An 101 billion VND construction dispute between VNP (formerly PVT) and PVC-KBC highlights critical contract risks. The contractor abandoned the project, leading to financial loss and litigation.

📜 Case Summary
🔹 Contract: Turnkey housing project with a 12-month timeline.
🔹 Dispute: Contractor ceased work in 2012, leaving the project incomplete.
🔹 Legal Actions: VNP sued for contract penalties, compensation, and return of advance payments.

🔹 Court Ruling:
✅ PVC-KBC must compensate 12.7 billion VND for security, asset depreciation, and partner selection.
❌ The 12% penalty was denied due to shared responsibility for delays.

⚖️ Arbitration Clause Defect – Legal Impact
🔹 No Specific Arbitration Center: The clause was unenforceable, forcing litigation.
🔹 Missed Arbitration Right: Under Article 43, Law on Commercial Arbitration (2010), VNP could have chosen an arbitration center but opted for court.

🔹 Lost Arbitration Benefits:
✅ Faster resolution & lower cost
✅ Easier international enforcement under the New York Convention
✅ Confidentiality & expert decision-making

🚀 Key Takeaways
✅ Always specify an arbitration institution to avoid jurisdictional issues.
✅ Use arbitration for cross-border disputes to ensure enforceability.
✅ Draft contracts with risk mitigation in mind, including dispute resolution clarity.

Link PDF: https://drive.google.com/file/d/15JKZfgEg6HJwf2nUVuJC-qz8puUJqdfS/view?usp=sharing

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