Abstract:The Investment Protection Agreement between Vietnam and the European Union (EVIPA) establishes a new mechanism for resolving investor-state disputes (ISDS), known as the Investment Tribunal System (ITS). This system features a two-tier permanent structure, comprising a first instance tribunal and an appellate tribunal. However, the use of the term “Tribunal” and the permanent two-level design has sparked debate over the legal nature of ITS: is it an international investment court or a reformed model of arbitration? This article analyzes the two main scholarly perspectives on this issue, clarifies the author’s viewpoint, and assesses the feasibility of applying ITS in the Vietnamese legal system.
Keywords: EVIPA, ISDS, International Investment Court, International Investment Arbitration.
1. Introduction
In the context of globalization and increasing cross-border investment flows, establishing a transparent, efficient, and highly binding investment dispute resolution mechanism has become a top priority for many countries and international organizations. The limitations of traditional international arbitration—such as lack of transparency, inconsistency, and concerns regarding arbitrator independence—have created a strong demand for reform, particularly within new-generation Free Trade Agreements (FTAs). The EU–Vietnam Investment Protection Agreement (EVIPA), signed in 2019, represents a significant step in this reform trend, as it establishes, for the first time, a permanent two-tier investment dispute resolution system, referred to as the “Investment Tribunal System” (ITS). However, this innovation also raises a series of questions regarding the legal nature of the ITS: Is it a judicial institution resembling an “international investment court,” or is it an evolution and improvement within the legal framework of traditional investment arbitration? The distinction between the two models—court versus arbitration—is not only theoretically significant but also directly affects the domestic implementation of EVIPA in member states, including Vietnam. This article employs a doctrinal analysis and comparative approach to clarify the legal nature of the ITS; it also uses a commentary method to discuss prevailing scholarly debates, present the author’s viewpoint, and propose an appropriate approach for Vietnam in adopting and operating the ITS in the future.
2. Overview of the EU–Vietnam Investment Protection Agreement
The EU–Vietnam Investment Protection Agreement (EVIPA) was signed on 30 June 2019 in Hanoi, concurrently with the EU–Vietnam Free Trade Agreement (EVFTA). This represents a significant milestone in Vietnam’s deeper integration into the global economy and marks a new phase in economic and investment cooperation between Vietnam and the European Union. EVIPA was developed to establish a modern, comprehensive, and coherent legal framework governing investment between Vietnam and EU member states, replacing over twenty outdated bilateral investment treaties (BITs) that lacked consistency and no longer met practical needs[1].
Initially, EVFTA and EVIPA were negotiated as a single comprehensive trade and investment agreement. However, due to the distribution of legal competencies within the EU following the Lisbon Treaty in 2009, investment matters were classified as “shared competence,” requiring ratification not only by the European Parliament but also by the parliaments of each member state. Meanwhile, the trade provisions in EVFTA fall under the exclusive competence of the EU and could be ratified and implemented more swiftly[2]. Consequently, to avoid delaying the implementation of EVFTA, the investment content was separated into a distinct agreement—EVIPA. This approach allowed the EU to maintain the schedule for trade commitments while demonstrating negotiation flexibility and aligning with its ongoing reforms in investment dispute resolution. Substantively, EVIPA focuses on three main areas: (i) investment protection principles, including fair and equitable treatment, protection against unlawful expropriation, and the national treatment principle; (ii) the investor–state dispute settlement (ISDS) mechanism; and (iii) provisions on recognition and enforcement of awards. The most notable and debated innovation is the establishment of a permanent two-tier investment dispute resolution body, replacing the ad hoc arbitration model commonly used in traditional investment agreements. The new body comprises a First Instance and an Appellate instance, with pre-appointed members operating under strict procedural rules designed to enhance transparency, consistency, and fairness in dispute resolution. Nevertheless, the precise legal nature of this mechanism remains a subject of debate. The English term used in EVIPA is “Investment Tribunal System” (ITS), while Vietnamese researchers have adopted various terms. For instance, Assoc. Prof. Dr. Tran Viet Dung refers to it as “Tòa Trọng tài đầu tư”[3], whereas Tran Thi Hai An, in her doctoral dissertation, uses the term “Tòa Đầu tư thường trực”[4]. Other studies use expressions such as “Toà án đầu tư” or “Toà án đầu tư thường trực”[5]. For Vietnamese government agencies, the official translation in EVIPA uses the phrase “hệ thống cơ quan giải quyết tranh chấp đầu tư thường trực”[6], aiming to balance legal accuracy with practical implementation. Given the lack of absolute consensus on the Vietnamese terminology, this article adopts the abbreviation ITS—following the original EVIPA text—to refer to the permanent two-tier investment dispute resolution body established under EVIPA. The discussion on the actual legal nature of the ITS—whether it constitutes a quasi-international court or an enhanced arbitration model—will be further analyzed and clarified in the subsequent sections.
