There is undoubted the vital role of foreign investment in oil and gas projects in Vietnam because of the lack of supply capital and technological know-how nationally. Inadvertently, participation of foreign companies can increase risks owing to inter alia differences in the level of technical knowledge between domestic and foreign contractors, different due process standards and environmental impact assessment regimes which can impede the success of projects. Indeed, this concern is vividly demonstrated via recent disputes between foreign partners and the national oil company – PVN as on behalf of Vietnamese government to manage the economic rights on petroleum resources. Furthermore, in the near future when many significant complex projects with the participation of multi-level parties are launched and operated, the risk regarding international investment disputes is forecasted to increase sharply.
With reference to relevant case, the paper initial provides the summary of recent dispute in oil and gas project in Vietnam which was finally settled by international arbitration mechanism. It then offers a critical analysis of some of the critical issues, such as the concept of Investor-State dispute prescribed in Vietnam regulations, the personal and subject matter jurisdiction of international arbitration in relation with this case, the typical ettle such disputes in domestic laws and international arrangements which Vietnam has entered into, and the source of prospective conflicts. It is shown that Vietnam has come a long way in providing attractive opportunities for investors in the oil and gas sector; however, there are still inherent gaps and lack of coherence between the legislation and State’s commitment in particular projects. Therefore, the identification of dispute risks in advance, choosing the optimal solutions to control, prevent such risks in accordance with laws and regulations and international well-known practices are urged.
Reference: Nguyen, T.H. Dispute settlement in petroleum contracts in Vietnam. Academic symposium “Investor-State dispute settlement”. Ho Chi Minh City University of Law(24 May 2018)
About authors: Ha Nguyen (LLB, LLM), a partner of Huy&Partners LLC., is interested in cross-border trade and investment, energy, infrastructure construction, competition and State-owned enterprises. He has participated in energy megastructure projects in Vietnam and other ASEAN countries (Nghi Son Refinery & Petrochemicals Plant, Song Hau 1 coal-fired power plant, petroleum production platforms in Vietnam offshore, Petronas RAPID project, Southern Johor, Malaysia) and airport projects in Vietnam (T3 Terminal – Tan Son Nhat Airport, Long Thanh international airport (phase 1)). He has also published a few articles on Vietnam oil and gas sector, renewable energy, State-owned enterprises privitisation and competition.
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