Under Vietnamese law, the domestic court system is organised according to the Law on Organisation of People’s Courts. The jurisdiction of the courts in the territory of Vietnam is detailed in the Civil Procedure Code.

There is no specialised court to settle maritime disputes. Therefore, maritime disputes can be resolved at a commercial or civil court, or even at a labour court based on the assignment of the chief justice.

Parties are usually insurers, domestic or foreign shipping lines, freight forwarders, shippers, cargo owners, bareboat charterers or crew members. Disputes often relate to cargo claims, loss and damage resulting from a collision/allision, crew claims and maritime insurance.

Vietnam’s seaport area is managed by 25 local maritime administrations, which are supervised by the Vietnam Maritime Administration, of the Ministry of Transportation. Some of the main duties of the Vietnam Maritime Administration are:

• granting licences;
• monitoring ships’ arrival and/or departure;
• operating at seaports and management areas;
• implementing decisions on ship arrest by competent state agencies; and
• temporarily impounding ships according to regulations.

In certain cases, such as grounding and pollution, the Vietnam Maritime Administration has a prominent role relating to:

• the investigation of maritime incidents;
• implementation of a decision on ship arrest from the competent court;
• mobilising the necessary personnel and means to carry out a rescue; or
• handling environmental pollution incidents, and so on.

The provisions on ship registration are expressed in the Decree on registration, deregistration, purchase, sale and building of ships, which was promulgated by the government of Vietnam and came into effect on 1 July 2017. The Vietnam Maritime Administration performs the functions of the Vietnam Registrar of Ships. In addition, some maritime administrations conduct ship registration – eg, the maritime administrations of Da Nang and Hai Phong.

According to statistics in 2022 from the United Nations Conference on Trade and Development (UNCTAD), Vietnam’s fleet ranks third in the Association of Southeast Asian Nations (ASEAN) after Singapore, Indonesia and Malaysia, and ranks twenty-second in the world. The registration policy of the state on allowing registration on such state-flagged ships plays an important role, which promotes the prestige of the fleet for the carriage of commercial goods.

For registration of a ship in Vietnam, there are requirements relating to proof of ownership, the submission of technical documents granted for ships, and the ship’s name. Furthermore, it is compulsory to prove that a ship does not fly any foreign flag at the time of registration. A ship owned by foreign owners can be registered in Vietnam and the owners are required to have their commercial presence in Vietnam. Domestic law sets forth the detailed requirements concerning the registration of ships under construction.

An application for a provisional ship registration can be made as per the law of Vietnam. A temporary certificate is valid for 180 days from the date of issuance. An extension may be granted in particular cases.

All forms of ship registration in Vietnam require the provision of a ship deregistration certificate for ships already registered abroad or a certificate of suspension of ship registration in the case of provisional registration. In other words, dual registration is yet to be permitted in Vietnam.

The Registrar of Ships is also responsible for the registration of mortgages. Under Vietnamese law, besides an original application form for registration, a contract for a seagoing ship mortgage is also required for mortgage registration. The competent authority may require the applicant to submit additional documents for verification. In Vietnam, a ship is a type of property with separate regulations on mortgages, which are different from those concerning the registration of other common kinds of properties.

Public information is available regarding ship ownership, but not through the mortgages registry. According to Vietnamese law, a ship is one of the special subject matters as regards secured transactions. For ship searches, to help the e-government (ie, the use of ICT to aid in the provision of public services) to manage administrative procedures in Vietnam, ownership information accompanied by the particulars of Vietnamese-flagged vessels is recorded via the national portal of the Vietnam Maritime Administration. Viewers are not charged a fee for ship searches via this portal.

Until now, Vietnam has been a party to the Protocol of 1992 to amend the International Convention on Civil Liability for Oil Pollution Damage of 29 November 1969 and the International Convention on Civil Liability for Bunker Oil Pollution Damage. Vietnam has not acceded to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992. This causes difficulties in claiming full or proportional compensation for damage, especially in accidents that cause serious pollution damage.

Vietnam does not have a specific law to regulate the liability of owners and interested parties in the event of pollution and wreck removal. The provisions related to liability and compensation for pollution damage are scattered across different legal documents. For example, the principle that the polluter must compensate for damage and address the consequences is recognised by the Vietnam Constitution and the law on environmental protection. As a specialised act, the Vietnam Maritime Code of 2015 (the “Maritime Code”) regulates matters regarding maritime activities, including the limitation of civil liability for maritime claims, compensation funds and other activities, and the obligation of the owners concerning wreck removal. For damage to life, property, rights and other legitimate interests as a result of pollution and wreck removal, the Civil Code provides for the liability to compensate for non-contractual damage.