3. Dispute Resolution Procedure of the ITS under EVIPA
To approach an objective and comprehensive assessment of the legal nature of the ITS, the author begins by analyzing the specific provisions of the Agreement regarding the organization, jurisdiction, and operational procedures of this body.
EVIPA represents a significant development in the ISDS mechanism by establishing a permanent two-tier dispute resolution system—comprising a First Instance and an Appellate instance—replacing the ad hoc arbitration model commonly used in previous investment agreements. The dispute resolution process under this system is designed with a strict procedural sequence, combining both non-judicial and judicial measures. A general overview of the dispute resolution process can be illustrated as follows:
From the diagram, it is clear that disputes are not immediately resolved through the ITS mechanism but first undergo a pre-litigation stage with alternative measures, aiming to encourage the parties to reach an amicable solution, save costs, and maintain cooperative relationships.
3.1. Pre-litigation Stage
Dispute resolution begins with a consultation measure. When a dispute arises, the investor must submit a written request for consultation to the host State. The consultation must take place within 30 days from the date of receipt of the request and conclude within 45 days, unless the parties agree to extend it. The goal of this stage is to provide an opportunity for the parties to resolve the dispute through direct dialogue, avoiding the need to submit the dispute to a judicial body[7]. If consultations fail, the parties may agree to initiate mediation under Annex 9 of EVIPA. The mediator can be selected from the ITS members list or by mutual agreement. Mediation aims to find an amicable and effective solution for the dispute. If the parties do not reach a settlement through mediation, the dispute proceeds to the litigation stage under the ITS.
3.2. Litigation Stage
If the dispute cannot be resolved through consultation or mediation, the investor may bring a claim against the host State before the ITS. The ITS is a permanent body organized in two tiers: First Instance and Appellate Instance.
(i) First Instance (Article 3.38)
The First Instance is a permanent body consisting of nine members appointed by the EVIPA Committee. Membership is structured to ensure balance: three members are nationals of EU member states, three are Vietnamese nationals, and three are nationals of third countries. Members serve a four-year term and may be reappointed only once. To ensure continuity and stability during the initial phase, five of the nine members have a six-year term, determined by random draw after the Agreement enters into force. In case of vacancy, replacement must be made promptly, and the appointee will serve the remainder of the predecessor’s term.
For a specific investment dispute, the First Instance constitutes a panel of three members selected from the pre-appointed list. The composition is explicitly designed to ensure balance and impartiality: one member is an EU national, one is Vietnamese, and one is a national of a third country, with the third-country member serving as the Chair of the panel.
(ii) Appellate Instance (Article 3.39)
The Appellate Instance under the ITS of EVIPA is also a permanent body, consisting of six members appointed by the EVIPA Committee. Similar to the First Instance, the composition ensures representation and impartiality, with two members from EU member states, two Vietnamese nationals, and two third-country nationals. If necessary, the EVIPA Committee may adjust the number of Appellate members, provided that nationality balance is maintained as in the First Instance. Appellate members serve a four-year term and may be reappointed once. To ensure institutional stability in the early implementation phase, three of the six members are randomly assigned six-year terms from the effective date of EVIPA. Vacancies must be filled immediately, with the successor serving the remainder of the predecessor’s term.
When hearing an appeal from the First Instance, the Appellate Instance forms a panel of three members selected from its own members. The composition mirrors that of the First Instance: one EU national, one Vietnamese, and one third-country national, with the third-country member acting as Chair of the panel. Both tiers of the ITS are organized as permanent bodies, while case-specific panels are formed only when a dispute arises, balancing professionalization with cost-efficiency.
Procedural Sequence, After consultation, mediation, or alternative measures fail, the investor may submit the case to the ITS. The case is referred to the First Instance to form a panel and proceed with litigation. Once the three-member panel is constituted, the parties are notified of procedural steps, including deadlines for submissions, counter-arguments, evidence presentation, hearings, and other procedures under the unified rules. The proceedings are conducted transparently and publicly, allowing participation of third parties with relevant interests. After reviewing arguments, evidence, and oral proceedings, the First Instance panel issues a binding decision, which may be appealed.
