International Arbitration for Construction Contracts in Vietnam

Updated: 22 October 2026 · IVLF Advisors

An arbitration clause that names the wrong institution, an unclear seat or an unenforceable forum can turn a winning claim into an award that nobody can collect. For foreign investors, lenders and contractors, the choice of forum is as commercially important as the price.

This article explains how international arbitration construction contract Vietnam clauses should be built under the 2025 Law on Construction and Decree 210/2026/NĐ-CP, where domestic and foreign institutions each make sense, and what to check before an award has to be enforced against assets in Vietnam. The choice looks different for a State-linked airport terminal, a private steel plant and an offshore wind project.

International arbitration construction contract Vietnam: the legal setting

Construction contracts are among the longest, most complex and most claim-prone commercial agreements. Parties therefore value a neutral decision-maker with technical understanding, procedural flexibility and an award that crosses borders. These are the same reasons that foreign sponsors favour arbitration over local courts.

The Law on Construction No. 135/2025/QH15 (the “Law on Construction”), in force since 1 July 2026, includes arbitration among the permitted methods in Article 86(5). Decree 210/2026/NĐ-CP (“Decree 210”), which replaced Decree 50/2021/NĐ-CP, confirms in Article 17 that the parties choose the method and that their choice should be respected. Article 6 of Decree 210 also recognises contracts with foreign elements as a category, which is the typical gateway to an offshore forum.

Public investment and PPP projects prefer domestic arbitration

The main statutory limit sits in Article 86(5)(b) of the Law on Construction. On public investment and PPP projects, the preference is for a domestic arbitration institution. An international-practice dispute model may be used where an international treaty requires it, or where the investment decision-maker permits it and the parties have agreed it in the contract.

The employer’s dispute-resolution costs on such projects are included in the total investment. For a foreign contractor tendering on a State project, the practical consequence is that insisting on an offshore seat may be unrealistic; a domestic institution with international-standard rules is often the achievable outcome.

On privately funded projects, the position is more flexible, and the contract is the primary control. Our overview of construction dispute resolution in Vietnam places arbitration within the wider ladder of negotiation, boards and courts.

Choosing an institution: ICC, SIAC or VIAC

The institution administers the case, applies its rules, scrutinises procedural steps and may appoint arbitrators if the parties cannot agree. Three names dominate the discussion for Vietnam projects. The comparison below reflects general market practice, not statutory requirements, and each institution’s current rules govern in practice.

Criterion	ICC	SIAC	VIAC
Base	International; secretariat in Paris	Singapore	Vietnam
Typical use	Large cross-border EPC and infrastructure; FIDIC default	Asia-focused projects, often with a Singapore seat	Domestic disputes and projects with Vietnamese parties
Fit for public/PPP	Needs treaty basis or permission	Needs treaty basis or permission	Aligns with the domestic-institution preference
Enforcement in Vietnam	Foreign award: recognition procedure	Foreign award: recognition procedure	Domestic award: Vietnamese enforcement route
Main consideration	Cost and duration for smaller claims	Cost; neutral Asian seat	Perceived familiarity with local law and language

Under Sub-Clause 20.6 of the FIDIC 1999 edition, the default is ICC arbitration with three arbitrators and the contract language for the proceedings, unless the parties agree otherwise. Many parties retain that default; others change it to SIAC or to VIAC in the Particular Conditions.

ICC arbitration Vietnam and SIAC arbitration compared

ICC arbitration Vietnam clauses are common where a multinational sponsor or EPC contractor wants a globally recognised institution. SIAC arbitration is often chosen where the parties prefer an Asian seat with a modern arbitration law. For more on that institution, see SIAC. Both can work with a Vietnamese governing law, but the tribunal then needs counsel and arbitrators who can handle the local statutes.

Where the project has strong Vietnamese content, including a Vietnamese joint venture partner or State-owned employer, VIAC arbitration is worth serious consideration. Its details are available from the VIAC website. The decisive factors are usually enforceability against the counterparty’s assets and the approving authority’s willingness to accept the forum.

International arbitration: from clause to enforcementEmployerContractorArbitral institutionICC, SIAC or VIACArbitral tribunalseat fixes supervising courtsVietnamese courtrecognition procedureCounterparty assetsin Vietnam and abroad1234561Arbitration clause: institution, seat, governing law2Claimant files request for arbitration3Institution runs case, may appoint arbitrators4Foreign award: recognition under New York Convention5Enforcement against assets in Vietnam6Public/PPP: domestic institution preferred

Seat, governing law and the arbitration clause construction contract

A well-drafted arbitration clause construction contract must settle several separate questions. Confusing them is the most common drafting mistake.

• Institution and rules. Name the institution exactly and the rules that apply, to avoid a pathological clause.
• Seat. The legal place of arbitration determines which courts supervise the proceedings and which law governs set-aside and interim support. It need not be where hearings are held.
• Governing law of the contract. State which law applies to the construction contract. Mandatory Vietnamese rules, such as those on payment currency and on public projects, may apply regardless.
• Law of the arbitration agreement. Say which law governs the arbitration agreement itself, since courts may differ on the default.
• Tribunal and language. Fix the number of arbitrators, their qualifications and the language, consistent with the contract’s language clause.
• Joinder and consolidation. An EPC chain often has several contracts. Allow related disputes with subcontractors or other contractors to be heard together, where the parties agree.

