Author: TNTP LAW

In the context of increasing international integration, disputes related to international sales contracts are becoming more frequent. Mediation can be applied as a preferred method to resolve these disputes effectively due to its flexibility, speed, cost-efficiency, and ability to maintain and protect the business relationship between the parties. In this article, TNTP will present our esteemed readers with basic knowledge of mediation in resolving disputes related to international sales contracts.

1. Definition of Mediation

Mediation is a negotiation conducted with the assistance of a third party (the third party is not involved in the negotiation). It is an independent dispute resolution method outside of court or arbitration. The mediator is the third party chosen by the disputing parties to assist in resolving the conflict. The parties can select either a single mediator or a mediation panel consisting of multiple mediators. During the mediation process, the mediator or the mediation panel listens, analyzes, and explains unclear or unresolved issues between the parties, suggests optimal solutions to resolve the dispute, and assists the parties in drafting a settlement agreement if they are resolved.

2. Classification

Mediation is classified into two types:

• Ad hoc Mediation

In ad hoc mediation, the disputing parties independently select any third party to act as the mediator. The parties are free to mutually negotiate on establishing mediation procedures or choose mediation rules provided by Mediation Centers.

• Institutional Mediation

Institutional mediation is conducted through a specific mediation organization chosen by the parties. This organization operates regularly with its charter, operational regulations, and mediation rules. Additionally, these organizations have management bodies, administrative departments, and secretariats to support the mediation process.

3. Characteristics of Mediation in Resolving Disputes in International Sales Contracts

• Mediation is only conducted when the parties have a mediation agreement

A mediation agreement can be a clause in the international sales contract or a separate agreement. The mediation agreement may be made before the contract is signed, during the performance of the contract, or after a dispute has arisen. The parties can refer to the sample mediation clause of the Vietnam Mediation Center (VMC).

• The mediator’s role is solely to assist the parties in resolving the dispute

In mediation, the likelihood of resolving the dispute depends heavily on the trust the parties have in the mediator. The mediator assists by raising issues neutrally and objectively without rendering a judgment. The mediator’s recommendations and support are only persuasive if the mediator has a deep understanding of the dispute’s subject matter, helping the parties fully comprehend the remaining conflicts and their impacts. If the parties reach a successful settlement, the settlement agreement reflects the content agreed upon by the parties, not the mediator’s opinion.

• Flexible mediation procedures

The parties are free to agree on the mediation procedures and can modify them at any time.

• High confidentiality

To encourage openness during mediation, all information shared during the mediation process is kept confidential and cannot be used as evidence in court or arbitration proceedings, except in certain special cases.

• Enforcement of the outcome

Upon conciliation is successful, results in a dispute resolution plan agreed upon by the parties, this agreement is considered a new contract between the parties and is voluntarily enforceable. To enhance the effectiveness of mediation, the law provides for the recognition of successful mediation agreements under civil procedure regulations. A successful conciliation has been recognized by the court with a legally binding decision, and the parties may request the enforcement agency to execute the decision in the same manner as other court judgments or decisions.

4. UNCITRAL Mediation Rules and Model Law on International Commercial Mediation of UNCITRAL

UNCITRAL has consistently prioritized the development of alternative dispute resolution methods, such as mediation, as a key issue. To establish a unified legal framework for parties participating in mediation procedures worldwide, UNCITRAL developed the Mediation Rules in 1980 and the Model Law on International Commercial Mediation in 2002.

• UNCITRAL Mediation Rules

The UNCITRAL Mediation Rules cover the following key points:

– Emphasis on freedom and voluntariness at all stages of the mediation process;
– Mediators must act independently and impartially, adhering to the principles of objectivity, fairness, and justice;
– The use of arbitration or court procedures while mediation is ongoing is not encouraged.

• UNCITRAL Model Law

The Model Law on Mediation was largely based on the provisions of the Mediation Rules. The basic aspects of mediation covered by the Model Law include:

– Initiation of mediation procedures;
– Agreed methods for conducting mediation;
– Selection/appointment of mediators;
– Information sharing;
– Confidentiality of information;
– Use of evidence;
– Termination of the mediation process.

