Author: TNTP LAW

Key Considerations in Resolving Credit Contract Disputes

Written by TNTP LAW on 18 June, 2025. Posted in Legal newsletter.

Dispute resolution arising from credit contracts remains a primary concern for credit institutions, enterprises, and individual borrowers. To best protect their legal rights and interests, the involved parties must clearly understand common types of disputes, appropriate resolution methods, as well as common mistakes in judicial practice. In the article below, TNTP will analyze the critical issues to consider when handling credit contract disputes, thereby providing readers with a comprehensive overview and clear direction for each specific situation.

1.Common Types of Credit Contract Disputes

A credit contract is a legally binding document between the lending institution (e.g. a bank or financial company) and the borrower (e.g. individual or enterprise). Under such a contract, the lender provides a loan amount to the borrower, and the borrower is responsible for fully repaying both the principal and interest in full within the agreed period.

Credit contract disputes arise when disagreements occur between banks, credit institutions, and borrowers concerning rights and obligations within the credit relationship. Common types of disputes include:

Disputes over principal and interest payment obligations: This is the most prevalent dispute type, occurring when borrowers either fail to repay or inadequately repay the principal and interest debts. The causes may stem from ineffective use of capital leading to insolvency or deliberate avoidance of obligations. Additionally, in some cases, borrowers argue that the applied interest rate deviates from the agreed terms or exceeds the statutory limit. Pursuant to Resolution No. 01/2019/NQ-HDTP, the overdue interest rate must not exceed 150% of the contractual interest rate at the time the debt becomes overdue. Disputes over principal and interest payment obligations may also arise where borrowers claim that the lender applied incorrect interest rates, compounded interest unlawfully, or imposed fees and penalties that do not comply with regulations.
Disputes over secured assets: These disputes often stem from disagreements regarding the validity of mortgage agreements, the scope of secured obligations, or asset disposal. The most contentious subjects of mortgage contracts are land use rights and associated property assets when these constitute shared marital or household property but only one person enters into the mortgage agreement. Additional disputes may arise where the credit institution disposes of the collateral in contravention of regulations or where the parties cannot agree on the asset’s valuation at the time of enforcement.
Disputes involving third parties: According to Article 335 Civil Code 2015, individuals or organizations may act as guarantors for a borrower’s obligations. For credit contracts with third-party guarantees, disputes typically concern the scope of liability of the third party and the validity of guarantee or mortgage contracts.

2.Methods of Resolving Credit Contract Disputes

When a dispute arises under a credit contract, the parties may choose among four principal dispute resolution methods: negotiation, mediation, arbitration or litigation in court.

Resolution by Negotiation
Negotiation is encouraged due to its flexibility, speed, and its ability to preserve long-term cooperative relationships between the parties. During negotiation, the parties discuss and negotiate freely, unconstrained by formal procedures.
In practice, many credit institutions have developed internal procedures for negotiation and debt restructuring for customers facing financial difficulties. Negotiated solutions may include extensions of repayment terms, interest waivers or reductions, debt restructuring or agreements on disposing of collateral to recover debt.
Resolution by Mediation

Mediation involves a neutral third party (a mediator or mediation center) assisting the parties in reaching a mutually agreed solution. Like negotiation, mediation outcomes are non-binding and depend on the goodwill of the parties to implement the agreement.

Resolution by Arbitration
To apply arbitration, the parties must have an arbitration agreement, which may be stipulated in the credit contract or agreed upon separately after the dispute arises.
Arbitration offers several advantages, including final and binding awards; flexible procedures; faster resolution compared to court litigation; and confidentiality, which is particularly valued by businesses.
However, arbitration costs are typically high and require parties have a valid agreement to resolve disputes through arbitration.
Resolution by Court Litigation
When the above methods are not suitable for application, one of the parties may choose to file a lawsuit in court. Court litigation is a dispute resolution method commonly preferred by parties in many credit contract disputes, applied after the parties can not reach a mutual settlement. Pursuant to the Civil Procedure Code 2015, the court reviews the case file, evaluates evidence and renders a judgment in accordance with the law.
However, litigation is often time-consuming, costly, and lacks confidentiality. Specifically, in credit contract disputes, prolonged litigation may increase the borrower’s repayment obligations due to accruing interest and penalties.

3.Key Considerations When Resolving Credit Contract Disputes

Resolving credit contract disputes requires a thorough understanding of the law, meticulous evidence evaluation, and selection of an appropriate resolution strategy. Key considerations include:

