How to Handle Disputes Over Industrial Land Lease Contracts with FDI in Vietnam?
Are you struggling with a dispute over an industrial land lease contract, especially involving a foreign direct investment (FDI) enterprise? I understand that feeling — you're worried, want to act quickly, but everything must stay legally compliant. In this article, I’ll break down the latest practical guidelines based on Vietnam's 2024 Land Law and trusted legal sources, helping you navigate the situation clearly, efficiently, and professionally.
Step-by-Step Process for Resolving FDI Land Lease Disputes in Industrial Zones in Vietnam
1. Understand the Roots and Nature of the Dispute
First, identify the cause of the dispute — it may stem from unclear contract terms, lack of enforcement mechanisms, or one party’s failure to fulfill obligations.
Carefully check the lease contract type: whether it's annual payment or one-off upfront payment, as the tenant’s rights and obligations vary significantly under the 2024 Land Law. For example:
Annual payments often cannot be transferred, subleased, or mortgaged with assets attached to the land — unless the investor switches to one-time payment.
Under the 2024 Land Law, FDI enterprises are allowed to sublease, sell, or contribute capital using the assets attached to the land — but specific conditions must be met.
2. Dispute Resolution Methods: From Negotiation to Legal Action
a) Internal Negotiation and Settlement
Start by sending an official letter clearly stating the issue and proposing a meeting to resolve it amicably.
If the parties reach an agreement, this process is fast and cost-effective, though the outcome is voluntary and non-binding.
b) Mediation via Government or Third-Party Institutions
You can seek support from the local People’s Committee or a professional mediation organization.
If mediation is successful and documented, the parties may ask the court to recognize the result, making it legally enforceable.
c) Filing a Lawsuit – The Last Resort
If mediation fails, you can file a lawsuit at a competent People’s Court:
District-level Court for regular civil disputes.
Provincial-level Court for contracts with foreign elements (e.g., FDI involvement).
Required documents include the petition, land lease contract, land use right certificate, mediation minutes (if any), proof of damages, etc.
Key Legal Knowledge and Practical Advice
3. Know Your Rights and Obligations Under the 2024 Land Law
The updated law grants FDI enterprises more flexibility in managing leased land, such as the rights to sublease, sell attached assets, transfer, mortgage, and even contribute capital using land-attached assets — all clearly stated in Articles 33, 34, and 41 of the 2024 Land Law.
4. When Signing Contracts – Prevent Disputes from the Start
Build a clear, well-drafted contract:
Specify lease type, duration, financial responsibilities, and termination conditions.
Add a detailed dispute resolution clause, prioritizing mediation, and clearly assign court/arbitration jurisdiction.
Any minor dispute should be addressed early through written communication and negotiation — avoid escalation by acting promptly.
5. Practical Lessons from Real Cases
If the lessee cannot fulfill obligations (e.g., late payments or improper land use), the lessor should send a written demand and legal warning — laying the groundwork for potential legal action.
In the event of the investor’s bankruptcy, lease treatment differs depending on the payment type:
Annual payment leases may be revoked by the government.
One-time payments are usually not revoked and are handled under bankruptcy or dissolution laws.
If you face legal complications, it’s highly advisable to consult an experienced land law firm to guide you from negotiation through litigation.
Conclusion
Identify the lease type (annual vs. one-off) to understand legal rights and limitations.
Prioritize negotiation and mediation to save time and costs.
If necessary, file a lawsuit at the competent court with a complete set of documents.
Leverage the flexibility provided in the updated 2024 Land Law — especially for FDI enterprises.
Always draft comprehensive contracts and prepare strong documentation and evidence to strengthen your case if litigation arises.
Are you currently facing a dispute over an industrial land lease contract? Don’t let it drag on and affect your company’s production plan. Act decisively and professionally. Remember: an effective resolution isn’t just about legal victory — it’s also about maintaining business credibility, which is priceless.
Contact DEDICA Law Firm for expert legal consultation!
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