Private International Law in Vietnam | ECOVIS Vietnam Law

Foreign parties negotiating a Vietnamese contract often treat the governing-law clause as the end of the analysis. In reality, choosing English or Singapore law to govern a contract does not decide who will hear a dispute, whether that forum’s decision can be enforced against assets or a counterparty in Vietnam, or how long that process will take. ECOVIS Vietnam Law’s cross-border work sits almost entirely in that gap between the contract as drafted and the contract as it will actually be enforced.

Why governing-law clauses aren’t self-executing in Vietnam

A choice-of-law clause governs the substantive interpretation of a contract, but it does not override the procedural law of the forum actually hearing the case. If a dispute ends up before a Vietnamese court — because a party sued there, because assets are located there, or because no valid arbitration agreement exists — Vietnamese civil procedure applies regardless of what the contract says about governing law. Foreign law, where applicable, generally has to be pleaded and proven as a fact rather than applied by the court’s own initiative, and a court can decline to apply a foreign rule it considers contrary to the fundamental principles of Vietnamese law. Clients are frequently surprised that a carefully chosen governing law clause did nothing to determine which court has jurisdiction in the first place, or how quickly a claim can be brought before it.

Arbitration vs. litigation: the enforcement-driven choice

Most sophisticated cross-border contracts touching Vietnam route disputes to arbitration rather than to a foreign court, and the reason is almost entirely enforcement rather than procedural preference. Vietnam’s accession to the New York Convention gives foreign arbitral awards a defined recognition pathway that foreign court judgments simply do not have. That does not make arbitration a shortcut: seat selection affects which court supervises the arbitration and grants interim relief, institutional rules differ meaningfully in how they handle emergency measures before a tribunal is constituted, and an arbitration clause that is ambiguous about seat, rules, or scope can itself become the first battleground in a dispute. We spend as much time stress-testing the dispute-resolution clause as the substantive terms of the deal, because a defective clause is discovered only when it is too late to fix.

Recognition of foreign judgments and arbitral awards: two different tracks

Recognition and enforcement of a foreign arbitral award and recognition of a foreign court judgment run through different tracks in Vietnam, with different risk profiles. Arbitral awards benefit from the New York Convention framework, but recognition still runs through the Vietnamese court system and is not automatic: a losing party can raise procedural or public-policy objections, translation and authentication requirements must be met precisely, and the recognition proceeding itself takes time — often longer than clients expect when they budget for it in a deal timeline. Foreign court judgments face a narrower and less predictable path, since recognition typically depends on treaty arrangements or reciprocity that may not exist for a given jurisdiction, making the outcome far less certain than for an arbitral award. Any contract that assumes a home-court judgment will simply be enforced against a Vietnamese counterparty’s local assets is building on an assumption that needs to be tested, not taken on faith.

Related-party and intra-group transactions: a different enforcement problem

Intra-group cross-border arrangements between a Vietnamese foreign-invested enterprise and its overseas parent raise a related but distinct set of issues. These transactions are rarely litigated in the traditional sense — the more common failure mode is a documentation gap that surfaces years later during a tax audit, a bank’s capital-account review, or a due diligence exercise ahead of a sale. Intercompany loans, management fee arrangements, and cost-sharing agreements need contemporaneous documentation that satisfies both the commercial intent of the parties and the transfer pricing requirements under Decree 132/2020/ND-CP, and the cross-border capital flows underlying them typically require separate regulatory approval that is easy to overlook when a group treats the arrangement as a purely internal matter. A private international law problem and a regulatory compliance problem often arrive in the same document, and treating them separately is a common and avoidable mistake.

Structuring for the realistic enforcement path, not the ideal one

The most useful private international law advice is often the least glamorous: draft for the enforcement path a client will actually use, not the one that looks cleanest on paper. That means matching the arbitration seat and rules to where the counterparty’s assets realistically sit, anticipating that a Vietnamese court may assert concurrent jurisdiction regardless of a foreign forum clause, and building interim-relief and security mechanisms into the contract rather than assuming they can be improvised after a dispute arises. It also means revisiting boilerplate clauses inherited from a parent company’s global template, which are frequently drafted with no reference to Vietnamese procedural reality at all.

Getting this right at the drafting stage is far cheaper than discovering the gap during a dispute. ECOVIS Vietnam Law works alongside in-house counsel and overseas parent companies to pressure-test these clauses before signature, not after a claim has already been filed.

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