First, verify the legality of the credit contract: Some credit contracts may be declared partially or entirely void if they violate legal provisions regarding form, content, or conditions of contract formation. Parties involved in dispute resolution must review the legality of contract terms, contract form, signing authority, and applicable lending interest rates.
Second, assess the actual performance of obligations under the contract: Disputes frequently stem from the borrower’s failure to repay on time or from the lender’s imposition of unfavorable terms. Effective resolution requires reconciling contract terms with actual performance, identifying payments made and outstanding balances, and verifying the appropriateness of applied penalty interest rates.
Third, prepare complete and thorough documentary evidence: The collection and assessment of evidence is vital to the success of the case. Parties should diligently gather documents to substantiate their rights and obligations, including the credit contract, loan repayment transaction records, meeting minutes between the parties, and documents relating to secured assets (if any).
Fourth, select an appropriate dispute resolution method: The choice of method should take into account the seriousness of the dispute and the willingness of the parties to cooperate. Parties should prioritize negotiation for swift resolution and preservation of business relationships. In the absence of goodwill, other avenues such as arbitration, or litigation should be considered.
Fifth, properly determine the legal standing of the litigants: Correct identification of the litigants’ legal status is essential in court proceedings. Some notes include:
Under the law, branches and transaction offices of credit institutions do not possess legal personality, so the credit institution itself must be the litigant. However, the credit institution may authorize branch representatives to participate in legal proceedings on its behalf.
Similarly, in the case of private enterprises, which lack legal personality, the business owner is the sole proprietor of all assets and is personally liable for the enterprise’s obligations. Thus, the litigant must be the owner of the private enterprise.
In disputes involving mortgaged assets, it is necessary to determine whether the mortgaged property is jointly or separately owned, ensuring that all property rights holders participate in legal proceedings when necessary.

Resolving credit contract disputes requires mastery of legal regulations, rigorous evaluation of evidence, and careful selection of the appropriate resolution method. Proactively reviewing contracts, clearly identifying the rights and obligations of the parties, and selecting a suitable resolution approach can help minimize risks and achieve optimal outcomes.

The foregoing is TNTP’s analysis of the key considerations in resolving credit contract disputes. We hope this information proves helpful to our esteemed readers. Should you require assistance, please do not hesitate to contact us.

Sincerely,

TNTP congratulates Lawyer Dang Mai Phuong

Written by TNTP LAW on 17 June, 2025. Posted in Our Activities.

TNTP & Associates International Law Firm (“TNTP”) proudly congratulates newly appointed Lawyer Dang Mai Phuong, who has successfully passed the final assessment following her legal apprenticeship, officially becoming a member of the Hanoi Bar Association. This is a significant milestone, marking her professional maturity and recognizing her persistent efforts throughout her journey in pursuing the legal profession.

Lawyer Dang Mai Phuong is one of TNTP’s outstanding personnel, who has grown within the firm and been a dedicated companion over the years. With her high sense of responsibility, eagerness to learn, and professional working style, Lawyer Phương has become an indispensable part of the development of TNTP’s Hanoi Branch.

Lawyer Dang Mai Phuong represents the generation of lawyers “made by TNTP,” affirming TNTP’s credibility and capability in training and enhancing the quality of its human resources.

Once again, TNTP warmly congratulates Lawyer Đặng Mai Phương on her new, honorable role. We wish her continued growth, resilience, and success on her professional legal journey.

Sincerely,
TNTP

Overview of accounts Receivable Management for Enterprises

Written by TNTP LAW on 16 June, 2025. Posted in Legal newsletter.

The business operations of enterprises and organizations require a rigorous and clear management system to achieve their goals effectively. Among them, accounts receivable management is one of the crucial factors, contributing to maintaining financial stability and optimizing cash flow. In this article, TNTP will provide an overview of “Accounts Receivable Management for Enterprises”.

1.Definition of Accounts Receivable Management for Enterprises

Enterprise debt management is the process of controlling, monitoring, and handling receivables and payables in business activities to maintain stable cash flow, reduce financial risks, and support sustainable growth. Specifically, accounts receivable management involves establishing policies, tracking payment status, pursuing debt collection, and addressing bad debts when necessary. When implemented effectively, this system will help enterprises optimize capital resources, improve debt recovery rates, and minimize the risk of losing funds.

2.Enterprises Need to Establish a Rigorous Accounts Receivable Management Regulation

To effectively manage accounts receivable and conduct debt recovery, enterprises should consider creating management regulations that include these key elements:

a.The enterprise’s accounts receivable management system must have specific regulations for debt classification

The regulation helps categorize debts according to the value, ageing period, debtor cooperation level, and financial capability, thereby determining the priority level for recovery and appropriate handling solutions.

Specifically, all debts and debtors must be classified into specific groups to implement corresponding debt recovery measures. For instance, recently incurred small-value debts are assigned a lower collection priority compared to high-value debts that have remained outstanding for an extended period, and the corresponding recovery measures for these two categories will also be distinct.

The management and categorizing of debts will help enterprises create efficient debt recovery plans for each corresponding debt. This crucial first step should be taken whenever debt arises, ensuring proper monitoring and timely handling them effectively while preventing overlooked debts from disrupting the company’s cash flow.

b.The enterprise’s accounts receivable management system must have specific regulations for debt collection procedures

Enterprises should establish a standardized debt management system with clear procedures for debt collection from basic communication through phone, email, and written documents to advanced measures like filing lawsuits. Using standard procedures enables enterprises to track, manage, and evaluate debt collection progress effectively. This allows enterprises to adjust their debt resolution strategies for each case, ensuring quick, effective, and cost-efficient recovery.

