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Vietnam’s construction market continues to grow rapidly, driven by foreign investment, infrastructure development, and industrial expansion. Along with this growth comes an increase in construction contract disputes, especially between foreign investors and Vietnamese contractors, subcontractors, or project owners.
When a dispute arises—delayed completion, unpaid progress payments, defective work, or unilateral contract termination—businesses often face a crucial decision:
Should you negotiate, or should you initiate legal proceedings?
The answer is rarely black and white. Choosing the wrong approach can escalate costs, delay recovery, and damage project outcomes.
Construction disputes are more complex than standard commercial disputes because they involve:
Long project timelines
Multiple stakeholders and subcontractors
Technical standards and variations
Progress payments and retention money
Site handover and acceptance procedures
In Vietnam, these disputes are further complicated by:
Incomplete documentation
Informal project changes
Weak contract administration
As a result, disputes often escalate not because one party refuses to cooperate, but because legal and contractual positions become unclear over time.
Construction disputes in Vietnam frequently arise from:
Delayed project completion
Non-payment or late payment of progress claims
Disputes over variation orders
Quality or safety issues
Suspension or termination of works
Disagreement on final accounts
Each of these issues can trigger either negotiation or litigation—but not all disputes should be handled the same way.
Negotiation is usually the first option when:
The project is still ongoing
Both parties want to avoid work suspension
The dispute involves payment timing or variations
The commercial relationship remains valuable
Negotiation allows parties to:
Keep the project moving
Reduce legal costs
Avoid public disputes
Preserve long-term cooperation
In Vietnam’s construction sector, many disputes are resolved through structured negotiation supported by legal advisors.
However, negotiation without legal oversight can be dangerous.
Common mistakes include:
Agreeing to extensions without documentation
Accepting partial payment without reserving rights
Informal variation approvals
Verbal agreements that later become disputed
These mistakes often weaken legal claims if litigation becomes unavoidable later.
Negotiation should be legally controlled, not purely commercial.
Litigation or arbitration should be considered when:
Negotiation is used only to delay obligations
One party refuses to pay or perform
Contract termination is imminent
Significant financial losses are at stake
Evidence needs to be preserved urgently
In such cases, early legal action helps preserve leverage, even if settlement remains the final goal.
The choice depends largely on the contract.
Many construction contracts include:
Arbitration clauses (domestic or international)
Vietnamese court jurisdiction
Arbitration is often preferred because:
Proceedings are more flexible
Confidentiality is maintained
Technical arbitrators can be selected
Court litigation may be unavoidable if no arbitration clause exists, but it is usually more formal and time-consuming.
Choosing the wrong forum can waste months or even years.
Winning a construction dispute means little without enforcement.
Businesses must consider:
Whether the counterparty has assets in Vietnam
Whether bank guarantees or performance bonds exist
Whether judgments or awards are enforceable
In many construction disputes, legal pressure combined with negotiation produces faster results than waiting for final judgments.
In practice, businesses often choose poorly because:
Decisions are made under project pressure
Legal advice is sought too late
Contracts were not drafted with disputes in mind
Management focuses on “winning” instead of recovering value
As a result, disputes become longer and more expensive than necessary.
One common misconception is that a company must choose either negotiation or litigation.
In reality:
Litigation can strengthen negotiation leverage
Negotiation can continue during legal proceedings
Early legal action does not prevent settlement
The most effective strategy is often a combination of both, guided by legal professionals.
Many construction companies only consult lawyers after disputes escalate.
By then:
Evidence may be incomplete
Project records may be inconsistent
Informal agreements may weaken claims
Construction disputes require continuous legal oversight, not emergency intervention.
With ongoing legal consultancy, businesses can:
Draft construction contracts with clear risk allocation
Manage variations and payments properly
Identify dispute risks early
Decide strategically when to negotiate and when to litigate
This proactive approach significantly reduces dispute costs and project disruption.
Foreign investors and EPC contractors face additional risks:
Unfamiliarity with Vietnamese construction law
Language and documentation issues
Enforcement challenges
Without continuous legal support, small disputes can derail entire projects.
DEDICA provides ongoing legal consultancy services and dispute resolution support for construction projects in Vietnam, including EPC, infrastructure, and industrial developments.
DEDICA assists clients by:
Reviewing and structuring construction contracts
Advising on dispute prevention and contract administration
Designing negotiation strategies backed by legal leverage
Representing clients in arbitration and court proceedings
Supporting enforcement and recovery strategy
DEDICA’s approach focuses on project continuity, enforceability, and commercial outcomes, not unnecessary escalation.
In construction contract disputes in Vietnam, both negotiation and litigation have their place—but choosing the right timing and strategy is critical.
Negotiation without legal structure weakens leverage. Litigation without enforcement planning wastes resources.
By engaging ongoing legal consultancy, businesses can:
Control disputes before they escalate
Decide when to negotiate and when to litigate
Protect project timelines and financial interests
Reduce long-term legal risk
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
Contact us today for a free initial consultation with our experienced lawyers!
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