DISPUTE RESOLUTION MECHANISMS OF THE INTERNATIONAL FINANCIAL CENTRE – INTERNATIONAL EXPERIENCE AND IMPLICATIONS FOR VIETNAM
Dr. Lawyer. Nguyen Trung Nam,
Abstract:
This article analyses the arbitration-based dispute resolution mechanism in the International Financial Centre (“IFC”) model through a study of the experiences of Singapore, London and Dubai. On that basis, the article clarifies the role of the dispute resolution mechanism as an important component of the legal infrastructure that builds confidence for international financial and commercial transactions. In particular, the article focuses on analysing the commercial dispute resolution model of the Dubai International Financial Centre (“DIFC”) as a noteworthy experience for Vietnam in the context where Vietnam is developing an IFC with a distinctive legal mechanism. Therefore, the article offers a number of implications for Vietnam in developing an IFC dispute resolution mechanism suited to its legal context and the future development needs of the financial market.
1. Introduction
Amid the increasingly strong movement of global capital flows and the ever-expanding scope of cross-border financial activities, the International Finance Centre (IFC) model has become an important economic and financial structure in the development strategies of many countries. According to the International Monetary Fund, an IFC has a large scale, provides a full range of cross-border financial services, possesses deep and highly liquid capital markets and a modern payment and clearing system, together with a legal and supervisory framework sufficient to ensure the safety and stability of international transactions.
The foundational value of an IFC lies not only in the concentration of financial institutions but also in its ability to create an internationalised legal environment that ensures global financial transactions are carried out safely, efficiently and with predictable legal risk. Therefore, alongside financial infrastructure and incentive policies, the dispute resolution mechanism is regarded as an essential component of an IFC. Practice in the DIFC, London and Singapore shows that IFCs often simultaneously develop systems of international commercial courts, arbitration and specialised mediation in order to ensure neutrality, efficiency and cross-border enforceability.
According to the Report on Financial Institutions and International Arbitration1 (“ICC 2016 Report”) published on 24 November 2016, financial institutions in major financial centres such as London, New York, Hong Kong and Frankfurt are increasingly open to using international arbitration in cross-border banking and financial disputes. The reason arises from a changing legal environment and the increase in cross-border transactions, which give rise to the need for a dispute resolution mechanism that is neutral, flexible and ensures enforceability. The report also indicates that financial institutions tend to favour arbitration where (i) the transaction is of high value and particularly complex; (ii) confidentiality is a matter of concern; (iii) the counterparty is a state-owned enterprise; (iv) the counterparty is established in a country where recognition of foreign court judgments is difficult, or where enforcement of an arbitral award may be more favourable.
In Vietnam, the policy of building an IFC has been strongly promoted in order to enhance Vietnam’s position in the regional and global financial network. The National Assembly has issued Resolution No. 222/2025/QH15 on the IFC in Vietnam (“Resolution 222/2025/QH15”), and the Government has issued Decree No. 328/2025/NĐ-CP on the International Arbitration Centre under the IFC in Vietnam (“Decree 328/2025/NĐ-CP”) as the orientation for building a specialised and internationalised dispute resolution mechanism serving the investment and financial environment at the IFC. However, the arbitration-based dispute resolution mechanism under the IFC in Vietnam is still in the process of formation and refinement. This calls for studying the experience of IFC models around the world in order to identify the elements of an effective arbitration mechanism and to chart a direction for refinement for Vietnam.
2. Overview of international financial disputes and the suitability of the arbitration mechanism within the IFC
2.1. Characteristics of disputes arising at the IFC
The operation of an IFC is associated with the concentration of financial institutions, banks, investment funds, securities companies, multinational enterprises and entities providing cross-border financial services. In this environment, financial transactions take place on a large scale, at high speed and with deep international interconnection, entailing an increase in international financial disputes that are highly complex and specialised. Compared with ordinary disputes, disputes arising at an IFC have a number of distinctive characteristics.
First, international financial disputes often arise from transactions with complex legal and financial structures, such as derivative product contracts, securities and capital market transactions, international credit, bank guarantees, asset management or cross-border investment. This entails the simultaneous application of many different types of legislation, such as commercial banking, securities and foreign exchange law, as well as the regulation of financial markets. Resolving such disputes therefore requires a high degree of specialisation in both legal and financial expertise.
Second, disputes at an IFC tend to be multi-party and multi-contract, involving many different financial institutions. In many cases, financial transactions are designed as chains of interdependent contracts, so that a dispute arising in one transaction may affect the rights and obligations of many related parties. This gives rise to “chain-type disputes”, where a single dispute event has the potential to spread and simultaneously affect the rights and obligations of many participants across different transaction layers.