3.Accounts Receivable Management Process in Enterprises

Accounts receivable management and debt recovery are essential factors related to corporate finance. Based on the above contents, TNTP outlines a process for enterprises to manage accounts receivable in compliance with legal regulations as follows:

Step 1: Develop an Accounts Receivable Management Regulation

Develop a management regulation that includes:

Categorizing debts and debtors
Debt resolution procedures
Responsibilities of relevant departments and individuals
Measures for handling bad debts

Step 2: Record Debts and Issue Invoices

Issue official invoices according to contractual agreements and legal requirements
Record debts in the accounting system
Send invoices and confirm debts with customers

Step 3: Categorize Debtors

Classify customers according to payment risk levels: Group of customers nearing payment due date, group of customers with late payments, group of customers with bad debts.

Step 4: Monitor and Remind Payments Before Due Dates

Send payment reminders to customers approaching payment deadlines
Update the payment status of customers
Contact customers if there are signs of late payment

Step 5: Recover Overdue Debts

Request debtors to sign the Debt reconciliation records
Contact customers via email, phone, and official letters to request payment
Arrange meetings with debtors to find payment solutions
Negotiate with debtors on payment schedules
If debtors continue to delay payment, enterprises may consider engaging law firms to handle debt recovery through litigation or appropriate legal measures.

Step 6: Store Documents and Monitor the Payment Process

Fully store transaction documents, invoices, and Debt reconciliation records
Regularly update payment status
Review and optimize the accounts receivable management process

Effective accounts receivable management not only helps enterprises maintain stable cash flow but also reduces financial risks, ensuring sustainable business operations. TNTP hopes this article provides useful information, offering you an overview of “Accounts Receivable Management for Enterprises”.

Best regards,

Legal consequences of an invalid contract: The bona fide party in receiving yield and/or income is not required to return such yield and/or income

Written by TNTP LAW on 13 June, 2025. Posted in Legal newsletter.

A civil contract may be deemed invalid if it does not satisfy the statutory conditions for validity. In such cases, the parties are obliged to return what they have received and restore the original condition. However, after the transfer of property has taken place, yields (fruits) and income may arise from the exploitation of that property. A key legal question arises: Whether the party receiving the property is required to return the generated yields and income, particularly in cases where that party acted in good faith. This article analyzes the legal implications for the good-faith recipient of yields and income when a contract is invalidated.

1.Definition of Yields and Income

The concepts of yields and income are defined under Article 109 of the 2015 Civil Code of Vietnam (“the Civil Code”).

Specifically, yields refer to natural products derived from a property, independent of human intent. In practice, yields are also known as “fruits of the property” and they may originate from crops, livestock, or other similar sources.

Income refers to material benefits generated from the use or exploitation of property. Income may arise from leasing, investing, conducting business, or other lawful means of utilizing the property. It is important to distinguish income from increased market value of the property due to market fluctuations, as such value increases do not qualify as income in the legal sense. This distinction is particularly relevant when resolving legal consequences of invalid contracts or asset-related disputes.

Illustration: Party A sells an apartment to Party B for VND 3 billion. Party B makes full payment and receives possession of the apartment. Over the course of one year, Party B leases the apartment and earns VND 120 million. Subsequently, the court declares the sales contract invalid. At that time, the market value of the apartment has increased to VND 4.2 billion. When addressing the legal consequences of the invalid contract, the VND 120 million in rental income is retained by Party B as lawful income, while the VND 1.2 billion in market value increase is excluded from compensation.

2.Criteria for Determining Good Faith

The Civil Code does not specifically prescribe criteria for identifying a good-faith party (bona fide party) in the context of yields and income derived from an invalid contract. However, based on general provisions on possession in good faith, one may infer that a good faith party is: A party who has reasonable grounds to believe that they have legal rights to the property being possessed under a valid civil transaction (e.g., believing the contract was legally effective); or A party who did not know and was not obliged to know that their possession of the property lacked legal basis (e.g., unaware that the property being transferred was jointly owned and required consent from all co-owners).

3.Legal Treatment of Yields and Income Received in Good Faith Under an Invalid Contract

In practice, for contracts involving the transfer of property, delivery of the asset often occurs before the contract is declared invalid. During the period of possession, yields and income may arise from the property through natural growth or lawful exploitation. To protect the interests of the good-faith recipient, the Civil Code provides that yields and income obtained in good faith are not subject to restitution upon contract invalidation.

Illustration:

Mr. A enters into a house purchase contract with Ms. B, pays in full, and takes possession of the property. Over two years, he leases the property and earns VND 240 million in rental income. Later, Ms. B’s husband files a lawsuit claiming the property is marital property and that the contract is invalid since only Ms. B signed it without the husband’s consent or authorization. The court declares the contract invalid due to a lack of authority over jointly owned property.

At the time of the transaction, Mr. A neither knew nor was required to know that the property was jointly owned. Ms. B’s name appeared on the Certificate of Land Use Rights, House Ownership, and Other Assets Attached to Land, and she executed the contract directly. Mr. A is therefore identified as a good-faith party. Under Clause 3, Article 131 of the Civil Code, Mr. A is not required to return the VND 240 million in rental income, as it qualifies as lawful income earned during his good-faith possession, despite the subsequent invalidation of the contract.

