Contemporary Issues in Construction Contracts: Dispute Adjudication Boards

In a landmark series of judgments, the Vietnamese Courts (Courts) have ushered in a transformative era for FIDIC-modeled dispute resolution mechanisms within the construction sector. This shift confirms a party’s prerogative to commence arbitration directly, bypassing the obligatory processes of disputes board and amicable settlement. The Courts have also avoided the common pitfall of reviewing arbitral awards on the merits.

Should it be demonstrated that parties have made attempts at amicable resolution, and the award debtor’s objection to arbitration is a mere delay tactic causing further financial harm, the award creditor is justified in pursuing arbitration directly. 

The dispute adjudication board and amicable settlement procedures may be considered mandatory in FIDIC-modeled contracts as applied in other jurisdictions, and are considered cornerstones in the dispute resolution framework of Vietnam’s construction industry. However, recent Court judgments have recognized the evolving complexities of disputes in the construction industry and the need for a more agile and efficient mechanism. 

This departure from the conventional approach underscores the Court’s commitment to fostering a business-friendly dispute resolution framework in the construction industry, and to align the practice with international standards.

Our article delves into the nuances of these Court judgments, analyzing their implications on construction projects in Vietnam that may have been impacted by various issues arising from the COVID-19 pandemic, and the impact that the recent controversy involving the real estate and the banking sectors in Vietnam may have on these projects.

Contemporary Issues in Construction Contracts - Dispute Adjudication Boards - December 2023