The above is TNTP’s article titled “Resolving International Sales Contract Disputes Through Mediation” presented to our esteemed readers.

Sincerely,

In the construction sector, a construction warranty not only ensures the quality and durability of a project but also serves as a legally binding commitment between involved parties. The contractor is responsible for repairing and addressing damages and defects that arise after the project is completed within a specified period to ensure the building is stable and safe. However, when the contractor fails to fulfill warranty obligations, it can cause significant damage to the investor. So, what is the legal liability of the contractor for failing to perform the warranty? In this article, TNTP will provide our readers with an in-depth look at ” The legal liability of the Contractor in performing construction warranty: regulations and remedies.”

1. Legal basis for determining the Contractor’s warranty responsibilities

The contractor’s warranty responsibilities are established based on fundamental principles in law and the contract agreements between the parties. In construction contracts, both parties must comply with the terms related to the construction warranty. If the contractor violates these terms, their liability will be assessed on the following grounds:

• Construction Law 2014 and its guiding decrees and circulars specify the contractor’s obligations. Specifically, Clause 1 of Article 125 of the Construction Law 2014 states that “The construction contractor is responsible for the warranty of the works they construct. The contractor supplying construction equipment and technology devices is responsible for the warranty of the equipment they provide.”

However, the construction contractor and equipment supplier have the right to refuse warranty in cases where damage or defects arise not due to the contractor’s fault or from force majeure causes stipulated in the construction contract. If the damage or defect results from the contractor’s fault and the contractor does not perform the warranty, the investor has the right to use the warranty funds to hire other organizations or individuals to carry out the warranty work. The investor, owner, or manager of the project is responsible for operating and maintaining the construction properly during its use.

• Signed Contracts: The contract serves as the primary legal document to determine the contractor’s warranty obligations. The warranty clause in the construction contract typically includes specific terms such as the warranty period for each type of work, the rights and obligations of both parties during the warranty period, including the contractor’s responsibility for technical defects and repairs without incurring additional costs, and the procedures for warranty requests and the time frame for addressing issues after receiving such requests.

2. Remedies for non-performance of warranty by Contractors

• Contractual penalties: Construction contracts often contain penalty clauses for breaches when one party fails to meet its commitments. The penalty rate can be agreed upon by the parties, but for projects using public investment or state capital, the penalty cannot exceed 12% of the contract value. Contractual penalties serve as a deterrent, ensuring that contractors fully comply with their warranty commitments.

• Compensation for damages: If a contractor fails to perform the warranty and it results in damages to the project, they are responsible for compensating all or part of the damages. The compensation is determined based on the extent of the damage, the contract’s provisions, and the value of the losses incurred. This includes both property damage and costs related to repairs or replacements.

– Direct damages: The investor can claim compensation for any costs incurred due to extended construction periods, such as labor or equipment rental fees or project management expenses. For example, if the project is delayed by three months, the investor may request compensation for machine and worker rental costs during that period.

– Indirect damages: Other losses, such as lost due to missed business opportunities or delayed project operation, may also be included in the compensation claim, depending on whether the parties have agreed on this in the contract, and the investor must provide evidence of the specific losses.

• According to Article 419 of the Civil Code 2015 and Clause 5 of Article 146 of the Construction Law 2014, the breaching party (contractor) must compensate for all damages caused by the breach, including property damage, lost income, and reasonable costs incurred by the aggrieved party (investor).

• Withholding payment: The investor has the right to withhold any remaining payments (if applicable) to the contractor until the contractor has rectified the project’s defects and damages.

Typically, a portion of the contract value (usually 5-10%) is retained after project completion and is only released after the warranty period or once all technical errors have been corrected.

• Hiring alternative contractors: If the defects and damages are due to the contractor’s fault and fail to perform the warranty, the investor may use the warranty funds to hire other organizations or individuals to carry out the warranty work.

