A foreign investor's contract with a Vietnamese counterparty has broken down. The dispute clause points to VIAC. Now what?

Arbitration at the Vietnam International Arbitration Center (VIAC) is governed by a distinct body of rules that diverges from court litigation in important ways — including how arbitrators are selected, how evidence is admitted, and how awards are enforced. Counsel and parties who treat VIAC proceedings like Vietnamese court litigation routinely encounter avoidable problems.

This guide draws on Dilinh Legal's practical experience in VIAC arbitrations to give counsel and parties a clear picture of how proceedings actually run, from the appointment of arbitrators through to post-award remedies.

The Legal Framework Governing VIAC Arbitrations

VIAC arbitrations are primarily governed by four instruments:

In addition, VIAC circulates an internal Guidelines on Arbitration Procedure to its arbitral tribunals. This document outlines detailed procedural steps and includes sample templates. It is not publicly available but shapes how VIAC tribunals actually run proceedings.

Understanding the interplay between these instruments — and where gaps exist — is essential for effective advocacy before VIAC.

Arbitrator Qualifications and Selection

Minimum qualifications under the LCA

Under Article 20 of the LCA, every arbitrator must:

VIAC's higher standards

VIAC applies stricter criteria for admission to its panel under Article 20.3 of the LCA. Panel arbitrators must be aged 30 to 70, hold a university degree with at least eight years of relevant work experience, and satisfy one of four additional conditions: prior arbitrator experience, membership in an internationally recognized arbitration panel, introduction by a professional institution, or sponsorship by a member of VIAC's Executive Committee.

Satisfying the minimum conditions does not guarantee admission. VIAC's Executive Committee has the final authority on appointments.

Selecting an off-panel arbitrator

Parties are not limited to VIAC's published panel. Under Articles 12 and 13 of the VIAC Rules, parties may appoint an arbitrator who is not on the panel — provided that person satisfies the LCA's minimum qualifications. This option is worth considering where a dispute requires deep expertise in a specific technical or commercial field.

Impartiality and disclosure obligations

Under Article 4.2 of the LCA and Article 16 of the VIAC Rules, arbitrators must be independent, impartial, and objective — both at the time of appointment and throughout the proceedings.

VIAC's Arbitrator Statement sets out a detailed conflict framework modeled closely on the IBA Guidelines on Conflicts of Interest in International Arbitration (2024). The framework categorizes potential conflicts into three lists:

Arbitrators are required to investigate potential conflicts proactively — including past and present familial, financial, and professional relationships with the parties, their affiliates, and counsel. Doubts about whether to disclose should be resolved in favor of disclosure.

The IBA Guidelines also provide a Green List — a safe harbor of situations that do not require disclosure, such as membership in the same professional association as counsel or prior co-service on a different tribunal.

Structure and Roles Within the Tribunal

Tribunal members

Under Article 60 of the LCA and Article 31 of the VIAC Rules, arbitral decisions are made by majority vote. Each tribunal member has an equal vote.

At the outset, the tribunal should establish internal guidelines covering the arbitration roadmap, each member's roles, question protocols during hearings, and deadlines for exchanging draft award sections.

The Presiding Arbitrator

The Presiding Arbitrator (also called the chairman or chairwoman) controls the proceedings — directing hearings, managing witness examination, ruling on procedural issues, and representing the tribunal externally. In practice, the Presiding Arbitrator also leads the drafting of all orders, decisions, and the award itself.

Because of this workload, the Presiding Arbitrator typically receives 40% of the total arbitration fees allocated to the tribunal. Parties selecting or approving a Presiding Arbitrator should prioritize substantive expertise, procedural fluency, and language capability in the arbitration language.

The VIAC Secretariat

All communication between the tribunal and the parties — including orders, requests, and awards — must pass through the VIAC Secretariat. Under Article 16.4 of the VIAC Rules, no private contact between arbitrators and any party is permitted.

The Secretariat may, on its initiative or at the tribunal's request, provide procedural guidance and precedents — but must respect the tribunal's independence in deliberation.

Can Foreign Lawyers Represent Parties?

Yes. Vietnamese law contains no prohibition on foreign lawyers participating in arbitral proceedings. VIAC confirms this on its website — a foreign lawyer may act as counsel in the same way as a Vietnamese lawyer. This is a significant practical advantage of VIAC arbitration over Vietnamese court litigation, where representation rules are more restrictive.

Service of Process

Under Article 3.2 of the VIAC Rules, VIAC serves all notices and documents at addresses provided by the parties. Service may be effected by delivery against receipt, registered mail, facsimile, email, or any means creating a record of transmission. A document is deemed received on the day it is actually received — or on the day it would have been received had delivery been attempted in accordance with the Rules.

The service gap

A persistent problem in VIAC proceedings is respondents who avoid or refuse delivery and then use non-receipt as grounds to set aside an award. The LCA and VIAC Rules currently contain no mechanism for dealing with refused or undelivered notices.

One established practice is to use Vietnamese thừa phát lại (court bailiffs) to effect personal service of key documents. Bailiffs are State-appointed legal professionals authorized to serve papers and record delivery, producing contemporaneous evidence of service that is difficult to challenge before a court.

Procedural Orders

After the first case management meeting, the tribunal issues Procedural Order No. 1 (PO1) — the foundational document governing how the proceedings will run.

PO1 typically covers:

PO1 is the appropriate vehicle for parties to secure clear procedural commitments early. Counsel should actively engage in the pre-PO1 consultation to ensure the order reflects their client's needs regarding evidence and hearing logistics.

