Construction Disputes

Construction projects are highly uncertain in nature: insufficient quality, waste of resources, and delays due to unforeseen factors are unfortunately common occurrences. In such an adversarial environment, construction disputes are bound to arise. Known to be paperwork-heavy and fraught with tension, construction litigation requires a very specific type of good construction law firm to reach a successful resolution.

With that understanding, Le & Tran is one of the top choices for construction projects & disputes in Vietnam. Aside from legal expertise, our Vietnam construction lawyers & litigators are likewise familiar with the industry’s language and procedures. In practice, our construction lawyers readily travel to site and engage in in-depth discussions with our clients. Leaving no stone unturned, we also examine the opposition’s perspective to arrive at the most comprehensive judgement and approach. In this regard, our proficiency, mobility, and diligence are unmatched.

Whilst recognised for our trial prowess, our litigation team has mastered a balance of tenacity and tact. Hence, we are able to modify and adapt our strategy whenever needed to meet our clients’ goals and expectation.

We have represented a number of transnational companies in high value, technically compounded disputes. Whether we assist project developers, business owners, contractors, or investors, we are committed to delivering smart and effective resolutions.

What is Vietnam construction law?

Construction law involves any legal issue related to the construction of a building or other structure.  It is a tremendously large field encompassing numerous matters and parties connected to construction projects.  It can involve construction by private parties for industrial, commercial or residential purposes, public projects by the government, or public private projects (PPP) which is a mixture of the two (examples would be a new telecommunications system or an airport).

With the incredible growth of the Vietnamese economy and infrastructure in the last two decades, the construction industry is booming and has attracted significant foreign investment from around the globe, especially from the East Asian region.  These days it seems that a day does not pass when the foundation is laid for a new high rise, shopping mall, industrial park or apartment complex.  Much of this new construction has been focused on the economic centers of Ho Chi Minh City and Hanoi and their peripheries, but has been spreading out all over Vietnam in recent years, partly through government development incentives.  Of course, this greater demand for new construction in Vietnam is accompanied by a greater demand for legal certainty in construction law as well as the inevitable rise in legal disputes.

Construction law in Vietnam is generally governed by the 2014 Law on Construction (No. 50/2014/QH13) which was amended and supplemented in 2020 (No. 62/2020/QH14, effective on January 1st, 2021).  The Construction law encompasses a several areas including regulations on construction planning and zoning, construction permits, construction survey and design, specific requirements and obligations at construction sites, project finalization and warranties, construction investment requirements and construction contracts, and qualifications for those involved in the construction process.  The construction law of 2020, makes a number of amendments such as expanding pre-feasibility studies, compulsory insurance for contractors, and updated construction permit exemptions, among other changes.

Whether you are an investor, contractor, subcontractor, construction equipment or material supplier, it is helpful to have a good construction lawyer who has a solid understanding of Vietnam construction law before consulting you on any project.  Further, the construction law firm or lawyer that you retain should be fluent in other fields of the law as construction law in Vietnam overlaps with several other areas which are subject to different legal codes and the supervision of different agencies such as investment law, environmental law, contract law, employment law, taxation and others.

What does construction law involve?

In general, the construction of any structure involves a number of steps, from the bidding on the project to the finalization and warranty of the work.  The law on construction in Vietnam has a number of provisions that provide guidance to the various parties during the process.

For bidding, contractors that can meet capacity, experience and technical requirements may submit financial proposals for review.  A contractor that submits the lowest price but does not possess the requisite capacity, experience and technical requirements will be eliminated from the bidding.  Foreign investors may take part in the bidding but must obtain a permit and form a joint venture with Vietnamese contractors or use Vietnamese subcontractors unless the domestic contractors are not qualified to participate in the work.

Following this, the construction contract will be negotiated and signed by the investor and contractor, which will include, amongst other items, construction unit price, installment payments and provisions for changes that occur during performance. The parties will also enter into a contract with a construction supervision contractor or engineer who will oversee the quality, volume, progress, labor safety and environmental protection during the course of construction.

The project then enters the building stage and the contractor is paid in installments based on the quantity of work actually performed and confirmed by the parties.  A number of documents are required under the construction law must be submitted to the authorities during the ongoing building process.  After the completion of the construction, the take-over certificates are issued and the project is transferred to the investor for use.

A number of issues tend to arise during the finalization process and the final payment between the parties regarding the price of additional construction materials, delay penalties and other unforeseen costs.  Further, there is a warranty period under the contract where part of the final payment is withheld by the investor to guarantee the quality of the project pursuant to the contract.