3. Solutions to minimize risks when Contractors fail to perform warranty obligations

To minimize risks arising when contractors fail to fulfill their warranty obligations, the investor should proactively implement preventive measures from the contract drafting stage and throughout project supervision. Some specific solutions include:

• Drafting detailed contracts: The construction contract should clearly outline the contractor’s warranty obligations, including mutual agreements on the warranty period for construction works, equipment, and technology, the methods and forms of warranty, warranty value, and the retention, use, and refund of warranty money or other equivalent forms of guarantee. Contractors should only be refunded the warranty money or security after the warranty period ends and the investor has confirmed the completion of all warranty obligations. The contract should also include clear penalty clauses and specify the extent of damage compensation when the contractor fails to perform the warranty.

• Requiring a warranty bond: The investor may require the contractor to provide a warranty bond from a reputable bank or financial institution. The warranty bond is a financial safeguard for repairs and defect rectification if the contractor does not fulfill their obligations, giving the investor an additional financial resource to handle warranty risks.

The contractor’s legal liability for failing to perform the construction warranty as per the contract is a critical issue that needs careful consideration. To avoid unwanted legal disputes, both the investor and the contractor must comply with the contract terms and relevant legal provisions. Prompt and appropriate handling of violations will protect the rights of all parties and help maintain long-term cooperative relationships.

This article, titled ” The legal liability of the Contractor in performing construction warranty: regulations and remedies” is provided to you by TNTP. We hope it will be of value to our readers.

Sincerely,

Arbitration is a commonly used method for resolving international commercial disputes. According to the principle of territoriality, an arbitral award is only effective within the jurisdiction of the country where the award is issued. Therefore, for an award issued in one country to be enforceable in another country, the parties must go through the process of recognition and enforcement of that award. In this article, TNTP will present the fundamental principles of recognition and enforcement of foreign arbitral awards in Vietnam.

1. First principle: Based on international treaties

According to Clause 1, Article 424 of the 2015 Civil Procedure Code, a foreign arbitral award will be considered for recognition and enforcement in Vietnam if both countries are members of an international treaty on the recognition and enforcement of foreign arbitral awards.

This principle was concretized in Article 1 of the 1958 New York Convention, of which Vietnam is a member. The scope of the Convention is defined as follows: i) It applies to the recognition and enforcement of foreign arbitral awards issued in the territory of any country other than the country where recognition and enforcement are sought and arising from disputes between legal entities or individuals; ii) It applies to arbitral awards that are not considered domestic awards in the country where recognition and enforcement are sought. The principles for applying the Convention include: i) The Convention applies to member states; ii) The Convention also applies on a reciprocal basis with non-member states; iii) The Convention only applies to disputes arising from commercial relations; iv) The principle of non-discrimination.

In addition to the 1958 New York Convention, the recognition and enforcement of foreign arbitral awards in Vietnam are also governed by mutual legal assistance agreements and investment promotion and protection agreements that Vietnam has signed with other countries around the world, such as agreements with Italy, Malaysia, France, Singapore, Cambodia, China, etc.

2. Second principle: Reciprocity

This principle highlights the importance of international relations, where a country grants foreign individuals or organizations the same treatment as it grants its citizens or organizations. Typically, this treatment is in the form of most-favoured-nation status, national treatment, or another special arrangement. In some cases, the principle may take a negative form, such as when a country imposes retaliatory measures if the rights of its individuals or organizations are restricted in another country.

This principle has not yet been specifically regulated in the 2015 Civil Procedure Code in terms of the legal basis, procedures, or authority for its application. However, the 2007 Law on Mutual Legal Assistance provides the legal basis for courts to apply this principle, based on the announcement by the Ministry of Foreign Affairs regarding the list of countries that apply the principle of reciprocity with Vietnam. Nonetheless, there is currently no mechanism to verify or compile a list of Vietnamese arbitral awards that have been recognized abroad. This principle is primarily applied based on mutual respect between countries.

The application of this principle by countries does not necessarily require them to be members of any international treaty on the matter. Therefore, Vietnamese courts can still recognize and enforce foreign arbitral awards if foreign courts recognize and enforce Vietnamese arbitral awards in their country.

