In the globalization and international
integration in general as well as economic integration in particular,
foreign investment including foreign direct investment (FDI) and indirect foreign
investment in countries ảe increasing significant. This trend also comes
along with the growth of international investment dispute
between foreign investor and host state (or related state
agencies). This dispute is often complex with huge amount of compensation
demanded by the investor.
Subjects of this dispute include foreign investor
(plaintiff) and host state or related state agencies (defendant). In
particular, Vietnam laws stipulate that foreign investor means an individual
holding a foreign nationality or an organization established under foreign laws
an making business investment in Vietnam. The second subject is state, a
“special” subject because this subject is the beneficiary of “jurisdictional
immunity”. Specifically, jurisdictional immunity is a right of a state which do
not be judged by any international or national jurisdiction without the consent
of such state.
This dispute shall relate to the investment of
foreign investor in host state according to regulation of (i) investment law of
host state; (ii) treaty of promotion and protection of investment (bilateral
investment treaty - BIT) or investment chapter in bilateral/regional trade
agreements; or (iii) contract relating to investment of foreign investor and
competent state agencies.
To promote foreign investment and to protect
investors, countries around the world as well as Vietnam have signed and will
sign bilateral agreements on promotion and protection of investment (BIT),
agreement between countries on promotion and protection of investment
(international investment agreement – IIA), free trade agreement (FTA) having
investment chapter. Accordingly, investor holding the nationality of a
signatory to investment agreement (chapter) is entitled to have full protection
and security, fair and equitable treatment, non-discrimination, no
expropriation... of investment according to regulation of such investment
agreement (chapter) in host state. Besides, to ensure
that dispute between foreign investor and host state will
be fairly and properly settled and to prevent the case of refering to jurisdictional
immunity to avoid being sued, there are provisions on dispute
settlement mechanisms between foreign investor and host
state in most of these agreements.
Through investment
agreement (chapter), the host state abandons its right
of jurisdictional
immunity to be sued and judged at competent jurisdiction. If the
host state violates
and harms the foreign investor, such country shall
compensate according to judgement of that jurisdiction. Jurisdictions being
competent to resolve disputes between foreign investor and
host state may
be arbitration, court of the host state; international arbitration;
or other jurisdictions by agreement between the parties.
Behaviours which state
violates commitment on investment protection may be very broad, including: (i)
expropriation such as: requisition or nationalization without compensation;
“indirect” requisition or “according to regulation” without reasonable
compensation; (ii) no fair and equitable treatment; (iii)
no full protection
and security; (iv) there is discrimination such as violation of
most favoured nation and national treatment; (v) and/or other violations such
as: legal obligation/commitment, right of withdrawing investment and interest,
compensation due to war or riot.
Dispute resolution process
between foreign
investor and host state usually takes place
with three stages, including (i) conflict management stage means carrying out
resolving complaints and consultation, mediation; (ii) dispute resolution
stage; and (iii) implementation stage. In above process, consulting with international dispute lawyers in
Vietnam to for resolution of international investment disputes
is a very important and necessary.
ANT Lawyers - a Law firm in Vietnam with
international standard, local expertise and strong international network. We
focus on customers’ needs and provide clients with a high quality legal advice
and services. For advice or serive request, please contact us via email
ant@antlawyers.vn, or call us +84 24 730 86 529
Let ANT Lawyers help your
business in Vietnam.
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