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What need to do when choosing to suit by Commercial Arbitration

Commercial arbitration is one of the most popular dispute settlement methods thanks to its flexibility in procedures and confidentiality in the dispute settlement process. If a party submits a dispute to Commercial Arbitration, the litigating party will have to comply with the provisions of the Law on Commercial Arbitration. Therefore, to clearly understand as well as to help parties who intend to take action at the Commercial Arbitration Center carry out the work in accordance with regulations, in this article, TNTP will clarify when choosing Commercial Arbitration, what the parties need to do.

1. What is commercial arbitration? Scope of settlement of Commercial Arbitration

• Commercial arbitration is a method of dispute settlement agreed upon by the parties and conducted under the provisions of the Law on Commercial Arbitration 2010 (“Law on CA”).

• Scope of settlement of Commercial Arbitration (Article 2 of the Law on CA):

(i) Disputes among parties that arise from commercial activities.
(ii) Disputes among parties at least one of whom conducts commercial activities.
(iii) Other disputes among parties which are stipulated by law to be settled by arbitration.

2. What do enterprises need to prepare when filing a lawsuit to Commercial Arbitration?

Before filing a lawsuit at the Commercial Arbitration Center, the Plaintiff needs to check the legal regulations on the following issues:

• Agreement to settle disputes by commercial arbitration:

To settle a dispute by Commercial Arbitration, the parties must have a written agreement or have a clause in the Contract or documents incarnate that the parties agree to choose to settle the dispute by Commercial Arbitration. A flexible point of Commercial Arbitration is that the Arbitration Agreement can be made before or after a dispute arises (Clause 1, Article 5 of the Law on CA).

Therefore, in cases where there is no arbitration agreement in the contract between the parties, but the parties wish to settle the dispute at commercial arbitration, or the arbitration agreement in the contract is unclear, the parties can negotiate to supplement or adjust the terms of the commercial arbitration agreement in the contract or establish a written arbitration agreement before or after a dispute arises.

• Statute of limitations for initiating a lawsuit:

According to Article 33 of the Law on CA, unless otherwise provided by discrete laws, the statute of limitations with arbitral procedures is 2 years from the time the claimant acknowledges the infringement of their lawful rights and interests.

• Prepare the Petition and enclosed documents:

 According to the provisions of the Law on CA, when a dispute is settled at an arbitration center, the plaintiff shall file a petition with the arbitration center. When a dispute is settled by ad hoc arbitration, the plaintiff shall make a petition and send it to the defendant.

 The petition must fully contain the following contents:

 Date of its making;
 Names and addresses of the parties; names and addresses of witnesses, if any;
 Summary of the circumstances of the dispute;
 Grounds and evidence for initiating the lawsuit, if any;
 Specific requirements of the plaintiff and the value of the dispute;
 Name and address of the person whom the plaintiff selects as arbitrator or requests to be designated as arbitrator.

 Enclosed with the petition shall be the arbitration agreement and the originals or copies of relevant documents.

Practice shows that commercial arbitration will help legal entities save time and costs, simplify procedures, ensure business secrets, etc. However, up to now, many legal entities, due to inadequate preparation before filing a lawsuit, face many obstacles when settling at the Commercial Arbitration Center such as supplementing documents and evidence and adjusting procedural documents many times, causing a waste of time and money. Therefore, we hope that through this article, we can give readers a comprehensive perspective to consider the factors that help prepare for lawsuits at the Commercial Arbitration Center fully to ensure the benefits of enterprises.

Above is an article by TNTP lawyer on the topic: “What need to do when choosing to suit by Commercial Arbitration“. Hopefully this article brings value to readers.

Sincerely,

Disputes over credit contracts and handling of collateral

Credit contracts and the handling of collateral are integral parts of the financial and banking system, promoting economic development and helping businesses and individuals access capital. However, when parties fail to fulfill their commitments or when disputes arise, resolving these disputes over credit contracts and handling collateral becomes complex and hard to deal with.

1. Credit contracts and collateral

A credit contract is a written legal agreement between the lender (credit institution) and the borrower (individual or legal entity) regarding the provision of a loan with specific terms on interest rates, loan duration, and repayment methods.

Collateral (or security) is the asset that the borrower uses to secure the loan, and where the borrower cannot fulfill their repayment obligation, the lender has the right to handle the collateral to recover the debt.

2. Common arising disputes

Disputes over credit contracts are types of disputes arising from the relationships between parties in a credit contract. The content of disputes often revolves around issues such as:

• Disputes due to breaches of obligations in the credit contracts: The borrower does not comply with the commitments on principal and interest payments according to the contract terms or violations related to the misuse of funds, providing false information.

• Disputes regarding the parties establishing and performing the contract: Disputes about the legal status and authority of the parties when signing the contract, or ambiguities about the rights and obligations in the contract.

• Disputes over the law governing credit contracts: Conflicts regarding the choice of applicable law and dispute resolution methods.

• Particularly common now are disputes arising from the implementation of security interest for credit contracts and the handling of collateral.

3. Causes of disputes in the process of handling collateral

Article 295 of the Civil Code 2015 has specifically detailed the conditions for collateral:

• Collateral must be under the ownership rights of the securing party, except for the cases of lien on property or title retention.
• Collateral may be described broadly but must have enough information to identify.
• Collateral may be existing property or off-plan property.
• The value of collateral may be greater, equal or smaller than the value of the secured obligation.

