A dispute arises — where to sue? Chinese and Vietnamese courts have different procedures, timelines and costs, and foreign judgment enforcement is its own story. This article compares them so investors choose correctly in the contract clause.
1. Each country’s commercial court system
- Vietnam: people’s courts — provincial level hearing FDI cases first;
- China: people’s courts — tiers, with specialised commercial courts;
- Jurisdiction: territory and subject matter — determined upfront;
- Language: Vietnamese / Chinese — proceedings in the local language;
- Translation: foreign documents — must be translated and legalised;
- Lawyers: local lawyers — representing in court.
2. Trial timelines: realistic frames
- Vietnam: months to years — depending on complexity (qualitative);
- China: also lengthy — complex cases lasting years;
- Appeal: adding time — if appealed;
- Retrial: special procedures — on proper grounds;
- Reality: mentally preparing — litigation is not fast;
- Compare: arbitration usually faster — consider.
3. Court fees and litigation costs
- Vietnam: value-based court fees — on the dispute amount;
- China: its own mechanics — ask Chinese counsel;
- Lawyers: legal fees — agreed, usually significant;
- Experts: expert fees — technical, financial;
- Total: calculating upfront — whether suing is worthwhile;
- Recovery: the loser pays — per the judgment.
4. Recognising foreign judgments in Vietnam
- Principle: international treaties — or reciprocity;
- Procedure: applying to Vietnamese courts — for recognition;
- Conditions: effective judgments — proper jurisdiction;
- Refusal: contrary to fundamental principles — of Vietnamese law;
- Reality: not automatic — procedures required;
- Advice: lawyers — assessing prospects.
5. Recognising foreign judgments in China
- Principle: treaties or reciprocity — (qualitative frame);
- Practice: gradually opening — as reported (qualitative);
- Details: ask Chinese counsel — on the current picture;
- No assumptions: don’t assume — enforceability;
- Compare: arbitration easier — the New York Convention;
- Strategy: choosing arbitration — for cross-border enforcement.
6. Enforcing Chinese judgments in Vietnam?
- Question: winning in China — enforcing back in Vietnam;
- Conditions: treaties / reciprocity — between the two;
- Procedure: Vietnamese courts — recognition first;
- Risk: being refused — if conditions unmet;
- Reality: ask lawyers — case by case;
- Prevention: arbitration clauses — from the start.
7. Enforcing Vietnamese judgments in China?
- Reverse: winning in Vietnam — enforcing in China;
- Similar: treaties / reciprocity — examined;
- Details: Chinese lawyers — assessing;
- Assets: the loser having assets — in China;
- Reality: difficult — preparing thoroughly;
- Strategy: international arbitration — usually more feasible.
8. Do courts favour local parties?
- Concern: foreign investors — often worried;
- Reality: hard to assert — generally;
- Mitigate: solid evidence — good lawyers;
- Arbitration: more neutral — in perception;
- Clauses: choosing the mechanism — at signing;
- Experience: asking businesses — that have sued.
9. Arbitration: the alternative
- Advantages: neutral, confidential — single tier;
- Enforcement: the New York Convention — 170+ states;
- China: CIETAC, BAC — arbitration institutions;
- Vietnam: VIAC — the Vietnam International Arbitration Centre;
- International: SIAC, HKIAC — for neutrality;
- Cost: higher than courts — but fast and confidential.
10. Interim emergency measures
- Purpose: freezing assets — before dissipation;
- Vietnam: courts applying — on request;
- China: its own mechanics — ask counsel;
- Arbitration: the tribunal — or supporting courts;
- Speed: the sooner the better — on detection;
- Security: deposits — may be required.
11. Gathering evidence across borders
- Difficulty: evidence in another country — collecting;
- Legalisation: consular — for foreign documents;
- Mutual assistance: treaties — between states;
- E-evidence: emails, chats — having value;
- Preserve: notarising — early;
- Lawyers: guiding — proper collection.
12. Mediating before suing
- Recommended: negotiating — first;
- Mediation: mediation centres — commercial;
- Benefits: fast, cheap, preserving relations;
- Settlement: recognising — outcomes;
- Clauses: multi-tier — negotiation, mediation, arbitration;
- Culture: Asia valuing — harmony.
