The short answer
If your contract contains a valid written arbitration agreement naming the Vietnam International Arbitration Centre, a Vietnamese court must refuse to hear the dispute. Article 6 of Law on Commercial Arbitration No. 54/2010/QH12 gives the court no discretion: it declines jurisdiction unless the arbitration agreement is invalid or incapable of being performed. That rule reaches further than most contracting parties expect. An arbitration clause written into a company charter binds the company and its members. And if your clause names the institution imprecisely, the fallback is not litigation: the parties must agree the institution again, and if they cannot, the claimant's choice prevails.
What VIAC can hear
Article 2 of Law on Commercial Arbitration No. 54/2010/QH12:
Arbitration has competence to resolve: 1. Disputes between parties arising from commercial activities. 2. Disputes arising between parties in which at least one party conducts commercial activities. 3. Other disputes between parties which are stipulated by law to be resolved by arbitration.
The second limb is wider than it looks. Only one side needs to be carrying on commercial activity, which is why disputes between a company and an individual member fall inside arbitral competence rather than outside it.
What makes the agreement valid
Article 16, Clauses 1 and 2:
1. An arbitration agreement may be established in the form of an arbitration clause in a contract or in the form of a separate agreement. 2. An arbitration agreement must be established in writing. An agreement established through telegram, fax, telex, email or other forms of electronic communication provided by law shall also be deemed established in writing.
An email exchange qualifies. So does a clause in a corporate charter.
Article 19 makes the arbitration agreement separable: it exists independently of the main contract, and the amendment, extension, termination, invalidity or unenforceability of that contract does not by itself kill the clause. Arguing that the sale contract was void therefore does not get you into court.
Article 18 lists what does kill it. Clause 1: the dispute falls outside the fields in Article 2. Clause 2: the person who made the agreement lacked authority under the law. Clause 4: the form does not comply with Article 16. In practice the authority ground does most of the damage, typically a branch manager or deputy director signing a contract containing an arbitration clause with no power of attorney from the legal representative. Check signing authority at the time the contract is signed, not when the dispute starts.
The case: a clause in the charter closed the courthouse
An interior furnishings company based in an industrial park in Binh Duong Province sued one of its own members in the Ho Chi Minh City People's Court. The relief sought was the cancellation of her membership from the company's incorporation on 17 September 2013 until the company was divided on 29 August 2019. The court accepted the case on 9 June 2022.
The member pointed to Article 25, Clause 2 of the company's charter. It read that where the parties reached no agreement, each party had the right to bring the dispute to the Vietnam International Arbitration Centre in Ho Chi Minh City, alongside the Vietnam Chamber of Commerce and Industry, for a final award under Vietnamese law, and that the VIAC award was final and binding on the parties.
The Ho Chi Minh City People's Court terminated the case by Decision No. 1850/2022/QDST-DS dated 5 October 2022 case.unilaw.vn , applying Article 6 of the Law on Commercial Arbitration together with Article 192, Clause 1, Point đ and Article 217, Clause 1, Point g of the 2015 Civil Procedure Code.
The company appealed on a narrow ground: cancelling a member's status was not a matter the charter's arbitration clause addressed. The High People's Court in Ho Chi Minh City rejected that in Decision No. 26/2023/QD-PT dated 12 April 2023 case.unilaw.vn . Its reasoning was short. The claim was a dispute between a company and its member. Article 6 requires a court to refuse a case where the parties have an arbitration agreement, unless that agreement is invalid or incapable of performance. The charter assigned jurisdiction to VIAC. Therefore the matter did not fall within the court's jurisdiction, the first-instance termination stood, and the company paid the appeal fee.
Two practical points come out of it. First, a charter arbitration clause covers the company's internal disputes with its members, including status and membership claims, not only contract claims. Second, arguing that your particular claim is not expressly itemised in the clause is not a route back into court. The court looks at whether the dispute is arbitrable and whether a valid arbitration agreement exists, not at whether the clause enumerated your remedy.
How a VIAC arbitration actually runs
Filing. The claimant files a Statement of Claim with the VIAC Secretariat with the arbitration agreement, the contract, supporting evidence and the advance on fees. The Secretariat serves it, and the respondent files a Statement of Defence and any counterclaim within the time limit under the VIAC Rules.
Tribunal. A sole arbitrator or three arbitrators, as agreed. In a three-member tribunal each side nominates one and the two nominees choose the presiding arbitrator. If a party does not nominate in time, the President of VIAC appoints for it, so missing the deadline costs you your choice of arbitrator, not the proceeding.
Applicable law. Article 14, Clauses 1 and 2:
1. For disputes without foreign elements, the arbitral tribunal shall apply Vietnamese law to resolve the dispute. 2. For disputes involving foreign elements, the arbitral tribunal shall apply the law chosen by the parties; if the parties have no agreement on the applicable law, the arbitral tribunal shall decide to apply the law it deems most appropriate.