In civil transactions, parties typically act voluntarily, in good faith, and in compliance with legal regulations to obtain legitimate benefits. However, not all transactions yield expected results, especially when contracts are invalidated due to objective legal deficiencies or factors beyond the parties’ control. In such cases, identifying and protecting the rights of the good-faith party – who entered into and performed the contract honestly, lawfully, and without fault – is essential and consistent with the principles of the Civil Code. Recognizing the good-faith party’s ownership of yields and income derived from the property ensures the stability of civil transactions and promotes fairness in resolving the consequences of invalid contracts.

This article, titled “Legal consequences of an invalid contract: The bona fide party in receiving yield and/or income is not required to return such yield and/or income”, is respectfully provided to readers by TNTP. We hope this article offers practical insights.

Best regards,

Assignment of rights and obligations in civil judgment enforcement

Written by TNTP LAW on 11 June, 2025. Posted in Legal newsletter.

Civil judgment enforcement is the stage aimed at ensuring that legally effective court judgments and decisions are implemented in practice. However, in reality, the parties involved in a judgment enforcement case may change for various reasons such as death, assignment, division, merger, or corporate restructuring. In such cases, the assignment of rights and obligations in judgment enforcement plays an important role. Through this article, TNTP would like to present to our readers an analysis of the assignment of rights and obligations in civil judgment enforcement.

1.What is the assignment of rights and obligations in civil judgment enforcement?

The assignment of rights and obligations in civil judgment enforcement refers to the transfer of rights and obligations from one individual or organization (the original judgment creditor or judgment debtor) to another entity, which will then continue to fulfill those rights or obligations as prescribed in a legally effective judgment or decision. This assignment may arise from circumstances including: inheritance, corporate restructuring (including division, separation, merger, consolidation, or dissolution), transfer of obligations or rights to request enforcement, or from civil agreements.
The assignment of rights and obligations in judgment enforcement does not alter the nature of the obligation itself; it only changes the subject who is entitled to exercise the right or required to perform the obligation during the enforcement process.

2.Cases of assignment of rights and obligations in civil judgment enforcement

The assignment of rights and obligations in civil judgment enforcement is governed by Article 54 of the Law on Civil Judgment Enforcement 2008 (as amended in 2014), as well as relevant provisions of the Civil Code and the Law on Enterprises. Accordingly, the main scenarios in which such assignments may occur include:

Merger or consolidation: The newly formed organization is responsible for continuing to perform the rights and obligations of the original organization, unless otherwise provided by law.
Division or separation of an organization: The decision on division or separation must clearly identify the organization or individual that will inherit the rights and obligations of civil judgment enforcement. If the decision does not specify this, the newly formed organizations shall be jointly responsible for the enforcement obligations of the original entity.
Dissolution: The competent authority issuing the dissolution decision must notify the civil judgment enforcement agency in advance. If the enforcement rights and obligations of the dissolved organization are transferred to another organization, the successor organization shall continue to perform those rights and obligations. In cases where assets no longer exist due to an unlawful dissolution, the authority responsible for the dissolution shall be held liable to the extent of the lost assets.

The civil judgment enforcement agency, the judgment creditor, and any related parties have the right to request the competent authority to review the dissolution decision in accordance with the law.

Bankruptcy: The enforcement rights and obligations are handled in accordance with bankruptcy laws. This includes determining interest on debts, settling secured debts, and identifying the order of asset distribution.
Transformation of enterprise type: The newly converted company remains responsible for the outstanding debts and enforcement obligations of the pre-conversion company.
Death of an individual: The enforcement rights and obligations are transferred to the legal heirs in accordance with the inheritance provisions of the Civil Code. Accordingly, the heir or estate administrator shall be responsible for fulfilling the deceased’s enforcement obligations.
Aggrement to transfer the enforcement rights or obligations to a third party: The third party becomes the subject of those rights and obligations, and the agreement must be made in writing. Pursuant to Clause 2, Article 15 of Decree No. 62/2015/ND-CP, such agreement must be made in writing. However, if the judgment creditor assigns their right, consent from the judgment debtor is not required unless otherwise stipulated by law. In contrast, if the judgment debtor wishes to assign their obligation to a third party, the consent of the judgment creditor is mandatory.

3.Legal consequences of the assignment of rights and obligations in judgment enforcement

Individuals or organizations receiving the assigned rights and obligations shall become the judgment creditor, or the judgment. The transferee of the enforcement rights and obligations has the right to file a request for judgment enforcement..
After receiving a complete set of documents and verifying the legality of the assignment, the civil judgment enforcement agency shall issue a decision confirming the transfer of enforcement rights and obligations and proceed with the enforcement in accordance with legal regulations.

The assignment of rights and obligations in civil judgment enforcement is not only a legal mechanism to ensure that judgments are executed accurately and effectively, but also a preventive measure against the abuse of changes in legal entity or personal status to evade legal obligations. For those involved in enforcement proceedings, understanding these provisions helps protect their lawful rights and minimizes unnecessary disputes.