Third, disputes at an IFC are cross-border in nature; assets, cash flows and activities are distributed across many jurisdictions, while the applicable law, the seat of dispute resolution and the adjudicating body do not belong to the same legal system. This gives rise to issues of conflict of laws, conflict of jurisdiction, and recognition and enforcement of awards abroad. In practice, the same clause in an international financial contract may be interpreted differently across jurisdictions, increasing the risk of inconsistency and affecting the predictability of the legal environment for international financial institutions.
Fourth, international financial disputes are often of high value and capable of producing ripple effects on the market. A dispute relating to a syndicated credit transaction, an international bond issuance or a derivative product affects not only the interests of the parties directly involved but may also impact credit institutions, investors or the stability of the financial market.
Fifth, disputes in the financial sector often involve data of high commercial value, such as transaction structures, investment strategies, customer data or a company’s financial situation, thereby also raising confidentiality requirements.
Finally but not least, against the backdrop of the waves of greening and digitalisation and the market leadership of AI, the rapid development of fintech, greentech and bluetech, and the emergence of new concepts such as carbon credit markets and net-zero are shaping the orientation and development strategies of a new generation of financial centres and are turning disputes at international financial centres into the most complex disputes of all, in terms of financial expertise, technical aspects and law alike.
2.2. The necessity of establishing an appropriate dispute resolution mechanism within the IFC
Within the IFC framework, arbitration is regarded as the appropriate dispute resolution mechanism, meeting the need to resolve international financial disputes, with the following advantages:
First, it ensures deep specialisation in resolving international financial disputes. Arbitration allows the parties to select arbitrators with deep expertise in finance, banking or capital markets, thereby enhancing the quality of dispute resolution through the ability to assess evidence and interpret complex, highly technical financial transactions.
Second, arbitration ensures neutrality in dispute resolution, allowing the parties to choose the seat of arbitration, the language of the proceedings and the applicable law to suit the particular features of the transaction. This helps to mitigate any “home advantage” mindset in dispute resolution, while strengthening the confidence of international investors and financial institutions in the IFC’s adjudicatory mechanism.
Third, arbitration is a private adjudicatory institution with more flexible and objective adjudicating principles. Arbitration resolves disputes on the basis of the core principles of respecting the parties’ party autonomy and applying the law that the tribunal considers most appropriate. At the same time, the development of expedited procedures, interim emergency measures and online resolution helps to enhance the efficiency of dispute handling, meeting the speed requirements of modern financial transactions.
Fourth, arbitration meets confidentiality requirements. Compared with the principle of open hearings in the courts, arbitral proceedings allow the parties to limit the disclosure of information and to control the scope of access to the case file. This is one of the important reasons why financial institutions tend to favour arbitration in international transactions.
Fifth, a prominent advantage of arbitration lies in the international recognition and enforcement of awards. Through the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, an arbitral award may be recognised and enforced in most countries in the world under a relatively uniform mechanism. By contrast, the recognition and enforcement of a national court’s judgment abroad usually depends on bilateral treaties or the principle of reciprocity, with a more limited scope of application. For cross-border financial transactions, where assets and the parties involved are distributed across many different countries, the international enforceability of an arbitral award is a factor of particular importance.
3. The Arbitration dispute resolution mechanism under the VIFC
Resolution 222/2025/QH15 is the first document to lay the legal foundation for the establishment and development of the IFC in Vietnam (“VIFC”). On that basis, Decree 328/2025/NĐ-CP further details the organisational and operational mechanism of the International Arbitration Centre under the VIFC (“VIFCA”). Pursuant to Clause 7, Article 3 of Resolution No. 222/2025/QH15, the VIFCA is an independent arbitral institution providing arbitration and commercial mediation dispute resolution services to parties involved in investment and business activities at the VIFC, in accordance with the rules and regulations issued by the VIFCA itself. It can be seen that the arbitration mechanism at the VIFC is built in a way that emphasises organisational and procedural autonomy, suited to the particular features of international financial activity.
3.1. Jurisdiction of the VIFCA
As regards dispute resolution jurisdiction, Article 5 of Decree 328/2025/NĐ-CP provides that the VIFCA has jurisdiction to resolve disputes on the basis of the parties’ agreement, for disputes relating to investment and business activities at the VIFC. However, the scope of the VIFCA’s jurisdiction is limited with respect to certain groups of disputes, including:
(i) Disputes whose subject matter is an administrative decision or administrative act of a state administrative agency or competent person;
(ii) Disputes relating to labour;
(iii) Disputes relating to the personal rights of individuals;
(iv) Other matters relating to state administration that have already been resolved by a judgment or decision of a competent state administrative agency or of a competent court in Vietnam.
With these specific limitations, it can be seen that the arbitral jurisdiction is designed distinctively to serve the purpose of resolving disputes within the VIFC framework. However, under Resolution 222/2025/QH152, the VIFCA is established under the provisions of the Law on Commercial Arbitration No. 54/2010/QH12 (“2010 Law on Commercial Arbitration”) and has a broader scope of jurisdiction, including resolving disputes by agreement of the disputing parties (except for disputes relating to the exercise of State power and other exceptions aimed at safeguarding the State’s management role and public order, and avoiding conflicts of jurisdiction).