If a party disagrees with the First Instance decision, it may appeal to the Appellate Instance within the prescribed timeframe. The Appellate panel of three members reviews the entire or part of the First Instance award based on specific grounds, including: (i) errors in applying the law; (ii) manifest errors in evaluating evidence or interpreting facts; and (iii) procedural violations affecting the outcome. The Appellate panel has authority to uphold, modify, or annul the First Instance decision. Its decision is final and binding, without further appeal within the ITS framework of EVIPA. Both tiers operate according to pre-agreed procedural principles, ensuring transparency, fairness, and efficiency in investment dispute resolution.
4. Legal Nature of the ITS under EVIPA
The emergence of the ITS under EVIPA raises significant legal questions, particularly regarding its nature in relation to traditional investment arbitration and international courts. The design of a system combining permanency and arbitration features has generated two main academic viewpoints that warrant clarification. The first viewpoint argues that the ITS constitutes a permanent investment court with the full characteristics of a judicial body. The second emphasizes that, from a legal perspective, the ITS remains an enhanced investment arbitration mechanism. The following analysis examines the rationale behind each viewpoint while presenting the author’s perspective on the legal nature of the ITS.
4.1. Viewpoint One: ITS as an “Investment Court”
According to this perspective, the dispute resolution body under EVIPA represents a critical transformation from traditional investment arbitration to a judicial institution. The European Commission—the “architect” of the ITS—stresses that instead of resolving disputes through ad hoc arbitration chosen by the parties, EVIPA establishes a judicial body with two permanent tiers: a First Instance tribunal and an independent Appellate tribunal[8]. ITS “members” are appointed for fixed terms and adhere to ethical standards similar to those governing judges in public courts. This design aims to overcome limitations of traditional arbitration such as inconsistency, lack of transparency, and potential conflicts of interest by “judicializing” the investment dispute resolution process[9][10].
EU assessments are reinforced by official statements in other trade agreements. For example, the Joint Interpretative Declaration between the EU and Canada under CETA—a similar dispute resolution system—emphasizes that the investment court system is “completely separate from traditional investment arbitration” and is designed as an independent, permanent, and impartial judicial body, inspired by EU public judicial systems, member state courts, and international courts such as the ICJ and ECHR[11]. The Advocate General of the Court of Justice of the EU described the ITS as a “hybrid institution,” representing a compromise between arbitration and an international judicial body, reflecting a trend toward “institutionalization and judicialization” of investment dispute resolution, moving away from traditional arbitration toward a public judicial system[12].
These EU positions provide a solid foundation for scholars advocating that the ITS is not merely an enhanced arbitration mechanism but indeed a genuine international investment court. Hannes Lenk argues that the ITS is the product of “judicialization.” Establishing a fixed roster of members, applying a fixed-term appointment mechanism, and creating an independent appellate tier blur the arbitration character and bring the ITS closer to international courts like ICJ and ECHR[13]. Similarly, Vanina Sucharitkul (2021) emphasizes the difference in selection rights: unlike traditional arbitration where parties choose arbitrators, ITS members are appointed independently for fixed terms and do not depend on individual cases. Parties can only select tribunal members from the pre-established list, which is crucial to ensuring independence and impartiality[14].
Lucy M. Winnington-Ingram (2021) adds that the creation of a second-tier appellate mechanism is foundational to defining an investment court, as no prior international investment arbitration system allows a higher independent body to review awards. The application of ethical rules and appointment standards equivalent to judges further reinforces the argument that the ITS constitutes an “investment court” rather than merely “enhanced arbitration”[15].
In Vietnam, the trend of viewing the ITS as a court is recognized by several scholars. Ngo Van Hiep & Pham Thuy Dung (2021) note that EVIPA “does not use the international investment arbitration mechanism… but establishes a permanent body to resolve investment disputes as an investment court and sets procedural deadlines to resolve disputes promptly”[16]. From an organizational and legal standpoint, Nguyen Manh Dung & Dang Vu Minh Ha (2021) argue that ITS represents an institutional milestone in international investment law, as the organizational and procedural features in EVIPA reflect public authority functions, marking a shift from private dispute resolution to a public judicial model[17]. Similarly, Nguyen Thi Hanh (2023) describes the ITS as an “international investment court” because the panels comprise members appointed for fixed terms, a key feature that renders the system more court-like than a mere arbitration mechanism[18].