The above is the article “Assignment of rights and obligations in civil judgment enforcement” prepared by TNTP. We hope this article proves helpful to our valued readers.

Best regards,

Basic Process of an M&A Transaction

Written by TNTP LAW on 2 June, 2025. Posted in Legal newsletter.

Mergers and Acquisitions (M&A) constitute a vital strategic growth tool for enterprises in the context of global economic integration. An M&A transaction is not merely a transfer of assets or shares, but a complex legal, financial, and organizational process that requires thorough preparation and close collaboration among multiple stakeholders. In this article, TNTP outlines the fundamental steps in a typical M&A transaction.

1. Strategic Planning and Target Identification

The initial step in any M&A transaction is to clearly define the strategic rationale and objectives. Common goals include market expansion, entry into new markets, vertical or horizontal integration within the value chain, access to new technologies, or divestment from underperforming business segments. Based on these objectives, the acquiring entity must develop both qualitative and quantitative criteria for selecting a suitable target, and prepare a strategic brief to guide the entire transaction process. Concurrently, a deal team should be established, comprising representatives from legal, financial, strategic, and operational departments to ensure specialized and coordinated execution at each stage.

2. Target Search, Approach, and Preliminary Evaluation

Once a shortlist of potential targets aligned with the strategic direction is compiled, the acquirer conducts a preliminary evaluation based on selected criteria, including financial performance, feasibility of synergy realization, transparency of disclosures, and potential legal risks. Based on this assessment, the parties may proceed to preliminary discussions and sign pre-transaction documents such as a Non-Disclosure Agreement (NDA), Memorandum of Understanding (MoU), or Letter of Intent (LOI). These instruments serve as the legal groundwork for launching the due diligence process and designing an appropriate deal structure.

3. Due Diligence

Due diligence is a critical phase aimed at identifying legal, financial, and operational risks. The scope typically includes:

• Incorporation and corporate records;

• Capital structure and ownership;

• Management and organizational structure;

• Labor and employment;

• Contracts and commercial arrangements;

• Financials, tax, and accounting;

• Assets;

• Banking and credit facilities;

• Business licenses and regulatory compliance;

• Sanctions, disputes, and litigation.

4. Valuation and Deal Structuring

Depending on the nature of the target and available data, the acquirer may apply one or a combination of the following valuation methods:

• Discounted Cash Flow (DCF) method;

• Market comparables;

• Net asset value method.

Simultaneously, a suitable deal structure must be developed to align with the investment objectives and due diligence findings. Key structuring considerations include the form of acquisition (equity or asset purchase), scope of acquisition (entire equity or partial interest), implementation method (one-time or staged transaction), and payment mechanism (bank transfer, or share swap).

5. Negotiation and Contract Drafting

Primary transaction documents typically include the Share Purchase Agreement (SPA), Disclosure Letter, Ancillary Agreements, and Conditions Precedent. Key clauses to be carefully negotiated and drafted include:

• Warranties and Representations;

• Covenants;

• Liability Caps;

• Dispute Resolution Clauses;

• Conditions for suspension or termination of the deal, and indemnification.

6. Closing and Legal Formalities

Upon satisfaction of the Conditions Precedent, the parties proceed to sign the definitive agreements and consummate the transfer of shares or assets according to the agreed deal structure. Concurrently, necessary legal formalities must be fulfilled, including:

• Filing changes to corporate registration with the competent business registration authority (e.g., updates to shareholder/member information, legal representative, etc.);

• Updating internal records such as shareholder registers, member ledgers, charters, and corporate resolutions;

• Fulfilling tax obligations related to the transfer, including corporate income tax, registration fees, and personal income tax (for individual sellers);

• Disclosing transaction information as required by law, especially when involving public companies, credit institutions, or entities operating in regulated sectors.

7. Post-Merger Integration (PMI)

The post-closing integration phase is essential to realizing the full benefits of the M&A transaction. PMI should be planned prior to completion and implemented immediately thereafter. Key areas of focus include:

• Organizational restructuring: Realigning roles and responsibilities, designating legal representatives and key personnel, and harmonizing internal controls and reporting systems;

• Operational integration: Aligning accounting software, financial systems, HR management, production – business processes, and IT infrastructure;

• Cultural integration: Internal communication planning, bridging core values, and revising HR policies and compensation frameworks;

• Monitoring post-closing commitments: Maintaining contractual obligations, financial targets, and shareholder/investor protections;

• Synergy tracking: Periodic assessment of revenue, cost, workforce, market share, and productivity synergies.

An M&A transaction, if executed in accordance with sound legal and strategic frameworks, can serve as a powerful catalyst for sustainable growth. A robust legal and financial due diligence process is a prerequisite to mitigating risk and safeguarding the parties’ legitimate interests. In the context of Vietnam’s international economic integration, aligning the M&A process with global best practices is not merely a technical requirement but a core competitive advantage.

This article, titled “Basic Process of an M&A Transaction”, is provided by TNTP. Should you have any inquiries, please feel free to contact us for further assistance.