3.2. Choice of applicable law
As regards the applicable law, Clause 4, Article 4 of Decree 328/2025/NĐ-CP refers to Clause 2, Article 6 of Resolution 222/2025/QH15 and Clause 2, Article 14 of the 2010 Law on Commercial Arbitration. Accordingly, the parties have the right to agree on the law applicable to a dispute involving a foreign element; in the absence of agreement, the arbitral tribunal has the power to determine the appropriate law to resolve the dispute. This approach is consistent with the principle of freedom to choose the applicable law, which is widely recognised in international commercial arbitration.
3.3. Enforceability of the Arbitral Award
The enforceability of arbitral awards is one of the outstanding features of the arbitration-based dispute resolution mechanism at the VIFC, as analysed in detail below.
a. Waiver of the right to request the court to set aside an award.
Notably, the provisions of Clauses 5 and 6, Article 4 of Decree 328/2025/NĐ-CP allow the disputing parties the right to agree to waive the right to request the court to set aside a decision recognising the parties’ agreement, or a legally effective arbitral award of an arbitral tribunal under the VIFCA. Accordingly, the court will not deal with a request to set aside an award or decision of the arbitral tribunal where the parties have a written agreement waiving this right. The waiver agreement is part of the arbitration agreement under the law on commercial arbitration.
This is a fundamental difference and a progressive development compared with the 2010 Law on Commercial Arbitration, recognising the right (rather than the obligation) of the parties to skip the court’s “award-review” step for considering whether to set aside an arbitral award, thereby helping to reduce the risk of an award being set aside and to enhance enforceability where the parties place absolute trust in the arbitration-based dispute resolution mechanism.
b. Affirming the enforceability of arbitral awards.
In addition, the fact that Resolution 222/2025/QH15 uses the phrase that an arbitral award is “enforceable”3 instead of “effective from the date of issuance”4 as in the 2010 Law on Commercial Arbitration further emphasises the enforceability of the VIFCA’s awards.
However, the agreement to waive the right to request the setting aside of an arbitral award is not absolute, because the court still has jurisdiction to consider a request to set aside an arbitral award or a decision of the arbitral tribunal where that waiver agreement:
Falls within the cases of invalid agreements provided for in Article 18 of the 2010 Law on Commercial Arbitration;
Was made after the time a party filed with the court a request to set aside the award or decision of the arbitral tribunal.
This limitation is intended to ensure the validity of the waiver agreement while still maintaining the principle of respecting the parties’ right of self-determination.
c. Effective support of the specialised court for arbitral proceedings and the enforcement of arbitral awards.
One of the important highlights of the VIFC is Law No. 150/2025/QH15 on the specialised court at the VIFC (“Law No. 150/2025/QH15”). This is a piece of legislation with very novel features, without precedent in Vietnam’s several decades of law-making. They are as follows:
(i) The applicable law may be foreign law, including the common law system. The language of adjudication is English, accompanied by a Vietnamese translation.5
(ii) The adjudication procedure is flexible, expedited and distinctive, in line with international standards and practices. 6
(iii) Judges may be foreigners; judges are granted immunity in the performance of their duties, except in cases of serious violations of the law due to intentional fault.7
(iv) The court resolves all requests relating to arbitration and other cases in which at least one party is a VIFC member.8
(v) Cases are adjudicated in an electronic environment, including the service of procedural documents and evidence.9
(vi) The limitation period for bringing a claim is extended to 06 years.10
(vii) Foreign lawyers may represent clients in litigation.11
(viii) The disputing parties may request the court to apply interim emergency measures in accordance with the Procedural Rules.12 The interim emergency measures at the specialised court are extremely diverse and open-ended, including special measures not found in the Civil Procedure Code, such as: suspending bid closing and activities related to bidding; arresting aircraft and ships to secure the resolution of the case; and other measures under the Procedural Rules or as the court deems necessary.13
(ix) First-instance and appellate proceedings are conducted within the same framework of the specialised court. The appellate judgment or decision is final and not subject to protest.14
Another extremely important new point in Law No. 150/2025/QH15 is that the specialised court has the power to directly issue decisions to enforce the court’s judgments and decisions without going through an independent enforcement agency.15 In this process, the court has very broad power to issue decisions to secure enforcement, as well as to apply coercive enforcement measures16 and to mobilise enforcement bodies such as the police force in the event of resistance to or obstruction of enforcement17.
So why are the above matters important for arbitration? Because they directly support the conduct of arbitration at the VIFC in an extremely efficient and rapid manner, and provide the arbitral tribunal with highly effective tools to compel the parties to comply with the tribunal’s requirements during the proceedings, as well as to enforce the arbitral award. Specifically, the specialised court can support the implementation of interim emergency measures and, at the same time, enforce arbitral awards immediately without going through any third-party organisation.
