Organizers have disqualified Vietnamese-American Director Victor Vu's Giao lo dinh menh (Inferno) from the Canh Dieu Vang (Golden Kite) Awards Friday, citing similarities to a 1991 Hollywood release titled Shattered.
Despite subtle differences, there are similarities between the films' plot and characters, said Tran Luan Kim, chief of the festival's examination board.
Since Inferno's release last September, fans and critics alike have accused Vu of plagiarism.
Both films tell the story of a man struggling with amnesia following a traffic accident. In both films the protagonist discovers a shocking truth about his past.
Vu and the film's producer Saiga Films have repeatedly denied any wrongdoing and have chalked up any similarities to "coincidence".
When it was nominated for the Golden Kite, Vietnam's national film awards, controversy flared up again, prompting the film's producer, Saiga Films, to seek advice from a team of US copyright lawyers.
The attorneys concluded that the film hadn't violated any intellectual property laws, according to Kim.
However, there is still a chance that the producers of Shattered will file suit, Kim said.
Meanwhile, Le Ngoc Minh, deputy chief of the Cinema Department under the Ministry of Culture, Sports and Tourism, has said his department wasn't aware of Shattered when they licensed the screening of Inferno.
The department said the producer will have to assume all responsibility in the event of a lawsuit.