Determining the jurisdiction of the court and practical risks
Determining the competent court is the first and one of the most critical steps in civil proceedings. In practice, numerous lawsuits are returned or significantly delayed due to the filing of claims with an incompetent court. This article analyzes the legal grounds for determining court jurisdiction under the current Civil Procedure Code and highlights practical risks that individuals and businesses should carefully consider.
1. The importance of identifying the court of competent jurisdiction?
In civil litigation, when a dispute arises, individuals and businesses often focus primarily on whether their claims will be accepted, as well as the value of the disputed assets and the evidence required to protect their lawful rights and interests before the court. However, many cases from a legal practitioner’s perspective encounter difficulties at the very outset due to an issue that may appear straightforward but is, in fact, decisive to the entire litigation process: The misidentification of the competent court.
In many cases, the plaintiff has spent considerable time preparing comprehensive pleadings, supporting documents, and evidence before commencing legal proceedings. Nevertheless, the lawsuit may still be returned, or the case file may have to be transferred to another court because jurisdiction was incorrectly identified. The legal consequence is not only limited to delaying the case resolution but also incurs additional litigation costs, affects evidence gathering and application of provisional urgent measures, and, in certain circumstances, adversely affects the parties’ ability to protect their lawful rights and interests.
2. Legal grounds for determining court jurisdiction under the current law
Court jurisdiction is not merely a procedural matter. It constitutes the legal basis for determining which judicial authority is empowered, on behalf of the State, to adjudicate a dispute and render judgments or decisions that are legally binding and enforceable. Accordingly, before addressing the substantive merits of a civil dispute, it is first necessary to determine which court has jurisdiction over the matter. Under the 2015 Civil Procedure Code, as amended and supplemented in 2025, court jurisdiction is determined based on several criteria, including subject-matter jurisdiction, jurisdiction by level of court, and territorial jurisdiction.
These statutory provisions are relatively clear. However, determining the competent court is often far more complex in practice, particularly following the significant amendments to the civil procedural framework that took effect on 1 July 2025, most notably the reorganization of the court system under the model of Regional People’s Courts.
2.1. First risk: Misidentification of the disputed legal relationship
One of the most common errors lies in incorrectly identifying the disputed legal relationship. This issue is fundamental because court jurisdiction is primarily determined based on the category of dispute as prescribed in Articles 26 through 34 of the 2015 Civil Procedure Code. In practice, the distinction between different categories of disputes is not always clear. Disputes arising from capital contribution agreements, investment cooperation agreements, business cooperation contracts, or transactions relating to real estate projects often raise the question of whether they should be classified as civil disputes or commercial and business disputes. An incorrect characterization of the legal relationship may affect not only the application of substantive law but also result in the designation of an incompetent court.
2.2. Second risk: Misunderstanding jurisdiction by level of court after 1 July 2025
Once the relationship of the dispute has been identified, the next step is determining jurisdiction by level of court. This area has undergone significant changes in recent years. Before the restructuring of the court system, jurisdiction was generally allocated between the district-level People’s Courts and the provincial-level People’s Courts. However, effective 1 July 2025, the Regional People’s Courts officially replaced the district-level People’s Courts. At the same time, numerous categories of cases that previously fell within the first-instance jurisdiction of provincial-level People’s Courts have been transferred to Regional People’s Courts.
This reform represents one of the most significant developments in Vietnam’s judicial system in recent years. It aims to strengthen decentralization, improve access to justice for individuals and businesses, and alleviate the caseload of higher-level courts. Nevertheless, during the initial implementation period, the reform has also created practical challenges. Many individuals and businesses continue to apply the previous jurisdictional framework, assuming that disputes involving foreign elements or complex legal issues automatically fall within the first-instance jurisdiction of provincial-level People’s Courts. Under the current legal framework, however, the jurisdiction of Regional People’s Courts has been substantially expanded to include numerous categories of cases that were previously beyond their competence.