Sincerely,

Coercive enforcement of civil judgments

Written by TNTP LAW on 30 May, 2025. Posted in Legal newsletter.

Judgments and decisions of the courts, arbitral awards, and other rulings issued by state authorities constitute fundamental legal instruments in defining the rights and obligations between disputing parties. However, the practical effect of such instruments is only realized when the obligated party duly fulfills their obligations. Therefore, to ensure the parties’ strict compliance, the judgment enforcement agency may exercise state power to implement coercive enforcement measures against a judgment debtor who possesses the means for execution but fails to comply voluntarily within the statutory period. This article, prepared by TNTP, outlines the general legal framework governing the coercive enforcement of civil judgments.

1. Legal definition and scope of coercive civil judgment enforcement

Pursuant to current legal provisions, coercive enforcement of civil judgments refers to the exercise of state authority by judgment enforcement agencies and enforcement officers through the application of compulsory measures against judgment debtors and related parties. The objective of such enforcement is to secure compliance with the rights and obligations as established in effective judgments, decisions, and arbitral awards rendered by courts, arbitration tribunals, or other competent authorities.

Article 45 of the Law on Enforcement of Civil Judgment 2008, amended and supplemented in 2014 (“Law on Enforcement of Judgment”), stipulates that from the date the judgment debtor receives or is duly notified of the judgment enforcement decision, the judgment debtor must voluntarily execute judgment within 10 days. After this period, the enforcement agency will enforce the judgment if the judgment debtor has conditions for judgment execution.

2. Notification Procedures and Prohibited Periods for Enforcement Actions

Coercive enforcement must strictly adhere to procedural rules and principles established by law, including obligations to notify relevant parties and observe statutory periods during which enforcement actions are prohibited.

• Notification of judgment enforcement: According to the provisions of Article 39 of the Law on Enforcement of Judgment, the coercive judgment enforcement decision must be served by the enforcement officer upon the relevant parties, person with related rights and obligations within 03 working days from the date of the decision, except in exceptional cases where the involved parties commit acts to evade their obligations as specified in Clause 2 of this Article. This notification aims to ensure that they are aware of the coercive enforcement and exercise their rights and obligations in accordance with the decision.

• Prohibited periods for coercive enforcement of judgments: In order to ensure social order, respect citizens’ rest time and cultural and traditional values, the law stipulates the following time periods during which civil judgment enforcement agencies must not conduct coercive enforcement activities:

– The time from 10:00 PM to 06:00 AM the following day;
– Official weekends and public holidays as prescribed by law.

In addition, specifically for judgment enforcement with the mobilization of forces, the coercive judgment enforcement agency does not organize enforcement during the following periods:

– The 15-day period before and after the Lunar New Year;
– Traditional holidays of policy beneficiaries to which the judgment debtor belongs;
– Other cases where coercive judgment enforcement seriously affects security, politics, social order and safety, and local customs and traditions.

3. Special Circumstances in the Coercive Enforcement of Civil Judgments

3.1. Enforcement of Assets under Co-ownership

When conducting coercive enforcement of judgment on assets under common ownership (such as assets arising during the marriage of husband and wife), the first step is to identify the proportion of ownership attributable to the judgment debtor.

Before enforcement, the enforcement officer shall notify both the judgment debtor and the co-owners of the joint assets. This notification is intended to provide the parties with an opportunity to voluntarily reach an agreement on the division of the property or to petition the court for a formal adjudication of ownership shares.

After 30 days from the date of receiving the notice, if the parties do not agree, negotiate but fail to reach an agreement, or reach an agreement that violates Article 6 of the Law on Enforcement of Judgment, and at the same time, do not request the Court to resolve the division, the enforcement officer will notify the judgment creditor.

From the date of receiving the notice, the judgment creditor has 15 days to request the Court to identify the ownership proportions of the judgment debtor in the joint assets. If the judgment creditor also does not request the Court to resolve the division, in order to continue with the judgment enforcement, the enforcement officer will request the Court to resolve the division.

After identifying the ownership proportions of the judgment debtor, the enforcement officer will proceed with enforcement based on whether the joint assets are divisible or indivisible. For dividable common assets, the enforcement officer shall apply coercive measures regarding the asset proportion owned by the judgment debtor. For undividable common assets or in case the division will considerably reduce the asset value, the enforcement officer may apply coercive measures regarding the whole asset and pay to other co-owners the value of asset proportions under their ownership.

3.2. Judgment enforcement assets are the subject of a dispute

During the enforcement process, a situation may arise where a third party disputes the judgment enforcement assets (For example: Dispute over ownership or the right to use judgment enforcement assets). In this case, according to Clause 1, Article 75 of the Law on Enforcement of Judgment, the enforcement officer is responsible for notifying the involved parties (including the judgment debtor and the judgment creditor) and the disputing party of their right to file a lawsuit with the Court or request another competent authority to resolve the dispute.

Within 30 days from the date of receipt of the notice, if the parties initiate legal proceedings or request a competent authority to resolve the dispute, the enforcement of the relevant asset shall be carried out by the enforcement officer in accordance with the resulting decision. Conversely, if the parties fail to initiate such proceedings or submit a request within the aforesaid period, the enforcement officer shall proceed with the enforcement of the asset in accordance with applicable law.

