Milestone year for international, domestic arbitration in Vietnam

As Vietnam’s economy continues to grow rapidly and integrates into the global market, arbitration has become a common, favoured method of dispute resolution for investors, suppliers and businesses. Since the pandemic, there has been a significant rise in both domestic arbitration cases and international hearings involving parties located in Vietnam.

The trend indicates increased adoption and preference of this faster, more flexible and non-public dispute resolution method. However, at the same time, there is apparently rising concern among foreign investors and businesses over the enforcement of arbitral awards.

Legislative updates

1. Arbitration under IFC framework. A landmark development of 2025 is the National Assembly’s latest enactment of Resolution No. 222/2025, establishing Vietnam’s first dedicated dispute resolution forum. The new International Financial Centre (IFC) initiative, incorporating an IFC Arbitration Centre, is based on a “one centre, two destinations” model with offices in both Ho Chi Minh City and Da Nang.

The IFC Arbitration Centre is expected to house not only local but also international experts in finance and investment, paving the way for an “exclusive” service resolving disputes between IFC members, or between IFC members and non-members.

Resolution No. 222 also marks a milestone in Vietnamese arbitration with its unprecedented provision allowing disputing parties to waive their right to request courts to set aside arbitral awards issued by the IFC Arbitration Centre

Local courts must respect the waiver agreement, which is expected to address a longstanding concern of foreign investors and businesses about their arbitral awards being set aside in Vietnam.

It also gives parties greater freedom to resolve their disputes in a more conclusive and efficient manner, without the fear that arbitral awards may later be annulled, reflecting party autonomy in arbitration and bringing dispute resolution under the IFC framework closer to international pro-arbitration practices.

2. Jurisdictional reforms. As part of the country’s reform towards a two-tier local administration model, the Vietnamese court system has also been significantly restructured to drastically change the jurisdiction of courts in handling arbitration-related matters. Previously, provincial courts, which are often burdened with heavy caseloads, were responsible for all aspects of support and supervision of arbitration proceedings. But now, as of 1 July 2025, all district courts have ceased to exist, and a total of 355 regional courts have been established to assume jurisdiction over almost all arbitration-related matters.

The regional courts will support local arbitrations, such as by granting orders for evidence collection, and be responsible for receiving and handling requests for recognition and enforcement of foreign arbitral awards in Vietnam.

Unlike foreign arbitral awards – when enforcement in Vietnam must first undergo local recognition before a relevant Vietnamese regional court – domestic arbitral awards can be enforced directly, unless the award debtor requests a court to set aside the award.

Interestingly, regional courts do not have the jurisdiction to set aside domestic arbitral awards and register domestic ad hoc awards. Rather, this power is only vested in the provincial courts of Hanoi, Da Nang and Ho Chi Minh City.

This is because lawmakers reportedly aim to ensure the quality and consistency of judicial reviews concerning arbitration by reserving those sensitive functions to the most experienced and well-resourced courts in those three prominent cities.

3. Clarified arbitrability of real estate and PPP contracts disputes. The law is clear and, in practice, there is consensus on the courts’ exclusive jurisdiction over land ownership disputes. However, local courts and researchers have long disagreed on whether local courts have exclusive jurisdiction over disputes arising from transactions relating to land, including leases, transfers of real estate projects, and transfers of shares in real estate companies.

In 2024, the Amended Law on Land was adopted, articulating that disputes “arising from commercial activities relating to land” can be resolved by Vietnamese commercial arbitration. The Amended Law on Public-Private Partnership (PPP) 2020 also provides for disputes over “PPP contracts and related contracts” to be arbitrable. These are positive developments expected to boost the influx of arbitration in real estate and PPP projects.

Institutional modernisation

1. Launch of the VIAC eCase platform. In June 2024, the Vietnam International Arbitration Centre (VIAC), the most recognised domestic arbitration institution, launched its eCase platform, a digital interface designed to enhance procedural efficiency and transparency. The platform offers e-filing capabilities, secure document management and real-time case monitoring. Integrated notifications for procedural steps, hearings and deadlines are synchronised with users’ work calendars, reducing administrative burdens and improving user experience. This digital transformation marks a significant improvement in the VIAC’s case management and handling of arbitration.

2. Draft amendments to VIAC Rules of Arbitration (2025). The VIAC is also working on a revised set of arbitration rules for 2025 to incorporate international best practices and address the practical needs of Vietnamese arbitration users. These planned developments include:

   a. Draft Provisions on the Constitution of the Arbitral Tribunal in the VIAC Rules on Arbitration;

   b. Draft Code of Ethics and Professional Conduct for VIAC Arbitrators;

   c. Draft VIAC Arbitrator’s Statement; and

   d. Draft Fee Schedule for Requests to Replace Arbitrators. The expected changes emphasise transparency and fairness in tribunal composition to establish a clearer and more equitable process for appointing arbitrators. The introduction of the code of ethics is also expected to reinforce the integrity of the arbitration process and build confidence among businesses.

Judicial trends

A growing number of arbitral awards were upheld by Vietnamese courts in the first half of 2025, demonstrating increasing support for arbitration. According to the public database of the Supreme People’s Court, in the first half of the year, local courts turned down six out of seven requests for setting aside domestic arbitral awards. This means that only one arbitral award was set aside earlier this year.

On their review of arbitral awards, local courts also appear to be moving closer to the international standards. On 7 January 2025, the Court of Ho Chi Minh City ruled that issues of contractual breaches and compensation of damages are substantive matters that fall under the arbitral tribunal’s jurisdiction. The court refused to review these issues, as well as the merits of the dispute.

A grave concern among businesses – both when enforcing domestic arbitral awards and when bringing international arbitral awards to Vietnam for local recognition and enforcement – is excessive reference by local courts to the “contrary to fundamental principles of Vietnamese laws” as a basis to set aside or refuse to recognise awards.

For example, in Decision No. 16/2025, dated 16 January 2025, the respondent claimed that the tribunal violated the parties’ equality principle by granting the claimant’s request for postponement of the hearing, while refusing the respondent’s request.

The respondent also argued that the tribunal’s rulings on the language of arbitration and late-payment interest rates were inconsistent with the parties’ contract and therefore infringed the principle of parties’ freedom of contract.

In this case, the Court of Ho Chi Minh City found that the issues raised by the respondent were properly handled by the tribunal, and the respondent failed to prove that the tribunal violated the fundamental principles of Vietnamese laws. The court ultimately upheld the arbitral award.

These decisions show an encouraging shift towards a more predictable and arbitration-friendly judicial environment.

Implications for investors

The recent legal developments are expected to give more meaningful support to arbitration and reduce the percentage of arbitral award annulments in Vietnam. However, they require investors and businesses to take greater care of their arbitration clauses and agreements if they really want to enjoy the incentives granted under the IFC arbitration framework, as well as recent positive add-ons in the Land Law, PPP Law and other updated laws.

Dispute resolution clauses must no longer be “midnight clauses” that receive insufficient consideration and as a result contain errors that may jeopardise efforts to negotiate and formulate favourable commercial teams.

The establishment of regional courts that now have jurisdiction over the local recognition of foreign arbitral awards may cast some doubts on the certainty of these being enforced against a local entity or assets in Vietnam.

However, the judicial trends and publication of court precedents lay down clear examples of the pitfalls that parties must avoid during offshore arbitration proceedings to increase their chance of eventually enforcing the awards in Vietnam. Local legal support, including a comprehensive check of local court cases on similar disputing issues, would never be “too early”, whether sought before or even during the offshore arbitration proceedings.

Source: https://law.asia/vietnam-arbitration-developments-2025/