VCI Legal – January 6, 2025

Promulgated in late 2025, Decree No. 328/2025/ND-CP of the Government of Viet Nam establishes the legal framework for the establishment and operation of the International Arbitration Centre (“IAC”) within the International Financial Centre in Viet Nam. Implementing the legislative orientations of the National Assembly, the Decree sets out a dispute resolution mechanism for investment and commercial matters in accordance with international standards, while systematically regulating jurisdiction, arbitral procedures, and procedural rules, as well as prescribing specific exceptions applicable in certain circumstances. 

1. Scope of Application

This Decree applies to the following subjects: the IAC; its founders and arbitrators; members of the International Financial Centre; investors; organizations and individuals involved in investment, business activities, and dispute resolution at the IAC; the Executive Body and the Supervisory Body of the International Financial Centre; and other relevant agencies, organizations, and individuals. 

2. Establishment of theIAC

The IAC shall be established upon the participation of at least five (05) founders. Such founders must satisfy the following conditions: 

• Being Vietnamese citizens; 

• Possessing full civil legal capacity and full civil act capacity; 

• Holding a university degree or higher qualification; 

• Attaining at least Level 5 English proficiency under the six-level foreign language proficiency framework applicable in Viet Nam, or an equivalent qualification; 

• Having a minimum of ten (10) years of practical experience in resolving disputes through arbitration in the fields of investment and business, with priority given to those possessing professional expertise in finance and banking; 

• Having participated in the issuance of at least ten (10) arbitral awards; 

• Being an arbitrator of an arbitration centre established in accordance with Vietnamese law. 

The IAC shall be headquartered within the International Financial Centre in Ho Chi Minh City, possess legal person status, its own seal and bank accounts, and operate independently in terms of organization and finance. 

3. Operations of theIAC

The operations of the IAC shall be conducted in accordance with the law on commercial arbitration, Resolution No. 222/2025/QH15, and this Decree.  

The rights and obligations of the IAC shall be exercised and performed in compliance with the provisions of the law on commercial arbitration.  

The IAC is responsible for ensuring that its activities are conducted in an effective, impartial, and transparent manner. 

The application of foreign law by the IAC shall comply with Clause 2, Article 6 of Resolution No. 222/2025/QH15 and Clause 2, Article 14 of the Law on Commercial Arbitration. Specifically: 

• Application of Law to Transactions, Investments, and Business Activities within the International Financial Centre (IFC): 
• For transactions involving at least one foreign individual or organization, the parties may agree to select and apply foreign law. Foreign law shall not be applied where the consequences of such application are contrary to the fundamental principles of Vietnamese law. In the absence of an agreement on the applicable law, the law of the country having the closest connection with the transaction shall apply; 
• For transactions relating to ownership rights or other rights in rem over immovable property, the lease of immovable property, or the use of immovable property as security, the law of the country where the immovable property is located shall apply. 

Application of Law in Dispute Resolution: 

• For disputes without a foreign element, the Arbitral Tribunal shall apply Vietnamese law to resolve the dispute; 
• For disputes involving a foreign element, the Arbitral Tribunal shall apply the law chosen by the parties; where the parties have not agreed on the applicable law, the Arbitral Tribunal shall determine and apply the law it considers most appropriate; 
• Where Vietnamese law or the law chosen by the parties does not contain specific provisions relevant to the subject matter of the dispute, the Arbitral Tribunal may apply international trade usages or international customs to resolve the dispute, provided that such application or its consequences are not contrary to the fundamental principles of Vietnamese law. 

Note: Where the parties have agreed to resolve disputes at the IAC, they may also agree to waive their right to request a court to set aside a decision recognizing a settlement agreement or a final and binding arbitral award rendered by the Arbitral Tribunal of the IAC. Such waiver shall form an integral part of the arbitration agreement. 

Courts shall not refuse to entertain or adjudicate a request for the setting aside of an arbitral award or a decision of the Arbitral Tribunal in the following circumstances: 

– Where the waiver agreement falls within any of the following cases of invalid arbitration agreements: 

1. The dispute arises in a field falling outside the jurisdiction of arbitration, namely where it does not arise from commercial activities or where arbitration is prohibited by law; 
2. The person entering into the agreement lacks proper authority; 
3. The person entering into the agreement lacks civil act capacity; 
4. The form of the agreement fails to comply with the written form requirement under the law on commercial arbitration; 
5. One of the parties was deceived, threatened, or coerced in the process of entering into the arbitration agreement and requests a declaration that such arbitration agreement is invalid; 
6. The agreement violates prohibitory provisions of law. 

– Where the waiver agreement is entered into after one party has submitted a request to the court for the setting aside of the arbitral award or decision of the Arbitral Tribunal. 

4. Jurisdictionover Disputes 

The IAC shall have jurisdiction to resolve disputes, based on the agreement of the parties, arising from investment and business activities within the International Financial Centre, except for the following categories of disputes: 

• Disputes whose subject matter involves administrative decisions or administrative acts of state management authorities or competent officials; 

• Disputes relating to labour; 

• Disputes relating to personal rights of individuals; 

• Other matters relating to state management that have already been resolved by judgments or decisions of competent state management authorities or by competent courts in Viet Nam. 

5. Qualifications and Eligibility of Arbitrators of theIAC

Arbitrators of the IAC may include both Vietnamese nationals and foreign nationals. The IAC shall prescribe the standards and qualifications applicable to arbitrators. The following persons shall be ineligible to serve as arbitrators: 

• Persons currently serving as judges, procurators, investigators, enforcement officers, or civil servants of the People’s Courts, the People’s Procuracies, or enforcement agencies; 

• Persons who are suspects or defendants in criminal proceedings, persons serving criminal sentences, or persons who have completed the service of criminal sentences but have not yet had their criminal records expunged.