Vietnam acceded to the Convention on the International Regulations for Preventing Collisions at Sea, 1972 on 18 December 1990.

Following that, Circular No 19/2013/TT-BGTVT, dated 6 August 2013, was promulgated, which stipulates the application of international regulations for preventing collisions at sea. The content of the Circular includes regulations on rules of navigation and the manoeuvring of ships in all visibility conditions, the use of lights and flags or sound, and light signals for warning.

The Maritime Code also contains two chapters concerning collision and salvage. The chapters regulate liability and the obligation of owners and interested parties in the event of a collision and salvage, and set forth the rules for the determination of fault and compensation for any loss arising out of a collision, etc.

Vietnam is not a member of the Convention on Limitation of Liability for Maritime Claims (LLMC) that was adopted in 1976. In Vietnam, the limitation of liability for maritime claims is regulated by the Maritime Code, which is quite different from the LLMC.

Limitation funds are regulated by the Maritime Code. The person entitled to limit liability may constitute a limitation fund for claims subject to limitation. The fund shall be constituted in the sum of each of the limit amounts, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund.

The fund may be constituted by depositing the sum or by providing other forms of security, by the ship-owner. After the limitation fund has been constituted, any person shall be barred from infringing any other rights and assets of a liable person. Any property of a liable person who has been arrested or any security given by such person may be released by order of the court.

Vietnam is not a member of any international convention concerning bills of lading – eg, the Hague–Visby Rules, the Hamburg Rules or the Rotterdam Rules. However, considering the expansion of international trade worldwide in recent years, Vietnam is now considering becoming a member of said conventions.

Despite not being a member of any international convention covering carriage by sea, Vietnam has referred to many international conventions related to carriage by sea and bills of lading, and internalised these into legal documents, including the Maritime Code and the domestic laws of Vietnam which have inherited the spirit of said international conventions. In particular, in Chapter VII of the Maritime Code, many regulations have been absorbed from the Hague–Visby Rules, such as the regulation on limitation liability of the carrier.

Under Vietnamese law, a bill of lading is determined as proof of possession of the goods used for disposition and receipt, and as evidence of a contract for the carriage of goods by sea. Therefore, the lawful holder of the bill of lading shall have the title to sue the carrier under the bill of lading. However, the Maritime Code does not provide explicit guidance on this issue.

Under Vietnamese law, the limitation regime applies to cargo (limitation for carriers) and tonnage (limitation for ship-owners). Accordingly, the limitation of liability of ship-owners for cargo damages is specified as follows.

• 83,000 units of account for a ship with a maximum tonnage of 300.
• 167,000 units of account for a ship with a gross tonnage ranging from 300 to 500.
• In respect of a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in the second point:
1. for each ton from 501 to 30,000 tons, 167 units of account;
2. for each ton from 30,001 to 70,000 tons, 125 units of account; and
3. for each ton in excess of 70,001 tons, 83 units of account.

The shipper, whether knowingly or unknowingly, shall be liable to the carrier, passengers, crew and other shippers for losses arising from incorrect or untruthful declaration of goods, if the carrier can prove that the shipper was at fault for the loss. However, there has been no case law on such a claim of the carrier against the shipper in Vietnam. The approach to these issues would depend on the judges handling such particular cases.

Vietnamese laws, specifically the Maritime Code, only regulate that the time bar for a party to file claims for damaged or lost cargo to the court is one year since the date of cargo receipt or the date on which the cargo should have been delivered. Vietnamese law does not clearly stipulate whether the time bar for cargo claims can be extended or sustained. In addition, the time bar for cargo claims under Vietnamese law is quite complicated as many different time bars may apply, depending on specific cases.

Vietnam is not a contracting party to the International Convention Relating to the Arrest of Sea-Going Ships, 1952 or the International Convention on Arrest of Ships, 1999 (“Geneva 1999”). However, Vietnamese lawmakers have incorporated parts of these conventions into domestic laws.

In Vietnam, ship arrest is regulated and governed by the Maritime Code, the 2008 Ordinance on procedures for the arrest of sea-going vessels, and some guidelines from the government and the Supreme Court.

Vietnam is not a state party to the International Convention on Maritime Liens and Mortgages, 1993. However, some regulations of the Convention regarding the definitions, types and priorities of maritime liens have been incorporated in domestic legislation, with some minor amendments.

Besides the five types of maritime liens, the Maritime Code provides a list of 15 types of maritime claims that are similar to those provided in Clauses 1(d) to 1(v) of Article 1 of Geneva 1999.

