VIAC Arbitration vs Court Litigation in Vietnam
By Michael Lee, Helen (Trang) Nguyen
The table below summarises the principal differences between VIAC arbitration and court litigation in Vietnam.
| Factor | VIAC Arbitration | Court Litigation |
|---|---|---|
| Adjudicator choice | Parties choose arbitrators by nationality, expertise, or language — including persons not on the VIAC list | Judge assigned by the chief justice; must be a Vietnamese citizen |
| Hearing location | Parties decide — in Vietnam or abroad; in-person or by videoconference | Determined by the judge; typically at a courthouse |
| Confidentiality | Confidential by default under LCA 2010 | Public proceedings by default; closed trial available in limited circumstances only |
| Impartiality | Arbitrators owe no state loyalty; must act independently and impartially under LCA 2010 | Judges take an oath of allegiance to the Socialist Republic of Vietnam |
| Foreign lawyers | Permitted — parties may use foreign legal counsel throughout | Foreign lawyers may not represent or plead in Vietnamese courts |
| Appeal | No appeal — arbitral awards are final and binding | Full appellate process available through first-instance and appellate courts |
| State authority involvement | Minimal — only enforcement agencies after an award is issued | May involve procuracy, jurors selected by the People's Council, and the police |
| Speed | Faster — parties can set their own timeline; arbitrators are incentivised to conclude promptly | No fixed timeline for disputes involving a foreign element; generally longer |
When to Choose VIAC Arbitration
Arbitration through VIAC offers significant procedural flexibility. Parties can shape the proceedings to match the specific needs of their dispute.
Choice of Adjudicator
In VIAC arbitration, parties select arbitrators based on specific criteria — nationality, language, industry expertise, or professional experience. Parties may appoint individuals not on VIAC's official arbitrator list. The decision-maker will have the qualifications the parties consider most relevant to the dispute.
In court litigation, judges are assigned by the chief justice under procedures prescribed by law (Article 47.1.b, Civil Procedure Code 2015 — CPC 2015). Judges must be Vietnamese citizens. There is no mechanism to ensure an assigned judge has sector-specific expertise.
Confidentiality
The entire arbitration process is confidential by default under Articles 4.4 and 55.1 of the Law on Commercial Arbitration 2010 (LCA 2010) and the VIAC Rules. Nothing from the proceedings becomes public unless the parties agree otherwise.
Court proceedings are open to the public (Article 8.2, Law on Organisation of People's Courts 2024; Article 15.2, CPC 2015). Spectators — including journalists — may attend hearings. A closed trial is available only in narrow circumstances: protecting state secrets, minors, or defined occupational and business secrets. High-profile disputes regularly receive media coverage.
Foreign Lawyers Permitted
Foreign lawyers cannot represent a party or plead in Vietnamese courts, even if they hold a Vietnamese practising licence (Article 76, Law on Lawyers 2006). In VIAC arbitration, there are no such restrictions. Parties may retain their trusted foreign counsel throughout the proceedings under Article 4.1 of the VIAC Rules.
Limited State Authority Involvement
In VIAC arbitration, the participants are VIAC, the arbitral tribunal, the parties, and their lawyers and witnesses. State authorities become involved only at the enforcement stage after an award is issued (Article 8, LCA 2010). In court litigation, the procuracy, jurors selected by the People's Council, and in some cases the police may all become involved (Articles 46, 103, and 234.1, CPC 2015). A straightforward commercial dispute can escalate if these authorities decide the matter warrants further investigation — potentially exposing parties to administrative sanctions or criminal liability.
Finality of Award
Arbitral awards are final and binding under Article 4.5 of the LCA 2010. A party cannot appeal simply because it disagrees with the outcome. Awards can only be challenged on limited grounds under Article 68.2 of the LCA 2010: lack of jurisdiction, procedural violations, forged evidence, conflicts of interest, or breach of fundamental principles of Vietnamese law. This finality reduces total dispute costs and timeline.
When to Choose Court Litigation
Court litigation is not simply a default option. In some circumstances it is the better choice — and in others, it is mandatory.
