Disputes between the government and foreign investors are arisen more and more common in the process of globalization and international economic integration, especially in case when foreign investment activities are increasingly developing with scale, scope and nature. In order to solve this problem, Vietnam and the European Union (“EU”) officially signed the EU-Vietnam Investment Protection Agreement (abbreviated as “EVIPA”) on June 30, 2019. In particular, EVIPA stipulates that the settlement of disputes between investors of one party with the government of the other party in the framework of EVIPA is performed through three mechanisms: (i) dispute settlement at Permanent investment dispute settlement body (“Investment Court”) (Section B - Chapter 3 EVIPA), (ii) arbitration (Chapter 3, and Appendix 8 EVIPA), and (c) resolved through mediation (chapter 3, Appendix 8, Appendix 10 EVIPA).

1. Dispute settlement at Investment Court

The resolution of disputes at the Investment Court is performed according to 02 Stages, including: Tribunal and Appeal Tribunal. The Investment Court shall be found by Vietnam and EU after the EVIPA comes into effect.

Firstly, the dispute will be resolved at the Tribunal; if there is any an appeal against the decision of the Tribunal, the appeal will be re-dispensed in the Appeal Tribunal.

In the event that the investor wins the case, the Investment Court's Judgment can only force the offending country to do one of the following terms: (i) compensate the damage and pay interest; and (ii) return the assets to investors or legal entities owned or controlled by the investor. In the case that Vietnam is the Respondent, enforcement of the judgment in Vietnam is carried out under the 1958 New York Convention.

2. Dispute settelement through conciliation

A disputing party may request mediation at any time during the dispute resolution process, by sending a written request to the other party.

The mediator can choose from among the members of the Investment Court. The parties or, any party (in the event that the parties do not agree to choose a mediator) may also request the President of the Investment Court to appoint a mediator among the members of the Investment Court, not a citizen of Vietnam or of the European Community.

The mediator can choose from among the members of the Investment Court. The parties or, any party (in the event that the parties do not agree to choose a mediator) may also request the President of the Investment Court to appoint a mediator among the members of the Investment Court, not a citizen of Vietnam or of the European Community.

Mediation begins when a mediator is appointed. Mediation shall be finished when (i) the parties agree to successful mediation; or (ii) when the mediator declares that the mediation process cannot reached or is not needed to continue; or (iii) when a party requests to termination.

After successful mediation results are available, the EU, a member country of European Community that is the disputing party or Vietnam has the right to announce the content of the mediation, after taking necessary measures to keep information to be confidential.

3. Dispute settlement by arbitration

EVIPA has no separate provisions on arbitration proceedings applicable to investor and government, only provisions on arbitrator's code of conduct in Appendix 8. Regarding proceedings, EVIPA only stipulates that in case when there is a request to the Investment Court to settle by arbitration, the claimant has the right to request resolution under the ICSID Auxiliary Rules or the UNCITRAL Arbitration Rules.

EVIPA is currently in the process of waiting for ratification by the Parliament of the 27 European Community and will take effect to settle a dispute between an investor of one party and the government of the other party for soon, it will contribute to creating a legal corridor and mechanism to settle investment disputes between investors and signatories in Vietnam and the EU.