Disputes are hard to avoid in cross-border investment. For Chinese investors in Vietnam, understanding the full “map” of dispute resolution mechanisms — from negotiation to international arbitration — determines how well their rights can be protected when conflicts arise. This overview follows the law in force as of 14 October 2026.
Priority order: negotiate first, arbitrate or litigate later
Disputes arising from investment and business activities are first resolved through negotiation and conciliation; only if these fail do parties proceed to Arbitration or Courts (Article 13(1) of Investment Law 143/2025/QH15). Dispute resolution clauses should therefore be drafted at the contracting stage, not improvised after a conflict erupts.
Disputes between investors: 5 options
For disputes between investors where at least one party is foreign (e.g. a Chinese investor and a Vietnamese partner), Article 13(3) of Law 143/2025 offers five options: (a) Vietnamese courts; (b) Vietnamese arbitration; (c) foreign arbitration; (d) international arbitration; (e) arbitration established by agreement of the parties. The right choice depends on where assets sit for enforcement, the language of proceedings, costs and desired neutrality — there is no universally “best” answer.
Disputes with Vietnamese state authorities
Disputes between a foreign investor and a competent Vietnamese state authority are resolved at Vietnamese arbitration or Vietnamese courts, unless a contract or an international treaty to which Vietnam is a party provides otherwise (Article 13(4) of Law 143/2025). This is the only gateway for Chinese investors to access an international mechanism in disputes with the State — via the 1992 Vietnam–China bilateral investment treaty (BIT).
ISDS under the 1992 Vietnam–China BIT: very narrow scope
This must be understood precisely and not overstated: ISDS under the 1992 BIT applies only to disputes over compensation for expropriation. After 6 months of unsuccessful negotiation, the dispute may go to (i) the competent court of the host state, or (ii) ad hoc arbitration (each party appoints one arbitrator, the chair being a national of a third country; if the tribunal cannot be constituted, the ICSID Secretary-General is invited to appoint). Once the court route is chosen, arbitration is no longer available. The 1992 BIT contains no ICSID mechanism. Any claim of “suing the Vietnamese Government at ICSID under the 1992 BIT” is wrong.
Enforcing foreign arbitral awards in Vietnam
Under the 1958 New York Convention (Vietnam acceded in 1995) and the 2015 Civil Procedure Code (Articles 424 and 459), arbitral awards rendered in China — both countries being Convention members — may be recognised in Vietnam, subject to Vietnam’s reservations (reciprocity; disputes arising from commercial legal relations only; interpretation under Vietnam’s Constitution and laws). Note: awards do not take effect automatically; they must pass a recognition procedure before Vietnamese courts.
Enforcing Chinese civil judgments in Vietnam and vice versa
The Vietnam–China Agreement on Judicial Assistance in Civil and Criminal Matters (signed 19 October 1998, effective 25 December 1999) provides the basis for recognising and enforcing civil court decisions and arbitral awards (Articles 1, 15–17: scope, dossiers, grounds for refusal). From 1 July 2026, the general framework of the 2025 Law on Judicial Assistance in Civil Matters 102/2025/QH15 (replacing Law 08/2007) applies.
Domestic commercial arbitration
Commercial Arbitration Law 54/2010/QH12 remains fully in force; an arbitration agreement is the prerequisite (Article 5); arbitral awards are final and may be set aside by courts only on narrow statutory grounds. When choosing an arbitral institution (VIAC, CIETAC, HKIAC, SIAC, etc.), weigh neutral criteria: where assets are located for enforcement, the language of proceedings, costs, and neutrality where one party is a Chinese enterprise.
Before any dispute arises, investors should review their exposure against our legal risk checklist for Chinese investors and prepare bilingual Vietnamese–Chinese governance documents to protect their legal position.
This information is for reference only and does not constitute legal advice.
Transparency note: this content was quality-reviewed by the AI Legal Council (an AI QA panel) and has not been reviewed by a human lawyer.
Need advice on dispute resolution clauses? Contact FLAT Law Firm: flaw.vn/en/contact.