Korean investors entering Vietnam instinctively want arbitration seated in Seoul, while the Vietnamese side wants to keep it at VIAC — and this clause negotiation matters more than it looks, because the forum decides language, cost, speed and the enforcement path afterwards. This article compares VIAC and KCAB specifically for the Korea–Vietnam investment pairing, marked off from the other pairings in the same arbitration series.
Legal basis
The Vietnamese foundation is the Law on Commercial Arbitration 54/2010/QH12 of the 12th National Assembly, letting parties choose the institution, seat, language and governing law. VIAC — the Vietnam International Arbitration Centre — runs on its own procedural rules with a panel including foreign specialists. On the Korean side, KCAB International is the international arm of the Korean Commercial Arbitration Board in Seoul, operating under dedicated international arbitration rules and a familiar address for Korean business.
Both Vietnam and South Korea are parties to the 1958 New York Convention on recognition and enforcement of foreign arbitral awards — Vietnam since 1995 — so each forum’s awards are in principle enforceable in the other country through court recognition; in Vietnam that procedure sits in the Civil Procedure Code 92/2015/QH13 from Article 423.
Applied analysis
VIAC’s strengths for disputes anchored in Vietnamese assets and operations are proximity: evidence, witnesses and assets needing preservation are all in Vietnam; costs are markedly lower than offshore proceedings; and a VIAC award enforces domestically with no foreign-award recognition step. Its commonly cited weakness is thinner depth on complex multi-jurisdiction investment disputes than the largest centres, plus home-turf perception on the Korean side.
KCAB is strong on Korean business familiarity, Seoul’s international hearing infrastructure and neutrality in the Korean investor’s eyes. But where enforcement assets sit in Vietnam, a KCAB award still needs recognition at a Vietnamese court, subject to the refusal grounds of the New York Convention and the Civil Procedure Code — an added layer of time and procedural risk that choosing VIAC avoids. Arbitration and counsel costs in Seoul also run above Vietnamese levels for a dispute of the same size.
Recommended actions
In negotiation, do not stop at naming the centre: fix simultaneously the seat, the language, the number of arbitrators, the governing law of the contract, and the route to emergency asset-preservation measures in Vietnam. Where enforcement assets are mainly Vietnamese, a common structure is VIAC with a neutral third arbitrator and English language — conceding the home-turf concern without surrendering the enforcement advantage.
The arbitration-choice series also includes the comparison with the Philippines’ PDRCI in the published EXP-3219, and with China’s CIETAC/BAC in EXP-3211 in this same WAVE-ASSIGN wave; each article handles only its own pairing and cross-refers, so investors see the full option set by counterparty nationality.
Frequently Asked Questions
Strengths and weaknesses of VIAC vs KCAB in investment disputes?
VIAC is strong on cost, proximity to Vietnamese evidence and assets, and direct domestic enforcement of its awards; it is weaker on depth for complex international investment disputes and on neutrality perception from the Korean side. KCAB is strong on international experience, Seoul hearing infrastructure and Korean business confidence; it is weaker in that an award needing enforcement in Vietnam must pass a recognition procedure, and total proceeding costs in Korea run higher. For FDI disputes whose assets and operations are all in Vietnam, the practical balance usually tilts to VIAC with a neutral-arbitrator mechanism.
Arbitration costs and duration in each place?
There is no fixed figure because fees track the amount in dispute and each centre’s fee schedule, but on a relative scale: arbitrating at VIAC is usually markedly cheaper than proceeding in Seoul once arbitration fees, administrative charges, travel, translation and foreign counsel are counted. On time, an ordinary international arbitration at either forum takes roughly a year to an award, excluding recognition and enforcement time where the award must travel to the other country — that extra layer arises only with KCAB where enforcement assets are in Vietnam.
Enforcement of arbitral awards in each country (New York Convention)?
Both countries are parties to the 1958 New York Convention, so a VIAC award can be recognised and enforced in Korea, and a KCAB award in Vietnam, through the courts of the enforcement country. In Vietnam, recognition of foreign arbitral awards is governed by the Civil Procedure Code 92/2015/QH13 from Article 423; courts refuse only on the Convention’s narrow grounds such as an invalid arbitration agreement, fundamental procedural breaches, or conflict with public policy. A VIAC award in Vietnam needs no such procedure — the structural advantage of seating arbitration where the assets are.
Model arbitration clause for contracts with Thai partners? Recommendation to check local counsel for foreign law details.
A model clause needs six elements: the chosen institution; the seat of arbitration; the language of proceedings; the number of arbitrators and how the neutral presiding arbitrator is appointed; the law governing the contract; and a statement that the award is final and enforceable. Although this series’ canon question names a Thai partner as a common template, the drafting principles apply unchanged to contracts with a Korean partner in this article’s pairing: with a Korean counterparty, the extra points to lock are the English language and an emergency-measures route in Vietnam. Check the foreign-law details with counsel in South Korea before finalising the clause for a specific deal.
This article has been quality-reviewed by the FLAW AI Legal Council