THE AUTHOR:
Le Thanh Hieu, LL.M. Candidate at Keio University
Despite being a state party to the 1958 New York Convention, Vietnam has long held a reputation for weak enforcement of foreign arbitral awards (See, N. Dridi, ‘The Enforcement of Foreign Arbitration Awards in Vietnam: Overview and Criticisms’, 59 Harvard Int’l LJ Online (2017)). Between 2005 and 2014, barely half of all applications seeking recognition and enforcement were successful (See, YKVN, ‘Bản Án của Tòa Án và Phán Quyết của Trọng Tài Nước Ngoài tại Việt Nam’, 6 January 2021). Even following legislative reforms—namely the enactment of the Civil Procedure Code 2015 (“CPC”) and Supreme People’s Court Resolution No. 01/2014/NQ-HDTP—official statistics from the Vietnamese Ministry of Justice indicate that over 36% (more than 30 out of 82) of foreign arbitral awards were still refused recognition. Critics attribute this persistent issue to the broad drafting of the Civil Procedure Codes of 2004 and 2015, alongside expansive judicial interpretations of key provisions, particularly the public policy exception under Article 459(2)(b) CPC (“contravention of basic principles of Vietnamese law”).
Decision No. 33/2026/QDPT-KDTM (“Decision 33”), a recently publicized appellate ruling by the Hanoi People’s Court, provides a rare look into how Vietnamese courts analyze the legal framework governing the recognition and enforcement of foreign arbitral awards. Crucially, Decision 33 clarifies the judiciary’s view on the limits of the court’s own jurisdiction under the prohibition against reviewing case merits (Article 458(4) CPC). It also offers a clearer picture on what the judiciary considers as constitute a breach of “fundamental principles of Vietnamese law” for the purpose of refusing recognition of a foreign arbitral award.
This article examines the implications of the Hanoi People’s Court reasoning in Decision 33 and assesses whether this approach aligns with international practice.
Background
Decision 33 stems from an appeal against a first-instance ruling that refused to recognize two awards rendered under the auspices of the Singapore International Arbitration Centre (“SIAC”) in favor of two South Korean buyers (the “Buyers”). The underlying dispute involved the sale by a Vietnamese seller, VMG Media JSC (“VMG”), of its stake in VNPT Epay—a payment intermediary whose directors were subsequently prosecuted for criminal fraud.
In the first arbitration, the tribunal held that VMG had breached both the Sale and Purchase Agreement and Singapore law (the “First Award”). However, the Hanoi People’s High Court (now abolished and replaced by the Hanoi People’s Court after the judicial consolidation process) denied recognition and enforcement of this First Award in 2023 under Decision No. 09/2023/HS-PT.
During the first arbitration, Vietnamese tax authorities audited VNPT Epay’s activities covering the period of VMG’s ownership, imposing substantial tax liabilities. Consequently, the Buyers commenced a second SIAC arbitration. Referencing the findings of the First Award, the second tribunal ordered VMG to indemnify the Buyers for VNPT Epay’s additional tax liabilities (the “Second Award”). Recognition of this Second Award was likewise refused, this time by the Hanoi People’s Court.
Ruling
In Decision 33, the Hanoi People’s Court first addressed the standard of review applicable to foreign arbitral awards. Under Article 458(4) CPC, courts are expressly prohibited from re-trying or reassessing the underlying merits of the dispute resolved by the arbitral tribunal. Interpreting this provision, the court clarified that while this statutory limitation prevents judges from reviewing the substantive correctness of the tribunal’s findings, it does not bar them from examining the contents of the award to ensure compliance with procedural and statutory requirements for recognition and enforcement in Vietnam. Specifically, the court held that it remains empowered to review the award across the following dimensions:
“the capacity to conclude the arbitration agreement; the legal validity of the arbitration agreement; the propriety and timeliness of the notice appointing the arbitrator; the procedures for resolving the dispute before the foreign arbitral tribunal; whether the award falls within or exceeds the scope of the parties’ request under the arbitration agreement; the conformity of the composition of the foreign arbitral tribunal and the dispute‑resolution procedure with the arbitration agreement or with the law of the country where the award was rendered; the effectiveness of the award; whether the award has been annulled or suspended by a competent authority of the country where it was rendered; whether the dispute was eligible to be resolved by arbitration; and whether recognition and enforcement in Vietnam of the foreign arbitral award would contravene the fundamental principles of the law of Vietnam”.
The Hanoi People’s Court further emphasized that courts are entitled to analyze how an arbitral tribunal arrived at its findings to determine whether the award violates the fundamental principles of Vietnamese law under Article 439(8) CPC. Addressing the lower court’s reasoning, the appellate panel noted that while the court of first instance examined substantive matters resolved by the tribunal—including principles of damages and compensation—it did not assess whether those determinations were substantively correct. Instead, it reviewed those issues as part of a holistic assessment of the tribunal’s decision-making process. The Hanoi People’s Court confirmed that this distinction is fully consistent with the prohibition against re-trying case merits under Article 458(4) CPC.