Similar to what is set forth in Geneva 1999, Vietnamese laws also regulate the power of exercising the right to arrest seagoing vessels to secure for maritime claims. Specifically, when applying for the actions in personam, the applicants must prove the liability of the owner or demise charters of the arrested ships.

Regarding maritime liens, Vietnamese laws also regulate that the lien shall follow the vessel, notwithstanding any change of ownership or registration of flag. In other words, arresting a ship to secure a maritime lien regulated under Vietnamese law is permissible regardless of its owner’s or demise charterer’s liability.

Claims for unpaid bunkers are identified as maritime claims under the laws of Vietnam. Such claims grant the bunker suppliers the right to apply for a ship arrest to secure their maritime claims. As when applying for the arrest, applicants must prove this unpaid bunker claim and the relationship between the supplier and the owner or demise charterer of the ship to be arrested. Normally, proving a contractual relation is easier than proving the applicant is the actual supplier via a broker.

In Vietnam, a claim holder or lien holder could apply for an action in rem or in personam to arrest a vessel, depending on the merits of the case.

To arrest a vessel, an arresting party must submit an arrest application to a local court enclosed with a power of attorney and all supporting documents to prove the title of the arresting party, the maritime claim or maritime lien to be secured, the current position of the vessel, etc.

All documents submitted to the handling courts must be original or legalised copies and translated into Vietnamese.

Before an arrest order is issued, the arresting party must provide a counter-security, the quantum and form of which will be decided by the handling judge.

Arresting bunkers and freight are not workable in Vietnam. In ASEAN countries, there is another jurisdiction with a comprehensive regime and legislation to arrest bunker and freight – ie, in Singapore. However, in Vietnam, a legal regime concerning such arrests is not available.

Arresting sister-ships is permissible in Vietnam. The regulations on the power to exercise an arrest against sister-ships under Vietnamese law are similar to those set forth in Geneva 1999. Specifically, any other ship or ships under the ownership of the person who is responsible for the maritime claim and who was the owner of the ship in respect of which the maritime claim arose, or was the demise/time or voyage charterer of that ship when the claim arose, could be arrested.

However, despite the current legislation and legal regime, the court practice in handling cases on applying for the arrest of sister-ships varies case by case, especially when there is no “supreme” maritime court. Each handling judge, with their background of general commercial or civil law, may have a different opinion about such matters.

Besides ship arrests, under Vietnamese regulations, the competent courts/arbitration bodies can issue interim measures at the request of a litigant during the case in order to obtain security for the requesting party. Such possibilities include:

• distraining the disputed properties;
• prohibiting the transfer of a property right over the disputed properties;
• freezing accounts at banks or other credit institutions, or the State Treasury;
• freezing properties at the place of their deposit; and
• freezing properties of the obligor.

Similar to Geneva 1999, ship interests can release the arrested vessel upon the provision of sufficient security. Normally, neither a club’s letter of undertaking (LOU) nor a foreign bank guarantee is accepted by local courts as sufficient security to release the vessel.

In most ship arrest cases, the local handling judges require a cash deposit. Some local judges may accept an LOU issued by certain local underwriters or local bank guarantees. The practice varies from court to court.

The judicial sale of an arrested seagoing ship is conducted under the competent court’s judgment. Afterwards, the enforcement agency issues the judgment enforcement decision for the judicial sale of the arrested ship. The judicial sale of the arrested ship is then conducted by a property auction organisation. The order and procedures for judicial sales of arrested seagoing ships must comply with the law on public property auctions. The bidders must pay the entrance fees, and the ship-owner and/or the captain of the arrested ship shall be liable for maintaining the vessel from its arrest until another decision from the competent court.

Creditors with a maritime lien take precedence over creditors with a mortgage. Other types of claims are considered inferior to a mortgage.

Vietnam does not have a specific maritime court. Insolvency cases of owners or ship-yards involving the sale of ships are handled by local courts depending on the place of business of the owners or ship-yards. The competent court handling the insolvency proceedings shall decide on the handling of assets. An asset management officer is involved, who is an individual specialised in the management and liquidation of the assets of an insolvent entity during a bankruptcy settlement.

Upon the consideration of wrongful arrest, the handling judge shall request the applicant of the ship arrest to pay for the damage to the arrested party from their counter-security. Such counter-security is a precondition for issuing the arrest order.

Under Vietnamese law – in particular, the Maritime Code – the time limit for filing claims related to maritime passengers is two years. However, if a passenger is injured in the course of transportation, resulting in their death after leaving the ship, this limit shall be counted from the date of their death, but within three years from the date of disembarkation. Therefore, depending on the type of the passenger’s claim, the time limit for filing such a claim must not exceed three years from the date the passenger disembarks the ship or the date the passenger should have left the ship, whichever is later.

