July 18 2025 | Tony Nguyen and Do Pham Khanh Huyen | Lexology
Abstract
With effect from 1 July 2025, Vietnam has now restricted the power to set aside arbitral awards to only three major courts in Hanoi, Ho Chi Minh City and Da Nang City. This reform, though procedural in nature, is a significant step forward in aligning Vietnam’s arbitration ecosystem with international best practices. By curbing judicial inconsistency and enhancing institutional expertise, it lays the groundwork for a more arbitration-friendly jurisdiction, especially in the context of Vietnam’s ambition to build an international financial and legal hub.
1. A Legislative Milestone: Centralising Court Oversight of Arbitration
As from 1 July 2025, only three provincial-level People’s Courts located in Hanoi, Ho Chi Minh City and Da Nang City have had jurisdiction to hear applications to set aside arbitral awards. This change stems from a broader restructuring of Vietnam’s court system under Resolution No. 81/2025/UBTVQH15, issued by the Standing Committee of the National Assembly, which establishes regional-level People’s Courts and redefines the allocation of judicial responsibilities.
To implement this new court structure, the Judicial Council of the Supreme People’s Court issued Resolution No. 01/2025/NQ-HDTP, which provides procedural guidance on jurisdictional transfers. Specifically, Clause 8 of Article 4 assigns exclusive authority to hear set aside arbitral awards to the regional People’s Courts in Hanoi, Ho Chi Minh City and Da Nang City.
This marks a critical institutional reform, paving the way for greater judicial specialisation, reducing interpretative inconsistencies, and enhancing confidence in Vietnam’s arbitration regime.
2. Solving a persistent problem: Inconsistency and judicial overreach
Prior to the 2025 reform, 63 provincial-level People’s Courts across Vietnam were authorised to hear applications to set aside arbitral awards.[1] In theory, this decentralised system promoted local access to justice. In practice, however, it resulted in fragmented jurisprudence, varying legal interpretations, and a lack of consistency in applying arbitration law.
Many local courts in small and remote provinces of Vietnam lacked judges with sufficient experience in arbitration and frequently applied domestic civil procedure standards that were ill-suited to the arbitration context. The risk that an award might be set aside due to a technicality or judicial misapplication discouraged parties from choosing Vietnam as the seat of arbitration.
This has been proven in several circumstances. In a case of application for enforcement of a CIETAC’s arbitral award in 2022,[2] the Hai Phong City People’s Court held that the arbitral tribunal failed to examine the Claimant’s contractual obligations and its breach of a fundamental contractual obligation, therefore rejected [the defendant’s] refusal to pay under the L/C, despite the fact that the submitted documents did not comply with the internationally accepted Uniform Customs and Practice for Documentary Credits. The Court also commented that the tribunal only considered [the defendant’s] obligation, without examining the applicant’s obligation. This approach is “inconsistent with the fundamental principles of Vietnamese law and international law, and adversely affects the legitimate rights and interests of the defendant.” On that basis, the Court refused recognition and enforcement of the award in Vietnam. This approach is an obvious breach of the New York Convention 1958, which requires that the courts are restrained from assessing the substance of the dispute.
Another example of the quality issues with the lower court level is in a case in 2019[3] when the parties chose Hanoi as the place of arbitration. The arbitral tribunal had decided to hold the hearing in Singapore, and the judge concluded that it is a violation of fundamental principles of Vietnamese law. In this judge’s view, such conduct does not conform with the arbitration agreement and procedures agreed by the parties, it was regarded as a procedural violation, which is a ground for setting aside the arbitral award. The court obviously confused between the legal seat of arbitration with the physical place where the arbitral tribunal decided the hearing to be conducted. There are multiple other examples of the abuse of the concept “principles of Vietnamese laws” by the lower level courts.[4]
Therefore, by concentrating jurisdiction in the three most prominent regional courts in Hanoi, Ho Chi Minh City and Da Nang City, the 2025 reform has hope for addressing the above shortcomings by increasing the quality of judgments related to arbitration, enabling a more uniform and expert application of arbitration law, reducing forum shopping and allowing for the gradual development of a coherent pro-arbitration body of case law. This is the starting point to make Vietnam be seen as a reliable arbitration jurisdiction in the region.
