Role of international treaties in Vietnamese law

Vietnam is a party to various international treaties. Many of those contain important market entry commitments, National Treatment commitments or Most Favoured Nations Treatments commitments. Accordingly, international treaties sometimes play an important role in determining the rights and obligations of a foreign investor. However, when studying an international treaty, one should note the following:

·         an international treaty can only be directly applied in Vietnam if the provisions of the relevant treaty are specific and clear enough and the Vietnamese Government decides to apply those provisions directly. Accordingly, until there is a specific law issued to implement an international treaty, Vietnamese authorities may decide not to apply an international treaty on the basis that such provisions are not specific and clear enough; and

·         in case the provisions of an international treaty and the provisions of a domestic law are “different” on the same issue, the international treaty will prevail. It is not clear what constitutes a difference between an international treaty and a domestic law.

Usually, an international treaty is intended to provide for the minimum rights and benefits that Vietnam needs to provide to a foreign investor. Therefore, Vietnam should be free to issue a law, which contains better or broader rights and benefits. However, in some cases where domestic laws contain better and broader rights and benefits, the authority may still refuse to apply the domestic laws on the ground that they are “different” from the provisions of the relevant international treaty. A notable example is the view taken by the Working Group Implementing the Enterprise Law and the Investment Law (Working Group) about the applicability of Resolution 71/2006 on the voting and quorum thresholds of a joint stock company and a limited liability company (more on this tomorrow).