These are important premises for completing the final piece in the entire cycle of enforcing contractual rights, maximising the benefits for investors in the VIFC. In the model of attracting and encouraging investors to become VIFC members, the specialised court and the VIFCA will be the two important pillars of the system, creating a highly attractive financial ecosystem within the territory of the VIFC in Ho Chi Minh City and Da Nang.
3.4. Participation of arbitrators and international experts of a high standard
The standards applied to founding members and arbitrators are a notable difference between the VIFCA and ordinary commercial arbitration centres. Specifically, Article 7 of Decree No. 328/2025/NĐ-CP sets significantly higher standards for founding members, such as:
– Foreign-language competence: English proficiency of level 5 or above under Vietnam’s six-level foreign language competency framework, or equivalent.
– Extensive expertise: at least ten years of experience in the field of arbitration-based dispute resolution, particularly in the fields of investment and business. In particular, professional knowledge in the field of finance and banking is preferred.
– Practical experience: having participated in issuing at least ten arbitral awards.
– Professional standing: currently serving as an arbitrator at an arbitration centre lawfully established in Vietnam.
The objective of this provision clearly reflects the aim of attracting leading experts capable of handling complex international disputes. In addition, Clause 1, Article 3 of Decree No. 328/2025/NĐ-CP also requires an international arbitration centre to have at least five founding members fully meeting the conditions, contributing to building a “gold standard” of arbitral adjudication capacity dedicated to the VIFC.18 At the same time, it sends a signal to international investors that arbitration at the VIFCA is specialised, with a high level of expertise, optimised efficiency and an orientation towards international practices.
Thus, it can be seen that, compared with the ordinary commercial arbitration model under the 2010 Law on Commercial Arbitration but “piloted” in an environment of the specialised court at the VIFC, the VIFCA was created and developed with a highly international orientation suited to international financial disputes. Therefore, resolving disputes by arbitration at the VIFCA exhibits a number of superior features, such as strengthening the finality and stability of awards, significantly limiting court intervention, raising the standards for arbitrators and, in particular, the ability to enforce promptly and efficiently not only arbitral awards but also decisions and interim emergency measures.
Alongside these bright spots, Decree No. 328/2025/NĐ-CP currently serves mainly to establish an orientation-setting legal framework for the VIFCA model, while many core issues relating to procedural rules, operating mechanisms and methods of handling complex financial disputes still need to be regulated in detail, and the VIFCA’s regulatory institutions as well as the Procedural Rules of the specialised court are still in the process of being built and refined. In that context, studying and drawing on the experience of arbitration models in leading IFCs is necessary in order to continue refining the arbitration mechanism at the VIFCA, ensuring its ability to meet the requirements of highly specialised and cross-border international financial disputes.
4. Arbitration dispute resolution models in selected IFCs
4.1. The Singapore model
Singapore is a typical example of a model combining a financial centre and an international dispute resolution centre. Notably, Singapore has not only developed its financial, banking, asset management and fintech markets, but has also proactively built an image as a legal hub of Asia in general.
On that basis, Singapore has simultaneously developed two models: international arbitration and an international commercial court.
a. Singapore International Arbitration Centre (SIAC)
The SIAC is one of the most important international arbitration institutions in Asia. The SIAC not only serves as a dispute resolution body in Singapore but is also an arbitration centre with a deeply international scope of operation, receiving and handling disputes with cross-border elements. In 2025, the SIAC recorded 625 new cases, of which 89% were international in nature, reflecting the distinct cross-border character of this institution.19 At the IFC, the role of the SIAC can be viewed from four perspectives.
First, the SIAC creates a neutral and safe mechanism for the parties in international transactions. In large financial transactions, the parties often do not want the dispute to be resolved in the national court of the other party. The SIAC provides and always commits to a neutral forum, applies international procedural rules and allows the selection of arbitrators with suitable expertise.
Second, the arbitration procedure at the SIAC is highly modern, focused on efficiency and flexibility and continuously renewed and developed, increasing the appeal of Singapore law and the choice of Singapore as the place to resolve disputes by arbitration in international contracts. The parties often choose the “combo” of the SIAC as the dispute resolution body and Singapore as the seat of dispute resolution, and even choose Singapore law as the governing law of the contract. This structure turns Singapore into an ideal legal destination for international financial transactions, even where the parties or the assets in dispute are not located in this country.
Third, the SIAC has specialised divisions and units as well as arbitrators with strong experience in finance20 to support highly technical transactions. International financial disputes often relate to M&A, project finance, commodity contracts, banking, fintech or cross-border investment. These disputes require resolvers with expertise, flexible procedures and high confidentiality and the SIAC always focuses on recruiting arbitrators and experts in these fields.