2.3. Third risk: Incorrect determination of territorial jurisdiction
While changes in court-level jurisdiction primarily stem from judicial reform policies, practical debates often focus on territorial jurisdiction. Article 39 of the 2015 Civil Procedure Code, as amended and supplemented in 2025, establishes the general principle that a civil case shall be adjudicated at first instance by the court where the defendant resides, works, or maintains its registered office. This principle is intended to safeguard the defendant’s procedural rights and facilitate evidence collection. However, this principle is subject to statutory exceptions.
Article 40 of the 2015 Civil Procedure Code, as amended and supplemented in 2025, permits the plaintiff to choose the competent court in certain circumstances. For example, contractual disputes may be filed with the court where the contract is performed, while disputes concerning non-contractual damages may be brought before the court where the damage occurred or where the injured party resides. The existence of multiple jurisdictional bases frequently creates uncertainty for litigants when determining the competent court.
3. Other practical risks
For disputes involving real property, the Civil Procedure Code establishes a specific jurisdictional rule. Pursuant to Clause 1, Article 39 of the 2015 Civil Procedure Code, as amended and supplemented in 2025, disputes relating to immovable property fall under the exclusive jurisdiction of the court where the immovable property is located. This mandatory rule is intended to facilitate on-site inspections, verification of the property’s status, and enforcement of judgments. In practice, however, disputes involving immovable property remain one of the areas in which jurisdictional issues most frequently arise. Litigants often fail to distinguish between contractual disputes relating to immovable property and disputes concerning rights in rem over immovable property.
For example, a dispute arising from a deposit agreement intended to secure the transfer of land use rights may give rise to different jurisdictional analyses. Where the plaintiff merely challenges the validity or performance of the deposit agreement, the dispute may be characterized as a contractual dispute. Conversely, where the claim directly concerns land use rights or seeks recognition or transfer of rights over immovable property, the rules governing disputes relating to immovable property may apply. Although this distinction may appear technical, it may ultimately determine which court has jurisdiction over the case. Another increasingly common jurisdictional issue involves disputes containing foreign elements. In practice, many people assume that a dispute involves foreign elements only where one of the parties is a foreign individual or foreign legal entity. Under Vietnamese law, however, foreign elements may also arise from the place of residence of the parties, the location of the disputed property, or the place where the legal relationship was established, modified, or performed. Failure to identify these foreign elements correctly may result in an incorrect determination of the jurisdiction of Vietnamese courts and may also trigger complex procedural requirements, including judicial assistance, service of process abroad, or the recognition and enforcement of foreign judgments and decisions.
Furthermore, as commercial transactions become increasingly sophisticated, dispute resolution clauses have become standard provisions in many commercial agreements. In practice, however, numerous contracts contain poorly drafted dispute resolution clauses. Some clauses refer simultaneously to both the courts and commercial arbitration without clearly identifying the parties’ intended dispute resolution mechanism. When disputes subsequently arise, the parties often spend considerable time determining the appropriate forum. In certain cases, proceedings have even been dismissed or had to be recommenced because the dispute was initially filed before an incompetent forum.
4. How Businesses Minimize Legal Risks?
Drawing on Bizlawyer’s experience in advising and representing clients in civil, commercial, and real estate disputes, many procedural difficulties arise not from the substantive merits of the dispute itself, but from an incomplete assessment of issues relating to jurisdiction. In numerous cases, an incorrect characterization of the legal relationship, or the omission of a jurisdictionally relevant factor-such as the identity of the parties, the location of the disputed property, or the place where contractual obligations are to be performed-may trigger unnecessary procedural complications and significantly delay the resolution of the dispute.
Conclusion
In civil litigation, determining the competent court is not merely the first procedural step in commencing legal proceedings; it is also a fundamental requirement for ensuring that the entire dispute resolution process is conducted efficiently, in compliance with the law, and in a cost-effective manner. As Vietnam’s court system continues to be restructured and the civil procedural framework further evolves, parties should carefully assess the legal grounds for determining jurisdiction, remain informed of legislative developments, and seek legal advice at the pre-litigation stage whenever appropriate. Taking these measures can substantially reduce procedural risks while safeguarding the lawful rights and interests of individuals, organizations, and businesses.
For specialized legal advice, please contact:
Litigation Counsel: Nguyễn Thị Hoa
- – Email: info@bizlawyer.vn
- – Phone: 086.885.1900
Sincerely./.