3. Third principle: Not contrary to the fundamental principles of Vietnamese law

This principle is stipulated in point b, Clause 2, Article 459 of the 2015 Civil Procedure Code. It aims to protect the rights of the parties involved in cases with foreign elements and reflects respect for the law and national sovereignty. Foreign arbitral awards will only be recognised and enforced in Vietnam if they do not violate the fundamental principles of Vietnamese law.

This is the article “Fundamental Principles of Recognition and Enforcement of Foreign Arbitral Awards in Vietnam” that TNTP would like to share with readers. If there are any issues to discuss, don’t hesitate to contact TNTP for timely support.

Sincerely,

In the current trend of economic globalization, Vietnamese enterprises is having more and more foreign partners to cooperate in business. However, in the process of cooperation, the parties may have commercial disputes. In such cases, the parties will usually choose to resolve the dispute by Arbitration. Depending on the provisions of the Contract, the foreign Arbitratoin could be the one to resolve the dispute. Thus, in the case of a dispute being resolved and a foreign Arbitrator has issued a award, will this award be recognized and enforced in Vietnam by the Court or not? In this article, TNTP lawyers will learn about the regulations related to the jurisdiction of courts in Vietnam to recognize and enforce foreign arbitral awards in Vietnam.

1. What is foreign arbitration?

According to the provisions of Clause 11, Article 4 of the Law on Commercial Arbitration: Foreign arbitration means an arbitration formed under a foreign law on arbitration and selected as agreed by the parties to settle a dispute outside or within the Vietnamese territory.

Thus, unlike commercial arbitration in Vietnam, foreign arbitration is established under the provisions of foreign arbitration law as agreed by the parties. Dispute settlement by foreign arbitration can be outside or within Vietnam’s territory.

2. Prescriptive periods for filing applications for recognition and enforcement of foreign arbitral awards in Vietnam

According to Article 432 of the Civil Procedure Code 2015, the time of period for recognition and enforcement of foreign arbitral awards is 03 years from the date the foreign arbitral award takes legal effect, except in cases where the applicant proves that due to force majeure or objective obstacles, the application cannot be submitted within the time limit. In that case, the time of such force majeure or objective obstacle shall not be counted in the time limit for applying.

Thus, a foreign arbitral award recognized and enforced by a Vietnamese court in Vietnam will have legal effect as a decision of a Vietnamese court. At the same time, when the court is requested to recognize a foreign arbitral award, the court is not only required to recognize the legal effect of the award, but also to ensure that the award is enforced.

3. Conditions for recognition and enforcement of foreign arbitral awards

According to Clause 1, Article 424 of the Civil Procedure Code 2015, foreign arbitral awards are considered for recognition and enforcement in Vietnam if:

• Arbitral award of a foreign country which is a signatory to an International treaty about recognition and enforcement of foreign arbitral award together with Vietnam;

• Foreign arbitral award other than those specified in point a of this clause on the basis of principle of reciprocity.

Foreign arbitral award specified in clause 1 of this Article shall be considered being recognized and enforced in Vietnam shall be the final ones of the arbitral tribunal that resolve all the contents of the dispute, finish the arbitral procedures and are effective.

Thus, it can be seen that the Court in Vietnam is not allowed to re-try a dispute that has been decided by a foreign Arbitrator, but is only allowed to carefully and thoroughly examine the foreign arbitral award, the papers and documents attached to the request as a basis for issuing a award to recognize or not recognize that award.

4. Procedures for requesting recognition and enforcement of foreign arbitration awards in Vietnam

(i) Person entitled to file a request

The award creditor or their legal representative has the right to request the Vietnamese Court to recognize and enforce in Vietnam the foreign arbitral award when:

• Individuals must reside and work in Vietnam;
• The agency or organization that must execute has its headquarters in Vietnam;
• Assets related to the enforcement of foreign arbitral awards located in Vietnam at the time of request.

(ii) Form and content of the request:

• The application for recognition and enforcement of a foreign arbitral award must be made in Vietnamese or, if made in a foreign language, must be accompanied by a notarized and legally certified Vietnamese translation.