From the analysis and comparison of the arguments of the aforementioned scholars, several key reasons can be drawn to reinforce the view that ITS is a genuine investment court:
Firstly, ITS has a two-tier adjudicative structure and is permanent in nature, with a fixed list of members, operating on a long-term basis rather than being established ad hoc for each individual case;
Secondly, the judge appointment process is designed to ensure independence and impartiality, not depending on the separate will of the disputing parties as in the arbitration model;
Thirdly, ITS has an official appellate mechanism, ensuring the consistency of rulings and the development of case law – something that traditional arbitration cannot achieve;
Finally, the EU itself and the European Commission publicly acknowledge that ITS is a mechanism possessing the characteristics of an international court, established as part of the effort to comprehensively reform the existing ISDS system. Therefore, the view that ITS is a permanent investment court system – rather than arbitration – has a solid rationale and reflects a worthy approach in the context of reforming the international investment dispute resolution mechanism.
4.2. Perspective Considering ITS as “Enhanced” Investment Arbitration
In contrast to the view that ITS under EVIPA is a permanent investment court system, a significant number of scholars and international lawyers still assert that this mechanism, although appearing "quasi-judicial"[19], is in legal essence still a form of enhanced international investment arbitration. This perspective is built upon foundational elements: source of authority, arbitration procedure, form and enforcement of awards – characteristics that are more typical of arbitration than a judicial adjudicatory body.
Firstly, according to researchers Le Dang Khoa and Professor August Reinisch, the authority of the “Tribunal” under EVIPA originates from arbitration consent, not from inherent authority as in traditional international courts[20]. Each dispute arises only with the investor’s consent based on the dispute resolution clause in EVIPA – a form of arbitration agreement between the investor and the host State. This setup is similar to the mechanism provided in bilateral investment treaties (BITs). Moreover, ITS members are not permanent judges with independent adjudicatory authority in the traditional sense, but arbitrators selected from a roster and assigned per case. Thus, ITS lacks general jurisdiction and exists solely within the scope of a specific dispute – an important indicator distinguishing it from a court[21].
Secondly, the procedural rules of ITS, although improved to enhance transparency and professionalization, still retain the basic structure and logic of the international investment arbitration model. In his article, Nguyen Ba Binh refers to ITS as an Arbitration Tribunal and analyzes its procedures according to arbitration rules[22]. Consequently, prominent features of arbitration procedures are evident: claims arise from consent; the arbitral panel constructs and manages procedural rules; parties have discretion over the publicity of hearings; and the national civil procedural system, with all mandatory stages typical of court litigation, is not applied. Therefore, the procedural framework under EVIPA retains many characteristics of traditional investment arbitration.
Finally, the awards and enforcement mechanism of ITS have the form and effect of an arbitral award, not a judicial judgment. EVIPA uses the term “final award” to refer to the final decision of ITS – a concept familiar in arbitration law. In particular, the Agreement explicitly provides that these awards, for enforcement purposes, are considered arbitral awards under the 1958 New York Convention. This indicates that the legal nature of the award remains a product of international commercial arbitration, not a judicial judgment with independent enforceability like decisions of the International Court of Justice (ICJ) or the European Court of Human Rights (ECHR). Scholar August Reinisch has questioned: “if ITS were truly a judicial adjudicatory body, its decisions should be treated as judgments, not as arbitral awards”[23]. EVIPA’s choice of the international arbitration enforcement mechanism shows that ITS has not fully departed from the arbitration tradition.
The enforcement mechanism under EVIPA further reinforces the arbitral nature of ITS. A fundamental characteristic of a court is that its judgments can be enforced directly within the national legal system without recognition. In contrast, arbitral awards require recognition and enforcement by a national court. The EFILA (European Forum for Investment Law and Arbitration) expert group, in its 2016 Report A, noted that ITS is merely a “renaming” to appease public opinion, with its foundation still rooted in arbitration due to the enforcement issue[24]. ITS awards rely on the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Although EVIPA commits that awards will be enforced as if they were domestic judgments, Vietnam has reserved the application of this mechanism for five years from the Agreement’s entry into force[25]. Therefore, at present, EVIPA awards are treated as foreign arbitral awards and must be recognized by Vietnamese courts before enforcement. Author Le Thi Anh Nguyet (2020) notes that theoretically, ITS can issue a “beautiful arbitral award on paper,” but without an effective mechanism for compelling the State to pay compensation, the award is meaningless[26]. This demonstrates that ITS does not yet have an independent enforcement mechanism like a true court, remaining dependent on the international arbitration recognition system[27].