Fourth, the SIAC regularly and continuously develops and supports ancillary activities alongside organising and administering hearings, creating economic ripple effects. Complex international disputes often entail demand for litigation lawyers, financial experts, damages experts, hearing-support services and legal technology services and the SIAC always proactively encourages the development of these types of support services to create an arbitration ecosystem.
It can be said that, in Singapore, arbitration is not merely a dispute resolution mechanism but also a professional, transparent service industry, a small economy within the IFC ecosystem.
b. Singapore International Commercial Court (SICC)
Alongside the SIAC, Singapore has also developed the SICC model, which allows the handling of complex commercial disputes with the participation of international judges. Although it is a unit of the Supreme Court of Singapore, it is not a traditional domestic court. Accordingly, the building of the SICC rests on three pillars:
First, not every dispute is suitable for resolution by arbitration. In some cases, the parties have a need to resolve disputes through the courts, particularly where a judgment is needed to form case law or legal precedent, to apply coercive measures, or to resolve a dispute involving many related parties.
Second, the SICC is designed as a competitive tool for Singapore in relation to the Commercial Court of London or the specialised Courts at the DIFC. This reflects Singapore’s strategy of expanding its role from an international arbitration centre into a diverse dispute resolution centre with many options.
Third, the SICC creates a model combining the national court and international procedural practice. The proceedings at the SICC are very close and approximate to international arbitration procedures, yet have the enforcement power of a court. This is particularly attractive to foreign investors because they have the sense of accessing an internationalised judicial institution rather than merely a domestic court.
4.2. The London model
London is one of the oldest and most influential IFCs in the world. London’s strength lies not only in its financial, banking, insurance, maritime and commodity-trading markets, but also in the standing of English law in international commerce.
In many international contracts, the parties choose English law even when the transaction has no direct connection with England. This is because English law is regarded as highly predictable, respectful of freedom of contract, with a rich body of case law and friendly to complex commercial transactions and, in particular, English judges, through their judgments, have continuously developed the body of case law to meet international practice.
a. London Court of International Arbitration (LCIA)
If London’s IFC has been underpinned by confidence in English law as a foundational legal pillar, then the LCIA model plays a role in reinforcing London’s position as one of the world’s leading IFCs.
The LCIA is one of the oldest and most reputable arbitration centres in the world. According to its 2024 report, the LCIA recorded 362 referrals, of which 318 were arbitrations under the LCIA Rules; 95% of cases were international in nature and the parties came from 101 countries/territories. These figures clearly show the cross-border character and deep internationalisation of the LCIA’s operations, thereby helping to reinforce London’s role as a global arbitration and financial centre.
The role of the LCIA for the IFC in London can be analysed along three main dimensions, as follows:
First, the LCIA reinforces London’s position as a leading international dispute resolution centre. Parties to cross-border transactions often choose the LCIA because they trust its neutrality, the professional quality of its arbitrators, as well as the effective support of the English court system during arbitral proceedings.
Second, the LCIA is closely connected with English law. In international financial transactions, English law is often chosen as the law governing the contract. When a dispute arises, the LCIA becomes a natural choice because of the compatibility between the applicable law, the seat of arbitration and the legal community, thereby creating a unified and stable legal ecosystem.
Third, the LCIA serves the core sectors of the IFC in London, such as finance, insurance, energy, commodities, construction and M&A. These are all sectors with high dispute values, complex legal structures and a need for a high degree of specialisation in the dispute resolution process which the LCIA’s arbitrators have many years of experience in handling.
b. The “arbitration-friendly” trend of the English courts
One of the important factors helping the LCIA maintain its leading position in the world is the strong support from the English court system in an “arbitration-friendly” direction. Accordingly, the courts generally show maximum respect for the parties’ arbitration agreement, limit intervention in the arbitral proceedings and recognise the finality of the arbitral award. The role of the court is mainly supportive, such as recognising the validity of the arbitration agreement, applying interim measures or supporting enforcement of the award, rather than reviewing the substance of the dispute.
This is a factor of particular importance in the design of an international arbitration institution. An arbitration centre can hardly maintain a competitive position if the court system tends to intervene deeply or to readily set aside arbitral awards.
Although current Vietnamese law also recognises many similar principles aimed at limiting court intervention through the 2010 Law on Commercial Arbitration, the degree of stability and predictability in practical application is not yet on a par with the English model.
4.3. The Dubai model
The Dubai IFC (DIFC) is one of the most distinctive IFC models in the world because it does not merely build a financial centre but also designs a “dedicated legal ecosystem” serving international financial transactions. The DIFC was established in 2004 as a financial free zone of the UAE with the aim of making Dubai the financial centre of the Middle East, Africa and South Asia (the MEASA region).