The second issue addressed by the Hanoi People’s Court was the scope of the “fundamental principles of Vietnamese law” public policy exception. Historically, Vietnamese courts have relied on an expansive reading of this principle to set aside domestic arbitral awards or refuse recognition of foreign awards—frequently intervening whenever a ruling conflicted with domestic statutory provisions, such as those governing contractual penalties, interest rates, or third-party rights (See, Dentons LuatViet, ‘Report on the Practice of Resolving Applications to Set Aside Arbitral Awards at the People’s Court of Ho Chi Minh City (2024–2025)’ (Mar. 2, 2026)). On this issue, the Hanoi People’s Court held that:
“The court finds that the determination of the basic principles of Vietnamese law is based on the provisions of the Civil Procedure Code, other relevant provisions of Vietnamese law, the dispute resolution procedures of the foreign arbitration, the law of the place where the foreign arbitral award was rendered, international treaties to which Vietnam is a party, and judicial practice...”.
Is this Ruling Consistent with International Practices?
On the first issue, the position taken by the Hanoi People’s Court aligns closely with international practice. According to the Global Arbitration Review (GAR) Know-How guide on Challenging and Enforcing Arbitration Awards, enforcement courts in most jurisdictions lack the power to review the merits of a dispute, including the tribunal’s underlying factual or legal findings, although it is widely accepted that enforcement judges may scrutinize procedural matters and examine facts necessary to determine whether a specific statutory ground for refusal exists (See, UNCITRAL Secretariat, ‘Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958)’ (2016), pp. 125-129; ICC, ‘Guide to National Procedures for Recognition and Enforcement of Awards under the New York Convention’ (2019)). While some jurisdictions treat the tribunal’s factual findings as binding on the court, others permit independent judicial review for enforcement purposes. For example, in Germany:
“When deciding on the recognition of an award, state courts do not conduct a substantive review of the arbitral award, for example regarding the correct application of the law (no révision au fond) (BGH SchiedsVZ 2022, 228). However, when the court examines the requirements of a ground for refusal, it is not bound by findings of fact and the legal assessment of the arbitral tribunal (OLG Frankfurt SchiedsVZ 2005, 311). Nonetheless, the court is generally prohibited from reviewing the assessment of evidence made by the arbitral tribunal (BGH BeckRS 2023, 41676; BGH SchiedsVZ 2024, 115)”.
In this respect, the scope of judicial review articulated by the Hanoi People’s Court is largely consistent with international practice, as it focuses on procedural conditions and matters directly relevant to statutory grounds for refusal.
Regarding the public policy exception, however, the decision signals a troubling continuation of an expansive approach. The court’s reasoning suggests that virtually any breach of a domestic legal provision may constitute a violation of the “fundamental principles of Vietnamese law”. Furthermore, by assessing potential breaches of Vietnamese fundamental legal principles through the lens of the seat’s governing law and the tribunal’s procedure, the court effectively broadened this ground and created unnecessary overlap with distinct non-recognition bases—specifically Article 459(1)(d) CPC (which addresses instances where arbitral procedure fails to accord with the parties’ agreement or the law of the seat). This broad construction runs counter to the foundational objectives of the 1958 New York Convention, which seeks to limit refusal grounds and promote uniform global enforcement (See, G. Born, International Commercial Arbitration (3rd ed. 2021), p. 3799).
Key Takeaways
A key takeaway from Decision 33 is that parties seeking to enforce foreign arbitral awards in Vietnam now have clearer guidance regarding the standard of review applied by domestic courts. Judicial scrutiny is strictly confined to the procedural integrity of the arbitration, the validity of the arbitration agreement, and potential conflicts with the fundamental principles of Vietnamese law—rather than the tribunal’s factual or legal findings on the merits. Consequently, enforcement defenses that effectively demand a re-trial of issues already resolved by the award are likely to be rejected.
However, taking the merits of the dispute off limits is only one half of the standard of review. Decision 33 demonstrates that Vietnamese courts maintain an expansive interpretation of the public policy exception. While the decision confirms that judges will refrain from re-adjudicating substantive outcomes and will focus instead on the tribunal’s reasoning, it also signals a continued willingness to scrutinize the award’s underlying findings when evaluating compliance with core legal principles. This means the risk remains that future judicial decisions can absorb any alleged breach of Vietnamese law into the fundamental principles ground. As such, navigating challenges grounded in a violation of the “fundamental principles of Vietnamese law” remains a daunting and unpredictable process, and parties and practitioners must carefully account for these dynamics when formulating enforcement strategies in Vietnam.