• The request must contain the following information:

– Full names and addresses of residence places or work places of the judgment creditors or their lawful representatives; if the judgment creditors are agencies or organizations, the full names and addresses of their head-offices must be fully inscribed;
– Full names and addresses of residence places or work places of the judgments debtors; if the judgments debtors are agencies or organizations, the full names and addresses of their head-offices must be fully inscribed; in cases where the judgment debtors being individuals do not have residence places or work places in Vietnam or the judgment debtors being agencies or organizations do not have head-offices in Vietnam, their applications must also specify the addresses of the places where exist the properties and assorted properties relating to the enforcement in Vietnam of foreign courts’ civil judgments/decisions;
– Requests of judgment creditors; where foreign courts’ judgments/decisions have been partly enforced, the judgment creditors must clearly state the executed parts and the remaining parts requested for recognition and continued enforcement in Vietnam.

(iii) Attached documents

• The request must be accompanied by documents specified in the international treaty to which the Socialist Republic of Vietnam is a member; in case there is no international treaty or the international treaty does not stipulate, the request must be accompanied by the following documents:

– Originals or certified true copies of the judgment/decision issued by the foreign Court;
– Original or certified copy of the Arbitration Agreement between the parties.

• Documents and papers attached to the application in a foreign language must be accompanied by a Vietnamese translation, notarized and legally certified.

Once again, the award creditor should note that the time of period for filing a request for recognition and enforcement of a foreign arbitral award is 03 years from the date the foreign arbitral award comes into effect or due to force majeure or objective obstacles, the time of force majeure or objective obstacles will not be counted as the time limit for applying. In case the prescribed time limit has expired, the judgment creditor will not receive the application.

5. Courts in Vietnam have the authority to recognize and enforce foreign arbitral awards.

Pursuant to Clause 5, Article 31, Point c, Clause 2, Article 35, Point b, Clause 1, Article 37 and Point e, Clause 2, Article 39 of the 2015 Civil Procedure Code, the Court with jurisdiction to accept and resolve the recognition and enforcement of foreign arbitral awards in Vietnam is the Provincial People’s Court where the Vietnamese enterprise has its head office or the Provincial People’s Court where the assets related to the enforcement of foreign arbitral awards are located.

Comparing with the provisions of the Civil Procedure Code 2015 on the jurisdiction of the Court, it can be seen that the Court with the jurisdiction to accept and resolve the recognition and enforcement of foreign arbitral awards in Vietnam is the Provincial People’s Court, which is appropriate. According to the provisions of the Civil Procedure Code 2015, the Provincial People’s Court is the court with the jurisdiction to resolve disputes with foreign elements. This is also consistent with the needs and practical capabilities when compared to the District People’s Courts, the Provincial People’s Courts will have a team of staff with better professional skills and facilities, helping to ensure the recognition and enforcement of foreign arbitral awards in Vietnam in terms of both processing time and whether the content of the award is suitable for recognition and enforcement in Vietnam.

Above is the sharing of TNTP expert on “Competence of courts in Vietnam to recognize and enforce foreign arbitral awards in Vietnam”. Hopefully, this article will be helpful to readers.

Sincerely,

The recognition and enforcement of foreign arbitral awards are codified in several international treaties, with the most prominent and foundational legal basis being the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. On July 28, 1995, the President of Vietnam signed Decision No. 453/CTN on Vietnam’s accession to the 1958 New York Convention. This article outlines key aspects of the 1958 New York Convention.

1. Definition

The recognition and enforcement of a foreign arbitral award can be understood as a judicial procedure conducted by a court to examine and recognise the validity of a foreign arbitral award within the territory of Vietnam. The process is initiated upon the request of at least one of the parties involved in the dispute resolution process.

2. The 1958 New York Convention

(i) Statute of limitations for requests for recognition and enforcement of foreign arbitral awards

The Convention does not stipulate a statute of limitations for a party to request the recognition and enforcement of a foreign arbitral award. Therefore, this matter is governed by national law.

(ii) Grounds for refusal to recognize and enforce foreign arbitral awards in certain member states

According to Article 5 of the Convention, grounds for refusal include:

– The parties to the arbitration agreement were under some incapacity or the agreement is not valid under the applicable law. If there is no applicable law specified, the law of the country where the award was issued will apply.

