Comparative Perspectives on Vietnamese Construction Law 2025 | Part II of IV: Non-contractual Liability in Construction

April 20, 2026

This article is Part II of IV of a four-part series summarizing the panel discussion on “Comparative Perspectives on Construction Disputes: International Practice and Vietnamese Law,” organized by the Swiss Arbitration Association (ASA) as a side-event at HICAC 2026 on 8 April 2026 in Ho Chi Minh City. The four-part series covers: Part I: Delay and Liquidated Damages; Part II: Non-contractual Liability in Construction (this article); Part III: Force Majeure and Fundamental Change of Circumstances; Part IV: Multi-tier Dispute Resolution Clauses.

On 8 April 2026, the Swiss Arbitration Association (ASA) organized a side-event panel discussion at HICAC 2026 held in Ho Chi Minh City, entitled “Comparative Perspectives on Construction Disputes: International Practice and Vietnamese Law.” The panel examined four topics arising under the newly enacted Construction Law 2025 of Vietnam (effective 1 July 2026): (i) delay and liquidated damages (“LD”); (ii) non-contractual liability in construction; (iii) force majeure and fundamental change of circumstances; and (iv) multi-tier dispute resolution clauses. Panelists were Mr. Mino Han (Peter & Kim, Korea/Singapore), Ms. Lesley Tan (WongPartnership, Singapore), and Dr. Alain Grieder (Schellenberg Wittmer, Switzerland/Singapore), with the discussion moderated by Mr. Thang Pham (YKVN, Vietnam/Singapore).

The panel was organized around the concept of “legal transplants” – the phenomenon whereby legal concepts originating in one system are borrowed and integrated into another, where they interact with local legal culture and evolve over time into something that may differ significantly from the original. This concept is directly relevant to the discussion on the new Vietnamese Construction Law 2025. The central question is not merely whether these concepts exist, but how they will function in practice when interpreted by Vietnamese courts and arbitral tribunals, and how their function compares to what practitioners familiar with FIDIC and international standard forms might expect.

This article, Part II of the series, summarizes the substantive discussion on Non-contractual Liability in Construction, focusing on the Vietnamese law position, the open interpretive questions it raises, and comparative perspectives from Switzerland, Korea, and Singapore.

1. Vietnamese Law

Article 86.1 of the Construction Law 2025 provides that compensation for damages must be agreed by the parties in the construction contract. This raises an immediate question about the interaction between this new contractual requirement and the Civil Code 2015’s non-contractual liability regime (Articles 584 and following), which does not require a contractual basis and imposes liability on any person who unlawfully causes damage to another. Whether Article 86.1 displaces Civil Code non-contractual liability between the contracting parties, or whether the two regimes run in parallel, remains to be determined.

Separately and independently of this question, the Construction Law 2025 (like its predecessor) imposes a series of mandatory statutory liabilities on construction contractors that apply regardless of what the contract provides and cannot be contracted out of by the parties. These liabilities are dispersed across multiple provisions of the law and cover: quality of the contractor’s own work, borne before the owner and before the law; responsibility for the quality and origin of materials used; warranty and defect rectification obligations; site safety and hazardous zone management; compensation to any harmed party (including third parties) for environmental pollution caused by construction activities; liability for construction incidents; and others.

The practical reach of this mandatory liability regime is illustrated by the Danang–Quang Ngai Expressway case (Judgement No. 502/2024/HSPT dated 27 June 2024 of the High People’s Court in Hanoi). This highway project (139 km, World Bank-funded, total investment approximately USD 1.5 billion) was found, shortly after opening, to have suffered extensive surface failures caused by the use of materials that did not conform to the approved design or applicable Vietnamese construction technical standards. Criminal proceedings followed. Individuals within the employer and the project management unit were convicted. The construction contractors (responsible for packages A1 to A5) were brought into the proceedings as civil parties and held civilly liable.

In accordance with the court’s analysis, the liability imposed on the contractors rested on the mandatory provisions of the Construction Law 2014 (the predecessor to the 2025 law) and its implementing decrees. The court invoked the contractor’s statutory duty to construct in accordance with the approved design, its responsibility for the quality and provenance of materials, and its liability for quality of the work even after the warranty period. Critically, the court expressly stated that it was not resolving a contractual dispute and did not engage with the construction contract at all. Vicarious liability was then imposed on the contractor entities through Article 597 of the Civil Code 2015 (employer’s vicarious liability for the acts of its employees), applied to make the contractors answerable for the conduct of their employed project managers. The result was a judgment that blended criminal liability, construction law statutory liability, and Civil Code non-contractual liabilities, bypassing the contractual framework entirely.

Two practical consequences of the judgment stand out. First, the court confirmed that the owner’s supervision of works during construction and the supervisor’s issuance of acceptance certificates did not reduce or extinguish the contractor’s mandatory statutory quality liability. Contractual acceptance is not a defense to statutory liability. Second, the contractual and statutory frameworks operated on entirely separate tracks, with the contractors able to simultaneously prevail in arbitration while being held liable in criminal or civil proceedings.

