock.

IV. Legal advisory services on the resolution of shareholder disputes

The foregoing article provides an overview of shareholder dispute resolution under Vietnamese law. With its team of experienced lawyers and legal specialists, NPLaw stands ready to assist clients with comprehensive legal support in handling shareholder disputes. For further assistance, please contact NPLaw.