INTERNATIONAL

 INVESTMENT  ARBITRATION  
AND  DISPUTE  RESOLUTION  IN  SOUTHEAST  ASIA  

ISDS  IN  VIETNAM  

 OPPORTUNITIES  AND  CHALLENGES  

Nguyen  Manh  Dzung,  MCIArb  

Dzungsrt  &  Associates  LLC  
Bangkok,  18th  July  2016  
FDI  INFLOW  IN  VIETNAM  FROM  1988  TO  2014    
TOTAL:  290,613.3  MILLION  USD  (1)  
80,000.0  
70,000.0   71,726.8  

60,000.0  
50,000.0  
40,000.0  
30,000.0   19,886.8   21,921.7  
20,000.0  
7,925.2   2,762.8   6,840.0  
10,000.0   1,603.5  

0.0  
1988-­‐1990  
1991  
1992  
1993  
1994  
1995  
1996  
1997  
1998  
1999  
2000  
2001  
2002  
2003  
2004  
2005  
2006  
2007  
2008  
2009  
2010  
2011  
2012  
2013  
2014  
(1)  General  Sta9s9cs  Office  of  Vietnam  
 BITS,  FTAS  SIGNED  BY  VIETNAM    
(2)

70  
64  
60  

50  

40  

30  
19  
20  

10  
5  
0  
BITs   Bilateral  FTAs   Regional/MulFlateral  FTAs  
(TPP,  RCEP,  AANZFTA…)  
(2)  United  Na9ons  Conference  on    Trade  and  Development  
 NO  ISDS  PROVISION  
No  ISDS  under  BIT  1992  between  Vietnam  and  
Thailand  

Dispute   ASEAN  
resoluXon   Comprehensive  
under   Investment  
Contract   Agreement    
 ISDS  UNDER  VIETNAMESE  LAW  
Dispute  Se[lement  
Mechanism  under  
contract(s)  or  IIA(s)  
NegoXaXon  
and  
conciliaXon   Vietnamese  court  

No  IIA  provision  
Vietnamese  
arbitraXon  
 ISDS  UNDER  VIETNAMESE  LAW  

  Alterna9ve   Dispute   Resolu9on   (ADR):  

Chapter  XXXIII  of  CPC  2015  on  recogniFon  
of  out-­‐of-­‐court  seSlement  
  Na9onal  Court:  CPC  2015  
  Arbitra9on:   LCA;   ResoluFon   01/2014/NQ-­‐
TANDTC  
 ISDS  IN  PRACTICE  
Contract-­‐Based  Investor-­‐State  Disputes  
      East-­‐West   Highway   Construc5on  
Project    
   [2013  -­‐  amicable  seSled]  
   Phap  Van-­‐  Cau  Gie  Ring  Road  2  Project  
  [Japanese   investor   relied   on   BIT   to  
warn   to   file   a   treaty   based   claim   if   the  
seSlement  result  is  not  jusFfiable]  
 ISDS  IN  PRACTICE  -­‐  BACKED  
INVESTMENT  TREATY  ARBITRATION  
EscalaXon  from  contractual   Purely  Disputes  related  to  
disputes     IIAs  
  Trinh  Vinh  Binh  (the     McKenzie  (USA)  vs.  
Netherlands)  vs.  Vietnam   Vietnam  [2010-­‐  
[2003];   jurisdicFon  declined];  
  DialAsie  (French)  [2011];  
  Recofi  (French)  vs.  
  SK  E&C  (Korea)  [seSled]   Vietnam  [2013-­‐
  Metropolitan  (The  US)   pending];  
[pending]        

Source:  MOJ  report  

 COMMON  ISSUES  
  Reasons:  Disappointment  with  the  judiciary  of  host  
state  or  licensing  state  authoriFes;  
  Alleged  breaches:  expropriaFon;  Fair  and  equitable  
treatment;  Full  protecFon  and  security  or  similar  
  ArbitraXon  Rules:  UNCITRAL  ArbitraFon  Rules  
  Administering  insXtuXons:    
•  PCA  (DialAsie;  Recofi;  McKenzie)  
•  SCC  (Trinh  Vinh  Binh)  
•  ICC  (East-­‐West  Highway  Construc9on  Project)  
  PosiXve  outcome!  
THE  ENFORCEMENT  OF  FOREIGN  
ARBITRAL  AWARDS  IN  VIETNAM  
[CATEGORY  
NAME]  
[PERCENTAG0%  
E]   Recognize
d    
Rejected     44%  
46.2%  

*Source:  The  report  of  the  Supreme  People’  Court  

 CHALLENGES  
  Lack  of  coordinaFon  mechanisms;  
  Lack  of  a  permanent  lead  agency;  
  Lack  of  experience  for  ISDS;  
  Systemic  consistency  of  the  IIA  regime  
with  domesFc  policy  
  New  challenges  from  TPP  and  EVFTA      
 THE  GOVERNMENT’S  REACTIONS  
  DirecFve  No.  01/CT-­‐TTg  dated  09/01/2012;  
  The  LegislaFve  Changes  
•  Civil  Code  
•  Civil  Procedure  Code  
•  Investment  Law  
  Human  Resources  Capacity  Buildings  
•  State/  Provincial/Regional  Officials  
•  Judges/  Arbitrators  
•  PracFFoners  
 CONCLUSIONS  

 Improvement  of  investment  climate:  

predictability,  stability  and  transparency    
 JusFce  reform:  to  be  more  consistent  with  
internaFonal  standards  
 ArbitraFon  friendly  jurisdicFon  
 Thank  you  for  your  kind  a[enXon!

Q  &  A  
Dzungsrt  &  Associates  LLC  
A  BouFque  Shipping  and  ADR  Law  Firm  
Hanoi  Office  Unit  6,  11th  floor,  HAREC  Building,    
No.  4A  Lang  Ha  Street,  Ba  Đinh  District,  Ha  Noi  city.  
Tel.  (84-­‐4)  3772  6970  /  Fax.  (84-­‐4)  3772  6971  
Saigon  office  7th  Floor,  162  Pasteur’s  Office  Building  
Ben  Nghe  Ward,  District  1,  Ho  Chi  Minh  city  
Tel.  (84-­‐8)  3822  0076/  Fax.  (84-­‐4)  3772  6971  
Email.  dzung.nguyen@dzungsrt.com  
Web.  www.dzungsrt.com