A purely domestic dispute gets Vietnamese law whatever the contract says. A foreign element opens the choice, and silence hands it to the tribunal.
Award. The tribunal deliberates and issues a written award by majority. It is final and not subject to appeal on the merits.
A badly named institution is not a way out
Article 43, Clause 5:
Where the parties have an arbitration agreement but have not specified the form of arbitration or the specific arbitration institution cannot be determined, upon a dispute arising the parties must agree again on the form of arbitration or the specific arbitration institution to resolve the dispute. If they cannot so agree, the selection of the form and institution of arbitration shall be made at the claimant's request.
A Chinese seller tested this. Its two sale contracts dated 13 April 2017 with a Binh Duong manufacturer named the forum in Article 6 as "VN International abritration Center at Chamber of Commerce and industry of HCM City". When the buyer did not pay, the seller sued in the Binh Duong Province People's Court and argued that no institution existed under that name, so the clause could not be performed and the court had jurisdiction.
The Binh Duong Province People's Court terminated the case by Decision No. 09/2018/QDST-KDTM dated 27 July 2018 case.unilaw.vn , and the High People's Court in Ho Chi Minh City dismissed the appeal in Decision No. 19/2019/QD-PT dated 18 April 2019 case.unilaw.vn . The parties had agreed to arbitrate. If the named institution did not exist, Article 43 obliged them to agree the form or the institution again, or choose another centre. It did not put the dispute back before a court.
Article 43, Clause 3 marks the real boundary: where the chosen centre has ceased operating with no successor organisation and the parties cannot agree on another centre, then they may litigate. Resolution No. 01/2014/NQ-HDTP of the Council of Justices of the Supreme People's Court treats that, not a drafting slip, as the paradigm of an agreement incapable of performance.
Setting aside an award: a narrow door
Article 68, Clause 2, Points a, b and c of Law on Commercial Arbitration No. 54/2010/QH12:
An arbitral award shall be set aside if: (a) there is no arbitration agreement or the arbitration agreement is invalid; (b) the composition of the arbitral tribunal or the arbitral procedure did not conform to the agreement of the parties or violated the provisions of this Law; (c) the dispute was outside the competence of the arbitral tribunal.
Article 14, Clause 2 of Resolution No. 01/2014/NQ-HDTP closes the merits route:
When considering an application, the Court Panel shall not re-examine the substantive content of the dispute, but shall check whether the arbitral award falls under one of the cases specified in Clause 2, Article 68 of the Law on Commercial Arbitration.
Set-aside is supervisory, not appellate. No re-weighing of evidence, no second view of the contract. That is the price and the point of arbitral finality.
Four drafting controls
Use VIAC's own recommended clause. "Any dispute arising out of or in relation to this contract shall be resolved by arbitration at the Vietnam International Arbitration Centre (VIAC) in accordance with its Rules of Arbitration." Verbatim. A paraphrase is where the naming arguments start.
Fix the four variables. Seat, language, number of arbitrators, and governing substantive law. Leave the law blank in a foreign-element contract and the tribunal chooses it.
Verify signing authority. Legal representative, or a power of attorney that covers the contract. This is the most common invalidity ground under Article 18.
Never run courts and arbitration in parallel. A clause that offers both without a clear hierarchy invites a jurisdiction fight before anyone reaches the merits.
How UniLaw helps
We draft and audit VIAC arbitration clauses, act as counsel in VIAC proceedings and in interim relief applications, and handle set-aside and enforcement proceedings before Vietnamese courts, including jurisdictional objections where a counterparty sues in court despite an arbitration agreement.
Sources
- First-Instance Decision No. 1850/2022/QDST-DS dated 5 October 2022 (Ho Chi Minh City People's Court) / Appellate Decision No. 26/2023/QD-PT dated 12 April 2023 (High People's Court in Ho Chi Minh City) – company versus member, VIAC clause in company charter, court declined jurisdiction and terminated the case; appeal dismissed.
- First-Instance Decision No. 09/2018/QDST-KDTM dated 27 July 2018 (Binh Duong Province People's Court) / Appellate Decision No. 19/2019/QD-PT dated 18 April 2019 (High People's Court in Ho Chi Minh City) – sale contracts of 13 April 2017, imprecisely named arbitration centre, Article 43 requires the parties to re-agree the institution rather than litigate.
- Law on Commercial Arbitration No. 54/2010/QH12 – Article 2, Article 6, Article 14 (Clauses 1, 2), Article 16 (Clauses 1, 2), Article 18 (Clauses 1, 2, 4), Article 19, Article 43 (Clauses 3, 5), Article 68 (Clause 2 Points a, b, c).
- Resolution No. 01/2014/NQ-HDTP of the Council of Justices of the Supreme People's Court – Article 4 (Clause 1), Article 14 (Clause 2).
- Civil Procedure Code 2015 – Article 192 (Clause 1 Point đ), Article 217 (Clause 1 Point g).
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