Law 150 Opens VIFC Court to Foreign Judges and Foreign Law

Vietnam's new International Financial Centre now has two dispute resolution bodies. The International Arbitration Centre (IAC), established by Decree 328/2025/NĐ-CP, is a private arbitral institution — already covered in this publication. The Specialised Court is different in kind: a state judicial body, created by Law No. 150/2025/QH15, passed by the National Assembly on 11 December 2025 and effective 1 January 2026. It carries first-instance and appellate authority, can seat foreign judges, and may apply foreign law — none of which is normal in Vietnam's court system. The forum selection decision between the two bodies will shape how IFC members structure dispute resolution clauses for years.

What the Law Creates#

The Specialised Court is a state court with jurisdiction over commercial and investment disputes arising from activities within the VIFC. The jurisdictional gate is specific: at least one party must be an IFC member. The government's representative to the National Assembly's 10th session confirmed the court is not designed to compete with the People's Court system — scope expansion may come later, but the current mandate is narrow.

The court operates at both first-instance and appellate levels internally, with an independence mechanism between levels to be detailed in Rules of Operation not yet published as of this writing. That internal appellate structure distinguishes it from arbitration, where finality is the default and annulment proceedings go to a separate court.

The presiding judge presenting the draft described the enacted law as a "preliminary foundation" to be refined through practice — an unusual public acknowledgment of developmental intent from the bench, and a useful signal to practitioners that interpretive certainty will build incrementally, not on day one.

Foreign Judges: The Capability Gap Argument#

Article 10.2 makes foreign practitioners eligible to serve as judges. Qualification criteria — covering reputation, ethics, and professional standards — will be developed by the Chief Justice of the Supreme People's Court and submitted to the President for appointment. Court clerks may also be drawn from outside the existing civil servant pool.

The rationale stated during drafting was practical: Vietnam's domestic judiciary has limited exposure to common law adjudication, and foreign judges fill that gap immediately while providing Vietnamese judges and clerks a learning environment. This is an honest framing of a real structural challenge. Vietnam's civil law system has no doctrine of binding precedent — only persuasive precedents — and the presiding judge presenting the draft acknowledged the "significant gap between common law and the domestic legal system" as the central drafting difficulty.

As of May 2026, no foreign judges had been publicly named. The appointment process depends on the qualification criteria the Chief Justice has yet to publish, so the court's first bench composition remains unknown.

Foreign Law Application: The Rules and the Gap#

The law's departure from standard Vietnamese court practice is most pronounced on governing law. Under Articles 5.2(a) and 5.2(c), parties may apply:

• Foreign law
• International commercial customs
• International treaties to which Vietnam is not a signatory

That last point matters. Standard Vietnamese private international law limits treaty application to instruments Vietnam has ratified. Allowing non-signatory treaties gives VIFC parties access to instruments like UNIDROIT Principles or ICC Uniform Rules without requiring Vietnam's formal accession.

One hard exception applies to real estate. Article 5.2(c) requires lex rei sitae for disputes involving ownership rights, other real property rights, leasing, or real estate used as collateral. Whatever law the parties choose, Vietnamese law governs if the dispute touches property rights in Vietnam. This is consistent with international norms but worth flagging explicitly for deals structured with Vietnamese real estate as security.

The "Public Order" Problem#

Article 6.3 limits foreign law application: it must not contravene Vietnam's "public order." The problem, flagged in published practitioner analysis of the law, is that this term is undefined — both in Law 150 and in Vietnamese legislation generally. The closest statutory concept, "fundamental principles of Vietnamese law" in Civil Code Article 670.1, is a distinct formulation that may be interpreted differently by the court.

This is not a theoretical concern. In practice, the public order carve-out gives the court discretion to decline foreign law application in any case where it determines a conflict exists — and without definitional guidance, that determination is unpredictable. International parties accustomed to the DIFC Courts or ADGM Courts, where the public policy exception is constrained by decades of common law authority, should treat this as an open risk until the Specialised Court develops its own interpretive record.

The Forum Selection Decision#

VIFC members will now have three dispute resolution options for commercial and investment disputes: the Specialised Court, the IAC, and international arbitration outside Vietnam. The choice turns on three variables: enforcement geography, appellate preference, and foreign law certainty.

