Vietnam - Chapter 17 - Force Majeure and Hardship in the Asia-Pacific Region
Nguyen Trung Nam (Tony) is a Founding Partner at EPLegal in Vietnam. He is also an arbitrator of the Chartered Institute of Arbitration (CIArb), and the Vietnam International Arbitration Center (VIAC);
Nguyen Van Son (John) is an Associate at EPLegal in Vietnam.
Originally from Force Majeure and Hardship in the Asia-Pacific Region
I. Force majeure
A. Background and definition of force majeure in Vietnam
1. Does Vietnam recognize force majeure or any other legal concept similar to force majeure such as frustration, etc. (in the following: “force majeure”)? Are there any statutory provisions or is there any case law setting forth the definition of force majeure?
Vietnam has recognized force majeure (“FM”) since 1995 in the then Civil Code, and the definition of FM is currently stipulated in the Civil Code 2015. The term “FM” is defined in Article 156.1 of the Civil Code 2015 as follows:
FM is an event that occurs in an objective manner which is unforeseeable and cannot be overcome despite taking all necessary and possible measures.
Accordingly, an event amounts to FM if it satisfies the following three conditions:
(ii) unforeseeability; and
(iii) impossibility to overcome despite taking all necessary and possible measures.
“Objectivity” means what exists outside, is not dependent on human consciousness, the will, in opposition to subjectivity, such as wars, natural disasters, etc.
“Unforeseeability” means an event or situation unknown and that cannot be predicted before it happens, beyond human control.
The event must be an impediment that could not be overcome despite the affected party’s attempt to implement all solutions.
2. What events have been recognized as force majeure events by the courts in Vietnam to date?
The Vietnamese courts recognize an event as FM if the event satisfies the above three conditions or other definition as specified in the law of the specialized area. For example, the Labour Code 2012 sets out certain events to be recognized as FM: natural disasters, fire, epidemics, acts of competent State agencies; the construction law lists natural disasters. environmental problems, enemy-inflicted disasters, conflagration, karst topography, antiquities, slug bags as FM.