3. Lessons from Other Jurisdictions: Global Trend Toward Centralization
Prominent arbitration centers follow a clear trend: jurisdiction over setting aside arbitral awards is centralised in specialised, higher courts. This model ensures consistent application of the law, judicial expertise, and enhanced credibility.
Singapore: Under the International Arbitration Act and Arbitration Act, only the High Court (General Division/SICC) hears set aside arbitral awards. Courts apply a strict standard, leaving awards intact unless procedural injustice or fundamental violation is proven. In Swire Shipping v Ace Exim [2024], the court emphasised the need to identify a clear “extractable error” rather than re-litigate substantive issues.[5]
Hong Kong: In Hong Kong, applications to set aside arbitral awards are handled exclusively by the Court of First Instance of the High Court, pursuant to Section 81 of the Arbitration Ordinance (Cap. 609).[6] This centralization of jurisdiction is a deliberate institutional design aimed at ensuring judicial expertise and consistency in arbitration-related matters. The court maintains a dedicated arbitration list, and its judges are highly experienced in applying international arbitration standards, including those under the UNCITRAL Model Law. Hong Kong courts adopt a pro-enforcement and pro-finality approach, intervening only in exceptional circumstances such as serious breaches of due process, lack of jurisdiction, or contravention of fundamental public policy.
As a result, the annulment rate in Singapore and Hong Kong are notably low, with successful challenges remaining rare. This outcome underscores the jurisdiction’s strong commitment to respecting the autonomy and integrity of arbitral proceedings.[7]
Conclusion
These comparative models demonstrate that the success of arbitration-friendly jurisdictions hinges not merely on the legislative framework but on the institutional capacity and judicial culture that support it. Vietnam’s decision to centralise jurisdiction over applications to set aside arbitral awards in only three regional-level People’s Courts located in Hanoi, Ho Chi Minh City and Da Nang City marks a significant institutional reform that aligns the country with global best practices in arbitration governance. This move addresses longstanding concerns about fragmented jurisprudence and inconsistent legal reasoning under the previous decentralised framework, and reflects a growing commitment to fostering judicial professionalism and predictability in the resolution of commercial disputes. By consolidating judicial oversight, Vietnam has the opportunity to develop a coherent and stable body of arbitration-related case law, enhance investor confidence and support its broader ambition of establishing Ho Chi Minh City and Da Nang City as a credible international financial centre.
Nonetheless, the long-term success of this reform will depend on the institutional capacity of the designated courts, the training and specialization of their judges, and the transparency with which arbitration decisions are published and disseminated.
1, Article 7 of Law on Commercial Arbitration 2010 and Article 5 of Resolusion 01/2014/NQ-HDTP of Council of Judges the People’s Supreme Court.
2, Case No. 03/2022/QĐST-KDTM by Hai Phong City People’s Court dated 28 September 2022.
3, Case No. 09/2019/QD-PQTT dated 24 September 2019 of Hanoi People’s Court.
4, See for example, case No. 06/2020/QD-PQTT dated 07 December 2020 of Hai Phong City People’s Court. See also Tony Nguyen and Manh Pham, ‘Vietnamese Court Sets Aside Arbitral Award for Failure to Legalize POA: An Abuse of Due Process Requirements‘ (2023) Kluwer Arbitration Blog, at accessed 17 July 2025.
5, Swire Shipping Pte Ltd v Ace Exim Pte Ltd [2024] SGHC 211, at accessed 11 July 2025.
6, Global Arbitration Review, The Guide to Challenging and Enforcing Arbitration Awards – Hong Kong (4th edn, Law Business Research, 2024), at accessed 11 July 2025.
7, Skadden, Seating an Arbitration in Hong Kong or Singapore: Considering a Decades-Old Conundrum in 2025 (Skadden, 2 April 2025), at accessed 11 July 2025.