On 17 January 2026, the Conference entitled “The 2025 Construction Law: Key Issues in Construction Contracts and Legal Risk Management” was successfully held in Ho Chi Minh City. The event attracted more than 300 in-person participants and served as a forum bringing together policymakers, lawyers, arbitrators, and leading construction corporations.
The Conference was jointly organized by three reputable institutions: the Vietnam International Arbitration Centre (VIAC), the Vietnam Society of Construction Law (SCLVN), and Ho Chi Minh City University of Technology – Vietnam National University HCMC.
The Conference comprised two panel sessions:
- Session 1: Cost management and variations in construction contracts
- Session 2: Dispute prevention and dispute resolution in the construction sector – Liquidated Damages and dispute resolution mechanisms
Session 2 was moderated by Mr. Nguyen Manh Dung, Arbitrator and Lawyer, Director of ADR Vietnam Chambers, Deputy Director of the Vietnam Institute for Arbitration Research and Training (VIART – under VIAC), with the participation of leading experts:
- Mr. Nguyen Bac Thuy (Head of the Division of Construction Economics and Contracts, Department of Construction Economics and Investment Management, Ministry of Construction; VIAC Arbitrator);
- Dr. Lawyer Nguyen Trung Nam (Founding and Managing Partner of EP Legal; Deputy Director of the Vietnam Mediation Center (VMC) under VIAC; VIAC Arbitrator); and
- Ms. Tong Thi Thu Thao, Lawyer (Member of the Inspection Committee of SCLVN; Head of Legal and Contract Management, Ricon Construction Corporation).
The session provided an in-depth discussion of key topics, focusing on the groundbreaking changes introduced by the 2025 Construction Law:
1. Resolving the long-standing debate on the applicable law and the legal status of Liquidated Damages (LD) in construction disputes in Vietnam
- Formal codification of Liquidated Damages: Previously, in construction disputes, the mechanism of “liquidated damages” was often misunderstood or rejected due to conflicts between the Civil Code (which requires proof of actual damages) and the Commercial Law (which caps penalties at 8%). However, Article 86 of the 2025 Construction Law (effective from 1 July 2026) allows parties to agree in advance on a predetermined amount of damages calculated per day or as a percentage. This provision addresses practical issues and harmonizes interests in projects involving foreign contractors and domestic employers, who are already familiar with international practices.
- Practical significance: The statutory recognition of LD relieves parties from the burden of proving actual damages—traditionally a major bottleneck in protracted construction disputes. LD now functions as a transparent risk management tool, enabling contractors and employers to accurately anticipate financial exposure in cases of delay or breach. Moreover, the legalization of LD enhances confidence in negotiating international standard-form contracts (such as FIDIC), ensuring consistency between domestic law and international practice.
2. The role of Dispute Boards as an international-standard dispute resolution mechanism
The session also devoted significant attention to the development of Dispute Boards (DAB/DAAB) in Vietnam pursuant to Article 86.5(a) of the 2025 Construction Law, reflecting international best practice:
- Proactive dispute prevention: Instead of waiting for conflicts to escalate into arbitration or court proceedings, Dispute Boards involve experts who closely monitor projects from the outset, enabling early resolution of technical issues and preventing construction delays.
- An inevitable trend: With a clearer legal framework, Dispute Boards are no longer limited to ODA-funded projects but are increasingly adopted in large private-sector projects. This mechanism is considered optimal for safeguarding project progress and preserving cooperative relationships among stakeholders.
3. Current status and development of ADR in the construction sector
To conclude the recap, the following practical insights on dispute resolution trends were shared by the panelists:
- Dispute flow at VIAC: According to VIAC’s 2024 Annual Report, VIAC received 478 new cases, with construction disputes accounting for the second-highest proportion at 22%, following sale of goods disputes at 25%. The 2025 preliminary statistics show more than 530 new cases, with construction disputes continuing to rank second.
- Practice experience: In 2025, Arbitrator Nguyen Manh Dung adjudicated 7 construction-related disputes out of a total of 22 cases (nearly one-third), including 2 cases where he served as presiding arbitrator. The dispute values ranged from approximately VND 15 billion to nearly VND 100 billion. A recurring issue concerned the determination of late payment interest based on the average overdue interest rates of at least three commercial banks (e.g., Vietcombank, VietinBank, Agribank), in accordance with Article 11 of Resolution No. 01/2019/NQ-HĐTP of the Supreme People’s Court, guiding the application of Article 306 of the 2005 Commercial Law.
- Promotion of ADR mechanisms: As a Vietnamese arbitrator with specialized ADR training at Queen Mary University of London and four years of experience as the first Vietnamese member of the ICC International Court of Arbitration, Mr. Nguyen Manh Dung has consistently supported VIAC and SCLVN in promoting not only commercial mediation (having served as Deputy Director of VMC) but also dispute boards in construction disputes.
Overall, the Conference provided a high-level forum for in-depth analysis of the key changes introduced by the 2025 Construction Law and for addressing practical challenges in the negotiation and performance of construction contracts. By identifying legal risks and proposing effective management tools, the Conference contributed to strengthening legal governance and improving the effectiveness of construction investment activities in Vietnam.
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