13. Choosing governing law for contracts
- Freedom: the parties agreeing — on governing law;
- Default: the law of performance place — if unchosen;
- Impact: different laws — different outcomes;
- Advice: comparing — before choosing;
- Consistent: law and mechanism — matching;
- Write clearly: the clause — no ambiguity.
14. Domestic civil enforcement
- Vietnam: civil enforcement agencies;
- Seizing: the loser’s assets;
- Difficulty: asset dissipation — common;
- China: its own system — ask counsel;
- Reality: winning doesn’t guarantee — collecting;
- Prevention: emergency measures — early.
15. Suing the subsidiary or the parent?
- Issue: the Vietnamese subsidiary — parent in China;
- Who to sue: the contracting party — the rule;
- Piercing: the theory — hard to apply;
- Guarantee: a parent guarantee — from the start;
- Strategy: guarantee clauses — in contracts;
- Advice: structuring — before signing.
16. Limitation periods for suing
- Vietnam: limitation periods — by dispute type;
- China: its own rules — ask counsel;
- Don’t wait: expiry — losing the right to sue;
- Interruption: demands, acknowledgements — renewing;
- Track: a limitations calendar — for every contract;
- Act: early — don’t delay.
17. Language and translation in proceedings
- Vietnamese courts: Vietnamese — all documents;
- Chinese courts: Chinese — likewise;
- Cost: certified translation — not small;
- Quality: mistranslation — affecting the case;
- Witnesses: interpreters — at hearings;
- Prepare: early — large volumes.
18. Dispute-resolution clause strategy
- Model: negotiation — mediation — arbitration — multi-tier;
- Seat: Singapore, Hong Kong — neutral;
- Language: English — if parties agree;
- Law: choosing clearly — governing law;
- Enforcement: New York — easier enforcement;
- Review: lawyers — for every major contract.
19. Quick two-country comparison
- Procedure: both in local languages — local lawyers needed;
- Time: neither is fast — preparing for the long haul;
- Foreign enforcement: both difficult — not automatic;
- Solution: international arbitration — usually better;
- Rule: prevention beats cure — good clauses;
- Act: today — reviewing contracts.
20. Pre-signing checklist
- Mechanism — court or arbitration?
- Seat — where?
- Governing law — which?
- Language — what?
- Enforcement — feasible?
- Guarantee — parent company?
21. Enforcing arbitral awards in China and Vietnam
- Convention: New York Convention — both members;
- Procedure: applying to courts — for recognition;
- Grounds: limited refusal — grounds;
- Time: faster — than judgments;
- Reality: generally enforced — (qualitative);
- Still: local counsel — needed.
22. Litigation funding: third-party finance
- Concept: funders financing — cases;
- Share: portion of awards — in return;
- Fit: large claims — strong merits;
- Availability: varying — by jurisdiction;
- Ask: funders — early;
- Disclose: disclosure duties — may apply.
23. Settlement dynamics in Asian disputes
- Culture: settlement preferred — in practice;
- Timing: after filing — leverage shifts;
- Mediation: mediated settlements — common;
- Enforce: settlement agreements — enforceable;
- Strategy: negotiating from strength;
- Document: written — terms.
24. Choosing between VIAC, CIETAC and SIAC
- VIAC: Vietnam-based — local familiarity;
- CIETAC: China-based — Chinese parties;
- SIAC: Singapore — neutral, international;
- Cost: varying — fee schedules;
- Language: flexible — per agreement;
- Decide: neutrality vs convenience.
25. Pre-action preservation measures
- Concept: pre-action — preservation;
- Use: preventing dissipation — of assets;
- Urgency: proving — urgency;
- Security: counter-security — may be required;
- Wrongful: liability — for wrongful preservation;
- Speed: applying at once.
26. Document preservation duties
- Duty: preserving — relevant documents;
- Scope: emails, messages — included;
- Litigation hold: issuing — promptly;
- Breach: adverse inferences — risked;
- Policy: retention policies — reviewed;
- Train: staff — trained.
27. Keeping a dispute-readiness file
- Contracts: executed versions — filed;
- Correspondence: key letters — preserved;
- Timeline: event chronology — maintained;
- Contacts: counsel details — ready.
Contact us
FLAT Law Firm advises Chinese investors throughout the Vietnam investment cycle — from deal structuring and licensing to operations and compliance. Contact us for advice tailored to your project.
This article has been quality-reviewed by the FLAW AI Legal Council
