Model Dispute Resolution Clauses for Vietnam–China Contracts

Vietnam–China trade has grown steadily for years, bringing a rising volume of sale, processing, distribution and investment-cooperation contracts between businesses in the two countries. Regrettably, the Vietnam–China contract dispute clause is often the most hastily drafted part: many contracts carry a single generic line such as "all disputes shall be resolved in accordance with applicable laws", only for the parties to discover — when a conflict actually arises — that the sentence identifies no competent forum, no governing law and no place where an award could be enforced. This article compares how Vietnamese and Chinese law treat each element of a dispute resolution clause, highlights where the two systems diverge, and suggests a model clause structure that businesses on both sides can use as a negotiating reference — in short, the practical playbook for the dispute resolution clause Vietnam China contract.

Table of Contents

• 1. Background: why Vietnam–China contracts need a "two-system" dispute clause
• 2. Overview comparison: Vietnam vs China
• 3. Detailed analysis of each difference
• 4. Notable similarities
• 5. Five risks Vietnam–China businesses commonly face
• 6. Model clause for reference
• 7. Practical recommendations by stage
• 8. Frequently asked questions

1. Background: why Vietnam–China contracts need a "two-system" dispute clause

When two businesses of the same nationality sign a contract, the dispute clause is almost a formality: the governing law is clear, the courts are clear, and the enforcement mechanism is clear. In a Vietnam–China contract, by contrast, every choice in the dispute clause touches at least two different legal systems. Choosing arbitration in Hanoi or Beijing is not merely a question of geography; it determines which arbitral procedural law governs the proceedings, under which country's standards the arbitration agreement's validity is assessed, and through which country's court recognition procedure the award must later pass.

Our advisory practice shows that three groups need this article most. First, Vietnamese businesses buying raw materials, machinery or placing manufacturing orders in China — a group typically at an informational disadvantage and prone to accepting the counterparty's draft clause verbatim. Second, Chinese investors in Vietnam — a group that often brings its home legal habits with it, for example defaulting to the assumption that all disputes can be taken to Chinese courts. Third, in-house counsel and lawyers on both sides, who need a quick comparative framework for checking a clause before signing.

The key point to grasp from the outset: both Vietnam and China are parties to the 1958 New York Convention on the recognition and enforcement of foreign arbitral awards, so arbitration is the smoothest enforcement bridge between the two countries. But the two countries acceded to the Convention at different times, with different reservations, and have implemented it through two different domestic regimes. It is precisely these "technical" differences where loosely drafted dispute clauses most often fall into traps.

2. Overview comparison: Vietnam vs China

The table below summarizes the seven core comparison axes. Each cell is tied to a specific legal basis so readers can verify for themselves rather than relying on impressionistic claims.

3. Detailed analysis of each difference

The table above shows the big picture; this section examines each difference so drafters understand not only where the systems differ but why, and what follows in practice. The six points below follow the order in which a dispute clause is typically written: from the form of the agreement, through the arbitration model and governing law, to award enforcement and the role of the courts.

3.1. The arbitration agreement: written form and mandatory content

Both Vietnam and China require the arbitration agreement to be in writing — a common ground consistent with Article II of the 1958 New York Convention. But "in writing" does not demand the same level of detail in both countries.

Under Article 16 of Vietnam's Law on Commercial Arbitration 2010, the arbitration agreement may take two forms: an arbitration clause embedded in the contract, or a separate agreement concluded before or after the dispute arises. Vietnamese law recognizes a broad range of written forms: exchanges by telegram, fax, telex or email; written exchanges of information between the parties; records made by a lawyer or notary at a party's request; and even the case where one party raises the arbitration agreement in its statement of claim and the other does not deny it. The overall spirit is to respect the parties' genuine intent rather than to insist on formalities.