– If the party against whom the award is to be enforced was not properly notified of the arbitrator’s appointment or the arbitration proceedings, or for another reason was unable to present their case.

– The award was issued regarding a dispute not requested for resolution by the parties or beyond the scope of the parties’ requests. However, if the portion of the award addressing the requested matters can be separated from the portion that exceeds the scope of the requests, the part concerning the requested matters may be recognised and enforced.

– The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or the law of the country where the arbitration took place.

– The award has not yet become binding on the parties, nor it has been set aside or suspended by a competent authority in the country where the award was issued.

Recognition and enforcement of a foreign arbitral award may also be refused if the competent authority in the requested country finds that the subject matter of the dispute is not capable of settlement by arbitration under the law of that country or that recognition and enforcement would be contrary to the public policy of that country.

(iii) Submission of documents by the requesting party

The 1958 New York Convention stipulates that the process of recognition and enforcement is subject to national laws. In Vietnam, the competent court to consider requests for recognition and enforcement of foreign arbitral awards is the provincial People’s Court where the individual against whom enforcement is sought resides or works, or where the organization required to enforce the award is headquartered or has assets related to the enforcement of the foreign arbitral award.

According to Article 4 of the Convention, the party seeking recognition and enforcement must submit a request, accompanied by the original or a certified copy of the arbitral award and the arbitration agreement. If the award is not rendered in the official language of the country of the requested court, the court may require the requesting party to submit a certified translation by an official interpreter or by a diplomatic or consular authority.

(iv) Burden of proof

There are three principles governing the burden of proof:

– The principle of the claimant bearing the burden of proof: Under this principle, the party initiating the legal action or making the request must present evidence.

– The principle of reciprocity: According to this principle, the burden of proof is not solely on the claimant, but also on the respondent, who must present counter-arguments or defences against the claims.

– The principle of determining the burden of proof: According to this principle, the determination of the parties’ burden of proof is based on the judgments and assessments of the adjudicating authority, regardless of whether the parties make any requests.

This article aims to provide readers with a detailed overview of “Recognition and Enforcement of Foreign Arbitral Awards under International Treaties to which Vietnam is a Signatory”. If there are any issues requiring further discussion, please contact TNTP for timely support.

Sincerely,

In the business environment, particularly in construction, the potential for incurring debts is significant. However, debt recovery in the construction industry has some unique points compared to other sectors. In this article, lawyer from TNTP will provide readers with insights on the key issues to consider when recovering debts in the construction sector.

1. Debt Recovery Parties in Construction

In the construction sector, debts typically arise among the following entities:

• Project Investors
• Main Contractors
• Subcontractors

Specifically:

(i) Project Investors

According to point a of Clause 1, Article 4 of the Bidding Law 2023, a project investor is defined as: An agency or organization that owns borrowed capital or is directly assigned to manage and use capital during the project execution; budget-using units; direct budgetary expenditure units; centralized procurement units.

Consequently, a project investor is an entity that directly invests capital and manages the use of capital during the construction project.

(ii) Main Contractor

According to Clause 26, Article 4 of the Bidding Law 2023, a main contractor is: An organization or individual, or a combination of organizations or individuals, who enter into a bidding joint venture based on a joint-venture agreement to participate in bidding and directly sign the contract if selected. The joint-venture agreement must clearly define the responsibilities of the lead member and the common and individual responsibilities of each member within the joint venture for the entire scope of the contract package.

Therefore, the main contractor is the contractor named in the bid and directly signs the procurement contract with the project investor, responsible to the investor during the contract execution.

(iii) Subcontractors

According to Clause 27, Article 4 of the Bidding Law 2023, a subcontractor is: An organization or individual who signs a contract with the main contractor to participate in performing construction, consulting, non-consulting, and related services of the goods supply or mixed contract package.

As per the regulations, a subcontractor is a contractor that signs contracts with the main contractor and carries out related works in construction, consulting, non-consulting, and related services as per the signed contract.

Accordingly, for a construction project, the project investor will directly contract with the main contractor. During the construction process, the main contractor may sign contracts with subcontractors to perform tasks within the project scope. Therefore, debts in a construction project typically arise between the project investor and the main contractor; and between the main contractor and subcontractors.

