The Vanuatu police say local authorities will deal with the two parties involved in fighting during this year's independence celebrations in Luganville.
The acting police commissioner, Lieutenant Colonel Arthur Caulton, says fighting broke out between members of the Ulas family and villagers from Sara on Santo last week.
Lt Col Caulton says villagers from Sara took revenge after one of them was hospitalised with serious injuries.
He says police arrested five members of the Ulas family and evacuated them to Port Vila, where they are remanded in custody.
"Charges of intentional assault causing bodily harm have been laid against them. They have been taken to court. I think for their safety and for the proper administration of their evacuation from Santo to Port Vila, court has granted them custody."
Lt Col Caulton says if counvicted they could face up to two years in prison.
He says villagers from Sara will also be dealt with by local chiefs.
The tension had closed some schools in Luganville, but Lt Col Caulton says they have re-opened.