Unlike London or Singapore, the prominent feature of the DIFC lies not in a long legal history or the standing of national law, but in Dubai’s proactive creation of a special legal zone within the UAE legal system. In other words, the DIFC operates as a relatively independent legal space, designed specifically for the international investment and financial community.
This model reflects Dubai’s pragmatic approach. Instead of requiring investors to adapt to the domestic legal system, the DIFC adjusts the legal system to suit the expectations of international investors.
a. The distinctive legal structure of the DIFC
From a legal perspective, the DIFC has its own legal system, operating along the lines of a common law system with its own foundational regulations on companies, contracts, commerce and bankruptcy, in contrast to most of the UAE legal system, which bears the characteristics of a civil law system influenced by Islamic law. This makes international investors feel more familiar and able to predict outcomes more easily when transacting within the DIFC.
As regards the language of proceedings, English is used as the main language in transactions and proceedings at the DIFC, helping to significantly reduce the costs and legal risks of international transactions.
In addition, the DIFC also encourages the use of international judges for the DIFC Courts when resolving disputes, rather than using only local judges. The aim is to build confidence within the international financial community that disputes will be resolved by people with international practical experience, rather than entirely according to domestic judicial logic.
b. The DIFC Courts
The DIFC Courts act as an internationalised commercial court with the participation of many international judges and procedures oriented towards flexibility and friendliness to international business. The DIFC Courts not only resolve disputes arising within the DIFC but may also be chosen by the parties through contractual agreement, similar to the SICC model or the English Commercial Court.
The DIFC Courts are designed with flexible procedures, the application of technology and a business-friendly orientation. This suits the characteristics of international financial disputes, where requirements of speed, confidentiality and enforceability are given priority over traditional proceedings.
In parallel with the court mechanism, Dubai has also placed special emphasis on developing international arbitration as a core component of the DIFC. Previously, Dubai built the DIFC-LCIA Arbitration Centre model on the basis of cooperation with the LCIA in order to bring international arbitration standards to the Middle East region. After the DIFC-LCIA was restructured, the Dubai International Arbitration Centre continued to play the role of the DIFC’s leading arbitration centre.
Notably, the DIFC Courts and the Dubai International Arbitration Centre do not exist as two competing mechanisms but are mutually complementary. The DIFC Courts tend to support arbitration by recognising the validity of the arbitration agreement, supporting the application of interim measures, supporting the recognition and enforcement of awards, and limiting intervention in the substance of the dispute.
This approach contributes to building an “arbitration-friendly” environment, creating confidence for international investors and financial institutions when choosing Dubai as the place to carry out transactions or resolve disputes.
The effective, internationally friendly dispute resolution model in Dubai shows that the new competitive trend among IFCs lies not only in financial or tax incentives, but also in the ability to design an internationalised, flexible and highly predictable legal ecosystem for international financial activity. Unlike the traditional approach, which requires investors to adapt to the domestic legal system, Dubai has proactively built a distinctive legal space with an internationalised dispute resolution mechanism suited to the expectations of the international commercial and financial community. This approach clearly reflects the DIFC’s functional and globally competitive institutional thinking.
5. The trend towards specialisation of international financial dispute resolution mechanisms around the world
Alongside the trend of internationalising dispute resolution mechanisms within IFCs, current international practice also shows an increasing trend towards specialisation in international financial disputes. Whereas previously most financial disputes were resolved through ordinary commercial arbitration centres, today the development of the global financial market has given rise to a need for more highly specialised dispute resolution mechanisms.
This trend stems from the characteristics of modern financial transactions, with their complex legal and financial structures, high transaction values, cross-border elements and demanding technical expertise.
One of the typical models of this trend towards specialisation of international financial dispute resolution mechanisms is P.R.I.M.E Finance, established in The Hague after the 2008 global financial crisis to provide a specialised dispute resolution mechanism for the international financial market. The special feature of this model is the use of a team of international finance, banking and capital market experts as arbitrators or experts in resolving disputes, rather than relying solely on purely legal expertise as in many traditional commercial arbitration mechanisms.
The development of institutions such as P.R.I.M.E. Finance shows that the dispute resolution mechanism in a modern IFC aims not only at neutrality and international enforceability but also at an increasingly high degree of specialisation in complex financial disputes. This reflects a shift from the general commercial arbitration model towards specialised financial dispute resolution mechanisms.
For Vietnam, this trend offers many important implications in the context of studying the building of the VIFC and the corresponding dispute resolution mechanism. At present, most arbitration centres in Vietnam still mainly resolve commercial disputes within a general scope, while the future development of the IFC may increase the number of highly specialised disputes relating to international finance, fintech, capital financing, carbon markets, and so on.
Therefore, alongside developing the international arbitration mechanism in an internationalised direction, Vietnam also needs to study the possibility of forming panels specialising in international financial disputes, while developing a team of arbitrators, financial experts and lawyers capable of handling complex financial disputes in the VIFC environment.