Foreign element and arbitrability in an international arbitration construction contract Vietnam clause

Whether a dispute involves a foreign element can influence the choice of foreign law and an offshore seat under Vietnamese law. A contract between two Vietnamese entities, even where one has foreign investors, may be viewed differently from a contract with a foreign company directly. The treatment of foreign-invested entities is governed by the Law on Commercial Arbitration 2010 and the Civil Code.

Decree 210 itself recognises the category of contracts with a foreign element in its classification. How that category interacts with arbitration rules is a point for counsel at the drafting stage, not after the dispute begins.

Multi-party projects, interim relief and evidence

Large Vietnamese projects rarely involve only two parties. An employer, an EPC contractor, several subcontractors, a consortium partner and a lender may all hold rights that overlap. If each contract has a different forum, the same delay or defect can be litigated several times with inconsistent results.

Aligning the chain of contracts

The practical solution is to align the dispute clauses throughout the chain. Use the same institution and rules where possible, provide for joinder and consolidation, and make sure that a subcontractor’s liability to the contractor can be pursued in step with the contractor’s liability to the employer. Under Article 86(4) of the Law on Construction, a party remains responsible to the other party for a breach caused by a third party, so the contractor cannot simply point at a subcontractor. Back-to-back dispute clauses protect the contractor against being squeezed between two different outcomes.

Interim measures and evidence

Disputes on construction projects often need urgent steps, such as preserving evidence of defects, preventing a call on a guarantee, or securing assets. Most institutional rules allow tribunals to order interim measures, and some provide emergency arbitrator procedures. Whether and how a Vietnamese court will support arbitration seated abroad, for example by granting a preservation order against local assets, should be confirmed with counsel. Where urgent relief against assets in Vietnam is likely, that analysis should shape the choice of seat.

Evidence is the other recurring issue. Construction arbitrations are document-heavy, and the party with organised site records, instructions, programmes and cost data generally does better. Agree early on document production standards, expert witnesses for delay and quantum, and site inspections, rather than leaving them to the tribunal’s first procedural order.

Interaction with a dispute board and claims procedure

Most international forms insert a board step before arbitration. In the FIDIC 1999 edition, arbitration generally follows a board decision and a notice of dissatisfaction. Sub-Clause 20.5 allows arbitration to start on or after the fifty-sixth day after that notice, and Sub-Clause 20.7 allows a failure to comply with a final board decision to be referred straight to arbitration. Our article on the dispute adjudication board (DAB) in Vietnam explains the board stage in detail.

Under Sub-Clause 20.6, the tribunal may open up, review and revise certificates, determinations and board decisions, and is not limited to the evidence put before the board. This matters strategically: a party that loses before the board has not lost the case, and a party that wins should not assume the result is safe. Arbitration may also begin before or after completion of the works, and the works continue meanwhile.

International arbitration construction contract Vietnam: enforcing the award

An award is only as valuable as the assets against which it can be enforced. For an international arbitration construction contract Vietnam dispute, enforcement planning belongs at the contract stage.

Vietnam is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and this is the main route for recognising a foreign award. The convention text is published by UNCITRAL. Enforcement still runs through Vietnamese court procedure, and any reservations Vietnam made on accession, the grounds on which recognition can be refused, and the practical timetable should be confirmed with local counsel before relying on them. A prudent investor assumes that recognition takes time and that the court may examine public policy and procedural fairness.

New York Convention enforcement is therefore a risk-management exercise, not a formality. Consider the following steps.

• Map the counterparty’s assets in Vietnam and abroad before choosing the seat.
• Confirm that the arbitration agreement is in writing, signed by authorised representatives and clear about the institution.
• Where the counterparty is State-owned, check that the signatory had the necessary internal and external approvals.
• Keep the evidence file and procedural record in a form that supports recognition and resists challenge.
• Consider payment security, such as performance guarantees or retention, as a faster source of recovery than an award.

Currency and payment issues

Under Article 87(2)(c) of the Law on Construction, the payment currency is the Vietnamese dong, and foreign currency may be used only in compliance with foreign-exchange law. An award in a foreign currency may therefore raise conversion and remittance questions when enforced in Vietnam. Draft the payment currency and the currency of any claim with that in mind, and take specialist advice on foreign-exchange rules.

A hypothetical illustration

This hypothetical (ví dụ minh họa) shows why the details matter. A foreign contractor signs a private-sector EPC contract with a Vietnamese project company. The clause refers disputes to “arbitration in Singapore” without naming an institution or rules. Two years later the employer withholds a milestone payment, and the parties disagree about whether the clause is valid and who appoints the tribunal. Months pass on that question alone, while the contractor funds the works from its own balance sheet.