In summary, the majority of scholars support the view that ITS is an arbitration mechanism being enhanced to increase transparency and quality control of awards. Limiting the right to select arbitrators, establishing a fixed roster, and adding an appellate mechanism are significant technical reforms, but do not alter the legal essence of the arbitration framework. Disputes are still initiated by the investor against the State, adjudicated by a panel appointed for each case, and enforced under the international arbitration recognition mechanism. From this perspective, ITS is an “enhanced” investment arbitration model.
4.3. Personal Perspective – ITS as a “Next-Generation” Arbitration
From the author’s perspective, the investment dispute resolution mechanism under EVIPA still retains the nature of international investment arbitration, despite significant improvements in structure and procedure. Features such as the permanency of the arbitrator roster, the appellate mechanism, and transparency do not change the core nature of the method but only reflect an effort to enhance the legitimacy and efficiency of the arbitration mechanism. This assessment is reinforced through the author’s analysis of the fundamental legal characteristics of ITS under EVIPA, including the legal basis of adjudicatory authority, the form and legal effect of awards, and the rules of procedure.
Firstly, the legal basis for the authority of the “Tribunal” under EVIPA remains grounded in arbitration agreements – formed from international treaties and the consent of investors. This mechanism reflects a fundamental principle of international arbitration, namely the voluntariness and consent of the parties. Unlike national courts with inherent jurisdiction or established under domestic law, the “Tribunal” under EVIPA only has authority when the parties have agreed to dispute resolution, similar to traditional investment arbitration mechanisms.
Secondly, the form and legal effect of awards in ITS remain “arbitral awards” (final award), not judgments. EVIPA explicitly provides that these awards are enforceable under the 1958 New York Convention or the ICSID Convention, i.e., based on the recognition and enforcement mechanisms of international arbitration awards. From a critical perspective, if ITS were truly designed as an international court, the legal consequence would be that its awards should take the form of judgments, enforceable independently, without requiring recognition as in arbitration. EVIPA’s continued use of the term “award” rather than “judgment” is not merely a legislative technicality but also reflects a clear inheritance of the traditional investment arbitration model, thereby affirming that ITS’s legal nature remains within the framework of international arbitration, despite certain improvements.
Finally, EVIPA’s use of the term “Tribunal” instead of “Court” throughout the agreement, together with provisions allowing the parties to choose international arbitration rules such as UNCITRAL or ICSID, further reinforces the argument that the mechanism is shaped as an enhanced arbitral forum, rather than a judicial institution in the traditional sense of public international law. This approach demonstrates that EVIPA deliberately builds upon the legal foundation of international investment arbitration while adding more structured and controlled elements – such as a permanent adjudication structure, codes of conduct, and an appellate mechanism – to enhance transparency, increase reliability, and limit potential abuse in the dispute resolution process.
From a personal perspective, the author considers ITS under EVIPA to be a “next-generation” investment arbitration model – that is, a mechanism operating within the legal framework of international arbitration but significantly refined and institutionalized in terms of structure and procedure. The term “next-generation” is adopted from the concept of “next-generation Free Trade Agreements (FTAs)” to emphasize innovation, comprehensiveness, and alignment with higher standards of transparency, accountability, and public interest protection. In next-generation FTAs, designing a dispute resolution mechanism with clear, stable, and transparent institutional features is fully reasonable and consistent with the overall objectives of the Agreement.
From a research standpoint, defining ITS as a next-generation investment arbitration helps the author establish a clear direction for subsequent arguments regarding domestic implementation. Based on establishing the legal nature of ITS as arbitration rather than a court, the author argues that Vietnam’s domestic implementation obligations should also be fulfilled through arbitration law rather than court law. Dispute resolution may take place in various adjudicatory institutions, but when the mechanism’s nature is arbitration, the national legal system must accurately reflect this in legislative design. Choosing the appropriate legal instrument is not only technically significant but also crucial for ensuring compatibility in implementing international commitments such as EVIPA.
5.Assessment of the Feasibility of Domesticating the ITS Mechanism from EVIPA into Vietnam’s Arbitration Legal System
During the implementation of EVIPA, an important question arises for member states: Is it necessary and reasonable to domesticate the ITS mechanism into the national legal system for investment dispute resolution? This question stems from the requirement to comply with international commitments, particularly the obligation of domestic implementation—that is, transforming the provisions of an international treaty into national law to ensure applicability and enforceability. For Vietnam, the issue is whether the provisions on the ITS mechanism in EVIPA should—and can—be incorporated into the 2010 Law on Commercial Arbitration (LCA). According to the author, integrating the distinctive elements of ITS into the domestic commercial arbitration system requires careful consideration, including the legal characteristics of different types of disputes and the differences in function, objectives, and design principles between commercial arbitration and investment arbitration. The following is a detailed analysis of three main reasons why the domestic implementation of the ITS mechanism into the current LCA may not be appropriate within the existing Vietnamese legal context.