Evidence in VIAC Arbitrations

No court rules apply

The Civil Procedure Code governs Vietnamese court litigation — but it does not apply to arbitration. VIAC arbitrations are governed by the LCA and the VIAC Rules. Neither contains detailed rules on the admissibility of evidence.

Under Article 38.5 of the VIAC Rules, where an issue is not covered by the Rules, the tribunal should act in the spirit of the Rules and resolve the dispute fairly and efficiently. Under Article 14.3 of the LCA, the tribunal may apply international customs where Vietnamese law contains no specific applicable provision, as long as the result does not contradict fundamental principles of Vietnamese law.

IBA Rules of Evidence as the practical standard

In practice, VIAC tribunals regularly apply the IBA Rules on the Taking of Evidence in International Arbitration as the applicable international custom on evidence. Counsel appearing in VIAC proceedings should be familiar with these rules.

Under Article 9 of the IBA Rules, the tribunal has complete discretion to determine the admissibility, relevance, materiality, and weight of evidence. Grounds for exclusion include lack of relevance, legal privilege, unreasonable burden, loss of documents, commercial confidentiality, and considerations of proportionality and fairness.

Authenticity and sufficiency

In assessing evidence, VIAC tribunals focus on two criteria:

The tribunal's investigative powers

Under Article 46 of the LCA, the tribunal may request witnesses to provide documents and information. It may also order expert appraisals or valuations, with the requesting party advancing fees.

Where judicial expertise is required — for example, verification of signatures or seals — Vietnamese law requires the tribunal to use qualified tư pháp giám định (judicial expertise institutions) before engaging foreign equivalents.

Hearing Structure

Jurisdictional hearings

Under Article 43 of the LCA and Article 28 of the VIAC Rules, the tribunal must consider its own jurisdiction before proceeding to the merits — whether or not a party raises the issue. The tribunal may decide jurisdiction in a separate decision or reserve it for the final award.

Counsel challenging jurisdiction should do so early and in writing. Participating in the merits without reservation may constitute a waiver of jurisdictional objections.

Evidentiary hearings

A standard VIAC evidentiary hearing runs as follows:

VIAC tribunals may use the chess clock method — allocating each party a fixed total hearing time — or may establish a detailed schedule for each examination phase. Either approach benefits from early agreement between the parties.

Legalisation of Foreign Documents

Under Article 9.4 of Decree 111/2011/ND-CP, foreign documents are exempt from consular legalization if the receiving agency in Vietnam does not require it. VIAC does not require consular legalization as standard, and a 2023 Hanoi court decision supports this position.

However, Vietnamese courts have set aside VIAC awards where a power of attorney or authorization document from a foreign party was admitted without consular legalization, and the respondent objected — treating the acceptance as a breach of fundamental principles of Vietnamese law.

The practical rule: legalize all foreign documents relating to a party's standing to participate — powers of attorney, corporate authorizations, and representative credentials. The cost of legalization is significantly lower than the risk of an award being set aside.

Damages

Compensatory damages

Under Articles 302 to 305 of the Commercial Law 2005, damages must be actual, must result directly from the breach, and the aggrieved party must take reasonable steps to mitigate.

Penalty clauses

Punitive damages are not recognized under Vietnamese law. However, parties may contractually agree on a penalty for breach. For commercial contracts, the penalty is capped at 8% of the contract value attributable to the breach — or 12% for certain construction contracts.

Liquidated damages

Vietnamese law does not clearly address liquidated damages clauses. One view holds that they are impermissible because compensation must be based on actual, direct damage determined after the breach. Another view holds that they are permissible as pre-agreed liability waivers. There is no definitive precedent.

Counsel should address the enforceability of liquidated damages clauses in written submissions and should not assume VIAC will treat them as equivalent to penalty clauses.

Costs and Fees

Under Articles 36.1 and 36.2 of the VIAC Rules, the tribunal has broad discretion to allocate VIAC arbitration costs between the parties and to order one party to pay all or part of the other's legal fees and reasonable expenses.

On partial success, the tribunal may apportion costs in proportion to the percentage of the total claim amount the claimant has won. In assessing the reasonableness of legal fees, tribunals typically consider the amount in dispute, the length of the proceedings, the complexity of the issues, the volume of evidence, and the number of hearings.

The Arbitral Award

Requirements

Under Article 61 of the LCA and Article 32 of the VIAC Rules, the final award must be issued within 30 days of the last hearing. It must be in writing and include:

Awards are decided by majority vote. If no majority is reached, the Presiding Arbitrator's view prevails. The award is final and binding on the parties from the date of signing.

Post-award remedies

The VIAC Rules provide three post-award mechanisms, each with a 30-day window from receipt of the award:

Key Practical Takeaways

For businesses and counsel approaching a VIAC arbitration:

About the Authors

Michael Lee is a Partner at Dilinh Legal, bringing over a decade of experience from two international law firms in Vietnam. He advises on Corporate & M&A, FDI, and regulatory matters. Michael was ranked by Chambers Asia and Legal500 as a leading lawyer in Corporate & M&A from 2014 to 2019. He was admitted to the VIAC panel of arbitrators in May 2012.

Trang Nguyen is a Partner at Dilinh Legal, advising on Corporate M&A and Data Privacy. She works with foreign-invested enterprises and Vietnamese businesses on general corporate matters, employment compliance, workforce restructuring, and personal data protection.

For advice on VIAC arbitration strategy or dispute resolution in Vietnam, contact Dilinh Legal at contact@dilinh.com.

This article is for general information only and does not constitute legal advice. For further information, please contact Dilinh Legal at contact@dilinh.com | +84 (28) 73000864 | dilinh.com.