You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 13, 2021

Case Study: The Enforceability of Asymmetric Dispute Resolution Clauses in Vietnam

Subscribe to Updates

An asymmetric dispute resolution clause is one that is constructed to limit the right to dispute resolution of one party to, for example, a particular jurisdiction or dispute resolution method, while giving the other party or parties the right to flexibly choose between different options. Although this type of clause would clearly favor the party with the right to choose between options, by providing an effective risk management mechanism, the favor will only apply in countries which recognize the validity and enforceability of asymmetric clauses.

In Vietnam, the validity and enforceability of such clauses has been an open question due to a lack of statutory guidance. To shed some light on this matter, we can assess an ongoing case where a Vietnamese court has considered the enforceability of an asymmetric dispute resolution clause.

The dispute in question arose between a Thai company and a Vietnamese company in relation to a distribution contract. The Thai company filed a civil suit with a Vietnamese court to seek remedies for a breach of contract committed by the Vietnamese party. While the dispute clause of the contract provides that the Vietnamese party must submit to the jurisdiction of the courts of Hong Kong to settle all relevant disputes, there is no similar requirement for the Thai company. Moreover, the laws of Hong Kong are the governing law of the contract.

Initially, the Vietnamese court decided not to accept the suit, with its view supported by the peer procuracy’s opinion that the dispute clause implied that the Thai company had chosen the courts of Hong Kong to handle any relevant disputes that might arise. Consequently, the clause excluded the jurisdiction of Vietnamese courts.

Disagreeing with the above legal perspective, the Thai company filed a complaint against the Vietnamese court’s decision. In particular, the Thai company reasoned that the clause does not expressly indicate a choice of court, but only expresses that the Thai company would not challenge the jurisdiction of the courts of Hong Kong if any legal proceedings are commenced there under the Vietnamese party’s request. In other words, when any disputes arise, the Vietnamese party can only pursue legal proceedings before the courts of Hong Kong while the Thai party could choose to pursue legal proceedings before any other competent courts, such as courts in Thailand or Vietnam, and is not required to choose the courts of Hong Kong.

Given this, the dispute resolution clause in the contract of this case could be deemed an asymmetric dispute resolution clause where the favored party (the Thai company) can flexibly initiate legal proceedings before any competent courts that may be determined under private international law to have jurisdiction over disputes arising from or out of this commercial contract.

In consideration of the significant potential risk of non-enforcement of a Thai judgment in Vietnam, where the defendant is based, the Thai company wished to instead settle the dispute in a Vietnamese court in hopes that the enforcement steps would be much easier if they win the case. Further, based on certain facts of the case, the Thai company successfully proved that it had no intention to choose Hong Kong courts as the dispute resolution forum during the establishment and implementation of the contract.

Finally, the tribunal handling the complaint upheld the Thai company’s arguments and further concluded that the legal perspectives of both the first-instance court and the procuracy were inappropriate and groundless.

Although there is still not sufficient supporting practice to definitively conclude that Vietnamese courts recognize the validity and enforceability of asymmetric jurisdiction clauses, and there is still no statutory guidance, the fact that a Vietnamese court accepted the dispute above for settlement suggests that there is certainly a chance for an asymmetric dispute resolution clause in a commercial agreement to be valid and enforced in Vietnam.