2. Construction Debt Collection

a) Debt Between Project Investor and Main Contractor

The project investor, as the party awarding the contract to the main contractor, is responsible for making payments according to the contract to the main contractor. However, if the project investor neglects the capital plan and delays payments for completed projects awaiting final settlement, or for the purpose of misappropriate capital, they did not pay as committed to the main contractor, leading to bad debts.

b) Debt Between Main Contractor and Subcontractors

Subcontractors perform part or all of the project components under a subcontract with the main contractor. Debts typically relate to the payment fees for construction components, raw materials, and maintenance costs, among others.

3. Key Considerations for Effective Debt Collection in Construction

Due to the prolonged construction period typical of the construction, numerous fluctuations can arise due to changes in legal policies, prices, and funding sources. To effectively recover debts, businesses should consider the following issues:

a) Request Periodic Debt Reconciliation

One of the conditions for effective debt collection is to accurately evaluate the amount to be collected. To reconcile debts, the parties can create a Debt Reconciliation Minute, which is a document recording the debt value arising from the contract between the parties. This document will be signed and stamped by the parties as a testament to their status. In consequence, it serves as proof of the debtor’s payment obligations should the business require the debtor to make payments. If the parties cannot negotiate and must initiate litigation to resolve the issue at the competent authority, the Debt Reconciliation Document will be an important document to prove the debtor’s payment obligations and the value of the debt that the debtor must pay to the business.

b) Check the Financial Status of the Debtor

To check whether the debtor can make payments, the business must know the debtor’s financial capacity. Checking the debtor’s financial status helps the business identify which debtors are capable of paying so it can focus its resources and finances on recovering the debt from them. This avoids wasting resources and finances on trying to recover from debtors who are no longer able to pay.

However, checking the financial status of a debtor is not straightforward since information about a company’s assets and profits is not publicly disclosed (except for listed companies). Therefore, a business may engage with other partners in its sector to learn about the activities and projects the debtor is involved in, in order to assess the debtor’s financial capabilities.

c) Compliance with Legal Regulations

Businesses need to be aware of legal regulations to carry out debt collection activities legally. There have been cases where businesses have used debt recovery services in the form of “gangster,” which are prohibited under the Investment Law 2020, leading to criminal proceedings.

Although businesses have the right to demand payment from debtors, this request must be made within the legal regulations. Accordingly, businesses can recover debts by negotiating or initiating litigation if the negotiation process is unsuccessful. When initiating litigation, businesses must study the legal regulations to make reasonable demands and choose the appropriate competent authority to resolve the dispute so that their litigation request is accepted.

If a business has never initiated litigation at the competent dispute resolution authority, they can use the services of law firms to enhance its ability to recover debts and conduct litigation procedures most effectively.

This article by TNTP’s lawyer addresses the topic: “What are the issues to keep in mind when collecting debts in the field of construction?” We hope this article provides value to our readers.

Sincerely,

In civil proceedings, in order to protect the rights and interests of the involved parties as well as ensure the enforcement of judgments, the Court may apply provisional emergency measures as prescribed in the Civil Procedure Code. As society develops, life will become more and more complicated, and there will be acts infringing the rights and interests of others. Therefore, provisional emergency measures are a tool for the State to intervene through the legal corridor to promptly protect the rights and interests of the involved parties in civil proceedings. In this article, TNTP lawyers will analyze and clarify provisional emergency measures as prescribed in the Civil Procedure Code so that readers can better understand this legal issue.

1. What is a temporary emergency measure?

According to Article 111 of the 2015 Civil Procedure Code, provisional emergency measures are measures decided by the Court to apply when resolving a civil case to resolve the urgent requests of the parties, protect health, property, life, protect evidence, collect evidence, preserve the current state, avoid causing irreparable damage, ensure the execution of judgments and settlement of cases.

2. Features of Provisional Emergency Measures

Provisional emergency measures have the following two distinctive features:

• Urgency: Demonstrated through the fact that the Court will issue a decision for immediate application and this decision will be enforced immediately after that.

