VIETNAM Law and Practice Contributed by: Tony Nguyen, Ta Phuong Thao, Nguyen Minh Duc, Nguyen Phuong Anh, Nguyen Duc Tai and Truong Que Chi, EPLegal
In addition, Article 9 (1)(dd) of the Law on Lawyers prohibits a lawyer from demanding or receiving any sum beyond what has been agreed with the client, so any success-based fee arrangement should be docu- mented clearly and expressly in writing. 5.4 Insurance Insurance coverage specifically for litigation, arbitra- tion and ADR costs is not yet well developed in Viet- nam. In particular, products such as after-the-event insurance or legal expenses insurance are not com- monly available in the domestic market. That said, certain dispute-related costs or liabilities may be covered indirectly under broader insurance policies, depending on the wording and bespoke cover may be available in large cross-border matters on a case- by-case basis. Separately, Article 40 (6) of Law on Lawyers requires law practice organisations to maintain professional liability insurance, but this is different from insurance covering a party’s own litigation, arbitration or ADR costs. 5.5 Costs Dispute resolution costs may be recovered from the other side in Vietnam, but the position depends on the forum and the type of cost claimed. In arbitration, cost recovery is generally available. Arbitration In arbitration, pursuant to Article 61 (1)(h) of the LCA, the arbitral award must state the allocation of arbitra- tion costs and other related expenses. Under Article 36 of the VIAC Rules, the tribunal may allocate arbi- tration fees and may also order one party to pay all or part of the other party’s legal costs and reasonable expenses. Recovery is therefore possible, but remains subject to the tribunal’s discretion unless the parties have agreed otherwise. Litigation In court litigation, cost recovery is narrower and largely statutory. Vietnamese procedural law does not have a general “costs follow the event” rule equivalent to that found in common law jurisdictions. Court fees are subject to Resolution 326 and parties generally bear their own legal representation costs unless the court
orders otherwise. The practical effect is that Vietnam- ese litigation is often less efficient as a costs recovery mechanism than international arbitration, which is one reason why well-advised commercial parties increas- ingly choose arbitration for significant disputes. Meditation Decree No 22/2017/ND-CP on Commercial Mediation does not contain a specific provision governing how mediation costs are to be allocated between the par- ties. At the institutional level, Article 14 of the VMC Media- tion Rules provides the most detailed and practically relevant framework for mediation costs in Vietnam. Under Article 14 (1), mediation costs comprise three elements: a registration fee, the mediator’s remuner- ation and the Centre’s administrative fees. In addi- tion, Article 14 (2) identifies two categories of arising expenses: the mediator’s travel, accommodation and related costs and any further expenses arising from specific requests made by the parties. Article 14 (3) of the VMC Rules establishes the default cost allocation position. Unless the parties agree oth- erwise, the mediator’s remuneration, the Centre’s administrative fees and the mediator’s travel and accommodation costs are shared equally between the parties. However, expenses that arise specifically from a request made by one party, under Article 14 (2) (b), are borne exclusively by that requesting party. This means that a party that requests additional services, such as special translation arrangements or particular logistical support, pays for those extras alone. 5.6 Assessment of Costs Factors Considered When Awarding Costs Arbitration The statutory and institutional framework for cost assessment in Vietnamese arbitration is deliberately sparse. Article 61 (1)(h) of the LCA requires the arbitral award to address the allocation of arbitration costs and other related expenses, establishing that costs must be dealt with in the award, but prescribing noth- ing about how they should be assessed.
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