China has changed course with the 2025 revision (effective 01/03/2026). Previously, Article 16 of China's Arbitration Law required the arbitration agreement to contain three elements: an expression of the intent to resolve disputes by arbitration, a defined scope of disputes submitted to arbitration, and the designation of the arbitration commission chosen — the third being the critical one that put many "international standard" clauses at risk. The revised law significantly relaxes this: Article 27 recognizes a "deemed arbitration agreement" — if one party applies for arbitration and the other party raises no written objection to the existence or validity of the arbitration agreement before the first hearing, and remains silent after being reminded by the tribunal, the parties are deemed to have an arbitration agreement. This marks a shift from formalism toward respecting the parties' genuine intent.

The practical consequence for drafters of Vietnam–China contracts remains, however: if the contract selects a seat in China, or the award is expected to be enforced in China, the arbitration clause should still name a specific arbitration commission — for example CIETAC or a local commission competent over foreign-related disputes — to avoid any validity dispute. Drafting to a generic "international standard" without a fallback is an invitation to risk.

3.2. Institutional vs ad hoc arbitration: where China is markedly stricter

This is the deepest structural difference between the two systems, and the point where many international model clauses stumble when applied to Vietnam–China relations.

Vietnamese law follows an open model: the Law on Commercial Arbitration 2010 covers both arbitration at arbitral institutions and ad hoc arbitration, where the parties agree on the procedural rules themselves without going through a permanent institution. A business can validly agree to resolve its dispute through an ad hoc tribunal sitting in Singapore or Hong Kong with no obstacle to the agreement's validity.

China has made a major step with the 2025 revision (effective 01/03/2026). Article 82 permits ad hoc arbitration for the first time in certain foreign-related disputes: foreign-related maritime disputes, or foreign-related disputes between enterprises established and registered in a pilot free trade zone, the Hainan Free Trade Port, or other areas designated by the state. Outside these cases, the requirement to designate an arbitration commission continues to apply — and agreements signed before 01/03/2026 remain governed by the legal framework in force at the time of signing.

The upshot: an ad hoc arbitration clause may be perfectly valid if the dispute is arbitrated in Vietnam or falls within Article 82's scope, yet still face risk if it falls outside that scope and a Chinese court is asked to review the agreement's validity.

The practical drafting advice: in Vietnam–China contracts, always designate a specific arbitral institution. If you want to keep the flexibility associated with ad hoc arbitration, consider arbitrating under a neutral international institution with flexible procedural rules (such as SIAC or HKIAC) instead of using a pure ad hoc model — satisfying China's "institutional" requirement while preserving the neutrality both sides want.

3.3. Governing law of the contract — and of the arbitration agreement itself

Many drafters mistakenly assume there is only one layer of "governing law". In a Vietnam–China contract at least two layers must be distinguished: the law governing the substance of the contract (the parties' rights and obligations) and the law governing the arbitration agreement itself (assessing whether the agreement is valid and what its scope is).

On the first layer, the two countries are broadly similar. Article 683 of Vietnam's Civil Code 2015 allows the parties to agree on the law governing the contract, except in special cases such as contracts over real estate (which must apply the law of the place where the property is located) and labour or consumer contracts (where the choice may not reduce minimum protections under Vietnamese law). On the Chinese side, Articles 3 and 41 of the 2010 Law on the Application of Laws to Foreign-Related Civil Relations likewise permit party choice. The caveat is Article 4 of that law: the mandatory rules of Chinese law apply directly, regardless of the law the parties choose. The scope of "mandatory rules" is defined by judicial interpretations of the Supreme People's Court of China, varying by sector and over time, so for high-value contracts or transactions in regulated sectors (finance, data, security), businesses should consult Chinese counsel rather than assume a third-country choice-of-law clause "covers" everything.

On the second layer — the law of the arbitration agreement — China regulates the question far more explicitly. Article 18 of China's 2010 Law on the Application of Laws allows the parties to agree on the law governing the arbitration agreement; absent such agreement, the law of the place where the arbitration commission sits or the law of the seat applies. Vietnam's Law on Commercial Arbitration 2010, by contrast, contains no dedicated rule on this issue. The consequence for drafting Vietnam–China clauses: state the law governing the arbitration agreement expressly (usually the same as the contract's governing law, or the law of the seat), instead of leaving it open and hoping the forum will work it out.