The limitation on liabilities in respect of a passenger’s claim is specified under the Maritime Code as follows: the liability of the carrier for the circumstance of a passenger’s death, injury or other health-related damage cannot exceed 46,666 units of account per contract of passenger and baggage carriage, whereby the total compensation amount is not allowed to exceed 25 million units of account. For circumstances where the court has judged that payment of such compensation be made on a periodic basis, this total compensation amount cannot exceed the limits referred to in this paragraph.

A bill of lading is deemed a contract under the Maritime Code. As such, apart from in some limited circumstances where the parties are not permitted to freely make an agreement on the applicable law and jurisdiction, like most contracts, the parties of a bill of lading are able to agree on relevant matters to be prescribed in the bill of lading, including the law and jurisdiction clauses.

Pursuant to the Maritime Code, if there is a foreign party engaging in the bill of lading, the parties may even agree on a foreign jurisdiction or a foreign court. Under the Vietnamese Civil Procedure Code, the local court may recognise and enforce a law and jurisdiction clause stated in the bill of lading, unless the case is one of the circumstances in which the parties are not allowed to agree on the applicable law or it falls within the exclusive jurisdiction of Vietnamese courts. 

In theory, the parties may agree on a law and arbitration clause, which can be set forth in the bill of lading or a relevant charterparty. The law and arbitration clause states that the charterparty might be incorporated into the bill of lading. However, in practice, it may be difficult for the parties to persuade the judge to admit such agreement or said incorporation, especially when there is no court specialised in maritime disputes and the requirements for formality of evidence are taken strictly.

The 1958 New York Convention is applicable in Vietnam, as Vietnam is a contracting state. The regulations of the Convention have also been adopted into two notable laws: the Vietnamese Law on Commercial Arbitration and the Vietnamese Civil Procedure Code. The Law on Commercial Arbitration comprises regulations on arbitration, such as the basic concepts regarding arbitration in light of Vietnamese legislation. The Civil Procedure Code prescribes the legal procedure at court in respect of arbitration, including the legal proceeding for the recognition and enforcement of foreign arbitral awards.

Vietnamese law sets forth provisions on ship arrest under an action in rem or in personam. For an action in rem, although Vietnam is not a member of the International Convention on Arrest of Ships, 1999, many regulations thereof have been adopted into Vietnamese law. Therefore, the local court may order an arrest of a vessel under an action in rem regardless of the law and jurisdiction clause in the relevant contract, bill of lading or charterparty.

No domestic arbitration institutes are specialised in maritime claims. However, during an arbitration, the parties may appoint an arbitrator (or more than one) who is an expert in this area to hear the dispute.

Subject to the particular facts of the case, the defendant may request the court/tribunal to reject or dismiss the claim. For example, the respondent/defendant may, based on the arbitration agreement, request the local court to return the statement of claim/the petition or to dismiss the case if the claim has been enrolled.

In general, there is no exemption or tax relief on the income of a company just because the company is a ship-owner; nor is there tonnage tax or a more advantageous accelerated depreciation for a ship-owner’s company. The income tax regime and the accelerated depreciation system applied for the ship-owner’s company are similar to those applied for other companies.

Since the outbreak of COVID-19, the competent authorities in Vietnam have imposed limitations on, and requirements for, maritime activities. These requirements have changed constantly subject to the pandemic situation and government policy, which is different in each port. Most recently, the Ministry of Transport issued a decision on the promulgation of interim guidance on transport activities in five sectors (including maritime) for the COVID-19 period, which included the following.

• Areas within levels 1 to 4 of the COVID-19 risk classification (low-risk to high-risk areas) are eligible for maritime transport activities but should fully implement COVID-19 prevention and control measures at the request and guidance of the Ministry of Health and local health authorities.
• Personnel must:
1. comply with the “5K Rule” – make medical declarations in accordance with regulations of the Ministry of Health;
2. strictly implement COVID-19 prevention and control measures according to the guidance of the National Steering Committee for COVID-19 Prevention and Control and the Ministry of Health; and
3. regarding medical tests and isolation, comply with requests and guidance of the Ministry of Health and local health authorities.
• Seaports, inland harbours and other focal points for cargo loading and unloading in areas within levels 1 to 4 of the COVID-19 risk classification are eligible for operations but should fully implement COVID-19 prevention and control measures at the request and guidance of the Ministry of Health and local health authorities.

Force Majeure and Frustration in Relation to COVID-19

Vietnamese law does recognise the concept of force majeure. An event might be considered as a force majeure if it occurs in an objective manner that is not able to be foreseen and not able to be remedied by all possible necessary and admissible measures being taken.

