Vietnamese
The jurisdiction of commercial arbitration rests on two independent conditions that must be satisfied together: subject-matter jurisdiction — the dispute must fall within a category that the law permits to be resolved by arbitration; and jurisdiction by agreement — the parties must have a valid arbitration agreement.
- I. Scope Of Jurisdiction Under The Law
- 1. Jurisdiction of commercial arbitration under Article 2 of the LCA 2010
- 1.2. The particular nature of land disputes
- 1.3. Points to note in application
- II. Classification Of Real Estate Disputes In Practice And Recommendations
- 2.1. Classification of jurisdiction by type of dispute
- 2.2. Criteria for businesses to identify jurisdiction
I. Scope Of Jurisdiction Under The Law
1. Jurisdiction of commercial arbitration under Article 2 of the LCA 2010
The jurisdiction of commercial arbitration rests on two independent conditions that must be satisfied together: subject-matter jurisdiction — the dispute must fall within a category that the law permits to be resolved by arbitration; and jurisdiction by agreement — the parties must have a valid arbitration agreement. This Part addresses the first condition, which is the starting point for determining whether a real estate dispute may be brought to arbitration.
Article 2(1) of the Law on Commercial Arbitration 2010 ("LCA 2010") confines the subject-matter jurisdiction of arbitration to three groups of disputes:
Group of disputes | Application in the real estate sector |
|---|---|
Disputes between parties arising from commercial activities | Disputes over BCCs, investment cooperation contracts for project development, and project transfer contracts between real estate business entities |
Disputes in which at least one party engages in commercial activities | Disputes between a developer (a real estate business entity) and an individual purchaser over handover timing, construction quality, or payment obligations |
Disputes that the law provides may be resolved by arbitration | Construction contract disputes (Article 146, Construction Law 2020); disputes arising from commercial activities relating to land (Article 236(5), Land Law 2024 — analysed in Section 1.2) |
1.2. The particular nature of land disputes
The particular nature of land. Real estate is the field in which arbitral jurisdiction meets its clearest limitation, because the “land” component carries a constitutional feature: land is under all-people ownership, with the State acting as the owner’s representative (Article 53, Constitution 2013; Article 12, Land Law 2024 — “LL 2024”). Land users hold only land use rights, not ownership of the land itself. A dispute over who holds the land use right therefore touches the State’s administration of land, and Vietnamese legislative tradition reserves jurisdiction over such disputes to State bodies rather than arbitration.
Article 236 of the LL 2024 establishes a mechanism for resolving land disputes along two clearly distinct branches:
First branch — pure land disputes (Article 236(1) to (4)). These are disputes over who holds the land use right, boundary disputes, and claims to recover land. Such disputes require mandatory conciliation before the commune-level People’s Committee under Article 235(2) LL 2024 before being resolved at the court (where a party holds a Certificate or the documents under Article 137) or at the competent People’s Committee (where no such documents exist). Commercial arbitration has no jurisdiction over this branch.
Second branch — disputes arising from commercial activities relating to land (Article 236(5)). Article 236(5) provides:
"Disputes between parties arising from commercial activities relating to land shall be resolved by the court in accordance with the law on civil procedure, or by Vietnamese commercial arbitration in accordance with the law on commercial arbitration."
The line between the two branches is drawn by the object of the dispute and the relief sought:
Criterion | Pure land dispute | Commercial dispute relating to land |
|---|---|---|
Object of the dispute | Who holds the land use right; the boundary of the parcel | Performance of contractual obligations between the parties |
Relief sought | Recognition or denial of a land use right; determination of boundaries | Payment, handover, compensation for damages, penalty for breach, restitution |
Resolution mechanism | Mandatory commune-level conciliation → court or People’s Committee (Article 236(1)–(4)) | Court or Vietnamese commercial arbitration (Article 236(5)) |
1.3. Points to note in application
Although Article 236(5) has broadened arbitral jurisdiction, several points remain without official guidance and warrant the attention of businesses:
- The boundary between a pure land dispute and a commercial dispute relating to land in cases involving both elements;
- Whether the mandatory commune-level conciliation (Article 235) applies to disputes brought to arbitration under Article 236(5);
- The scope of the phrase “Vietnamese commercial arbitration” — whether it is limited to domestic arbitration institutions.