First, the distinction between commercial arbitration and investment arbitration.
The ITS mechanism in EVIPA is specifically designed for disputes between foreign investors and the host state, falling within the domain of international investment law, with higher requirements for legitimacy, transparency, and the balancing of public–private interests. In contrast, Vietnam’s LCA primarily governs disputes between private commercial entities, which are voluntary, expeditious, and cost-effective. Imposing elements such as a two-tier system, permanent organization, or a fixed list of members onto commercial arbitration would undermine the core criteria that commercial arbitration pursues, resulting in legislative design conflicts. This would not only reduce the efficiency of resolving commercial disputes but also complicate procedures, increase costs, and diminish the attractiveness of commercial arbitration in business practice.
Second, the risk of conflict with the principle of party autonomy in commercial arbitration.
One of the fundamental principles of the 2010 LCA is party autonomy, which allows parties to freely choose the form of arbitration (institutional or ad hoc), arbitrators, applicable law, venue, and procedural language. Arbitration proceedings are private and confidential. This flexibility and confidentiality are key advantages of commercial arbitration over court litigation, particularly in dynamic business environments where parties wish to control dispute resolution while protecting sensitive information. However, the ITS mechanism under EVIPA is designed in the opposite manner: Tribunal members are pre-appointed, parties cannot select arbitrators, a mandatory two-tier adjudication system applies, and proceedings are public with third-party participation. This creates a core conflict: while the LCA grants parties control over nearly the entire arbitration process, ITS restricts this autonomy through institutionalized designs. This opposition poses legislative challenges if ITS were to be integrated into the LCA, and it would change the fundamental nature of commercial arbitration—from a party-driven mechanism to a prescriptive, standardized system. Over the long term, this could undermine confidence in arbitration and push parties toward traditional courts or more flexible international arbitration centers. Therefore, integrating ITS elements into the LCA must be approached cautiously, avoiding the blurring of boundaries between private arbitration and public adjudication, and, importantly, preserving party autonomy—the legal cornerstone of modern commercial arbitration.
Third, the experience of EVIPA member states shows that none have domestically implemented the ITS mechanism into national law.
From a comparative legislative perspective, EU member states—even as co-creators of the ITS model in EVIPA—have not incorporated the two-tier system or a fixed list of arbitrators into their national commercial arbitration laws. In Germany, France, and the Netherlands, commercial arbitration remains governed by the UNCITRAL Model Law or national regulations, with a single-tier system, final awards, and party freedom in choosing arbitrators. Notably, Canada, a CETA signatory with a similar ITS mechanism, also does not integrate ITS into domestic commercial arbitration law, regulating it instead under a separate legal framework. This demonstrates a clear trend of separating investment arbitration from commercial arbitration in modern legal systems.
From the above international legislative practices, it is clear that integrating the ITS model into Vietnam’s LCA is inappropriate because it would compromise the flexibility, efficiency, and business-friendly nature—core values of domestic commercial arbitration. Instead, Vietnam could develop an independent legal framework for international investment disputes through a specialized law or a dedicated chapter within the Investment Law or the Arbitration Law. This approach allows for legal stratification between commercial arbitration (private) and international investment arbitration (public). Consequently, the Vietnamese legal system would comply with FTA commitments, such as EVIPA, while preserving the simplicity, efficiency, and party autonomy that are central to domestic commercial arbitration.
Vietnam may draw on the experience of countries that have successfully established specialized legal frameworks for international arbitration, such as Australia and Singapore. Australia enacted the International Arbitration Act in 1974, continuously updating it in 2010, 2015, and 2018. The Act specifically governs the recognition and enforcement of foreign arbitral awards and regulates international commercial arbitration in Australia. Significantly, it directly incorporates the UNCITRAL Model Law and the 1958 New York Convention, creating a unified, transparent legal framework aligned with international arbitration standards. Similarly, Singapore has developed an independent, modern legal system for international arbitration, particularly in response to increasing cross-border investment flows. Singapore’s International Arbitration Act (IAA) was enacted in 1994 and most recently amended in 2021. Unlike the domestic Arbitration Act, which applies only to domestic commercial disputes, the IAA specifically governs international arbitration disputes arising in or connected with Singapore, including international investment disputes where a valid arbitration agreement exists. The IAA applies key principles of the UNCITRAL Model Law (1985, revised 2006) and directly recognizes the New York Convention, facilitating the recognition and enforcement of international arbitral awards in Singapore.
