Comparative Perspectives on Vietnamese Construction Law 2025 | Part III of IV: Force Majeure and Fundamental Change of Circumstances

April 20, 2026

This article is Part III 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; Part III: Force Majeure and Fundamental Change of Circumstances (this article); 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 III of the series, summarizes the substantive discussion on Force Majeure and Fundamental Change of Circumstances, focusing on the Vietnamese law position, the open interpretive questions it raises, and comparative perspectives from Switzerland, Korea, and Singapore.

1. Vietnamese Law

Prior to 2025, force majeure in the construction context was addressed not in the Construction Law itself but in implementing decrees, most notably Decree 37/2015/ND-CP on construction contracts, and, for general civil law purposes, in Article 156 of the Civil Code 2015. Article 156 defines force majeure, in the context of tolling the statutory limitation period, as “an objective event which is unforeseeable and which cannot be overcome despite all necessary and permissible measures having been taken.” Courts and arbitral tribunals had been applying this definition despite its statutory purpose being confined to the limitation period.

Fundamental change of circumstances was separately addressed in Article 420 of the Civil Code 2015, which entitles a party to request renegotiation and, failing agreement within a reasonable time, to seek court intervention where: (i) the change in circumstances is caused by objective factors occurring after the contract was concluded; (ii) at the time of contract conclusion, the parties could not have foreseen such change in circumstances; (iii) the change is so significant that, had the parties known in advance, the contract would not have been concluded or would have been concluded with entirely different terms; (iv) continued performance of the contract without modifying its terms would result in severe harm to one party; and (v) the party whose interests are affected has taken all necessary measures within their capabilities, consistent with the nature of the contract, but is unable to prevent or mitigate the impact on their interests.

Article 13 of the Construction Law 2025 introduces, for the first time, a dedicated provision on force majeure and fundamental change of circumstances within the construction statute itself. Its structure is twofold. First, it establishes non-exhaustive lists of qualifying events for each category:

(a) For force majeure (Article 13.1):

(i) natural disasters, environmental catastrophes;

(ii) fire, epidemic;

(iii) national security emergencies, public order emergencies, national defense emergencies;

(iv) strikes, blockades, embargoes, sieges;

(v) activities involving the discovery of relics or archaeological works; and

(vi) other cases provided by relevant laws.

(b) For fundamental change of circumstances (Article 13.2):

(i) changes in State policies or law;

(ii) unforeseeable abnormal geological conditions; and

(iii) other cases provided by relevant laws.

Second, and critically, Article 13.3 provides that the determination of whether any event or circumstance falls within these categories “must satisfy the conditions prescribed by civil law in relation to force majeure events and performance of contracts under fundamental changes of circumstances.” The listed categories in Article 13 are therefore not self-executing: they identify events capable of qualifying as force majeure or fundamental change, but do not automatically trigger any legal consequence. A party invoking Article 13 must still satisfy the Civil Code conditions on the facts of the specific case.

The legal consequences of a successfully invoked force majeure event or fundamental change of circumstances are addressed in Articles 84 and 85 of the Construction Law 2025. Article 84 permits amendment of a construction contract on the grounds of, among others, force majeure, fundamental change of circumstances, or change in law. For public investment and PPP projects, contract amendments on these grounds require additional competent authority approvals. Article 85 expressly permits suspension, and in some cases termination, of the construction contract where a force majeure event occurs. FIDIC forms used on Vietnamese projects (e.g., FIDIC’s “Exceptional Events” provisions and the “Change in Law” clause) must now be read alongside Articles 13, 84, and 85, as the statutory framework sets boundaries within which contractual provisions operate.

2. Korean Law

In Korean law, force majeure as a distinct legal concept is largely structurally unnecessary — a consequence, again, of the fault-based liability principle. Because a contractor is not liable for non-performance or delay where it can establish an absence of fault, a force majeure event that prevents performance will, in most cases, give the contractor a complete defense without the need for an express contractual force majeure clause. By the same reasoning, suspension clauses are also theoretically unnecessary: a party is entitled under Korean law to suspend performance where a breach or default by the counterparty is anticipated, without requiring a specific contractual right to do so.

In practice, Korean contractors regularly execute FIDIC forms and other international standard contracts that contain detailed force majeure, extension of time, and suspension provisions. When Korean law is the governing law of those contracts, however, many of these provisions become functionally redundant, except that these provisions provide some clarity on when a contractor may be deemed not to be at fault, or may suspend its performance. The contractual force majeure mechanism is designed to provide relief in a strict-liability legal system where, absent such a clause, the contractor would be liable for any non-performance regardless of cause. In a fault-based system, the contractor already has a statutory defense that force majeure provisions in common law contracts are designed to replicate. The practical implication for Vietnamese practitioners using FIDIC forms under Korean governing law (e.g., in Korean EPC contracts on Vietnamese projects) is that the FIDIC force majeure regime may not operate as expected if Korean law applies; for instance, contractors may seek to claim exemption of liability based on no fault even if they have failed to comply with the notice requirement in the force majeure provision.

