Investing in Vietnam: Treaty Protection, ISDS Risk, and Six Practical Recommendations

On 11 June 2026, Nhu-Hoang Tran Thang, founder of Astute Dispute Resolution, presented at The Investor’s Shield — Vietnam Edition, a webinar series co-organized by Florete Law (Philippines) and The Lam Law LLC (Vietnam). Nhu-Hoang’s session, entitled Investor-State Disputes Involving Vietnam: Legal Framework and Practice, addressed Vietnam’s investment treaty landscape, its publicly known investment arbitrations record, and six practical recommendations for foreign investors operating in Vietnam.

The presentation slides are available for download at the end of this post.

Vietnam’s Investment Treaty Landscape

Vietnam is party to more than 80 international investment agreements, including bilateral investment treaties (“BITs”), multilateral investment agreements, and regional free trade agreements containing investment chapters. These agreements span several generations.

Older BITs define protected investments and investors broadly, provide broadly framed consent to Investor-State Dispute Settlement (“ISDS”), and set out substantive standards of protection in general terms that leave considerable room for interpretation. More recent instruments, in line with the development of case law under older generation BITs, contain progressively more precise formulations.

Today, Vietnam’s investment treaty practice is most prominently reflected in multilateral agreements, which adopt a more balanced approach between States’ regulatory prerogatives and investors’ rights. From an investor’s perspective, the starting point remains to scrutinize the applicability and content of BITs, as these constitute the most common basis under which investor-State disputes are brought to arbitration.

Key Multilateral Agreements

CPTPP. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership reflects modern treaty practice. Most-Favoured Nation treatment does not extend to dispute settlement provisions. The standards of Fair and Equitable Treatment and Full Protection and Security are expressly tied to customary international law and do not create additional substantive rights beyond the internationally accepted minimum standard of treatment. ISDS follows an arbitration model with a choice between institutional arbitration rules and ad hoc arbitration under the UNCITRAL Arbitration Rules.

Importantly for investors in Vietnam: Annex 9-J of the CPTPP provides that the submission of a claim to Vietnamese courts or administrative tribunals amounts to a waiver of the right to pursue the same claim before an investor-State arbitral tribunal. Investors must assess this risk carefully before initiating any domestic proceedings.

ACIA. The ASEAN Comprehensive Investment Agreement contains core investment protections and an ISDS mechanism comparable to that of the CPTPP: a cooling-off period of six months for consultations and negotiations, followed by a fork-in-the-road choice between domestic courts and investor-State arbitration.

EVIPA. The EU-Vietnam Investment Protection Agreement was signed in 2019 but has not yet entered into force. It introduces an Investment Court System with a standing investment tribunal and a standing appellate investment tribunal. The European investment court system is yet to be tested in practice and, pending ratification, EVIPA remains unavailable to European investors.

Vietnamese Legislation on Investment

Investment treaties do not operate in a vacuum. Foreign investors should consider them alongside the host State’s domestic investment legislation.

In Vietnam, the primary reference is Law No. 143/2025/QH15 of 11 December 2025, which entered into force on 1 March 2026, and its implementing Decree No. 96/2026/ND-CP. The Law governs applicable requirements, certificates, approvals, and restrictions on investment, and should be reviewed carefully by any investor operating in or entering the Vietnamese market.

Depending on treaty language, investments made in violation of the host State’s laws and regulations may be excluded from treaty protection. The Law also provides for a domestic fallback dispute mechanism, which is superseded where the parties have agreed otherwise or where an applicable treaty binding on Vietnam provides otherwise. Investors should therefore negotiate arbitration clauses carefully in State contracts supporting the investment, wherever there is room to do so.

Vietnam’s ISDS Record

Vietnam’s publicly known ISDS record counts 13 investment treaty arbitrations brought over the period 2004 to 2023, according to public sources including the UNCTAD ISDS Navigator. This is a modest number relative to Vietnam’s FDI stock, which exceeded USD 540 billion in April 2026. Vietnam has prevailed in several cases, including on jurisdictional grounds.

The case Shin Dong Baig v. Vietnam, in which the investor’s claims were dismissed, offers a salient reminder: ISDS proceedings carry significant cost consequences. In that case, the investor was ordered to reimburse Vietnam’s arbitration and legal costs in the amount of USD 1.9 million.

This does not mean that ISDS should be avoided where treaty protection is genuinely available and the claim is well-founded. It underscores, rather, that ISDS is a serious strategic step, requiring time, financial resources, and careful preparation. Before initiating treaty proceedings, investors should thoroughly assess the prospects of success of the envisaged claims, both on jurisdiction and on the merits.

Six Practical Recommendations

The presentation closed with six concrete recommendations for foreign investors seeking to preserve and effectively use treaty protection in relation to their Vietnamese investments.

1. Structure the investment before the dispute is foreseeable. Map the investor’s nationality, ownership chain, applicable investment agreement(s), their entry into force, any sunset clause, denial-of-benefits clause, limitation period, and whether the protected investor is the same entity holding the Vietnamese approvals or licences. Late-stage corporate restructuring is vulnerable to an abuse-of-process objection.

2. Do not rely on treaty protection as a substitute for Vietnamese-law compliance. Check registration certificates, foreign ownership limits, land-use rights, construction permits, environmental approvals, and other applicable requirements. Retain Vietnamese counsel early, in particular for regulated sectors or provincial-level commitments. Treaty protection will be considerably stronger if the investment is lawfully admitted and properly documented.

3. Draft project contracts with dispute resolution and enforcement in mind. Arbitration clauses in State contracts should be negotiated carefully. Where there is room to agree, align the contractual dispute resolution mechanism with the treaty framework and ensure enforceability of any resulting award.

4. Manage local proceedings carefully. Before filing in Vietnamese courts or administrative forums, verify the fork-in-the-road and waiver provisions under the relevant treaty. Local proceedings may be useful for interim relief or administrative correction, but they may also affect the availability of treaty claims. This is particularly critical under the CPTPP (Annex 9-J).

5. Use early engagement, but reserve rights. Preliminary engagement with the host State or the counterparty may be valuable for resolving disputes amicably. Avoid unnecessary admissions, manage confidentiality and privilege where possible, and ensure that any engagement does not inadvertently prejudice treaty claims.

6. Preserve evidence from the first warning sign. As in any litigious situation, conserve evidence and maintain a clean track record in correspondence with adverse parties. Contemporaneous documentation of investments, authorizations, and communications with State entities is critical for both jurisdictional and merits purposes.

Download the full slides of the presentation ⬇️

NH Tran Thang_ISDS in Vietnam.pdf

Download PDF • 3.71MB

About The Investor’s Shield. The Investor’s Shield is a webinar series organized by Florete Law (Philippines) and The Lam Law LLC (Vietnam), dedicated to practical legal guidance for foreign investors in South-East Asia. More information is available at www.investors-shield.com.