6. Comparison and recommendations for Vietnam
The DIFC model is of particular reference value for Vietnam in the current context, as Vietnam is studying and discussing the building of a VIFC with a distinctive legal mechanism.
Unlike traditional IFCs based on the long development history of the common law system, such as London or Singapore, the DIFC is a relatively newly established model that has nonetheless quickly developed into an influential financial and dispute resolution centre in the Middle East region. On that basis, the DIFC’s development experience will provide important implications for countries in the process of developing an IFC, such as Vietnam.
6.1. Advantages of the DIFC model
One of the outstanding advantages of the DIFC model is the ability to build a highly internationalised legal ecosystem within the IFC. The DIFC has not only developed its financial market but has also simultaneously designed: (i) its own legal system; (ii) an internationalised dispute resolution mechanism; (iii) a procedural mechanism in English; (iv) a team of international judges and experts; and (v) a legal environment friendly to international arbitration.
This enables Dubai to build confidence among international investors without changing its entire national legal system. This is a point of particular note for Vietnam, because Vietnam is also currently facing the problem of how to build a legal mechanism with sufficient international competitiveness while the domestic legal system still bears the characteristics of a traditional civil law system and is subject to the uniform regulation of the national judicial system.
In addition, the DIFC follows a hybrid dispute resolution system model, that is, combining international arbitration and an international commercial court in parallel. This shows that a modern IFC no longer develops along either a court or an arbitration line, but rather as a complementarity among many different dispute resolution mechanisms in order to meet the diverse needs of the international financial market. This is also an important experience for Vietnam in the process of designing the VIFC dispute resolution mechanism in the future.
6.2. Limitations for Vietnam in implementing the DIFC model
Although the DIFC model provides many important reference experiences in designing the VIFC, Vietnam’s application of this model will encounter certain difficulties and limitations, and not all of the constituent elements of the DIFC can be transferred or applied similarly in Vietnam’s legal context.
First, the DIFC operates on the basis of a special legal zone mechanism, that is, there exists a relatively independent legal space within the UAE legal system. By contrast, pursuant to Law No. 150/2025/QH15, Vietnam still applies the principle of the uniformity of the national legal and judicial system. Therefore, the development of a completely separate legal mechanism like the DIFC may raise many issues relating to: jurisdiction, conflict of laws, enforceability, and the uniformity of the Vietnamese legal system, in particular, the excessively large difference between the rules inside and outside the VIFC will create a gap that may give rise to legal inequality as well as inequality in access to justice.
Second, the DIFC is supported by a very high degree of internationalisation, including: an international team of personnel (judges, lawyers, experts), proceedings in English, and a legal environment strongly bearing the characteristics of the common law system. To achieve this, the DIFC has invested enormous financial resources over many years.21 By contrast, Vietnam still has limitations in terms of in-depth human resources in the fields of finance and international arbitration, legal English competence, experience in handling complex cross-border financial disputes, and the level of development of the international legal services market. The human factor will be the biggest question mark for the practical success of the legal ecosystem and contract enforcement at the VIFC.
Third, the DIFC was built in a context where Dubai had a very clear orientation towards developing into the financial centre of the Middle East region and was ready to apply highly flexible mechanisms as well as to invest resources in attracting, encouraging and developing ancillary services for adjudication and dispute resolution activities with a globally competitive vision. By contrast, Vietnam is still in the early stages of the process of building the VIFC, so the degree of acceptance of groundbreaking legal and judicial reforms, as well as the capacity for financial investment in developing ancillary services within the VIFC’s legal ecosystem, will certainly be much more modest.
Fourth, Law No. 150/2025/QH15 on the Specialised Court at the VIFC itself is already a departure from the traditional judicial system of Vietnam. This court applies the common law, uses the English language and foreign judges, so it will become a hybrid model between the common law and civil law systems, similar to South Korea. This will pose another challenge of reconciling differences (potentially very large) between the Procedural Rules under Law No. 150/2025/QH15 and the traditional civil-law procedural rules as provided in the 2015 Civil Procedure Code. It will take a sufficiently long time to answer whether the building and practical implementation of the Specialised Court’s Procedural Rules can resolve the fundamental differences/contradictions mentioned above and successfully ensure judicial uniformity under this hybrid model.
6.3. Recommendations for Vietnam
From the comparison with the DIFC model, it can be seen that, in the short term, Vietnam does not yet have all the conditions to fully adopt the special legal zone model as in Dubai’s approach. However, Vietnam can still learn many important lessons from the DIFC in the process of building the IFC dispute resolution mechanism.
First, Vietnam may study the building of a specialised dispute resolution mechanism for the IFC, oriented towards a much higher degree of internationalisation than the current ordinary procedural mechanism. This may include: detailing and standardising dispute resolution techniques, particularly in complex financial fields; recognising and managing expertise according to international standards with respect to the participation of arbitrators as well as international experts; and strengthening the application of international commercial and financial practices.
