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​ 

January 8, 2026
Doing business in Thailand means operating under a strict regulatory framework. From time to time, companies may receive unexpected administrative orders from government authorities that restrict their operations, impose new compliance obligations, or levy fines and penalties. When this happens, a business may challenge the order under Thailand’s administrative law system. The primary concern in pursuing administrative litigation is timing, as strict statutory deadlines apply and missing them can permanently affect a company’s rights. First Step: Administrative Appeal Many companies assume the first step is to immediately bring the matter before the Administrative Court to seek revocation or suspension of the order. Some even attempt to request an interim injunction to stop the order from taking effect. However, Thai law generally requires that the company first challenge the order through an administrative appeal with the same agency that issued it. Only after this process is complete can the matter be taken to court. Seeking an interim injunction at this stage is also not possible. This is because Thai law does not allow a standalone application for an interim injunction; an injunction can only be requested together with the underlying complaint filed with the Administrative Court. Since a court complaint cannot be filed until the administrative appeal process has been exhausted, an injunction is usually not available at the early stage. What Are the Timeframes for Administrative Appeal? Thailand applies a two-stage administrative appeal process. The appeal must first be submitted to the same authority that issued the order, which will review its own decision. If that authority affirms its decision, the appeal is then escalated to the relevant higher authority for further review. In most cases, both stages must be completed before a company is allowed to proceed to court. The timeframe for filing an administrative appeal is very
Read More
January 6, 2026
Thailand is developing new legislation on responsible business conduct that would impose statutory obligations on large enterprises to manage human rights and environmental risks throughout their operations and supply chains. The Draft Act on the Promotion of Responsible Business Conduct, commonly referred to as the Human Rights and Environmental Due Diligence (HRDD) Bill, has been developed through extensive consultation involving a wide range of stakeholders, with the Ministry of Justice playing a leading role. If enacted, the HRDD bill would reshape how certain large businesses operate and manage their supply chains, reflecting a recognition of international standards and global concerns regarding human rights and environmental protection. By introducing legally binding due diligence obligations, the draft aims to ensure that businesses operating in Thailand are held accountable for adverse impacts throughout their operations and supply chains, in line with emerging global legal frameworks. Who Will Have to Comply? The HRDD bill primarily targets large enterprises based on their annual revenue thresholds: Manufacturing businesses with annual revenue exceeding THB 500 million Wholesale, retail, or service businesses with annual revenue exceeding THB 300 million The draft would also cover state-owned enterprises and foreign businesses operating in Thailand if their operations meet the applicable revenue thresholds. What Does Human Rights and Environmental Due Diligence Involve? Under the HRDD bill, due diligence is not a one-time checklist but an ongoing process with several key requirements: Adopt and publicly disclose a sustainability policy. Businesses must commit publicly to respecting human rights and protecting the environment, and must integrate this policy into corporate governance and risk management systems. Identify and assess risks. Companies must identify and assess risks of human rights violations and environmental harm across their operations and value chains. Prevent or reduce risks. Businesses must implement effective and proportionate measures to prevent or mitigate
Read More
December 30, 2025
On December 17, 2025, Laos’ Ministry of Industry and Commerce (MOIC) issued a notice introducing a new digital system that allows e-commerce businesses to obtain required certificates and licenses through an online, application-based platform. Notice No. 3988, which will take effect on February 1, 2026, introduces the E-Trust platform, a downloadable application that allows e-commerce businesses to remotely obtain acknowledgement certificates and business operating licenses. New Digital Registration Options Under the previous framework established by the Decree on E-commerce (2021), businesses were required to complete registration exclusively through paper-based submissions. The new system now offers businesses two registration options: Traditional paper-based process at the Division of E-commerce Management within the MOIC; or Electronic registration and renewal through the E-Trust platform. This change is expected to streamline procedures, reduce administrative burdens, and enhance accessibility for businesses operating outside Vientiane. The E-Trust platform facilitates compliance for both individuals and legal entities required to submit applications and renewals for required certificates and licenses. The development is particularly beneficial for businesses located in remote provinces, as it eliminates the need for physical travel and significantly accelerates processing times. Compliance Requirements and Penalties Businesses must obtain or renew the required certificates and licenses to avoid sanctions under the Decision on Fines and Other Measures for Violation of the Decree and Regulations on E-commerce (No. 2828/MOIC, dated November 11, 2025). Penalties for noncompliance may include monetary fines and other enforcement measures.
Read More
December 19, 2025
Prior to the dissolution of the House of Representatives, Thailand’s cabinet approved a draft amendment to the Administrative Procedure Act, following review by the Council of State. If enacted, this reform will fundamentally change how state agencies process business applications and appeals by imposing enforceable timelines and legal consequences for inaction. The draft directly targets a longstanding commercial frustration: applications and appeals that vanish into administrative silence, stalling investment and foreclosing judicial review across sectors ranging from real estate and manufacturing to healthcare and finance. The “Silence Means Yes” Rule for Applications At the core of the reform is a new automatic “approval by implication” for applications subject to statutory processing deadlines. If an official fails to notify an applicant of a decision within the legally prescribed period, the application will be deemed approved as a matter of law. This presumption shifts the costs of delay from businesses to the bureaucracy and gives applicants a definitive legal position once time expires. The mechanism applies to routine licensing and registration matters governed by explicit consideration periods in existing statutes or ministerial regulations. Officials may extend the decision period by up to thirty days, but only if they notify the applicant before the original deadline and substantiate that the delay arises from genuinely exceptional circumstances beyond their control. Certain sensitive applications are expressly excluded from automatic approval, including those that may significantly affect national security or defense, public safety and health, the environment or natural resources, or national cultural heritage. Once the deadline passes without a decision, businesses can proceed with deployment of capital and operations—construction, hiring, procurement, and market entry—without waiting for formal permission that may never arrive. For time-sensitive projects, this materially reduces regulatory timing risk. The “Deemed Rejection” Rule for Appeals The draft introduces a parallel “deemed rejection”
Read More