IAC (Decree 328/2025/NĐ-CP)#

The IAC is a private arbitral body. Parties must agree to arbitration by contract. Resolution 222/2025/QH15 Article 30 permits waiver of the right to seek court annulment of IAC awards in Vietnamese courts — a strong finality mechanism that the Decree 328 explainer covers in detail. Critically, IAC awards are enforceable under the New York Convention: Vietnam is a signatory, and that gives cross-border parties 170+ jurisdictions in which to pursue recognition.

Specialised Court (Law 150/2025/QH15)#

The Specialised Court carries court enforcement authority domestically — its judgments are court orders, not awards, and enforcement inside Vietnam proceeds accordingly. For disputes where the counterparty's assets are primarily in Vietnam, that is a material advantage over an arbitral award that still requires a Vietnamese court to recognize it.

Internationally, the picture reverses. Specialised Court judgments rely on bilateral enforcement treaties or judicial comity — not the New York Convention. Vietnam's bilateral treaty network for civil judgment enforcement is limited. Parties seeking cross-border enforcement will face jurisdiction-by-jurisdiction assessment, with no default multilateral framework. This distinction should be explicit in any dispute resolution clause that anticipates international asset recovery.

The court also provides appellate review within its own structure, which arbitration does not. For disputes where parties value the ability to challenge a first-instance outcome on the merits — rather than on the narrow grounds available to annul an arbitral award — the Specialised Court's internal appellate tier is a clear advantage.

Practical Guidance for Drafting Clauses#

Neither forum is uniformly superior. Transactions with Vietnamese-domiciled counterparties and Vietnam-sited assets may favor the Specialised Court; transactions where international enforcement is the priority should default to the IAC or international arbitration with a seat in an established jurisdiction.

Comparison with DIFC and ADGM Courts#

The government's representative to the National Assembly's 10th session explicitly cited Vietnam's ambition to attract dispute resolution business from Singapore and Dubai, and the drafting process studied DIFC Courts and ADGM Courts directly. The structural parallels are clear: common law courts within civil law jurisdictions, foreign judge eligibility, and — anticipated but not yet confirmed by the published Rules of Operation — English-language proceedings.

The gap is the enforcement network. DIFC Courts operate under judicial comity arrangements with the UK and enforcement agreements across more than two dozen jurisdictions, accumulated over two decades of operation. Vietnam's Specialised Court launches without any comparable network. That gap will narrow only as the court operates and Vietnam negotiates bilateral arrangements — a process measured in years, not months.

The comparison with the AIFC Court in Astana, Kazakhstan, is also instructive. The AIFC Court launched in 2018 with a similar model — foreign judges, English law, common law procedure — and its enforcement profile has improved as its caseload has grown. Vietnam's trajectory will depend on how quickly the court generates published decisions and how aggressively the government pursues bilateral recognition agreements.

What Remains Unsettled#

Four material questions lack published answers as of May 2026:

1. Rules of Operation — the internal governance document for the court, including the independence mechanism between first-instance and appellate levels, has not been published. Until it is, procedural practice is uncertain.
2. Foreign judge appointments — the qualification criteria have not been issued, and no appointments have been announced. The court cannot fully operationalize its international mandate without them.
3. Exclusion list — the complete scope of matters outside the court's jurisdiction has not been fully analyzed in publicly available secondary sources. Practitioners should review the full text of Law 150/2025/QH15 directly before assuming the court has jurisdiction over a given dispute type.
4. "Public order" definition — as noted above, this will be defined by the court through its decisions rather than by the legislature. Early decisions will be closely watched.

What Comes Next#

The Specialised Court is operational in legal terms — Law 150 is in force. But operationally, the critical milestones are the Rules of Operation and the first foreign judge appointments. Watch for those instruments in the second half of 2026; they will determine whether the court can hear substantive cases with international parties before year-end.

For VIFC members drafting new agreements now, the conservative approach is to include a tiered clause: negotiation, then IAC arbitration, with an explicit seat and governing law selection. The Specialised Court becomes more attractive as its enforcement network and interpretive record develop. Firms that want to test the court early — particularly those with Vietnam-sited assets — should take specialist legal advice on the public order risk before submitting to its jurisdiction on foreign law grounds.

The court's first decisions will be the real measure of whether Law 150's ambition translates into an institution that international parties trust.

This article is based on published analyses of Law No. 150/2025/QH15 and National Assembly debate reporting. The full official gazette text should be consulted for any transactional purpose. We will update this article as the Rules of Operation and first judicial appointments are published.