In the absence of specific guidance, businesses should proceed with caution and seek legal advice where a dispute sits at the boundary between the two categories.
II. Classification Of Real Estate Disputes In Practice And Recommendations
2.1. Classification of jurisdiction by type of dispute
Following Article 236(5) LL 2024, the jurisdictional line is no longer “anything relating to land is outside arbitration,” but rather: disputes over who holds the land use right are outside arbitral jurisdiction; disputes over commercial contractual obligations with a land element fall within arbitral jurisdiction. On this basis, common real estate disputes are classified as follows:
Type of dispute | Legal basis and reasoning | Arbitral jurisdiction |
|---|---|---|
Within the jurisdiction of commercial arbitration | ||
Contracts for the sale or transfer of commercial real estate (handover timing, quality, payment, termination) | The developer is a real estate business entity → Article 2(2) LCA 2010. The dispute concerns contractual obligations, not the land use right | Within jurisdiction |
BCCs and investment cooperation contracts for real estate project development | Commercial dispute between legal entities — Article 2(1) LCA 2010 and Article 236(5) LL 2024. Note: a claim to determine the land use right still exceeds jurisdiction (see Section 2.2) | Within jurisdiction as to contractual obligations |
Contracts for the transfer of land use rights between enterprises — disputes over payment, handover, compensation for breach | Expressly recognised by Article 236(5) LL 2024. This is a dispute over performance of contractual obligations, not over who holds the land use right | Within jurisdiction |
Construction, EPC, main contractor, and design/supervision consultancy contracts | Article 146, Construction Law 2020 permits resolution by arbitration. Disputes over contract value, schedule, quality, and payment | Within jurisdiction |
Leases and hire-purchase of commercial real estate (offices, retail premises, factories, warehouses) | Commercial dispute between business organisations over lease obligations — Article 2(1), (2) LCA 2010 | Within jurisdiction |
Brokerage, operation/management, and valuation service contracts | Commercial dispute over commission, service fees, and service quality between business organisations — Article 2(1) LCA 2010 | Within jurisdiction |
Outside the jurisdiction of commercial arbitration | ||
Pure land disputes — who holds the land use right, parcel boundaries, claims to recover land | Article 236(1)–(4) LL 2024. Mandatory commune-level conciliation (Article 235(2)) → court or People’s Committee. An arbitration agreement over this type is void under Article 18(1) LCA 2010 | Outside jurisdiction |
Disputes over compensation, support, and resettlement upon State land recovery | An administrative relationship — the State exercises public power, not an equal commercial relationship. Resolved under the Law on Complaints and the Law on Administrative Procedure | Outside jurisdiction |
Disputes over administrative decisions in land and construction management (permits, planning, administrative sanctions) | An administrative relationship between individuals/organisations and State bodies. Resolved under the Law on Administrative Procedure | Outside jurisdiction |
Inheritance and division of marital real estate; disputes between individuals not engaged in commercial activity | No commercial element on either side — does not satisfy Article 2 LCA 2010. A civil matter — resolved by the People’s Court | Outside jurisdiction |
2.2. Criteria for businesses to identify jurisdiction
Before drafting an arbitration clause or deciding to commence arbitration over a real estate dispute, a business should answer the following three questions in turn:
- Question 1 — What is the dispute about? If the relief sought is performance of a contractual obligation, compensation, penalty for breach, or restitution → it may fall within arbitral jurisdiction. If the relief sought is to determine who holds the land use right or the parcel boundary → it is outside arbitral jurisdiction, even where the contract contains an arbitration clause.
- Question 2 — Is there a commercial element? At least one party must be a trader or a business entity, and the transaction must be for profit-making purposes. Without this (for example, a dispute between individuals not engaged in business), the dispute is outside arbitral jurisdiction.
- Question 3 — Is the other party a State body? If the dispute is with a State body over an administrative decision (land recovery, permits, sanctions), it is an administrative relationship — outside arbitral jurisdiction in all cases.
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The article is written by experts from Asia Legal – a law firm with many years of experience in mergers and acquisitions (M&A), capital markets, foreign investment, mining and energy, real estate, labor, personal data protection, and dispute resolution.
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