3.4. Recognition and enforcement of awards: one Convention, two sets of reservations

The best news for Vietnam–China businesses is that both countries are parties to the 1958 New York Convention — the most important international instrument on the recognition and enforcement of foreign arbitral awards, with more than 170 member states. An award rendered in Vietnam can therefore be taken for recognition and enforcement in China and vice versa, without depending on any separate bilateral treaty.

But "both are members" does not mean "both apply it identically". Vietnam acceded to the Convention in 1995 under Decision 453/QD-CTN of 28 July 1995 of the President, with three reservations: the Convention applies only to awards rendered in the territory of a member state (for awards from non-member states, on a reciprocity basis); only to disputes arising from commercial legal relationships; and any interpretation of the Convention before Vietnamese courts must comply with the Constitution and laws of Vietnam. These contents have been implemented domestically in the 2015 Civil Procedure Code, specifically Article 424 (conditions for considering recognition) and Article 459 (grounds for refusal, corresponding to Article V of the Convention).

China acceded much earlier — on 22 January 1987, effective 22 April 1987 — with two reservations: the commercial reservation and the reciprocity reservation. In practice, the Chinese court system has built an internal "reporting mechanism" for decisions refusing recognition of foreign arbitral awards, producing a relatively stable enforcement practice.

What businesses should take away is not a comparison of which side is "easier", but an understanding that the enforcement path for arbitral awards between the two countries is legally paved. Choosing arbitration over litigation in a Vietnam–China contract clause is, in most cases, choosing the enforcement option that works at both ends.

Two further innovations of China's 2025 Arbitration Law revision (effective 01/03/2026) directly affect post-award strategy. First, the "seat of arbitration" concept is codified in Article 81: parties may agree in writing; absent agreement it is determined under the chosen arbitration rules. The procedural law follows the seat (unless otherwise agreed) and awards are deemed rendered at the seat — so the clause should state the seat expressly rather than leaving it to default. Second, the time limit for applying to set aside an award is cut from six months to three months from the date of receipt of the award (Article 72): a losing party must prepare its set-aside application immediately, with far less room for delay than before.

3.5. When arbitration is not chosen: court jurisdiction in the two countries

If the parties have not agreed to arbitration — or the arbitration agreement is invalid — the dispute must go to court. The question "which country's courts have jurisdiction" then becomes existential, and it is here that Chinese law has just undergone a major change that needs updating.

On 1 September 2023, the Standing Committee of the National People's Congress of China adopted amendments to the Civil Procedure Law, effective 1 January 2024, significantly expanding the part on foreign-related civil litigation. Article 276 (formerly Article 272) broadens the bases on which Chinese courts may hear foreign-related civil disputes: beyond traditional bases such as the place of contracting, the place of performance and the place where assets are located, it adds disputes having "other appropriate connections" with China. Article 277 further allows the parties to agree in writing to choose a Chinese court for foreign-related civil disputes. In other words, after 2024 the "door" into Chinese courts is wider than before for disputes involving Chinese businesses.

On the Vietnamese side, the 2015 Civil Procedure Code also contains rules on jurisdiction over foreign-element civil cases, but Vietnamese courts are generally more cautious about expanding jurisdiction. For Vietnamese businesses this sets up a practical calculation: if the contract has no clear arbitration clause and the Chinese counterparty sues in a Chinese court, acceptance of the case is entirely possible under the new law. Conversely, a Chinese civil or commercial judgment taken to Vietnam for recognition must go through the procedure for recognizing foreign court judgments — a much narrower path than recognition of arbitral awards. Once again, every analysis returns to the same conclusion: never leave the dispute clause in the void of "no arbitration, unclear courts".

3.6. Interim measures: who decides

Once a dispute has erupted, the need to freeze assets or restrain ongoing breaches is often more urgent than waiting for the final award. The two systems handle this need very differently.

