When a commercial dispute arises, foreign-invested enterprises (FDI companies) often face a critical strategic question:
Should the lawsuit be filed in Vietnam or in a foreign jurisdiction?
This decision is far more complex than it may appear. Choosing the wrong forum can lead to long delays, unenforceable judgments, unnecessary costs, or even dismissal of the case altogether.
For FDI companies operating in Vietnam, where to sue can be just as important as whether to sue at all.
Many FDI companies instinctively prefer to litigate outside Vietnam, believing that:
Foreign courts or arbitration feel more familiar
Procedures appear more predictable
Home-country law seems more favorable
However, a judgment that cannot be enforced in Vietnam has little commercial value, especially when the counterparty’s assets are located in Vietnam.
Jurisdiction decisions must balance legal strength, enforceability, cost, and business objectives.
The first and most important factor is the dispute resolution clause in the contract.
FDI companies should carefully review:
Governing law (Vietnamese law or foreign law)
Dispute resolution forum (Vietnamese courts, foreign courts, or arbitration)
Seat of arbitration (if applicable)
If the contract clearly specifies a forum, that clause is usually binding. Filing in a different jurisdiction may result in the case being rejected or delayed due to jurisdictional challenges.
Filing in Vietnam is often the most practical option when:
The Vietnamese counterparty’s assets are located in Vietnam
The dispute concerns performance or obligations carried out in Vietnam
Enforcement is expected to take place in Vietnam
The contract is governed by Vietnamese law
Vietnamese courts and arbitration centers are increasingly experienced in handling FDI-related disputes, particularly in commercial and trade matters.
For many FDI companies, local enforceability outweighs perceived procedural convenience abroad.
Key advantages include:
Direct enforcement against assets in Vietnam
Familiarity with local regulatory and commercial context
Lower enforcement barriers compared to foreign judgments
Greater leverage in settlement discussions
While procedures may feel unfamiliar at first, experienced local counsel can manage procedural complexity effectively.
In some cases, filing outside Vietnam may be justified, such as when:
The contract mandates foreign courts or foreign arbitration
The counterparty has significant assets outside Vietnam
Enforcement will occur primarily abroad
The dispute involves multiple jurisdictions
However, even in these cases, enforcement in Vietnam must still be considered if assets are located there.
Many FDI companies focus on where they can “win” the case, rather than where they can collect.
Critical enforcement questions include:
Will Vietnam recognize and enforce a foreign judgment?
Does Vietnam have an applicable treaty or reciprocity arrangement?
How long will recognition and enforcement take?
Without enforceability, even a favorable foreign judgment may offer little practical value.
Arbitration is often a preferred option for FDI companies because:
Awards are generally more enforceable internationally
Proceedings are private
Parties can choose neutral venues
Vietnam is a signatory to the New York Convention, which facilitates enforcement of foreign arbitral awards in Vietnam—although procedural requirements still apply.
Arbitration clauses must be carefully drafted to avoid ambiguity and enforcement challenges.
Jurisdiction decisions also affect:
Legal costs
Time to resolution
Management involvement
Business disruption
Foreign litigation may appear prestigious but can be significantly more expensive and time-consuming, especially when evidence and witnesses are based in Vietnam.
FDI companies that decide jurisdiction without local legal advice often face:
Jurisdictional objections
Procedural delays
Enforcement roadblocks
Unexpected compliance requirements
Once a case is filed incorrectly, reversing course can be costly and damaging.
The decision of where to sue should be made before disputes escalate, not after positions harden.
Early legal assessment allows companies to:
Evaluate jurisdictional risks
Strengthen documentation
Preserve enforcement options
Use litigation risk strategically during negotiation
This is especially important in cross-border disputes where mistakes are difficult to correct.
Many FDI companies consult lawyers only when disputes have already escalated. At that stage:
Contractual weaknesses may already exist
Strategic options may be limited
Enforcement risks may be unavoidable
Reactive legal advice limits flexibility.
Ongoing legal consultancy provides continuous legal oversight, allowing FDI companies to:
Structure contracts with enforceable dispute clauses
Assess jurisdiction risks before disputes arise
Align legal strategy with business goals
Respond quickly and strategically when disputes emerge
Instead of choosing jurisdiction under pressure, companies make informed, forward-looking decisions.
FDI enterprises face unique challenges:
Cross-border enforcement issues
Differences in legal culture
Regulatory scrutiny
Language and procedural barriers
Without local legal support, these risks compound quickly.
DEDICA provides ongoing legal consultancy services and dispute strategy support for FDI companies operating in Vietnam.
DEDICA assists clients by:
Reviewing dispute resolution clauses
Advising on court vs arbitration strategies
Assessing enforcement feasibility in Vietnam
Representing clients in Vietnamese proceedings
Supporting cross-border dispute coordination
DEDICA’s approach focuses on practical enforceability and business impact, not just legal theory.
For FDI companies, the question is not simply whether to sue—but where to sue.
Filing in Vietnam or abroad each carries advantages and risks. The correct choice depends on:
Contract terms
Asset location
Enforcement feasibility
Cost and time considerations
Long-term business objectives
By involving legal advisors early—and ideally through ongoing legal consultancy—FDI companies gain the clarity needed to make strategic, enforceable decisions rather than reactive ones.
📞 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!
Select a platform to view details