The above is the article “Coercive enforcement of civil judgments” that TNTP sends to readers. We hope this article will be useful to readers interested in this issue.

Best regards,

Debt Collection Experience: Does Debt Recovery Litigation Always Need to Go to Trial?

Written by TNTP LAW on 28 May, 2025. Posted in Legal newsletter.

All of debt collection methods, litigation stands as the final option for creditors when negotiations fail and the debtor no longer cooperate with payment. When the court serves as the dispute resolution authority, the ultimate goal of creditors is typically to proceed to trial, so the court can issue a legally binding judgment that enables enforcement. However, in certain situations, pushing for a trial may not only be ineffective for debt enforcement but also prolong the resolution process. In this article, TNTP provides insights into whether litigation for debt recovery always needs to go to trial.

1. Litigation Process

According to legal provisions, when disputes arise between parties and cannot be resolved through negotiation or mediation, they have the right to request a court or another competent authorities as prescribed by law to resolve the dispute. The resolving disputes may be specified in either the contract, mutual agreement between parties or as.

The litigation process begins when the court receives the plaintiff’s statement of claim and assigns a judge to handle the case following the procedures outlined in the Civil Procedure Code. During legal proceedings, the plaintiff is required to pay advance court fee (if applicable), provide additional documents when requested by the court, and participate in meetings, mediation sessions, and court trials as required.

A trial will take place if the parties cannot reach a settlement. The court will issue a judgment after the trial concludes. If the judgment is not appealed or protested through the appellate procedure, it will take legal effect and serve as the basis for enforcement.

2. Does Debt Recovery Litigation Always Proceed to Trial?

According to civil procedural regulations, the trial is the final stage requiring all parties’ participation before a judgment is issued. However, is proceeding to trial always the optimal solution for resolving debt-related disputes? Based on TNTP’s experience in this field, many disputes can be resolved without going to trial. Specifically:

a) Resolving the Case at the Mediation Stage

According to the Civil Procedure Code, even after filing a case in court, the parties reserve the right to mediate and negotiate before the court issues a decision to bring the case to trial. If the parties reach a mutually agreement on settling the case, the court will issue a The Decision recognizing the agreement of the involved parties (“The Decision”) in accordance with legal provisions. This decision holds the same legal value as a court judgment and takes effect immediately when issued. The Decision cannot be appealed but may only be gone under cassation procedure.

Thus, from the time a creditor files a lawsuit until the trail begins, the parties are entirely entitled to negotiate a settlement. If the creditor agrees with the debtor’s payment proposal, they may request the court to issue a The Decision to terminate the dispute resolution at the court.

b) Advantages of a The Decision Compared to the Judgment

• Legal Effective Date of The Decision and the Judgment

Compared to a first-instance judgment, The Decision takes effect more quickly. Specifically:

– A first-instance judgment takes effect 15 days after its pronouncement, assuming no appeal is filed.

– The Decision takes effect immediately upon issuance.

The effective date of a judgment or The Decision is crucial, as this is when the creditor can begin requesting enforcement against the debtor. The enforcement authority is empowered to implement legally prescribed measures for debt collection. Within 15 days of a first-instance judgment being issued, parties may file an appeal, or the People’s Procuracy may protest within 30 days, which could move the case to the appellate phase. This extends the debt recovery period and adds costs for resolving the case at appeallate stage.

• Appeal and Protest Procedures

– A first-instance judgment can be appealed within 15 days from the date of its pronouncement.

A first-instance judgment can also be protested by the same-level People’s Procuracy within 15 days, or by the direct superior People’s Procuracy within 1 month from the date of its pronouncement.

– For The Decision, after 7 days from the date of the mediation record, if neither party withdraws from the agreement, the judge presiding over the mediation or a judge assigned by the court chief justice will issue a Decision recognizing the agreement of the involved parties.

This decision takes immediate legal effect upon issuance and cannot be appealed or protested under the appellate procedure.

Thus, a first-instance judgment is more vulnerable to appeal or protest compared to a The Decision. If the parties agree to a settlement and 7 days have passed, the court will issue a decision that is immediately enforceable. Any challenge to The Decision must go through the cassation procedure, which requires sufficient legal grounds to do so. In practice, requesting cassation is complex, time-consuming, and expensive. Given these factors, parties typically hesitate to appeal the Decision through the cassation process.

From the above points, it is clear that proceeding to trial may not be the most effective approach for debt recovery. Mediation serves as an efficient and cost-effective alternative that creditors should consider when circumstances and strategy are conducive to negotiated settlements.

This article has been prepared by TNTP on the topic: “Debt Recovery Experience: Is Litigation for Debt Recovery Always Necessary to Go to Trial?”. We hope this article provides valuable insights for readers.

Best regards,

Key Points of Decree 115/2024/ND-CP providing guidance on the Law on Bidding regarding the selection of investors for investment projects involving land use

Written by TNTP LAW on 26 May, 2025. Posted in Legal newsletter.

