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The provisions of the Investment Law 2020 govern disputes related to business investment activities in Vietnam. Clause 1, Article 14 of the law outlines the general framework for resolving these disputes, prioritizing negotiation and conciliation as the first step in the conflict resolution process.
Negotiation and Conciliation as Primary Methods
The Investment Law 2020 encourages parties involved in disputes related to business investment activities to resolve their issues through negotiation and conciliation. These methods allow parties to settle their differences amicably without resorting to formal legal proceedings, which can be time-consuming and costly.
However, if negotiation and conciliation fail, the parties must seek resolution through more formal channels such as arbitration or the courts.
Formal Dispute Resolution Mechanisms
When negotiation and conciliation efforts are unsuccessful, Clause 2, Article 14 of the Investment Law 2020 specifies that disputes can be escalated to the following forums:
- Arbitration – Disputes may be referred to either Vietnamese or international arbitration, depending on the nature of the case and the agreements between the parties. Arbitration is often preferred in international disputes due to its flexibility and confidentiality.
- Court – Disputes may also be brought before the Vietnamese courts, especially when one or more parties are domestic investors or when a dispute involves state agencies.
Disputes Involving Foreign Investors
Special provisions apply to disputes where one or more parties are foreign investors. Clause 1, Article 23 of the Investment Law 2020 outlines the options available for resolving such disputes, which include:
- Vietnamese Court – Foreign investors can seek resolution in Vietnamese courts.
- Vietnamese Arbitration – Domestic arbitration remains an option for foreign investors.
- Foreign Arbitration – If agreed upon by the parties, the dispute may be resolved through foreign arbitration bodies.
- International Arbitration – This is another viable option, often preferred for cross-border investment disputes.
- Arbitration as Agreed by the Parties – The disputing parties may agree on an alternative arbitration body, providing flexibility in resolving the conflict.
Disputes Involving State Agencies
When a dispute arises between foreign investors and competent state agencies, the default resolution method is through Vietnamese arbitration or courts. However, if a contract or international treaty to which Vietnam is a member provides otherwise, the terms of that agreement will govern the resolution process.
The Investment Law 2020 in Vietnam offers a multi-tiered dispute resolution process, disputes can be resolved through arbitration or the courts. Special provisions are in place for disputes involving foreign investors, offering a range of options including both domestic and international forums. This approach provides flexibility for parties while ensuring that disputes are resolved within a clear legal framework.
Investors and businesses operating in Vietnam should be aware of these mechanisms to effectively manage potential disputes.
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