Choosing Arbitration: VIAC (Vietnam) vs HKIAC (Hong Kong) for FDI Disputes

HKIAC brings into this pairing a card no other centre in the series holds: the arrangement with Mainland China on interim measures, letting Hong Kong-seated arbitration seek asset preservation from Mainland courts. For an FDI dispute whose assets or counterparties touch the Mainland, that card can outweigh every fee difference. This article compares VIAC and HKIAC for the Vietnam–Hong Kong pairing on exactly that weighting.

Legal basis

HKIAC — the Hong Kong International Arbitration Centre — operates under the HKIAC Rules 2024, effective 1 June 2024, within Hong Kong’s Arbitration Ordinance, Cap 609. Hong Kong is an independent arbitral jurisdiction with a common-law tradition and pro-arbitration courts; the New York Convention applies to Hong Kong through China.

The 2019 arrangement between Hong Kong and Mainland China on mutual assistance in interim measures provides that parties to Hong Kong-seated arbitration administered by a qualifying institution — HKIAC is one — may apply to Mainland people’s courts for preservation of assets, evidence and conduct. It is a privilege that arbitration seated anywhere else, VIAC or SIAC included, does not have over Mainland assets.

Applied analysis

Beyond the Mainland card, HKIAC is strong on its international bench, experience in financial and China-related transactions, and neutrality for both Vietnamese and foreign sides. Its weaknesses are costs in Asia’s top band alongside Singapore, and — where enforcement assets are purely Vietnamese — the recognition step a HKIAC award still needs at a Vietnamese court under the Civil Procedure Code 92/2015/QH13 from Article 423, a layer VIAC does not have.

VIAC is therefore far from outclassed in this pairing when the dispute anchors in Vietnam: much lower fees, direct in-country preservation, enforcement without recognition. HKIAC only truly pulls ahead where the asset map or deal structure reaches into the Mainland or Hong Kong — where the ability to freeze Mainland assets from day one changes the entire negotiation balance.

Recommended actions

One deciding question must be answered before choosing: where do the enforceable assets and the key evidence sit? In Vietnam — choose VIAC. Substantially in the Mainland or Hong Kong, or with a counterparty whose assets move between them — choose HKIAC, and name HKIAC as the administering institution to engage the 2019 arrangement, because it applies only to institution-administered Hong Kong arbitration, not to ad hoc arbitration seated there.

This pairing is delineated from the AIAC pairing in EXP-3218 in this batch and the PDRCI pairing in the published EXP-3219: Hong Kong is the only pairing where a third jurisdiction — Mainland China — decides the choice, rather than the pure bilateral relationship.

Frequently Asked Questions

Strengths and weaknesses of VIAC vs HKIAC in investment disputes?

VIAC is strong on cost, direct enforcement and asset preservation in Vietnam. HKIAC is strong on international standing under its 2024 Rules, a global bench, and an advantage no other centre has: HKIAC-administered Hong Kong arbitration can seek interim measures from Mainland Chinese courts under the 2019 arrangement between the two sides. HKIAC’s weaknesses are top-band regional costs and the recognition step still needed in Vietnam for Vietnamese assets. The choice follows the dispute’s asset map — above all, whether it touches the Mainland.

Arbitration costs and duration in each place?

HKIAC fees scale with the amount in dispute and sit in Asia’s high band, comparable to Singapore and several times VIAC once Hong Kong counsel is counted; in exchange the company buys international hearing infrastructure and cross-border preservation reach into the Mainland. On time, an ordinary HKIAC case runs about one to two years to an award. Add recognition time where the award must be enforced in Vietnam; where assets are in the Mainland, interim relief there can be very fast from the start of the case — the time value VIAC cannot supply for Mainland assets.

Enforcement of arbitral awards in each country (New York Convention)?

Hong Kong applies the 1958 New York Convention through China, and Vietnam has been a party since 1995, so a HKIAC award is recognised in Vietnam under the Civil Procedure Code 92/2015/QH13 from Article 423, and a VIAC award is recognised in Hong Kong under the SAR’s Arbitration Ordinance. The special feature is interim support during the case: a party to HKIAC arbitration may seek preservation in the Mainland under the 2019 arrangement — pre-award support the New York Convention does not govern and no seat outside Hong Kong enjoys with the Mainland.

Model arbitration clause for contracts with Thai partners? Recommendation to check local counsel for foreign law details.

A model clause for a contract with a Hong Kong counterparty must: name HKIAC as administering institution and Hong Kong as the seat — the two triggers of the 2019 interim-measures arrangement; state the language; the number of arbitrators and how the presiding arbitrator is appointed; the governing law; and coordination for seeking interim measures in Vietnam and the Mainland. This series’ canon question uses a Thai-partner template, but in this Hong Kong pairing the Mainland element is the very reason HKIAC exists as a choice, so the clause must be drafted so as not to lose the arrangement’s conditions. Have Hong Kong counsel review the details before finalising.

Reviewed by the Legal Practice Group – FLAT LAW FIRM

This legal analysis has been verified against current Vietnamese regulations and cross-border FDI transaction practices by the attorneys at FLAT LAW FIRM.

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