Vietnam may draw on the experience of countries that have successfully established specialized legal frameworks for international arbitration, such as Australia and Singapore. Australia enacted the International Arbitration Act in 1974, continuously updating it in 2010, 2015, and 2018. The Act specifically governs the recognition and enforcement of foreign arbitral awards and regulates international commercial arbitration in Australia. Significantly, it directly incorporates the UNCITRAL Model Law and the 1958 New York Convention, creating a unified, transparent legal framework aligned with international arbitration standards. Similarly, Singapore has developed an independent, modern legal system for international arbitration, particularly in response to increasing cross-border investment flows. Singapore’s International Arbitration Act (IAA) was enacted in 1994 and most recently amended in 2021. Unlike the domestic Arbitration Act, which applies only to domestic commercial disputes, the IAA specifically governs international arbitration disputes arising in or connected with Singapore, including international investment disputes where a valid arbitration agreement exists. The IAA applies key principles of the UNCITRAL Model Law (1985, revised 2006) and directly recognizes the New York Convention, facilitating the recognition and enforcement of international arbitral awards in Singapore.Therefore, in the near future, the LCA can serve as an effective domestic legal basis for ISDS resolution. To achieve this, the author proposes renaming the 2010 LCA as the “Arbitration Law” and expanding its scope to cover two main areas:
(i) Commercial arbitration—resolving disputes arising from purely commercial activities between business entities. Existing deficiencies in the current LCA should be revised and improved. During the revision process, experiences from EVIPA and other “new-generation” FTAs may be selectively incorporated to ensure simplicity, flexibility, and efficiency—the core values of commercial arbitration. This separation prevents domestic businesses from being burdened by overly complex rules suited only for international investment arbitration.
(ii) International investment arbitration—resolving disputes between foreign investors and the host state, particularly where no relevant international treaty exists or where parties have specific arbitration agreements. Clear distinction of this type of dispute allows for an ISDS mechanism consistent with modern international standards. Vietnam can flexibly apply higher standards of transparency, ethics, and two-tier adjudication as in EVIPA for international investment arbitration without affecting the simplicity, speed, and flexibility of commercial arbitration. Moreover, this approach enables Vietnam to handle international investment disputes even in the absence of an investment treaty with the relevant country, reducing legal risk and enhancing national interest protection.
In summary, revising and supplementing the 2020 LCA with these two separate components would make Vietnam’s arbitration legal system clearer and more transparent while effectively meeting the practical requirements of international integration, particularly as Vietnam increasingly participates in new-generation FTAs with ISDS mechanisms.
6.
Conclusion
The Investment Tribunal System (ITS) under the EU–Vietnam Investment Protection Agreement (EVIPA) is a typical manifestation of the current trend of reforming the Investor–State Dispute Settlement (ISDS) mechanism, featuring a two-tier adjudicatory model and a more institutionalized organizational structure. Academic debates over the legal nature of the ITS indicate that this mechanism lies at the boundary between traditional investment arbitration and an international court—a “hybrid” mechanism that combines elements of both form and function. However, based on theoretical and practical analysis, this paper affirms that the ITS still retains the nature of a new-generation international investment arbitration mechanism, improved to better meet the requirements of transparency, efficiency, and the balance of interests in the context of globalization. As a member state implementing the EVIPA, Vietnam needs to establish a clear position on the legal nature of the ITS, proactively improve its institutional framework, and select an appropriate method of domestic incorporation. This will create a foundation for Vietnam to develop an independent and modern investment dispute settlement system capable of deep integration into the emerging international legal order.
