1. Concept and Legal Basis of International Bidding
International bidding is a form of contractor or investor selection involving foreign participation, typically applied when domestic goods or services cannot meet the requirements of a tender package.
According to Article 3 of the Law on Bidding 2023, international bidding refers to bidding activities involving foreign contractors or the procurement of goods from abroad. The core principles — competition, transparency, fairness, and economic efficiency — are stipulated in Article 10.
Articles 14 and 15 clarify when domestic or international bidding must be applied to ensure optimal selection.Regarding eligibility, Articles 5 and 6 specify the rights of foreign contractors and investors to participate in Vietnam.
In addition to the Law on Bidding 2023, relevant regulations can be found in the Commercial Law 2005 (Articles 27–28 on contracts with foreign elements) and the Law on Commercial Arbitration 2010 (Articles 4, 5, and 16 on arbitration agreements). At the international level, the New York Convention 1958, as well as treaties such as CPTPP, EVFTA, and the WTO Government Procurement Agreement (GPA), provide key legal foundations for international bidding and dispute resolution.
2. Agreements in International Bidding
In international bidding, agreements serve as legal and commercial instruments binding the rights and obligations of the parties. Major types of agreements include:
2.1. Invitation to Bid (Bidding Documents):
Issued by the procuring entity, setting out participation conditions, selection criteria, technical requirements, timelines, and dispute resolution mechanisms.
(Clause 21, Article 4 – Law on Bidding 2023)
2.2. Bid Documents (Bid Proposal):
Prepared by the contractor, expressing commitments on price, technical capacity, performance schedule, and acceptance of the tender conditions.
2.3. Joint Venture Agreement:
Formed when multiple contractors jointly participate in a tender, defining the division of work, joint or several liability, and internal responsibilities.
2.4. Official Contract:
Signed after winning the bid, this contract comprehensively binds the parties regarding price, quality, schedule, governing law, and dispute resolution (arbitration or court).
2.5. Framework Agreement:
As a new mechanism introduced under Articles 44–45 of the Law on Bidding 2023, it allows the establishment of general terms between a procuring entity and one or more contractors for a fixed period (not exceeding 36 months).
These terms serve as the basis for subsequent specific contracts, suitable for recurring or periodic procurements.
Article 54. Framework Agreement
1. A framework agreement in centralized procurement is an agreement between the centralized procurement unit and one or more selected contractors, applicable to a package that is not divided into lots or to a portion of a package that is divided into lots.
2. The framework agreement shall specify the contents and conditions serving as the basis for procurements conducted under specific contracts.
3. The term of application of the framework agreement shall be stated in the contractor selection plan but shall not exceed thirty-six (36) months. At the time of signing the framework agreement, the bid documents of the selected contractor must remain valid.
4. For joint venture contractors, all members of the joint venture must directly sign and affix their seals (if any) to the framework agreement.
3. Practical Application of Arbitration in International Bidding Disputes
In practice, disputes arising from international bidding commonly occur during three stages:
(1) preparation of bidding documents,
(2) execution of joint venture agreements, and
(3) performance of official contracts.
When the parties agree to resolve disputes through commercial arbitration, it is often considered the most efficient method due to its flexibility, confidentiality, and the international enforceability of arbitral awards under the New York Convention 1958.
In Vietnam, several cases have been resolved at the BigBoss International Arbitration Center (BBIAC).
For instance, in a dispute concerning a medical equipment supply contract involving a foreign bidder, disagreements arose over late delivery and product quality.
Since the contract contained a BBIAC arbitration clause, the matter was resolved through a fair and expeditious arbitral award.
Similarly, in large infrastructure projects involving Vietnam–foreign contractor joint ventures, BBIAC has been a trusted forum thanks to its understanding of both Vietnamese law and international practice.
In cases with higher complexity or foreign financing, disputes may be referred to institutions such as the International Chamber of Commerce (ICC). Nevertheless, BBIAC has increasingly proven its position as a neutral, cost-effective, and credible forum for resolving international bidding disputes in Vietnam.
4. Rights of Commercial Arbitration in International Bidding
Disputes may arise from various bidding agreements — invitations, proposals, joint venture agreements, framework agreements, or official contracts.
Once parties have agreed to arbitration, the arbitral tribunal is granted several important powers to ensure efficient dispute resolution:
4.1. Jurisdiction to Hear and Resolve Disputes
Under Article 16 of the Law on Commercial Arbitration 2010, where a contract contains an arbitration clause, the tribunal has jurisdiction even if one party refuses to participate. This is vital in international bidding, as foreign contractors often prefer arbitration over local courts to ensure neutrality.
4.2. Final and Binding Awards
Article 60 stipulates that arbitral awards are final and binding, taking effect immediately upon issuance.
This finality helps expedite project implementation and maintain contractual stability.
4.3. Power to Grant Interim Measures
Article 49 authorizes arbitral tribunals to apply interim measures such as account freezing, asset preservation, or suspension of obligations — essential for protecting contractors’ rights during disputes.
4.4. Power to Determine Applicable Law and Procedure
Article 14 allows arbitrators to choose the applicable law where the parties have not agreed.
This is crucial in international bidding disputes involving multiple legal systems and treaties. Arbitrators may also determine appropriate procedural rules to ensure fairness and efficiency.
Practical Significance:
These powers demonstrate that arbitration not only substitutes for courts but also ensures transparency, fairness, and efficiency in resolving international bidding disputes — enhancing investor confidence in Vietnam’s legal environment.
5. Conclusion and Recommendations
Commercial arbitration plays an increasingly central role in resolving disputes arising from international bidding agreements.
Based on the Law on Bidding 2023, the Law on Commercial Arbitration 2010, and international treaties, arbitration ensures transparency and trust among foreign contractors. However, certain challenges remain: many contracts lack clear arbitration clauses; some parties are unfamiliar with arbitration; and enforcement of awards may face procedural hurdles.
Recommendations:
Promote awareness of arbitration benefits among contracting authorities and bidders. Encourage inclusion of arbitration clauses in all bidding contracts. Strengthen enforcement mechanisms for arbitral awards in Vietnam. Such measures will enable commercial arbitration to further enhance transparency and quality in international bidding.
6. How to Resolve Disputes through the BigBoss International Arbitration Center (BBIAC)
To resolve disputes through arbitration at BBIAC, parties may include one of the following sample clauses in their contracts:
6.1. Standard Arbitration Clause
“All disputes arising out of or in connection with this contract shall be settled by arbitration at the BigBoss International Arbitration Center (BBIAC) in accordance with its Arbitration Rules.”
Optional additions:
(a) Number of arbitrators: [one or three];
(b) Seat of arbitration: [city and/or country];
(c) Governing law: [ ];*
(d) Language of arbitration: [ ].***Note: (a) and (b) apply where foreign elements are involved;
*(c) applies where at least one party is a foreign-invested enterprise.
6.2. Expedited Procedure Clause
“All disputes arising out of or in connection with this contract shall be settled by arbitration at the BigBoss International Arbitration Center (BBIAC) in accordance with its Arbitration Rules. The parties agree that the arbitration shall be conducted under the Expedited Procedure set forth in Article 37 of the BBIAC Arbitration Rules.”
Optional additions:
(a) Seat of arbitration: [city and/or country];
(b) Governing law: [ ];*
(c) Language of arbitration: [ ].**Notes as above apply.
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