Of course, this is a simplified version and does not encompass the multitude of parties and issues such as subcontracts, insurance, and unforeseen events (ex. workplace accidents, breakdown of equipment, or shortage of materials) that occur before, during and after the project is completed.  With a number of moving parts, it is imperative for the parties to retain a good construction lawyer who is fluent in Vietnam construction law as well has having multi-disciplinary expertise (commercial contacts, tort law, insurance, regulatory, etc.).

What does a Vietnam construction law firm or lawyer do?

There are many services that a good construction law firm or lawyer in Vietnam may provide for investors, contractors, subcontractors and other project participants that include, but are not limited to:

  • Establishment of real estate and construction companies;
  • Consultation regarding the bidding process;
  • Providing advice on project financing and real estate issues;
  • Contract negotiation and preparation;
  • Construction litigation and out of court dispute resolution;
  • Lien and surety claims;
  • Construction defect litigation;
  • Payment disputes and recovery of debts;
  • Workplace safety and personal injury;
  • Taxation;
  • Regulatory inspections and investigations;
  • Delay and abandonment claims;
  • Insurance coverage and claims.

Do you need a good construction lawyer?

There are a number of complex issues and regulations surrounding the law on construction that need to be handled in a proficient manner.  Unless your organization has specialized knowledge of Vietnam construction law, it is strongly advisable that a Vietnam construction lawyer or law firm be retained when considering a construction project.

Further, it is important to find a construction lawyer who understands the economics, culture, language, and technology of modern construction projects.  Le & Tran’s Vietnam construction lawyers have over a decade of experience so we are able to anticipate issues, recommend innovative solutions and structure agreements that are advantageous for our clients and equitable to all parties involved. Our construction lawyers are able to rapidly analyze any construction-related claim, communicate with all parties involved, and assist our clients respond confidently.

To resolve disputes Le & Tran construction law team has significant experience in commercial mediation and other alternative dispute resolution.  Should a negotiated settlement not be possible, our Firm is prepared to go to trial and have years of successful experience in the courtroom and before arbitration panels.

When to call a Vietnam construction attorney

When a new construction project is considered or when problems arise with a construction project, Le & Tran construction lawyers map a strategy that aligns with our client’s business objectives. Construction transactions and disputes are often extremely complex, involving multiple parties, and our team works to ensure that matters are resolved as efficiently and effectively as possible.

At Le & Tran, we have a long history of representing clients in all phases of construction projects throughout Vietnam, from bidding and signing of the construction contracts to the finalization and warranty period.  Our diverse expertise and numerous years of consultation, trial and advocacy experience uniquely equips us with the ability to offer our clients a thorough knowledge of Vietnam construction law and to proficiently handle construction issues at all stages of the project.  We have represented real estate development companies, contractors and subcontractors, material suppliers, architects and engineering firms in high profile projects involving manufacturing facilities, residential developments and subdivisions, industrial parks, high-rise buildings, and numerous other types of commercial and residential projects.  The Firm has provided a strong defense to clients in cases involving delay, negligence and breach of contract claims; bid protests; scope of work disputes, collection and enforcement issues, compliance investigations; and other disputes. Le & Tran construction law attorneys have extensive experience and success at trial and arbitration and have routinely represented clients in lawsuits at the trial and appellate levels across Vietnam.

Because Le & Tran construction lawyers know and can anticipate litigation issues, we have a specialized advantage in advising clients on how to avoid potential costly disputes in the Construction field.  This includes assisting clients with pre-dispute contract negotiation and drafting, project oversight and pre-litigation counseling.  Significantly, this guidance has proven valuable for placing clients in the best possible position in the event of potential litigation — often resulting in the settlement of claims before litigation has commenced.

The team is led by Mr. Stephen Le who has been shortlisted by a number of independent legal ranking organizations in the South East Asia region including Chambers and Partners- Asia Pacific, Benchmark Litigation and Legal 500.  Further, with a number of specialized areas of practice, including construction disputes, tax disputes, securities, insurance, banking and finance, government and regulatory, mergers & acquisitions, and commercial contracts and arbitration, the Firm is uniquely positioned to assist clients through the complex issues of construction law utilizing the most efficient, strategic and comprehensive methods possible.  In short, our multi-disciplinary approach is the key to providing you with the most successful, holistic and cost-effective solution and ensuring that all of your interests are protected.

Le & Tran’s internationally recognized construction lawyers are available to answer any of your questions. Our main office is located in Ho Chi Minh City, the business center of Vietnam.  Please feel free to contact us at info@letranlaw.com to arrange a free consultation.