2. Singapore Law

In Singapore, non-contractual liability in construction is approached through the tort of negligence, with the Spandeck test, established by the Singapore Court of Appeal in Spandeck Engineering (S) Pte Ltd v Defence Science and Technology Agency [2007] SGCA 37, providing the governing framework for determining whether a duty of care exists between parties who have no direct contractual relationship.

The Spandeck test proceeds in two stages, preceded by a threshold requirement. The threshold is factual foreseeability: whether the defendant could reasonably have foreseen that its conduct might cause harm to a plaintiff in the claimant’s position. Where this threshold is cleared, as it generally is without difficulty in construction cases, the first stage requires the court to examine the proximity of the relationship between the parties: whether there is physical, causal, or circumstantial proximity, and whether the plaintiff reasonably relied on the defendant and the defendant was aware of that reliance. Where proximity is established, the second stage requires the court to consider whether any policy considerations negate the prima facie duty of care, including, most importantly, whether recognition of the duty would expose the defendant to the risk of indeterminate liability.

The Spandeck framework matters in construction because of the tiered structure of project relationships: a subcontractor’s defective work can damage an adjacent landowner, a consultant’s negligent design can cause pure economic loss to a downstream contractor, and neither has a direct contract with the party whose conduct caused the loss. The Spandeck test provides a structured basis on which such claims can be advanced.

However, Singapore courts are alert to the risk that a duty of care in tort could be used to circumvent a carefully negotiated contractual allocation of risk. Where parties have agreed a limitation of liability clause or a contractual cap on damages, Singapore courts will generally not allow a tort claim to override that allocation and expose the defendant to indeterminate liability. The interplay between tort and contract is a fact-specific analysis, but the courts’ starting position is to respect the parties’ own allocation of risk where one exists.

3. Swiss Law

Non-contractual liability under Swiss law arises through two routes: tort law and strict liability. Under Article 41 of the Swiss Code of Obligations, a person who unlawfully causes damage to another, intentionally or negligently, must pay compensation. This provision applies both to claims by third parties harmed by construction activities and to claims brought by the employer in parallel with, or instead of, contractual remedies.

The second route, strict liability, applies to property owners in specific circumstances. Where damage results from the dangerous nature of a construction site or building, the property owner (typically the employer) may be held strictly liable even in the complete absence of negligence or fault. Such danger may, for example, arise from a breach of mandatory technical or safety standards. Importantly, this strict liability is the liability of the owner, not of the contractor directly. The injured third party has a claim against the owner; the owner must then pursue the contractor separately, in contract or in tort, for contribution or indemnity.

Some statements in Swiss legal doctrine raise the theoretical possibility that strict liability could be extended beyond the formal legal owner to a person who exercises total and effective control over a construction site. This extension has not been confirmed by any Swiss court decision, however, and the outcome of the Danang–Quang Ngai Expressway case would be difficult to replicate under Swiss law as it currently stands.

One point of practical relevance: tort claims under Swiss law are subject to a shorter limitation period than contractual claims. The limitation period for tort is three years from the moment the claimant becomes aware of the damage and the person who caused it (relative limitation period), and ten years from the date of the harmful act (absolute limitation period). Contractual claims run for ten years from the date of breach.

4. Korean Law

Korean law takes a broad, non-categorical approach to tort liability. A single provision of the Korean Civil Code (Article 750), covering “unlawful acts”, encompasses all forms of tort without specifying categories, types, or required relationships between the parties. As a structural matter, this means that concurrent tort and contractual claims are most often theoretically available where one party’s conduct causes loss to another.

In practice, however, there is limited strategic benefit to pursuing a tort claim concurrently with a contractual claim in a construction dispute, for two reasons. First, the scope of recoverable damages under both routes is the same: a successful tort claimant recovers no more than a successful contract claimant would for the same loss. Second, the limitation period for tort claims is shorter than for contractual claims, which may preclude the tort route by the time a latent defect comes to light.

The Danang–Quang Ngai Expressway case also introduced a dimension: criminal liability for construction defects, with civil liability attached. This would be unusual in the Korean context. The standard Korean response to defective construction work is a demand for rectification, followed if necessary by the employer engaging third parties to carry out the rectification and seeking recovery of the cost. Criminal proceedings arising from construction quality failures of this nature are not a feature of Korean practice.

5. Comparative Observations for Vietnamese Practitioners

The Danang–Quang Ngai Expressway case confronts Vietnamese construction practitioners with a liability regime that has no close parallel in the other three systems. The statutory mandatory liability of the Construction Law 2025, which imposed directly on the contractor, surviving employer acceptance, bypassing the contractual framework, and extending through the criminal law into civil liability, represents a legal exposure that no contractual limitation clause can eliminate and no acceptance record can neutralize (unless such contractual limitation is provided in a treaty of Vietnam). Contractors operating in Vietnam must understand that the contractual warranty period and agreed limitation of liability provisions may not define the ceiling of their legal risk exposure.

[1]            Thang Pham is a Partner and Head of YKVN Singapore Office. The views expressed in this article are the individual views of the author and the panelists, and are not attributable to YKVN or to any of the law firms represented by the panelists.

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