A clause naming the institution, rules, seat, number of arbitrators and language would have avoided that preliminary fight. The cost of careful drafting is a few hours of legal time at signature.

Cost, duration and proportionality

Arbitration is not always the right tool for every claim. Institutional fees, arbitrator fees, counsel, experts and hearing costs can be significant, and a modest payment claim may not justify them. Many projects therefore combine tiers: a board or mediation for small and medium issues, and arbitration reserved for large claims or termination disputes. Some institutions offer expedited or summary procedures for lower-value cases; check the current rules of the chosen institution for thresholds and conditions rather than assuming they apply.

Duration also depends on the parties. A well-organised international arbitration construction contract Vietnam case with agreed procedural timetables, early expert reports and limited document production can move far faster than one where every procedural step is contested. Cooperation on process is often the cheapest saving available.

Practical checklist for foreign investors and lenders

Before signing, test the clause against these points:

• Is the project private or public investment or PPP, and does the forum comply with Article 86(5)(b)?
• Does the chosen institution, seat and law match the loan agreement and any direct agreement?
• Is there a board or mediation step, with deadlines, before arbitration?
• Can related contracts be consolidated, and are subcontract dispute clauses aligned?
• Has the enforcement route been mapped for each counterparty’s assets?
• Are the contract language and the proceedings language the same?

Lenders in particular should avoid mismatched forums across the construction contract, the facility agreement and any guarantee, since parallel proceedings multiply cost and risk inconsistent outcomes.

How an International Arbitration Construction Contract Vietnam Clause Applies Across Project Types: Infrastructure, Industry, Energy and Real Estate

Forum choice follows the counterparty, the funding and the location of assets, all of which vary by sector.

Infrastructure and transport

Expressways, ports, metro, high-speed rail stations and airport terminals are often State-owned or PPP, and public investment projects tend to prefer domestic institutions; classification depends on the funding source and depends on the funding source of each project. Large programmes such as the North–South high-speed railway (about 1,541 km between Hanoi and Ho Chi Minh City) or the Long Thành International Airport phase 1 terminal (commercial operation expected from 24 December 2026, per press reports) will involve foreign designers and equipment suppliers whose subcontract forum differs from the main contract’s.

Heavy industry and factories

Steel, petrochemical, cement and FDI factory projects are usually private, so an international arbitration construction contract Vietnam clause naming ICC or SIAC is a realistic choice. The practical test is whether the counterparty holds assets in Vietnam against which an award can be enforced.

Renewable energy and power

Solar, wind (onshore or offshore), grid and LNG or gas-to-power projects often combine foreign sponsors, offshore lenders and local contractors. The position depends on ownership and the power purchase structure; the forum should match the financing documents so that awards and lender remedies do not conflict.

Real estate and mixed-use

Hotels, resorts, urban areas and mixed-use complexes involve land-related rights and local owners. Enforcement is practical only where the debtor has reachable assets, and land-related rules under the land and real estate business laws should be checked before relying on foreign proceedings.

Sector	Typical contract or risk feature	What to check
Expressway, rail, airport terminal	Public or PPP; foreign suppliers on subcontracts	Domestic preference; consistency down the contract chain
Steel, petrochemical, cement, factory	Private; foreign equipment vendors	ICC or SIAC option; asset location
Solar, wind, grid, LNG or gas-to-power	Foreign sponsors and lenders	Match financing and offtake forums
Hotel, resort, urban area, mixed-use	Private; local assets and land rights	Enforceability; land-law constraints

This is a hypothetical map, not a description of any real project. The principle stays constant: pick the forum that can actually produce a collectable result against the assets in question.

Conclusion

Choosing international arbitration for a construction contract in Vietnam is a decision about enforceability, not prestige. Private projects allow wide freedom, public investment and PPP projects lean towards domestic institutions, and every clause should be tested against the assets it is meant to reach.

Your practical next step is to compare your current arbitration clause against the checklist above, and to confirm with local counsel how an award would be recognised against your counterparty. Fixing the clause before a dispute is far cheaper than fixing it after.

Frequently Asked Questions

Can a Vietnam construction contract use foreign arbitration?

On private projects, generally yes, subject to mandatory law. Public investment and PPP projects prefer domestic institutions unless a treaty or the investment decision-maker’s permission applies.

Which institution is the FIDIC 1999 default?

Sub-Clause 20.6 provides for ICC Rules and three arbitrators, unless the parties agree otherwise.

Is the New York Convention available in Vietnam?

Vietnam is a party, so foreign awards can be recognised through the local court process. Reservations and procedure should be confirmed with counsel.

Does arbitration stop the works?

Not under the FIDIC 1999 edition: arbitration may start before or after completion, and the parties’ obligations continue.

Should lenders care about the forum?

Yes. A mismatch between construction and finance documents risks parallel proceedings and delay in recovery.

Disclaimer: this article provides general information, not legal advice for a specific matter. It reflects the law as of 22 October 2026. Please obtain advice on your own facts before acting.