Broader Jurisdiction
Vietnamese courts have full authority to resolve all types of disputes under Article 26 of the CPC 2015 — from commercial and intellectual property matters to family and inheritance issues. Courts cannot refuse to hear a case even when no specific law applies (Article 4.2, CPC 2015). Arbitration jurisdiction is narrower, limited under Article 2 of the LCA 2010 to commercial disputes, disputes where at least one party engages in commercial activities, and other disputes expressly permitted by law.
The scope of arbitration jurisdiction has expanded in 2024–2025:
- Land disputes (commercial) — Article 236.5 of the Law on Land 2024 (effective 1 August 2024) now permits commercial land disputes to be referred to Vietnamese commercial arbitration. Official implementation guidance is pending.
- Intellectual property — Article 198.1.d of the Law on Intellectual Properties 2025 permits IP rights holders to file disputes with arbitration institutions.
- Labour-adjacent agreements — Case Law No. 69/2023/AL (People's Supreme Court, 1 October 2023) confirmed VIAC has jurisdiction over non-disclosure and non-compete agreement disputes between employers and employees, because the employer engages in commercial activities.
Case Law No. 69/2023/AL opens the possibility that other civil contracts arising from labour relationships may be submitted to commercial arbitration — subject to interpretation and further judicial guidance.
Procedural Rigour and Judicial Oversight
Court proceedings involve multiple oversight authorities. The procuracy may initiate judicial review and overturn judgments it considers inconsistent with objective facts and harmful to a party (Articles 325, 326.1.a, and 331, CPC 2015). Each procedural step is governed by strict legal requirements. For parties who value external oversight and the ability to appeal, this structure is an advantage.
Right of Appeal
If a party is dissatisfied with the first-instance judgment, it can appeal under Articles 271 and 285 of the CPC 2015 and have the case heard by an appellate court. No equivalent right exists in arbitration. The finality of an arbitral award — an advantage for the winning party — is a risk for the losing party if the award contains errors.
Costs and Timelines
For disputes involving a foreign element, neither arbitration nor court proceedings are subject to mandatory resolution timelines. Duration depends on case complexity and, in arbitration, the procedural framework the parties agree upon.
Arbitrators are typically compensated upon conclusion of an arbitration. Their compensation does not increase with the length of proceedings — creating an incentive to resolve disputes efficiently. Parties may also set their own procedural deadlines, the form of hearing, and the language of proceedings.
The table below compares standard filing fees:
| Court (first-instance) | VIAC Arbitration (3 arbitrators) | |
|---|---|---|
| Lowest range Dispute value up to VND 60M / VND 100M |
VND 3,000,000 approx. USD 115 |
VND 16,500,000 approx. USD 630 |
| Highest range Dispute value over VND 4B / VND 500B |
VND 112,000,000 + 0.1% on the amount exceeding VND 4B | VND 3,609,300,000 + 0.3% on the amount exceeding VND 500B |
Filing fees alone do not reflect total dispute cost. In a hypothetical cross-border dispute over a factory acquisition in Vietnam: VIAC arbitration allowed a three-arbitrator panel of mixed nationalities, a videoconference hearing in English within three months, and no requirement to hire Vietnamese lawyers or fly counsel to Vietnam. Court litigation required Vietnamese legal representation throughout, an in-person hearing due to case complexity (with related travel and accommodation costs), and additional resources to manage an appeal filed by the respondent.
Key Considerations Before Signing a Dispute Clause
The choice of dispute resolution forum is most effectively made at the contract stage — before any dispute arises. Parties should consider:
- Whether the dispute type falls within arbitration jurisdiction under the LCA 2010 or applicable sector law
- Whether confidentiality is important to one or both parties
- Whether one party requires a right of appeal
- Whether the parties anticipate involving foreign legal counsel
- The relative importance of speed versus procedural oversight
- The nationalities of the parties and the governing law of the contract
Both forums serve important purposes in the Vietnamese legal system. The right choice depends on the nature of the dispute, the identity of the parties, and the priorities that matter most when a dispute arises.
About Dilinh Legal
Dilinh Legal is a boutique business law firm based in Ho Chi Minh City, Vietnam, founded in 2010. The firm is ranked by Chambers Asia and Legal500 in Corporate & M&A and Dispute Resolution. For dispute resolution advice in Vietnam, contact the Dilinh Legal Disputes team.
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.