Related Professionals

Practices

Corporate/M&A

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

March 9, 2026
Over the past several years, numerous automobile manufacturers have brought electric vehicles (EVs) to the market and received positive feedback from consumers in Thailand and around the world. EVs have gained popularity due to their lower maintenance costs, reduced energy expenses, and environmental benefits. However, reports have emerged of EVs causing problems such as battery fires, autopilot malfunctions leading to accidents, and safety systems such as brakes engaging automatically under inappropriate conditions. Even when these situations do not cause injury to drivers or passengers, they raise significant concerns for EV manufacturers, importers, and sellers operating in Thailand. These problems may seriously impact businesses if the products are identified as unsafe under Thailand’s Product Liability Act (PLA), officially known as the Liability for Damages Arising from Unsafe Products Act. Under this law, authorities or courts can order business operators to recall products from the market or prohibit their export, import, or sale. To manage and mitigate the risk of being found liable for damages due to an unsafe product under the PLA, EV business operators should be aware of the scope of the law. Potentially Liable Parties The PLA identifies several types of entrepreneurs and business operators—both individuals and entities—as “potentially liable parties” (PLPs) who may be held liable under the law. In the EV context, this could include vehicle manufacturers, battery suppliers, software developers whose systems are integrated into the vehicle, and local importers or distributors. Specifically, the PLA covers: Manufacturers or hirers Importers Sellers of goods for which the manufacturer, hirer, or importer cannot be identified Any other party who uses the name, trade name, trademark, or statements associated with the alleged unsafe products, or acts in a manner that causes them to be perceived as a manufacturer, hirer, or importer Definition of “Product” and “Unsafe Product” The
Read More
March 5, 2026
Amid increasing financial globalization, Vietnam’s establishment of an International Financial Center (IFC) represents a strategic initiative to attract high-quality foreign investment and enhance the country’s position in the global financial system. In support of this objective, a Specialized Court was introduced under Resolution No. 222/2025/QH15 as a dedicated dispute resolution mechanism within the IFC framework. The Specialized Court at the IFC was subsequently operationalized by Law on the Specialized Court No. 150/2025/QH15, effective from January 1, 2026. Organizational Structure of the Specialized Court The Specialized Court at the IFC is a court within the system of the People’s Courts, organized and operating in accordance with the Law on the Specialized Court, and vested with jurisdiction to adjudicate and resolve cases at the IFC. The Specialized Court is located in Ho Chi Minh City and comprises (i) a Court of First Instance; (ii) a Court of Appeal, and (iii) a supporting apparatus. Jurisdiction of the Specialized Court The jurisdiction of the Specialized Court at the IFC is strictly defined based on both (i) the subject matter of the cases and (ii) the membership status of the parties involved. Specifically, the Specialized Court has jurisdiction over (except for cases involving public interests or the interests of the state) the following: Disputes arising from investment and business activities. Requests for recognition and enforcement in Vietnam of judgments and decisions of foreign courts and foreign arbitral awards. Requests related to dispute resolution by arbitration. Other disputes directly related to investment and business activities (to be specified by the Supreme People’s Court). Additionally, at least one party in the case must be a member of the IFC. The IFC’s membership status is established through registration, recognition as a member, or the grant of a license for establishment and operation within the IFC. In the
Read More
February 25, 2026
In December 2025, the National Assembly of Vietnam enacted a new Law on Construction, replacing the 2014 Law on Construction as amended in 2020. The 2025 Law on Construction will, in principle, take effect on July 1, 2026, subject to certain exceptions. Among its notable reforms, one development has attracted particular attention from both legal practitioners and market participants: the introduction of a statutory framework governing predetermined damages, commonly referred to as “liquidated damages.” This marks the first time liquidated damages have been expressly recognized at the level of primary legislation in Vietnam. While liquidated damages clauses have long been a common feature of construction contracts in practice, their legal enforceability has historically been subject to uncertainty. Although the new provision appears to represent a positive step toward greater legal clarity, it remains an open question whether it is sufficient, on its own, to provide a solid legal basis for the enforceability of liquidated damages clauses in construction disputes in Vietnam. What’s New? Article 86.2 of the 2025 Law on Construction provides (emphasis added): “Compensation for damages shall be determined on the basis of actual damages [or] predetermined damages corresponding to obligations under the construction contracts that are breached [and] the extent of such breaches.” This provision is significant in that it expressly recognizes predetermined damages, or liquidated damages, as a lawful basis for determining compensation for damage. However, the new law does not define “predetermined damages.” The absence of a statutory definition creates potential ambiguity as to the scope and nature of this concept and may give rise to disputes over how—and whether—a particular contractual clause qualifies as predetermined damages for the purposes of Article 86.2. Further, Article 86.2 qualifies the application of predetermined damages by requiring that such damages correspond to the obligations not fulfilled and the
Read More
February 25, 2026
Tilleke & Gibbins has updated the Vietnam chapter in the newly released Licensing 2026 guide, published by Lexology Panoramic. The comparative guide provides companies and other interested readers with information on licensing law and practice in various countries around the world. Licensing 2026 provides detailed information on the following topics: Restrictions, laws and licensing arrangements Intellectual property issues: Paris Convention for the Protection of Industrial Property, contesting the validity of licensor’s IP rights, invalidity and expiry of IP rights, security interests, proceedings against third parties, sublicensing, jointly owned IP, first to file, scope of patent protection, trade secrets, copyright Software licensing: Perpetual licensing, legal requirements, user restrictions Royalties and payments, currency conversion, and taxes: Relevant legislation, restrictions, taxation of foreign licensors Competition law issues: Restrictions on trade, legal restrictions, and IP-related court rulings Indemnification, disclaimers, and damages: Prevalence and enforceability of indemnity provisions and contractual waivers of damages Termination: Right to terminate, impact of termination Bankruptcy: Impact of licensee or licensor bankruptcy Dispute resolution: Governing law, arbitration, enforceability, injunctive relief, contractual waivers The Vietnam chapter is available below as a PDF. Readers can gain 30 days of complementary access to the full Licensing 2026 guide and the rest of Lexology Panoramic’s varied offerings through this link.
Read More