New resolution on the mechanism for settling international investment disputes: Which provisions may become bottlenecks in implementation?

In the context of deepening international economic integration, Vietnam has signed and participated in many investment promotion and protection agreements, new-generation free trade agreements and high commitments on foreign investor protection. By the end of 2025, Vietnam has been responding to more than 30 lawsuits initiated by foreign investors. Accordingly, on April 23, 2026, the National Assembly passed Resolution No. 20/2026/QH16 on coordination mechanisms and specific policies to improve the effectiveness of international investment dispute prevention and settlement ("Resolution 20/2026"). However, despite the Resolution’s new and progressive provisions, several bottlenecks remain unresolved.

Resolution 20/2026 marks a breakthrough step in efforts to improve the institution of international investment dispute prevention and settlement in Vietnam.

Highlights of Resolution 20/2026

Resolution 20/2026 marks a breakthrough step in efforts to improve the institution of international investment dispute prevention and settlement in Vietnam. The first bright spot is the clarification and expansion of the jurisdiction of the "Presiding Agency", covering the agencies conducting proceedings in case the complained measure originates from the system judiciary.[1] In addition, the resolution establishes the "Foreign Investor Feedback Mechanism", which operates as an early warning system to monitor, assess and resolve risks from the infancy stage before escalating into legal disputes.[2] At the same time, the process of developing the Mediation Plan is codified in detail, associated with the prerequisite that the foreign investor must commit to waiving all the right to initiate a lawsuit related to the case.[3] In terms of resources, the Resolution offers unprecedented specific remuneration policies, with financial support of up to 300% of the current salary for personnel directly involved in handling cases.[4] Notably, the mechanism of exclusion, exemption or reduction of responsibility is also established to protect the official duty enforcement team if they comply with the correct process and do not have personal interests, even if the final result arises a risk of damage.[5] Finally, the establishment of specialized institutions such as the High-level Interdisciplinary Steering Committee and the Center for Prevention and Resolution of International Investment Disputes contributes to creating a synchronous directing and operating apparatus.[6] These comprehensive reforms are of strategic significance, not only improving the capacity of the state agency system to proactively defend against global legal risks, but also creating a solid protection corridor, thereby maximizing the preservation of the legitimate rights and interests of the country in the integration process.

Potential bottlenecks that may cause stagnation

Dependence on the Prime Minister's decision to determine the "Presiding Authority"

Resolution No. 20/2026 still depends on the Prime Minister's decision to determine the presiding agency for complex cases. Although the scope of regulation has been expanded to include agencies conducting proceedings, in case the lawsuit involves two or more agencies and these agencies cannot agree on their own, the process is still to notify the legal representative agency to report to the Prime Minister for decision.[7] The absence of rigid quantitative criteria (such as delimitation based on actual damage rates or the final decision-making body) to automatically assign the Presiding Authority can lead to an extrusion of responsibility, delaying the response process in the "golden moment" of the lawsuit.

The high-tech early warning system has not been established

The document has not yet established an early warning institution for high-tech application. Although the Resolution has noted a step forward in establishing a "Foreign Investor Feedback Mechanism"[8] to receive, synthesize and track feedback and complaints to prevent disputes, this mechanism still seems to be manual and traditional. The Resolution does not have regulations guiding or mandating the application of modern technologies such as Artificial Intelligence (AI) or Big Data to automatically analyze data, identify and warn early of potential legal risks from complex investment agreements.

Source: Vietnam Economic & Financial Review

Regulations on international coordination networks are still not really clear

The regulations on international coordination networks in dispute settlement are still not really clear. The content of the Resolution mainly focuses on the delineation of responsibilities and "internal" coordination mechanisms among state agencies in Vietnam, including the presiding agency, the legal representative agency and relevant ministries, sectors and localities.[9] However, the document lacks specific mechanisms to mobilize and leverage resources from networks outside the territory, such as diplomatic missions, investment promotion agencies, or Vietnamese professional associations abroad in gathering legal intelligence or proactively contacting investors.

The "arbitrary" nature of the coordination mechanism has not been thoroughly resolved

The "discretionary" nature of the coordination mechanism has not been thoroughly resolved due to the lack of strong enough supervisory sanctions. Although the Resolution requires relevant agencies, organizations and individuals to be responsible for providing adequate, accurate and timely information, documents and evidences,[10] it  does not clearly stipulate specific handling measures if these agencies are delayed or do not cooperate.  in addition to the principle of "responsible for the consequences arising" is general.[11] The forms of handling are still mainly based on internal administrative discipline, lacking a measure of effective coordination that is strong enough to enforce smooth cooperation between ministries and agencies in the context of international arbitration cases always having extremely strict procedural time requirements.

Conclusion

Resolution No. 20/2026 marks an important step forward in efforts to institutionalize Vietnam's legal response capacity in the face of increasing pressure from new-generation investment agreements. However, there is still a significant gap between policy ambitions and actual operability. These legal gaps are not a reason to be afraid but a signal to be able to prepare more proactively.