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The National Assembly of Vietnam passed a new Investment Law on 17 June 2020 which will become effective on 1 January 2021 (LOI 2020) and replace the current Investment Law 2014 (LOI 2014). In this briefing, we briefly discuss some new key points of LOI 2020.
This briefing is written by Ha Thi Dung and edited by Nguyen Quang Vu with the research assistance of Tran Kim Chi.
Please download our write up here.
Under the law of Vietnam, in case a contract between a Vietnamese and a foreigner (i) selects Vietnamese law as its governing law for the whole contract, (ii) selects a foreign seated arbitration as the dispute resolution mechanism, but (iii) fails to specify the governing law of the arbitration agreement, it is likely that the law of the country where the arbitration is seated (not Vietnamese law) will be the governing law to such arbitration agreement. This is because:
Similar to the separability doctrine, which is widely accepted in the practice of international commercial arbitration, the Law on Commercial Arbitration 2010 also provides that the arbitration agreement is "completely independent" from the main contract. Accordingly, the governing law of the main contract should not automatically be the governing law of the arbitration agreement. However, the Law on Commercial Arbitration 2010 does not clarify what is the governing law of the arbitration agreement in the case illustrated above. This is different from common law position where the governing law of the contract will be considered as governing law of the arbitration agreement unless there is evidence to the contrary;
The Competition Law 2018 defines an anti-competitive agreement to mean: (a) an act of agreement between parties in any form, and (b) which causes or has the ability to cause a competition-restraining impact. Under Article 3.3. of the Competition Law 2018, a competition-restraining impact means an impact, which removes, reduces, distorts or hinders competition in the market. The definition of anti-competitive agreement is a new provision under the Competitive Law 2018 which the Competition Law 2004 does not have.
The Competition Law 2018 continues to provide a list of specific agreements which may be considered as an anti-competitive agreement which is similar to that of the Competition Law 2004. However, due to the new definition under the Competition Law 2018, logically, an anti-competitive agreement must now satisfy two tests:
Under Vietnamese law, joint chairmanship in a JSC is not allowed since the position of Board of Directors (BOD) Chairman can only be held by one person:
Article 152 of the Enterprise Law 2014 expressly provides that the BOD will elect one member of the BOD as the chairman, without any exception that can be provided in the charter;
Various qualifications of a BOD member under the Enterprise Law 2014 suggest that BOD members as well as the BOD Chairman should be natural persons (i.e. having expertise, experience in managing the business of the company). A joint chairmanship is not a natural person as such.