Disputes over business investment activities in Vietnam: settled by a Court or by an arbitration body?

Regarding this matter, LawNet would like to answer as follows:

1. Disputes over business investment activities in Vietnam: settled by a Court or by an arbitration body?

According to the provisions of Article 14 of the Investment Law 2020 on settlement of disputes over business investment activities:

- Disputes over business investment activities in Vietnam shall be settled through negotiation and conciliation. If the negotiation or conciliation fails, the dispute shall be settled by an arbitration body or by a court in accordance with Clauses 2, 3, and 4 of Article 14 of the Investment Law 2020.

Therefore, when disputes over business investment activities in Vietnam occur, the parties will resolve it through negotiation and conciliation. If the negotiation or conciliation fails, the dispute shall be settled by an arbitration body or by a court.

- Every dispute between a Vietnamese investor and a foreign-invested business organization, or between a domestic investor or a foreign-invested business organization and a regulatory agency over business investment activities within Vietnam’s territory shall be settled by a Vietnam's arbitration body or Vietnam’s court, except for the cases in Clause 3 of Article 14 of the Investment Law 2020.

- Every dispute between investors, one of which is a foreign investor or a business organization defined in Points a, b and c Clause 1 Article 23 of the Investment Law 2020, shall be settled by one of the following agencies/organizations:

+ Vietnam’s court;

+ Vietnam’s arbitration body;

+ Foreign arbitration body;

+ International arbitration body;

+ An arbitral tribunal established by the parties in dispute.

In addition, every dispute between a foreign investor and a regulatory agency over business investment activities within Vietnam’s territory shall be settled by Vietnam’s arbitral tribunal or Vietnam’s court, unless otherwise agreed under a contract or prescribed by an international treaty to which the Socialist Republic of Vietnam is a signatory.

Thus, when parties in business investment activities in Vietnam have their interests violated or conflicts or disputes occur, the parties can settle them through negotiation and conciliation.

If the negotiation or conciliation fails, the dispute will be settled by a Court or by an arbitration body.

2. Regulations on guarantees for business investment activities in Vietnam

According to the provisions of Article 11 of the Investment Law 2020 on guarantees for business investment activities:

- Investors are not required by the State to satisfy the following requirements:

+ Give priority to purchase or use of domestic goods/services; or only purchase or use goods/services provided by domestic producers/service providers;

+ Achieve a certain export target; restrict the quantity, value, types of goods/services that are exported or domestically produced/provided;

+ Import a quantity/value of goods that is equivalent to the quantity/value of goods exported; or balance foreign currencies earned from export to meet import demands;

+ Reach a certain rate of import substitution;

+ Reach a certain level/value of domestic research and development;

+ Provide goods/service at a particular location in Vietnam or overseas;

+ Have the headquarters situated at a location requested by a competent authority.

- Depending on the socio-economic conditions and demands for investment attraction in each period, the Prime Minister shall decide to apply forms of guarantee of the State to execute investment projects subject to approval for their investment guidelines by the National Assembly, the Prime Minister, and other important investment projects on infrastructural development.

In addition, the law also stipulates guarantees for asset ownership in business investment activities

- Lawful assets of investors shall not be nationalized or confiscated by administrative measures.

- Where an asset is bought or requisitioned by the State for reasons of national defense and security, national interests, state of emergency or natural disaster management, the investor shall be reimbursed or compensated in accordance with regulations of law on asset requisition and relevant regulations of law.

Best regards!

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