On September 16, 2024, Decree 115/2024/ND-CP was issued, marking an important step in guiding and regulating bidding activities related to land-use projects. This decree not only ensures transparency in the bidding process but also fosters fair competition and protects the interests of the parties. In this article, TNTP’s lawyers will delve into the new points in the Decree and their impact on investors, government agencies, and other relevant parties.

1. New provisions on investors selection

Decree 115/2024/ND-CP (“Decree 115”) details the process and criteria in selecting investors for land-use investment projects. One significant new point is the introduction of clearer and more transparent criteria in evaluating investors’ capabilities, including financial capacity, experience, and project implementation capacity.

Decree 115 stipulates that land-use investment projects must select investors through bidding. Article 4 of Decree 115 provides that the following types of projects must be subject to bidding:

(i) Investment projects for constructing urban areas with mixed functions and rural residential areas for which the Provincial People’s Council decides on land allocation or lease through bidding.

(ii) Projects in which the State reclaims land for socio-economic development, environmental protection, and cultural heritage conservation.

Authorized state agencies are responsible to public information about investor selection results, ensuring transparency, and preventing exploitation or fraud during the bidding process.

2. Reforming the investor selection procedure

Decree 115/2024/ND-CP has implemented important reforms in the bidding and investor selection process. One notable point is the simplification of procedures, reducing time and costs, thus making the investor selection process faster and more efficient. Specifically, Decree 115 has adopted measures such as:

• Provisions related to the preparation, appraisal, and approval of the investor selection plan have been removed in Decree 115. At the same time, the appraisal of the Expression of Interest (EOI) and the list of technically qualified investors have been simplified. Additionally, Decree 115 allows for the simultaneous preparation of tender documents and EOIs with procedures for planning, and investment policy approval, thus reducing duplication and saving time for stakeholders.

• The decree provides more detailed provisions on the bidding process and project document appraisal. Decree 115 requires that competent agencies closely coordinate in appraising the bidding documents, ensuring objectivity and efficiency in evaluating tender submissions. The appraisal steps must be conducted in a specific and strict manner to avoid overlooking or inadequately evaluating crucial project elements.

• Removing the acquisition of feedback from the Ministry of Planning and Investment: Under previous regulations, in certain special cases, the authority would need to obtain the Ministry of Planning and Investment’s feedback on investor approval documents for projects under the jurisdiction of the Prime Minister. However, Decree 115 removes this requirement, granting more autonomy and responsibility to local authorities in the bidding process, thus promoting the proactive and timely execution of public investment projects.

These changes not only help reduce bureaucratic procedures but also create favorable conditions for investors to participate in public investment projects and at the same time enhance transparency and fairness in bidding and promote a fair competition among investors.

3. Changes in the investor selection process

• One important new regulation in Article 59 of Decree 115 concerns how to handle situations where fewer than three investors participate in bidding. The competent agency has two options: (i) Allowing an extension of the bidding deadline and adjusting the tender documents to attract more investors, or (ii) Opening the bids if the number of investors is insufficient. This provision helps prevent “fixed” bidding and protects the interests of investors and society.

• By changing the investor selection process to be more open, transparent, and inclusive, Decree 115 creates a more flexible and effective legal mechanism, promoting public investment projects and contributing to the sustainable development of the economy.

4. Incentives for investor selection

Decree 115 not only simplifies bidding procedures but also provides clear incentives to encourage investors to participate in public projects, especially land-use projects. Specifically, Article 6 of Decree 115 stipulates two categories of investors who are eligible for incentives when participating in bidding:

• Investors applying advanced and eco-friendly technologies: For projects with significant environmental impact, investors who apply advanced technology to reduce negative effects will be granted a 5% advantage during the evaluation process.

• Investors commits to carry out technology transfer: Investors who implement advanced technology transfer, which is within the government’s priority list, will receive a 2% advantage.

To qualify for these incentives, investors must submit complete documentation proving their use of advanced, high-tech, environmental-friendly solutions, or the best available technologies, and documents proving their legal rights to use technology in accordance with laws on high-tech, technology transfer, and environmental protection.

These incentives enhance competitiveness and provide investors with the necessary motivation and financial capacity to participate in large-scale projects, contributing to economic and social development.

These changes will have far-reaching effects on both investors and government agencies. For investors, the Decree creates a fair competitive environment, encouraging investors to undertake high-quality projects. At the same time, investors will have more access to full and transparent information, reducing risks during the bidding process.

Decree 115/2024/ND-CP marks an important step in improving the legal framework for bidding, especially for land-use projects. The new regulations will ensure transparency, efficiency, and fairness in the investor selection process while fostering a fair bidding environment and protecting the interests of stakeholders.

Above is an article by TNTP’s lawyers on the topic: “Key Points of Decree 115/2024/ND-CP providing guidance on the Law on Bidding regarding the selection of investors for investment projects involving land use” We hope this article provides value to our readers.

Best Regard.

Author: TNTP LAW

TNTP congratulates Lawyer Dang Mai Phuong

TNTP & ASSOCIATES INTERNATIONAL LAW FIRM

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