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A New Era for Dispute Resolution in Vietnam – Legislation on International Arbitration Centre and Specialised Court for the IFC 15 January 2026

Vietnam’s establishment of an International Financial Centre (“IFC”) in 2025 forms part of a broader strategy to further strengthen its robust economic growth, already close to 8% for 2025, through increased foreign investment and integration into the global banking system, all whilst pivoting the economy towards services.

To this end, Resolution No. 222/2025/QH15 dated 27 June 2025 (“Resolution 222”) established IFCs in Ho Chi Minh City and Da Nang City. Resolution 222 also provided that, in future, disputes between IFC members, or between an IFC member and non-members, may be resolved via Vietnam’s new International Arbitration Centre (“IAC”) within the IFC and its Specialised Court.

Accordingly, Vietnam has since introduced:

  • Decree No. 328/2025/ND-CP, dated 18 December 2025 and effective immediately, on establishing and regulating Vietnam’s new IAC (“Decree 328”); and
  • the Law on the Specialised Court at the IFC, passed by the National Assembly on 11 December 2025 and effective on 1 January 2026 (“Law on Specialised Court”).

"Under Resolution 222, Article 30 is of particular interest as it upholds agreements between parties to disputes resolved at the IAC to waive the right to request that a Vietnamese court set aside mediation or arbitration awards."

International Arbitration Centre within the IFC

Under Resolution 222, Article 30 is of particular interest as it upholds agreements between parties to disputes resolved at the IAC to waive the right to request that a Vietnamese court set aside mediation or arbitration awards. This should increase the enforceability of such awards and boost the confidence of businesses that participate in the IFC that awards obtained through the IAC will be consistently enforced.

Furthermore, under Decree 328 establishing and regulating Vietnam’s new IAC, the IAC is granted authority to resolve disputes arising from investment and business activities within the IFC, provided the parties have agreed to arbitration. However, certain categories of disputes are excluded from the IAC’s jurisdiction, including:

  • disputes concerning administrative decisions or acts of state management agencies or authorised officials;
  • employment-related disputes;
  • disputes involving personal rights of individuals; and
  • matters related to state management that have already been resolved by a judgment or decision of a competent state authority or court in Vietnam.

The introduction of IAC arbitration provides an additional option for parties operating within the IFC to resolve disputes to the already available dispute resolution mechanisms such as international and domestic arbitration and courts.

Specialised Court at the IFC

Under the Law on Specialised Court, extensive provisions governing the establishment and operation of the Specialised Court have been proposed. Notable features include:

  • applicable law: parties may opt for the application of foreign law, international commercial customs and international treaties to which Vietnam is not a signatory in the IFC Specialised Court in transaction where at least one party is a foreign individual/organisation;²
    • for disputes related to ownership rights, other rights over real estate, leasing real estate or using real estate as collateral, the lex rei sitae must be applied; and³
    • the application of foreign law must nevertheless comply with the public order of Vietnamese law;⁴
  • foreign judges: foreign practitioners are now proposed to be eligible to serve as judges in the IFC’s Specialised Court. To qualify, they must meet certain conditions set out in the Law on Specialised Court.⁵

Whilst these provisions offer foreign investors a potentially attractive dispute resolution option outside of national courts and arbitration, it remains uncertain how they will be applied in practice.

The prospect of foreign judges may make the court system appear more neutral and appealing to international investors. However, foreign and Vietnamese judges alike will face the challenge of reconciling certain aspects of foreign law, particularly common law systems which rely heavily on binding precedents, with Vietnamese law, which contains no binding precedents and only offers limited precedents which are deemed merely persuasive.

The requirement for the application of foreign law not to contravene “public order” of Vietnam, has not been clearly defined and explained.⁶ Whilst Article 670.1 of the Civil Code mentions “fundamental principles of Vietnamese law”, which appears to be the closest concept to “public order” in Vietnamese law, they remain distinct terms which may be interpreted and applied differently in practice.

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"Whilst these provisions offer foreign investors a potentially attractive dispute resolution option outside of national courts and arbitration, it remains uncertain how they will be applied in practice."

In particular, Article 670.1 states that foreign law shall not be applied if “the consequences of application of the foreign law are inconsistent with the basic principles of the laws of Vietnam” or if “it is impossible to determine the contents of the foreign law although necessary measures have been applied in accordance with the procedural law”. However, Vietnamese legislation and judicial practice offer no clear definition of what constitutes “the basic principles of the laws of Vietnam” either. In the absence of a statutory definition, some limited guidance may be drawn from Resolution 01/2014/NQ-HDTP of the Supreme People’s Court, which addresses the implementation of the Law on Commercial Arbitration. Under this Resolution, “basic principles” are to be interpreted as fundamental norms of conduct that underpin the drafting and enforcement of Vietnamese law more broadly.

Nevertheless, in practice Vietnamese courts exercise broad discretion in determining whether the application of a foreign law conflicts with these fundamental principles. The absence of clear legal criteria for identifying violations of Vietnam’s fundamental legal principles creates uncertainty in applying foreign law, making it difficult to predict outcomes and potentially affecting investors rights and interests in unexpected ways.

Conclusion

Accordingly, Resolution 222, along with Decree 328 and the Law on IFC’s Specialised Court offer promising new dispute resolution mechanisms designed to reflect Vietnam’s ambition of establishing a modern, investor-friendly legal environment within the IFC. The extent to which they become effective in practice and promote investor confidence will depend heavily on how their provisions are interpreted and applied.

Ha Hoang, a Trainee in our Hanoi office, also contributed to this article.

[1] https://www.reuters.com/world/asia-pacific/vietnam-targets-10-gdp-growth-2026-2025-10-20/.
[2] Article 5.2(a) of the Law on the IFC’s Specialised Court.
[3] Article 5.2(c) of the Law on the IFC’s Specialised Court.
[4] Article 6.3 of the Law on the IFC’s Specialised Court.
[5] Article 10.2 of the Law on the IFC’s Specialised Court.
[6] Previously, during drafting, it was proposed that “the application of foreign law must not contravene the fundamental principles of Vietnamese law”. However, the final official Law on Specialised Court uses the term “public order” instead.

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