Chapter XII

INVESTMENT SECURTY AND DISPUTE HANDLING

Article120.- Investment security

1. The Vietnamese Government assures the equal and satisfactorytreatment for foreign investors investing in Vietnam under the Foreign Investment Law.Where the international agreements which the Socialist Republic of Vietnam has signed oracceded to contain provisions different from those of this Decree and other legaldocuments, the provisions of such international agreements shall apply.

2. The signing of agreements on or the application of measures for,investment security or guaranty shall apply only to particularly important projects ofinvestment under the Government's programs in the field of infrastructure, investmentprojects under BOT, BTO or BT contracts and a number of other particularly importantprojects.

Article 121.- Investment security in case of legal changes

1. In cases where the changes of Vietnamese law provisions cause damageto the interests of foreign- invested enterprises and business cooperation parties suchforeign-invested enterprises and business cooperation parties shall be entitled to enjoythe preferences prescribed in the investment licenses or the satisfactory settlement bythe State according to the following measures:

a) Changing the operation objectives of the projects;

b) Tax reduction and exemption according to the provisions of law;

c) The damage suffered by foreign-invested enterprises and/or businesscooperation parties shall be deducted from their taxable incomes;

d) Being considered for satisfactory compensation in a number ofnecessary cases.

With regard to projects licensed by the provincial-level People'sCommittees or the Industrial Parks Management Board, before deciding to apply theabove-said measures, the provincial-level People's Committees or the Industrial ParksManagement Board shall have to consult with the Ministry of Planning and Investment andthe Ministry of Finance.

3. The more preferential provisions promulgated after the granting ofinvestment licenses shall automatically be applied in replacement of the previouscorresponding regulations. If the application of new law provisions requires theadjustment of investment licenses, the investment licensing agencies shall adjust theinvestment licenses.

Article122.- Handling of disputes

1. Disputes between joint-venture parties between business cooperationparties; or disputes between foreign-invested enterprises and foreign organizations and/orindividuals, or disputes between foreign parties to joint-ventures or to businesscooperation and Vietnamese economic organizations must, first of all, be settled throughnegotiations and reconciliation among the disputing parties.

In case of reconciliation failure, the disputing parties may come toagreement on one of the following handling modes:

a) Vietnamese courts.

b) Vietnamese arbitrators; or foreign arbitrators, internationalarbitrators;

c) Arbitration set up upon the agreement reached between the parties.

2. Disputes among foreign-invested enterprises or betweenforeign-invested enterprises and Vietnamese economic organizations shall be settled atVietnamese arbitrators or courts according to Vietnamese laws.

3. Disputes between foreign investors and competent State bodies whicharise from BOT, BTO or BT contracts; disputes between BOT enterprises and Vietnameseeconomic organizations shall be settled by modes agreed upon by the parties in thecontracts in conformity with the Government's Regulation on investment under BOT, BTO andBT contracts, applicable to foreign investment in Vietnam.