3. Swiss Law

Swiss law contains no statutory provision on force majeure. While the concept is recognized in Swiss case law, there is no general statutory force majeure defense. Force majeure events are defined as “extraordinary external events related to elemental forces or actions of third parties, that are unexpected and unforeseeable to both parties, and that cannot be prevented by applying due care.” This is broadly aligned with the international standard, but parties are free to define the qualifying events and their consequences contractually, and they regularly do so, including through FIDIC standard forms.

In the absence of a contractual force majeure clause, Swiss law addresses force majeure-like situations through two distinct legal doctrines. The first is subsequent impossibility of performance: where a contractor is factually or legally prevented from carrying out the works after the contract was concluded, there is no breach of contract for the duration of the impossibility, and the contractor is temporarily relieved of its obligation to perform. However, subsequent impossibility does not by itself entitle the contractor to additional time or money: those consequences arise only if the impossibility was caused by the employer, not by an independent external event.

The second doctrine is hardship (clausula rebus sic stantibus). Four conditions must be satisfied: (i) circumstances have changed in a way not reasonably foreseeable by either party at the time of contracting; (ii) the change has created a significant imbalance between the parties’ obligations under the contract; (iii) continued performance has become exceptionally onerous for one party as a result; and (iv) that party did not assume the risk of such a change in the contract and the changed circumstances were beyond the control of this party. Where these conditions are met, a court or arbitral tribunal may modify the contract, for example, by adjusting the contract price, or, in exceptional cases, terminate it. The threshold is high. The COVID-19 pandemic provided a concrete test: Swiss courts were generally reluctant to grant hardship relief. The question of unforeseeability proved particularly difficult: while the first lockdown could plausibly be characterized as unforeseeable, the second and third lockdowns arose later into the pandemic and the government’s response had already materialized, which Swiss courts regarded as undermining the unforeseeability argument.

4. Singapore Law

Singapore has no statutory codification of force majeure. The concept is entirely contractual: the scope of a force majeure event, the notice and mitigation obligations it triggers, and its consequences are all defined exclusively by what the parties have agreed. The Singapore Court of Appeal’s decision in RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] SGCA 39 drew an important distinction between a contractual force majeure clause, which suspends performance and provides for renegotiation or extension of time while the contract remains on foot, and the common law doctrine of frustration, which automatically discharges the contract entirely and cannot be excluded by agreement. Parties who invoke the frustration doctrine to escape obligations under a construction contract may find that they have dissolved the contract more comprehensively than they intended.

The RDC Concrete decision also confirmed the narrow scope of force majeure in Singapore law: circumstances that make performance more expensive or commercially onerous do not constitute force majeure. Where a contractor can still source the necessary materials or services, even at a significantly higher cost, performance has not been prevented and no force majeure defense is available.

The COVID-19 pandemic demonstrated the limits of this position in practice. The common law frustration doctrine proved too narrow to address the disruption caused by government-mandated “circuit breaker” measures; parties remained technically capable of performing in many cases, even if severely impeded. Singapore’s legislative response was the COVID-19 (Temporary Measures) Act 2020, which imposed a temporary statutory moratorium on enforcement actions arising from breaches of scheduled contracts, including construction contracts entered into prior to 25 March 2020, caused by the pandemic. The moratorium was temporary by design and is no longer in force. Its enactment is itself an instructive data point: the general law was insufficient, and targeted emergency legislation was required to fill the gap. That gap is structural to the Singapore approach of leaving force majeure entirely to contract.

5. Comparative Observations for Vietnamese Practitioners

Vietnam is now the only jurisdiction among those discussed with a statutory list of qualifying force majeure events specific to construction activities. Switzerland and Korea leave force majeure to general judicial development and to contractual agreement; Singapore leaves it entirely to contract. The Article 13 list of force majeure events gives Vietnamese construction practitioners a concrete statutory anchor that their counterparts in other jurisdictions lack, but that anchor comes with two caveats. First, the listed categories are not exhaustive: the catch-all phrase “other cases as provided by relevant laws” preserves flexibility but also introduces uncertainty about what qualifies in borderline cases. Second, and more fundamentally, listing an event in Article 13 is a necessary but not sufficient condition for invoking force majeure or fundamental change: the Civil Code conditions must still be individually satisfied on the facts. The epidemic listing in Article 13.1(b), for instance, does not mean that every epidemic automatically constitutes a force majeure event; a party must still establish, case by case, that the epidemic was objective, unforeseeable, and unavoidable on the facts of its project.

The Swiss clausula rebus sic stantibus doctrine maps closely onto the Vietnamese Article 420 conditions for fundamental change of circumstances. Both provisions have a high threshold. The construction-specific listing of “changes in State policies or law” and “unforeseeable abnormal geological conditions” in Article 13.2 is useful as a gateway, but the Article 420 conditions must still be met, which means that a change in law that was, for example, foreseeable or that does not cause serious damage to the affected party would not qualify. Practitioners should resist the assumption that any event falling within a listed category automatically entitles a party to contract amendment or suspension.

[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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