The sale of goods is a common commercial activity aimed at transferring goods between two parties for profit. If disputes arise during the performance of the contract that the parties cannot negotiate themselves, they have the right to request the competent court to resolve the dispute. In such cases, the plaintiff needs to understand the regulations to initiate a lawsuit in the competent court. This article will provide readers with legal knowledge about the jurisdiction for resolving disputes in sales contracts between businesses in Vietnam’s People’s Courts.
1. What is a Sales Contract Dispute?
The sale of goods is a commercial activity involving the exchange of goods and money between the seller and the buyer. In this transaction, the seller delivers the goods, transfers ownership to the buyer and receives payment; the buyer pays the seller and receives the goods and ownership rights as agreed. When both the seller and purchaser wish to sell and purchase goods from each other, they will negotiate a contract that specifies each party’s rights and obligations.
A sales contract dispute refers to conflicts or disagreements between the parties during the performance of the sales contract, typically occurring when one party fails to fulfil their obligations, thereby affecting the legitimate rights and interests of the other party.
2. Jurisdiction for Resolving Sales Contract Disputes Between Businesses in the Court
When a dispute arises in a sales contract and the parties choose to resolve them in court, the competent court for resolving the dispute will be determined as follows:
2.1 Disputes Under the Jurisdiction of the Court
According to Article 30 of the Civil Procedure Code 2015, Vietnamese courts have jurisdiction to resolve disputes arising from business or commercial activities among organizations with business registration, which are all for profits. Therefore, when two businesses enter into a sales contract for profit, disputes arising from this relationship fall under the court’s jurisdiction.
2.2 First Instance Level People’s Court Jurisdiction
a. Disputes Under the Jurisdiction of District People’s Courts
At the first instance level, the district court will generally be the competent authority to resolve disputes over sales contracts between two businesses, except for disputes that fall under the jurisdiction of the People’s Courts of the province (explained below).
b. Disputes Under the Jurisdiction of Province People’s Courts
At the first instance stage, disputes typically fall under the jurisdiction of the provincial court in one of two scenarios: i) Disputes involving parties or assets located abroad or those requiring judicial assistance from Vietnam’s representative office abroad or a foreign court; ii) The provincial court may take up disputes to resolve on its initiative when deemed necessary or at the request of the district court.
2.3 Territorial jurisdiction of courts
According to Clause 1 of Article 39 and Clause 1 of Article 40 of the Civil Procedure Code 2015, the territorial jurisdiction for dispute resolution by the court is determined as follows:
● The court where the defendant’s headquarters is located;
● The parties have the right to agree in writing to petition the Courts where the plaintiff’s headquarters is located;
● The plaintiff has the right to choose the court to resolve sales contract disputes in the following cases:
– If the plaintiff does not know the location of the defendant’s headquarters, they may request the court where the head office of the defendant is last located or where the defendant’s properties are located to settle the dispute;
– If the dispute arises from the operation of a branch of an organization, the plaintiff may petition the Court where the organization’s head office is located or where its branch is located to settle it;
– If the defendant does not have a head office in Vietnam, the plaintiff may petition the Court where its office is located to settle the case;
– If the dispute arises from a contractual relation, the plaintiff may petition the Court where the contract is performed to settle the case;
– If the defendants are headquartered in different places, the plaintiff may petition the Court of the area where one of the defendants is headquartered to settle the case.
Thus, in most cases, the court where the defendant’s headquarters is located will have jurisdiction to settle the dispute. However, in general, civil law and commercial law always prioritize the agreement and wishes of the parties. Therefore, if the parties do not want the court where the defendant’s headquarters is located to resolve the dispute, they have the right to agree to choose the court where the plaintiff’s headquarters is located to resolve the dispute. Additionally, the plaintiff also has the right to choose the competent court to resolve the dispute in some of the aforementioned cases.
Above is the article “Jurisdiction to Resolve Sales Contract Disputes at Vietnamese Courts”. TNTP hopes that the article is helpful to readers.
Sincerely.