Under Vietnamese law, the arbitral tribunal has the power to grant interim measures, while courts also have authority to support arbitration under Articles 7 and 8 of the Law on Commercial Arbitration 2010. This "two-channel" mechanism lets the requesting party choose the fastest channel suited to the situation.

Under Chinese law, the arbitral tribunal cannot itself order interim measures; it must forward the parties' request to the competent people's court for decision. This means that in an arbitration seated in China, an application to freeze a counterparty's bank account must go through an additional round before the courts. For clause drafting, the practical consequence is: where the counterparty's assets are mainly in China and the risk of asset dissipation is high, build performance security into the contract from the signing stage (bank guarantees, escrow accounts) rather than relying entirely on interim measures after the dispute arises.

4. Notable similarities

Alongside the differences, there are points where the two systems converge that businesses often mistake for differences — and those misperceptions sometimes spark needless negotiation disputes.

First, both countries recognize the separability of the arbitration agreement. Under Article 19 of Vietnam's Law on Commercial Arbitration 2010, the arbitration agreement is fully independent of the contract: the invalidity of the contract does not automatically invalidate the arbitration agreement. Chinese law records the same principle. The argument "the contract was declared void, so we don't have to arbitrate" therefore stands little chance in either system.

Second, arbitral awards are final in both countries. Article 61 of Vietnam's Law on Commercial Arbitration 2010 provides that an arbitral award takes effect from the date of issuance and the parties may not appeal. Chinese law likewise provides that arbitral awards take effect from issuance and are in principle not appealable. Businesses should understand clearly: choosing arbitration means accepting a "single round", with no appellate review as in court litigation.

Third, both countries impose limitation periods for commencing arbitration. Under Article 33 of Vietnam's Law on Commercial Arbitration 2010, the limitation period for arbitration is two years from the time the lawful rights and interests were infringed, unless specialized legislation provides otherwise. China likewise has limitation rules for arbitration proceedings. The common message: do not sit on a dispute for too long before turning to arbitration.

Fourth, both systems require courts to respect the parties' arbitration agreement: where a valid arbitration agreement exists, the court must decline jurisdiction (Article 6 of Vietnam's Law on Commercial Arbitration 2010; Chinese law similarly requires courts to refuse cases where the parties have an effective arbitration agreement). This is precisely the "shield" that protects a business's choice of arbitration against a counterparty's surprise court filing.

5. Five risks Vietnam–China businesses commonly face

Risk 1: An arbitration clause that names no arbitral institution. This is the most common error in contracts drafted by the Vietnamese side from international templates: "Any dispute shall be settled by arbitration". Under Chinese standards, the clause lacks the mandatory element of designating an arbitration commission. When a dispute arises and one side wants to renege, it can ask a Chinese court to declare the arbitration agreement invalid for failing to identify the forum. The only prevention is to always state the full name of a specific arbitral institution.

Risk 2: Applying "ad hoc arbitration" thinking indiscriminately to a contract with a Chinese element. Many businesses that have dealt with European or Singaporean counterparties are accustomed to ad hoc arbitration clauses under the UNCITRAL Rules and carry them over verbatim into contracts with Chinese counterparties. Before 01/03/2026, Chinese law in principle did not recognize this model; the 2025 revision (Article 82) opens it only for certain foreign-related disputes (foreign-related maritime disputes, disputes between enterprises in pilot free trade zones / the Hainan Free Trade Port / designated areas). The prevention is to confirm whether the dispute falls within Article 82's scope, or to switch to institutional arbitration at a neutral international centre.

Risk 3: Choosing a governing law while forgetting "mandatory rules". Some contracts choose the law of a third country (for example Singapore law) in the belief that everything is "covered" by the chosen law. But if the dispute is resolved in China or enforcement is sought in China, the mandatory rules of Chinese law may still apply directly under Article 4 of the 2010 Law on the Application of Laws, regardless of the choice-of-law clause. For contracts in specially regulated sectors, conduct a separate review rather than assuming by default.

