12 - ISDS Reform and the EU–Vietnam Investment Protection Agreement

Summary

The EU-Vietnam Investment Protection Agreement (‘EVIPA’) includes the new trend of a two-tier permanent dispute resolution system called the ‘Investment Tribunal System’ (‘ITS’).The inclusion of the untested ITS in the EVIPA has unsurprisingly been met with mixed opinion from scholars and practitioners all over the world.A number of new issues, such as the constitution and operation of the tribunal system, the dispute resolution procedure, and the transparency of the dispute resolution process, is foreign to the traditional model that Vietnam usually follows.Furthermore, the enforcement of the awards rendered through the ITS, which are primarily to be enforced as the judgment of the contracting states’ courts and shall be also deemed as arbitral awards falling within the scope of the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, also poses a challenge for Vietnam and has given rise to serious concern in the community.Notwithstanding these matters, Vietnam should be well prepared for its participation in the EVIPA.This chapter reviews the procedure of the new system and critically analyse the situation of Vietnam, as well as some challenges that Vietnam may face when dealing with the new mechanism of investment dispute resolution under the EVIPA.