• Temporary: Provisional emergency measures cannot completely resolve the problems facing the parties. The measures are applied temporarily to meet the urgent requirements of the parties, protect life, health, property, collect and protect evidence, preserve the current state, avoid causing irreparable damage, ensure the execution of judgments and settlement of cases.

3. Summary of provisional emergency measures

(i) Sending minor persons, legally incapacitated persons, person with limited cognition or behavior control to individuals or organizations for nurturing, taking care of and educating;
(ii) Force to perform part of the alimony obligation in advance;
(iii) Force to perform of part of the obligation to compensate for damage to individuals whose lives and/or health have been infringed upon in advance;
(iv) Forcing the employers to provide the employees with advance wages, health insurance, social insurance, treatment cost for occupational accidents or occupational diseases or compensations, allowances for occupational accidents or occupational diseases;
(v) Suspending temporally the execution of decisions on unilateral termination of labor contract or decisions on dismissal of employees;
(vi) Distraining the disputed properties;
(vii) Prohibiting the transfer of property right over the disputed properties;
(viii) Prohibiting the change of the current conditions of disputed properties;
(ix) Permitting the harvesting, sale of subsidiary food crops or other products, commodities;
(x) Freezing accounts at banks or other credit institutions, State treasury; freezing properties at places of their deposit;
(xi) Freezing properties of the obligor;
(xii) Prohibiting involved parties from performing, or forcing them to perform certain acts;
(xiii) Prohibiting the obligors from leaving Vietnam;
(xiv) Prohibiting the contact with victims of family violence;
(xv) Suspending the bid closing and activities related to bidding;
(xvi) Arresting aircrafts or ships to ensure the lawsuit settlement;
(xvii) Other provisional emergency measures provided for by law.

4. Applying provisional emergency measures

a) When the case is being resolved:

Pursuant to Clause 1, Article 111 of the Civil Procedure Code 2015 and Article 2 of Resolution 02/2020/NQ-HDTP, the involved parties have the right to request the Court to apply provisional emergency measures during the settlement process when meeting the following cases:

• Temporarily settle the urgent request of the involved parties directly related to the case being resolved by the Court that needs to be settled immediately. If delayed, it will adversely affect the life, health, livelihood, property, honor, and dignity of the involved parties.

• Collect and protect relevant evidence of a case being handled by the Court in cases where the parties obstruct or negatively impact the collection of evidence or are destroying or are at risk of destroying evidence, making it difficult to collect it again later.

• Preserve the existing status, avoid causing irreparable damage, preserve the subjects and relationships directly related to the case being resolved by the Court.

• Ensure the basis for resolving the case and have sufficient conditions for enforcement when the Court’s judgment or decision is enforced.

b) Emergency situation:

Pursuant to Clause 2, Article 111 of the Civil Procedure Code 2015 and Article 3 of Resolution 02/2020/NQ-HDTP, individuals, agencies and organizations have the right to request the Court to issue a decision to apply emergency measures in case of an emergency requiring the protection of evidence and prevention of possible serious consequences and submit the request at the same time they file a lawsuit if there is one of the following grounds:

• Urgent situations need to be resolved immediately and cannot wait or delay.

• Evidence needs to be protected in cases where the source of evidence may be destroyed, is at risk of being destroyed, or is difficult to collect in the future.

• Prevent possible serious consequences (physical or mental).

c) The court issues a decision to apply provisional emergency measures by itself

Pursuant to Article 135 of the Civil Procedure Code 2015 and Article 5 of Resolution 02/2020/NQ-HDTP, the Court itself will issue a decision to apply provisional emergency measures if all of the following conditions are met:

• The application is directly related to the case being resolved.

• The application is really necessary to meet urgent requirements and fall into the scope of Clause 1, 2, 3, 4, 5 of Article 114 and from Article 115 to Article 119.

• The party does not make a request to apply provisional emergency measures due to objective obstacles or legitimate reasons.

Above is the article of TNTP on “Learn about provisional emergency measures in civil procedure” shared with readers. Hopefully this article will be helpful to readers.

Sincerely,