Risk 4: Not accounting for the court round when interim measures are needed in China. Businesses accustomed to a Vietnamese tribunal quickly freezing assets are caught off guard in China when they learn the request must still be forwarded to a people's court. In transactions with a high risk of asset dissipation, put security mechanisms in place from the outset (payment guarantees, escrow accounts) rather than depending on post-dispute interim measures.

Risk 5: Leaving the dispute clause blank out of "trust in the partner". In a business culture that values relationships, many Vietnam–China contracts are signed on mutual trust with a perfunctory dispute clause thrown in "for form's sake". But when the relationship breaks down — exactly when the clause is needed most — it proves unusable: unclear whether arbitration or courts, unclear which law, unclear where the award can be enforced. A good dispute clause is not a sign of distrust; it is the professional way to protect both sides.

6. Model clause for reference

Below is a suggested dispute resolution clause structure for Vietnam–China contracts, drawing together the analyses above. Businesses should adapt it to each specific transaction and consult counsel before applying it.

Article [__]. Dispute Resolution 6.1. Any dispute arising out of or in connection with this Contract, including disputes over its validity, interpretation and performance, shall first be resolved by the parties through good-faith negotiation within [30] days from the date one party sends a written notice of the dispute to the other. 6.2. Failing negotiation, the dispute shall be resolved by arbitration at [the Vietnam International Arbitration Centre (VIAC) / the China International Economic and Trade Arbitration Commission (CIETAC) / the Singapore International Arbitration Centre (SIAC)] under the arbitration rules of that institution in force at the time the request for arbitration is filed. 6.3. The seat of arbitration shall be [Hanoi, Vietnam / Beijing, China / Singapore]. The language of the arbitral proceedings shall be [Vietnamese / Chinese / English]. The arbitral tribunal shall consist of [01 / 03] arbitrator(s). 6.4. The law applicable to the substance of the dispute shall be [the law of Vietnam / the law of China / the law of [___]]. The law applicable to this arbitration agreement shall be the law of [___]. 6.5. The award of the arbitral tribunal shall be final, binding on the parties, and the parties undertake to perform it voluntarily.

When filling in the template above, note four points. First, the institution field must not be left blank, and the full name together with the abbreviation should be stated to avoid confusion between similarly named centres. Second, the seat should be considered together with where the assets of the likely award-debtor are located — the seat does not determine the place of enforcement, but the procedure is in practice smoother when the two are close. Third, for bilingual Vietnamese–Chinese contracts, state clearly which language version prevails in case of conflict, to avoid prolonged arguments over a single differently translated term. Fourth, the pre-arbitration negotiation period should be specific but not too long, so that one side cannot use it as a delaying device.

7. Practical recommendations by stage

Before signing. Devote time to the dispute clause commensurate with the contract's value. Check the three mandatory elements under both countries' standards: an agreement in writing, a clearly designated arbitral institution, and a governing law identified for both the contract and the arbitration agreement itself. If the counterparty presents a ready-made template, do not only read the price and delivery clauses — read the dispute clause carefully, because it is often the part drafted to the drafter's advantage.

During performance. Keep complete written records (emails, signed documents) of contract performance. At the first sign of dispute, send written notice early and follow exactly the negotiation sequence stipulated in the contract — skipping a mandatory negotiation step can be invoked by the counterparty to stall the arbitration. At the same time, monitor the limitation period so as not to lose the right to arbitrate.

Once a dispute has arisen. Quickly assess three questions: is the arbitration agreement valid under both countries' standards, where are the counterparty's assets located, and what interim measures are needed. If the assets are in China and an urgent freeze is required, factor in that the request must go through a Chinese people's court and prepare the file early. In all cases, consult counsel versed in both systems before filing — choosing the wrong forum at the outset can cost the business months arguing about jurisdiction alone.

For the long term. Businesses dealing regularly with Chinese counterparties should build an internal set of model clauses already reviewed by counsel in both countries, rather than renegotiating from scratch in every contract. The set should be updated periodically as the two countries' laws change — the 2023 amendments to China's Civil Procedure Law, for example, significantly altered the picture of Chinese court jurisdiction.