Second, Vietnam may learn from the model combining international arbitration and a court mechanism that supports arbitration in an “arbitration-friendly” direction. The Supreme People’s Court needs to promptly finalise and issue Procedural Rules with detailed provisions that clearly reflect flexible, efficient and distinctive features in line with international standards and practices, playing a strong supporting role in recognising the validity of the arbitration agreement and the enforceability of the arbitral award. This is the most important point of concern for investors in the VIFC. An IFC model is effective only if the jurisdiction to handle disputes is clearly defined, free of conflict with the national judicial system, and awards are enforced consistently, in order to establish firm confidence for investors. On the other hand, in order for the Procedural Rules to ensure harmony and avoid conflict with the existing procedural rules in the Civil Procedure Code, appropriate research is needed to suitably adjust and amend certain provisions of the 2015 Civil Procedure Code so as to ensure uniformity within the judicial system.
Third, the VIFC needs a step-by-step roadmap for building divisions/departments or panels specialising in international financial disputes within the VIFCA framework, instead of applying a commercial adjudication mechanism like ordinary commercial arbitration centres. International experience shows that disputes arising in IFCs are increasingly technical and highly specialised, requiring both hard and soft infrastructure systems, flexible rules suited to the particular features of the IFC, and a high-quality team of personnel.
This trend is clearly reflected through the P.R.I.M.E. Finance model, where the dispute resolution mechanism is built on the basis of combining legal expertise and international financial expertise. Therefore, Vietnam also needs to focus on building a team of arbitrators, financial experts and capital market experts capable of handling complex cross-border financial disputes in the future IFC environment.
Finally, experience from the DIFC shows that the most important factor of an IFC lies not only in financial incentives or economic infrastructure, but also in the ability to build legal confidence for international investors. Therefore, for Vietnam, building the VIFC dispute resolution mechanism should be seen as part of the strategy for developing legal infrastructure for the VIFC, rather than merely a procedural institution. The first arbitration cases adjudicated at the VIFCA and supported in enforcement at the specialised court in the VIFC will be very important tests and will attract particular attention from investors.
List of references
1. Resolution No. 222/2025/QH15 of the National Assembly, dated 27/05/2026, on the International Financial Centre in Vietnam;
2. Law on Commercial Arbitration No. 54/2010/QH12, dated 17/05/2010;
3. Decree No. 328/2025/NĐ-CP, dated 18/12/2025, on the International Arbitration Centre under the International Financial Centre in Vietnam;
4. Antonopoulou, G., ‘The “Arbitralization” of Courts: The Role of International Commercial Arbitration in the Establishment and the Procedural Design of International Commercial Courts’ (2023) Journal of International Dispute Settlement, 14(3);
5. Godwin, A., Ramsay, I., & Webster, M., ‘International Commercial Courts: The Singapore Experience’ (2017) Melbourne Journal of International Law, 18(2);
6. Hwang, M., ‘Commercial Courts and International Arbitration – Competitors or Partners?’ (2015), Arbitration International, 31(2);
7. Krishnan, J. K., & Purohit, P., ‘A Common Law Court in an Uncommon Environment: The DIFC Judiciary and Global Commercial Dispute Resolution’ (2015), American Review of International Arbitration;
8. Koster, H., & Beer, M., The Dubai International Financial Centre (DIFC) Courts: A Specialised Commercial Court in the Middle East (SSRN, 2018) accessed on 3/6/2026 at
<https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3237126_code2597856.pdf?abstractid=3237126&mirid=1>;
9. Mohtashami, R., & Tannous, S., ‘Arbitration at the Dubai International Financial Centre: A Common Law Jurisdiction in the Middle East’ (2009), Arbitration International, 25(2);
10. P.R.I.M.E. Finance. P.R.I.M.E. Finance Arbitration Rules (2022), accessed on 3/6/2026 at <https://primefinancedisputes.org/page/p-r-i-m-e-finance-arbitration-rules>;
11. Rogers, Catherine A. “The Vocation of the International Arbitrator.” American University International Law Review 20, no. 5 (2005): 957-1020;
12. International Chamber of Commerce, ICC Commission Report on Financial Institutions and International Arbitration (ICC, 2016), accessed on 3/6/2026 at: <https://iccwbo.org/wp-content/uploads/sites/3/2016/11/icc-financial-institutions-and-international-arbitration-icc-arbitration-adr-commission-report.pdf>;
13. Singapore International Arbitration Centre (SIAC), SIAC Records Steady Growth (2025), accessed on 2/6/2026 at: <https://siac.org.sg/siac-records-steady-growth>;
14. London Court of International Arbitration (LCIA), LCIA’s 2024 Annual Casework Report (2025), accessed on 2/6/2026 at: <https://www.lcia.org/News/lcias-2024-annual-casework-report.aspx>.