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20.Hannes Lenk, An Investment Court System for the New Generation of EU Trade and Investment Agreements: A Discussion of the Free Trade Agreement with Vietnam and the Comprehensive Economic and Trade Agreement with Canada, https://www.europeanpapers.eu/europeanforum/investment-court-system-new-generation-eu-trade-and-investment-agreements#:~:text=Commission%20has%20seized%20the%20opportunity,risks%20a%20negative%20opinion%20
21.Guillermo Schumann BarraGán, The investment arbitration in the new generation free trade agreements: A national analysis from the Perspective of the right to an effective judicial remedy, e-revistas.uc3m.es;
22.Eias, Innovative but Insufficient? The Investment Court System (ICS) in the EU-Vietnam Investment Protection Agreement (EVIPA), (17-08-2021), https://eias.org/publications/op-ed/innovative-but-insufficient-the-investment-court-system-ics-in-the-eu-vietnam-investment-protection-agreement-evipa/#:~:text=The%20EVIPA%20is%20viewed%20by,to%20engage%20with%20a%20question
23.Iclg, Investor-State Arbitration Laws and Regulations: The impact of EU law on ISDS, Intra-EU BITS, the ECT and the MIC 2025, (20-11-2024), https://iclg.com/practice-areas/investor-state-arbitration-laws-and-regulations/02-the-impact-of-eu-law-on-isds-intra-eu-bits-the-ect-and-the-mic
24.August Reinisch, "Will the EU’s Proposal Concerning an Investment Court System for CETA and TTIP Lead to Enforceable Awards?—The Limits of Modifying the ICSID Convention and the Nature of Investment Arbitration" Journal of International Economic Law, Oxford University Press, vol. 19(4), pages 761-786 (2016); Link xem bài viết : https://ideas.repec.org/a/oup/jieclw/v19y2016i4p761-786..htm
* Master,s degree Vu Thi Hoa Nhu – Lecturer, Faculty of Economic Law, Hanoi Law University. Approved for publication 15/5/2025. Email: vuhoanhu@gmail.com
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[2]Dinh Cong Tuan, The Lisbon Treaty and the Process of European Integration, Communist Review (22-04-2011 10:42), https://tapchicongsan.org.vn/web/guest/nghien-cu/-/2018/2119/hiep-uoc-li-xbon-voi-tien-trinh-nhat-the-hoa-chau-au.aspx?utm
https://tapchicongsan.org.vn/web/guest/nghien-cu/-/2018/2119/hiep-uoc-li-xbon-voi-tien-trinh-nhat-the-hoa-chau-au.aspx?utm
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[4]
Tran Thi Hai An, Dispute Resolution Mechanism between Foreign Investors and the State of Vietnam under the EU–Vietnam Investment Protection Agreement, PhD Thesis in Law, Academy of Social Sciences (2023), p.102
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[6]
See translation at : https://trungtamwto.vn/chuyen-de/8445-van-kien-hiep-dinh-evfta-evipa-va-cac-tom-tat-tung-chuong;
[7] See Article 3.3 of the EVIPA
[8] European Commision, The Investment Court System, https://trade.ec.europa.eu/access-to-markets/en/content/ investment-courtsystem#:~:text=Disputes%20between%20foreign%20investors%20and,submitted%20to% 20strict% 20ethical%20rules
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[10] Eias, tlđd, 10
[11] Guillermo Schumann BarraGán, The investment arbitration in the new generation free trade agreements: A national analysis from the Perspective of the right to an effective judicial remedy, (1-10-2020), e-revistas.uc3m.ese-revistas.uc3m.es
[12] Guillermo Schumann BarraGán , tlđd, 14
[13] Hannes Lenk, tlđd, 8
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[22]
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[23] Guillermo Schumann BarraGán , cited documents, 14
[24] Dr. Nikos Lavranos LLM- Secretary General of EFILA, The Shortcomings of the Proposal for an “International Court System”, (2-2-2016) , https://efilablog.org/2016/02/02/the-shortcomings-of-the-proposal-for-an-international-court-system-ics/#:~:text=8,the%20recognition%20and%20enforcement%20of
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[26]Le Thi Anh Nguyet, Enterprises Will Be Easier to Claim Compensation under EVIPA, Saigon Times (20-06-2020), https://thesaigontimes.vn/doanh-nghiep-se-de-doi-boi-thuong-hon-trong-evipa/#:~:text=Thông%20qua%20EVIPA%2C%20doanh%20nghiệp,sẽ%20bớt%20được%20gánh%20lo
[27] Iclg, Investor-State Arbitration Laws and Regulations: The impact of EU law on ISDS, Intra- EU BITS, the ECT and the MIC 2025, (20-11-2024), https://iclg.com/practice-areas/investor-state-arbitration-laws-and-regulations/02-the-impact-of-eu-law-on-isds-intra-eu-bits-the-ect-and-the-mic, truy cập ngày 20/4/2025
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[29] International Arbitration, International Arbitration in Australia: Legal and Institutional Framework (22-03-2021), https://www.international-arbitration-attorney.com/vi/international-arbitration-in-australia-legal-and-institutional-framework/?utm
