International Arbitration Rejects US Company's Lawsuit Against Vietnam

The International Arbitration Council affirmed that Mr. Michael McKenzie's claims were unfounded.

On March 4, Chief of the Office of the Ministry of Justice, Mr. Tran Tien Dung confirmed that the International Arbitration Court rejected all lawsuit requests by Mr. Michael McKenzie (US citizen) against the Vietnamese Government regarding the project to build a resort in Bac Binh district, Binh Thuan province.

Previously, on November 18, 2010, Mr. Michael McKenzie filed a lawsuit against the Vietnamese Government in International Arbitration regarding the South Fork resort construction project in Binh Thuan province.

The reason he gave was that the Vietnamese Government, directly the People's Committee of Binh Thuan province, violated the provisions of the Vietnam - US Bilateral Trade Agreement signed on July 13, 2000.

A corner of the South Fork project facing the beautiful Vung Mon and Hoa Thang beaches

According to Mr. McKenzie (investor of South Fork Company), based on the Investment Certificate issued by the Ministry of Planning and Investment of Vietnam on November 4, 2004, the People's Committee of Binh Thuan province will hand over the land in Bac Binh district to South Fork Company (a foreign-invested enterprise established and operating in Vietnam) to build a resort.

However, the authorities of Binh Thuan province did not carry out the land allocation but instead granted a license to another company to conduct mineral exploitation activities in a part of the land planned for the South Fork project without his knowledge.

Mr. Michael McKenzie said that the violations of the People's Committee of Binh Thuan province led to the Vietnamese Government violating its commitments in the Vietnam - US Trade Agreement. Specifically, it illegally deprived the investment, violated the standards of fair and equitable treatment and transparency provisions in the Agreement. Mr. Michael McKenzie requested that the Vietnamese Government compensate for the damages.

During the process of resolving the case, the competent authorities of Vietnam repeatedly discussed and explained to Mr. McKenzie about his rights and obligations and those of South Fork Company under Vietnamese law, but Mr. McKenzie did not accept.

In July 2013, the International Arbitration Council held a session to resolve the dispute in Hong Kong (China). In its argument, the Vietnamese representative expressed the view that the Arbitration Council has no authority to consider any of Mr. McKenzie's claims because Mr. McKenzie was dishonest and lacked goodwill right from the time he applied for an investment license in Vietnam, and Mr. McKenzie's investment is not protected under the Vietnam-US Trade Agreement.

His lawsuit claims are baseless; the competent authorities of Vietnam have complied with the provisions of the law and have not violated any provisions of the Vietnam-US Trade Agreement.

Five months after the end of the dispute settlement session in Hong Kong, in December 2013, the Arbitration Council issued a Decision accepting Vietnam's arguments, affirming that the Arbitration Council had no jurisdiction to hear the case; rejecting all of Mr. McKenzie's claims; forcing Mr. McKenzie to pay all costs that Vietnam had to bear when participating in the lawsuit, including the costs of the Arbitration Council, the costs of hiring international lawyers and participating in the case settlement session in Hong Kong.

This is the first international investment lawsuit that Vietnam has participated in. The International Arbitration Council's ruling on the lawsuit honestly and objectively reflects what the Government and competent authorities of Vietnam have done in the past; it is a message to the international community about Vietnam's clear and consistent policy of always welcoming and creating favorable conditions for foreign investors to invest and do business legally in Vietnam in accordance with domestic laws and international treaties to which Vietnam is a member./.

According to VOV