Jurisdiction of Courts and Arbitration in Resolving M&A Disputes in Vietnam

When a dispute arises in a Merger and Acquisition (M&A) transaction, clearly identifying the competent dispute resolution body—Court or Arbitration—is critical to ensure timely, effective resolution and protection of the enterprise’s legal interests.

1. When do Courts have jurisdiction to resolve M&A disputes?

1.1 Legal grounds and types of disputes

Courts have jurisdiction over M&A disputes that fall within the scope of business and commercial disputes, as regulated in the Vietnamese Civil Procedure Code 2015 (CPC)—particularly Articles 30, 35, 37, and 39.

• By level:

  • District-level People’s Courts handle ordinary commercial disputes (Article 35(1)(b) CPC).

  • Provincial-level People’s Courts handle more complex disputes or when district courts lack jurisdiction (Article 37 CPC).

• By territory: Determined based on the defendant’s residence, registered office, or the parties’ agreement (Article 39 CPC).

1.2 M&A disputes involving foreign elements

When foreign elements are involved, Vietnamese courts may still have exclusive or concurrent jurisdiction:

• Exclusive jurisdiction applies to disputes involving real estate located in Vietnam (e.g., capital contributions in real estate projects). Under Article 470 CPC, only Vietnamese courts can resolve such cases, and foreign judgments may not be recognized in these circumstances.

• Concurrent jurisdiction allows the parties to choose the dispute resolution body—foreign court or arbitration—if the choice complies with Vietnamese law or international treaties to which Vietnam is a signatory.

1.3 When arbitration is agreed upon but litigation is filed in court

According to Resolution 01/2014/NQ-HDTP, if a valid arbitration agreement exists, courts must decline jurisdiction or dismiss the case and refer it to arbitration—unless the agreement is void, arbitration cannot be conducted, or the court has already handled the case.

2. When does commercial arbitration have jurisdiction in M&A disputes?

2.1 Legal basis under the Law on Commercial Arbitration

Under the Law on Commercial Arbitration 2010, the Arbitral Tribunal only has jurisdiction over M&A disputes if a valid arbitration agreement exists.

This agreement can be a clause in the contract or a separate document, and can be established before or after a dispute arises (though it is advisable to include it in advance to avoid future conflict).

Arbitration is only applicable to disputes arising from business or commercial activities, or when at least one party is a trader, or other cases permitted by law.

2.2 Rights and procedures in arbitral proceedings

The Arbitral Tribunal has the right to:

• Collect evidence, request parties to submit documents, summon witnesses, seek expert opinions or asset valuations, and consult with experts when necessary.

• The parties may agree on multiple aspects of the proceedings: procedure type (ad hoc or institutional), location, applicable law (Vietnamese or international), language, number of arbitrators, etc.

2.3 Advantages of arbitration in M&A disputes in Vietnam

• Confidentiality: Proceedings are not public, which suits the sensitive nature of M&A transactions (business secrets, internal information, etc.).

• Flexibility: Procedures and timelines are more adaptable, improving dispute resolution efficiency.

• Finality and enforceability: Arbitral awards are final and binding, with enforceability equivalent to court judgments. They are also internationally recognized in over 140 countries.

• Freedom of choice: Parties can select arbitrators and institutions (e.g., VIAC for M&A arbitration) or opt for international arbitration mechanisms.

3. Summary

• Courts have jurisdiction when no valid arbitration agreement exists or when disputes fall under exclusive jurisdiction (e.g., real estate-related M&A projects). Jurisdiction is determined by judicial level and territorial scope under the CPC.

• Arbitration is only valid where there is a legally binding arbitration agreement. It offers flexible, confidential, and efficient dispute resolution—well-suited to the sensitive context of M&A.

• If an M&A contract includes both arbitration and court dispute clauses, it is critical to refer to Resolution 01/2014/NQ-HDTP to avoid overlapping jurisdiction and legal risks.

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