On 08 June 2020, Vietnam’s National Assembly passed a resolution ratifying the EU – Vietnam Investment Protection Agreement (EVIPA) (“Resolution”) and the EU – Vietnam Free Trade Agreement (EVFTA). Passage of the Resolution marks Vietnam’s completion of its legal procedure to ratify the EVIPA, however, the EVIPA requires further ratification by all EU member states before it can enter into force.
The EVIPA includes investment protection prohibiting discriminatory treatment and expropriation without compensation. The EVIPA further affords investor rights to: fair and equitable treatment, full protection and security, transfers and national treatment compensation for certain losses suffered due to armed conflict or a national emergency.
Once in force, the EVIPA will introduce a new Investor-State dispute settlement mechanism that will replace those mechanisms under existing Bilateral Investment Treaties (BITs) between Vietnam and individual EU member states. The new mechanism is expected to provide greater reassurance concerning the independence and expertise of arbitrators, as well as consistency in the resolution of investment disputes. EU and Vietnam investors will be able to lodge complaints directly against the state hosting their investments under the EVIPA when it comes into force.
The agreement has been drafted with the intention of making the investment dispute resolution process faster and more transparent.