Dispute Settlement In Business Investment Activities

Vietnam has emerged as a favored destination for foreign investors due to its rapid economic growth, stable political environment, and a proactive approach towards trade liberalization. As international businesses flock to capitalize on the country opportunities, the issue of dispute settlement becomes paramount. In this article, we will explore the mechanisms and frameworks available for resolving business investment disputes in Vietnam. Please contact immediately Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for legal advice and support.

1. What dispute resolution measures are there in business investment activities in Vietnam?

In Clause 1, Article 14 of the Investment Law 2020, the measures to settle disputes related to investment and business activities in Vietnam are as follows:

Article 14. Settlement of disputes in business investment activities

1. Disputes related to business investment activities in Vietnam shall be resolved through negotiation and conciliation. In case no negotiation or conciliation is possible, the dispute shall be settled at arbitration or court as prescribed in Clauses 2, 3 and 4 of this Article.

Thus, according to the above provisions, disputes related to business investment activities in Vietnam can be resolved through the following measures:

• Negotiating method: Is a method to resolve disputes in business investment without the need for the role of a third party. When there is a dispute, the disputing parties together discuss and agree to resolve by themselves.
• Mediation: is a method of dispute resolution with the participation of a third party as a mediator to assist and persuade the disputing parties to seek solutions to eliminate the arising dispute.
• Dispute settlement method through arbitration: It is a method of dispute settlement agreed by the parties and conducted in accordance with the provisions of the Law on Commercial Arbitration 2010 .
• Dispute settlement method through the Court: It is a method of dispute settlement at the adjudication agency in the name of state power, conducted according to strict and strict order and procedures and judgment or decision. The court decision on the dispute, without voluntary compliance, is guaranteed to be enforced by the coercive power of the state.

Dispute Settlement In Business Investment Activities

2. Measures to settle disputes between domestic investors, foreign-invested economic organizations or between domestic investors, foreign-invested economic organizations and state agencies

According to the provisions of Clause 2, Article 14 of the Law on Investment 2020 , disputes between domestic investors, foreign-invested economic organizations or between domestic investors and foreign-invested economic organizations outside with competent state agencies related to investment and business activities in the territory of Vietnam shall be resolved through Vietnamese arbitration or Vietnamese courts, except for the case in Section 3 below.

3. Measures to settle disputes between investors in which at least one party is a foreign investor

Disputes between investors in which at least one party is a foreign investor or an economic organization shall be settled through a in the following agencies and organizations:

• Vietnamese courts;
• Vietnamese arbitration;
• Foreign arbitration;
• International arbitration;
• Arbitration established by agreement of the disputing parties.

3.1. The object of application

The object of application of the above provisions is an investor, in which at least one party is a foreign investor or an economic organization that meets the conditions and carries out investment procedures as prescribed for investors. foreign investment when investing in the establishment of other economic organizations; make capital contribution, purchase shares, purchase capital contribution portion of other economic organizations; investment in the form of BCC contract if such economic organization falls into one of the following cases:

• There are foreign investors holding more than 50 percent of the charter capital or the majority of general partners are foreign individuals, for economic organizations that are partnerships;
• Having economic organizations specified at Point a of this Clause holding more than 50 percent of charter capital;
• There are foreign investors and economic organizations specified at Point a of this Clause holding more than 50 percent of the charter capital.

3.2. Dispute resolution methods

When there is a dispute between investors in one of the above cases, the parties may choose one of the following dispute resolution methods:

• Vietnamese Courts;
• Vietnamese arbitration;
• Foreign arbitration;
• International arbitration;
• Arbitration established by agreement of the disputing parties.

4. Measures to settle disputes between foreign investors and competent state agencies

According to the provisions of Clause 4, Article 14 of the Law on Investment 2020 , disputes between foreign investors and competent state agencies related to business investment activities in the territory of Vietnam shall be resolved through arbitration. Vietnam or a Vietnamese court, unless otherwise agreed under a contract or an international treaty to which the Socialist Republic of Vietnam is a signatory.

Dispute Settlement In Business Investment Activities

Vietnam progress in attracting foreign investment has been remarkable, and its commitment to improving the dispute settlement mechanisms signals a positive trajectory. As businesses continue to invest in Vietnam, they should be aware of the available dispute resolution avenues and carefully consider which approach best suits their needs. Please contact immediately Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for legal advice and support.

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