Although COVID-19 is assessed as a pandemic by the World Health Organization, it is not clear whether this pandemic would be considered a force majeure in Vietnam. Indeed, the mere fact that a disease is a pandemic does not directly lead to its recognition as a force majeure in Vietnam.

Until now, there is no case law on the recognition of COVID-19 as a force majeure or a contractual relief. Any decision would greatly depend on the handling judges, and vary on a case-by-case basis.

No information on this topic is available for this jurisdiction.

There have not been written regulations or incorporated law regarding the implementation of the “IMO 2020” rule limiting sulphur content of fuel oil used on board ships, which came into force on 1 January 2020 in this jurisdiction. However, as Vietnam is a member state of the IMO, the sulphur threshold is applicable within this jurisdiction and is expected to be incorporated into local law. In Vietnam, the Vietnam Maritime Administration is currently responsible for the enforcement of the sulphur content limitation. As provided by the Vietnam Registry, in 2020, the Vietnamese fleet completed transition into fuel oil used on board ships with a sulphur content of 0.5%, and so far no commercial or mechanical obstacles have been recorded.

Since the outbreak of the Russia-Ukraine conflict, the trade sanctions originating therefrom have negatively impacted on the economy, especially in the shipping industry of Vietnam. There is however no available information on the possible mechanisms within the Vietnamese legal system which authorise trade activities otherwise outlawed by sanctions. Both Russia and Ukraine are traditional and important trading partners of Vietnamese intra-regional trade, especially for the Asian-European bloc. Therefore, the punitive trade sanctions imposed on the Russian economy, as part of the three-way Ukraine-Vietnam-Russia import-export continuous link in the trading chain of the region (including the EU), have gravely distressed this trading chain.

In bearing the brunt from these punitive sanctions, a key impact on Vietnam has been on its economic sectors, including shipping. Due to the conflict and related sanctions, a number of Vietnamese businesses have had their export orders obstructed, their input supply severed, and transactions delayed. The punitive measures imposed on Russia by the US and the West in disconnecting Russian entities, especially Russian banks, from the SWIFT network have led to a chokehold on the capital flow and international financial and investment co-operation between Russian and Vietnamese entities. Investment projects funded by Russian investors, with payment terms using the Euro currency (eg, electric plants, petrol and gas projects) have been severely affected.

As Russia controls a massive reservoir of petrol and gas, trading sanctions imposed on Russia have caused a sharp rise in fuel costs globally, bringing about a rise in the manufacturing and logistics costs of most states trading with Russia, including Vietnam. This has left a large number of Vietnamese businesses, importing from and exporting to Russia, searching for alternative trading partners, and mostly shifting towards the Australian, South American and African markets. Coupled with the sanctions on directly dealing with Russian entities or SWIFT-disconnected fund transfers, shortage, delay in supply and high prices are the current situation for many economic sectors in Vietnam.

As has been reported, a number of shipping lines have declined bookings for carrying shipments from Vietnam to Russia due to fear of sanctions and risk of war. Freight prices are showing a rising upward trend, and insurers have also showed reluctance, or have declined, to provide policies for vessels, cargoes, shipments or trading to/with Russia and Ukraine for the same reasons of sanctions and risk of war. This has taken a toll on carriers, shippers, shipping lines and cargo owners based in Vietnam, resulting in the rerouting of vessels out of waters and ports in conflict areas, or the seeking of new trading partners. Insurance policies for voyages involving Russian and Ukrainian ports are rarely signed, and insurers have been vigorously revising their sample policies to raise insurance standards and re-evaluate policy values to mitigate the risks of war and sanctions.

Several entities based in Vietnam, either funded or invested in by Russian entities, are also facing the fear of being subjected to sanctions. However, there have not yet been any official reports or records on such entities in Vietnam being sanctioned by the UN, US or the West. Nevertheless, to alleviate the situation and avoid strict punitive measures, these entities have begun, or have even completed, the process of foreign divestment, to limit or decapitalise Russian presence from said entities.

There is no maritime court in Vietnam. Maritime disputes are usually handled by a civil court or an economic court. Unfortunately, not all judges of these courts are familiar with maritime law and practice. Therefore, some difficulties arise when pursuing a lawsuit of a maritime nature in a Vietnamese court.

Among the many courts in Vietnam, four usually deal with maritime disputes, specifically those courts of:

• Ho Chi Minh City;
• Ba Ria- Vung Tau;
• Hai Phong; and
• Quang Ninh.

These are the four major ports in Vietnam, and arrest orders are usually granted by these courts.