8. Frequently asked questions

Should a Vietnam–China contract choose arbitration or litigation?

Arbitration is generally preferred, because awards are reciprocally recognized between Vietnam and China under the 1958 New York Convention, to which both countries are parties. Taking a judgment from a court of one country to the other for enforcement is far more difficult, as the two countries have no comprehensive bilateral mechanism for recognizing civil and commercial judgments comparable to that for arbitral awards.

Can we choose ad hoc arbitration in a contract with a Chinese counterparty?

There is now a statutory basis since 01/03/2026: Article 82 of China's Arbitration Law (2025 revision) permits ad hoc arbitration in certain foreign-related disputes — foreign-related maritime disputes, or foreign-related disputes between enterprises established and registered in a pilot free trade zone, the Hainan Free Trade Port, or other areas designated by the state. Outside these cases, the safest course remains to name a specific centre such as CIETAC or an arbitration commission competent over foreign-related disputes.

What mandatory elements must an arbitration agreement in a Vietnam–China contract contain?

Under Article 16 of Vietnam's Law on Commercial Arbitration 2010, the agreement must be in writing and may be a clause in the contract or a separate document. On the Chinese side, old Article 16 required the intent to arbitrate, the scope of disputes, and the arbitration commission chosen; the 2025 revision (effective 01/03/2026) relaxes this with Article 27's "deemed arbitration agreement". Drafting practice should still satisfy all three elements to avoid validity disputes.

Is an arbitral award rendered in China enforceable in Vietnam?

Yes. Both Vietnam and China are parties to the 1958 New York Convention. Vietnamese courts consider recognition and enforcement under Article 424 of the 2015 Civil Procedure Code, refusing only in the cases set out in Article 459, which correspond to the refusal grounds in Article V of the Convention.

May a Vietnam–China contract choose the law of a third country?

Yes, subject to each country's rules. Vietnam allows the parties to agree on the law governing the contract under Article 683 of the 2015 Civil Code, except in special cases such as contracts over real estate. China also permits choice under Articles 3 and 41 of the 2010 Law on the Application of Laws to Foreign-Related Civil Relations, but the mandatory rules of Chinese law continue to apply directly.

Need counsel versed in both systems?

The dispute resolution clause in a Vietnam–China contract cannot be drafted from a one-size-fits-all template. Every choice of arbitral institution, seat, language and governing law must be weighed against both legal systems, particularly where the contract value is large or the transaction falls in a specially regulated sector. FLAT Law Firm's China Desk, with its experience handling Vietnam–China matters, can assist in reviewing, negotiating and drafting dispute clauses tailored to each specific transaction. Contact our hotline at 0988424851 for advice.

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References

• Law on Commercial Arbitration 2010 (Luật Trọng tài thương mại 2010, No. 54/2010/QH12), effective 01/01/2011.
• Civil Procedure Code 2015 (Bộ luật Tố tụng dân sự 2015, No. 92/2015/QH13), effective 01/7/2016.
• Civil Code 2015 (Bộ luật Dân sự 2015, No. 91/2015/QH13), effective 01/01/2017.
• New York Convention 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (Vietnam acceded 1995; China acceded 1987).
• Arbitration Law of the People's Republic of China (Luật Trọng tài nước Cộng hòa nhân dân Trung Hoa / Arbitration Law of the People's Republic of China), in force since 1995, amended 2009 and 2017.
• Civil Procedure Law of the People's Republic of China (Luật Tố tụng dân sự nước Cộng hòa nhân dân Trung Hoa / Civil Procedure Law of the People's Republic of China), amended 2023, effective 01/01/2024.
• Law of the People's Republic of China on the Application of Laws to Foreign-Related Civil Relations (Luật về áp dụng pháp luật đối với quan hệ dân sự có yếu tố nước ngoài của Trung Quốc / Law of the People's Republic of China on the Application of Laws to Foreign-Related Civil Relations), effective 01/4/2011.