Additionally, the Civil Code 2015, Law on Credit Institutions 2010, and accompanying legal documents provide detailed regulations on the process of handling collateral. However, in practice, the handling of collateral faces many difficulties, mainly due to the following reasons:

• There are many cases where during the process of handling collateral, credit institutions do not fully notify the asset owner and the borrower or do not follow the process to handle the asset correctly. This often leads to disputes and a lengthy dispute-resolution process in court.

• Disputes can also arise during the auction and sale of collateral. The lack of transparency in the auction process, unreasonable sale price, or the borrower and collateral owner not being timely informed about the auction of their property can lead to legal disputes over the recognition or cancellation of auction results.

• In some cases, the collateral is related to the interests of third parties (e.g., co-owners, beneficiaries of the asset, etc.). If handling the collateral affects the interests of third parties, it can cause disputes.

4. Solutions for resolving disputes

• Negotiation and Mediation: This is the first and preferred method of resolving disputes to avoid prolonged conflicts and minimize legal costs. Parties can seek the solution through direct negotiation or use mediation services from a third party.

• Arbitration: This is an alternative dispute resolution method to court and is often used when the parties have an arbitration clause in the contract. The arbitration process is usually quicker and less costly than litigation in court, and the arbitration result has high legal binding power.

• Court: Resolving disputes in court is a common method currently used. If parties do not comply with the judgment, they will be enforced by the Enforcement Agency. However, the court resolution process can be lengthy.

Disputes over credit contracts and handling collateral are complex processes, requiring strict adherence to legal regulations. To minimize disputes and ensure the lawful rights of all parties involved, credit institutions, as well as borrowers and guarantors, should consider consulting or seeking support from experienced lawyers in this field. Lawyers can provide accurate legal advice, help parties understand their rights and obligations, and guide the handling of complex legal situations. This not only ensures transparency and fairness in the handling process but also reduces legal risks and avoids unnecessary prolonged disputes. Seeking support from legal experts and a team of lawyers will be an important step to protect the rights of the parties.

The above article, “Disputes over credit contracts and handling of collateral” is presented by TNTP to our valued readers. If you have any issues for discussion, please contact TNTP for support.

Best regards,

Dispute resolution methods arising from mortgage contracts

The mortgage is a useful source for debt recovery when the borrower fails to repay the debt on time and in full. However, in practice, the realizing of mortgaged assets by the lender does not always proceed smoothly. During the execution of the contract, especially in the stage of realizing mortgaged assets, disputes between the parties often arise. In this article, TNTP will present several methods that parties in a mortgage relationship can apply to resolve disputes.

1. Types of disputes arising from mortgage contracts

Disputes arising from mortgage contracts are varied, but basically include the following types:

• Disputes related to the parties establishing and performing the contract;
• Disputes due to violations of the form of the mortgage contract;
• Disputes over ownership and use of the mortgaged asset;
• Disputes due to breaches of obligations in the mortgage contract;
• Disputes in selecting the method of realizing the mortgaged asset;
• Disputes when negotiating and valuing the mortgaged asset;
• Disputes over the priority order of payment and the discrepancy between the value of the mortgaged asset and the secured loan amount in the mortgage contract;
• Disputes related to the applicable law and jurisdiction for dispute resolution.

2. Methods for resolving disputes arising from mortgage contracts

Several common methods for resolving disputes arising from mortgage contracts include negotiation, mediation, arbitration, and court litigation.

• Negotiation:

The participants include the parties in the mortgage contract and lending contract relationship. Additionally, the parties may seek support from third parties such as lawyers, experts, etc. The parties will meet and discuss to reach a mutual agreement, but this agreement is not binding and relies entirely on the voluntary compliance of the parties.

• Mediation:

In this method, besides the parties involved in the mortgage contract and lending contract relationship, a mediator’s assistance is also required. The mediator acts as an intermediary to help the parties reach a dispute resolution agreement. The mediator can advise and propose solutions, which the parties may accept or reject, or propose alternative solutions. The mediator does not have the authority to impose solutions on the parties. If the mediation is successful, for the result to be enforceable, the mediation agreement must be submitted to the court for recognition as per the Civil Procedure Code. If the parties fail to reach a resolution through mediation, they may proceed to resolve the dispute through arbitration or court, depending on their agreement.

• Arbitration:

The parties must have an arbitration agreement to resolve disputes through arbitration. The arbitration agreement can be established before or after the dispute arises. Depending on the parties’ agreement, the arbitration can be an arbitration center or ad hoc arbitration. When the parties reach a dispute resolution agreement, the arbitration tribunal will prepare a mediation record and then issue a decision recognizing the parties’ agreement. This decision is final and has the same value as an arbitral award. Arbitral awards are binding on the parties, providing an advantage over negotiation and mediation.

• Court litigation:

This is the most common method that parties use to resolve disputes arising from or related to mortgage contracts after unsuccessful negotiation attempts. One of the parties must submit a lawsuit petition to the court, clearly stating the facts of the case, the claims, and relevant evidence. During the court proceedings, the plaintiff must undertake several tasks, such as paying court fees in advance, attending court meetings and sessions, preparing statements, and providing additional evidence as requested by the judge, participating in the trial, etc. The court’s judgment/decision is binding on the parties, and if the obligor does not voluntarily comply, the other party has the right to request enforcement through the competent civil enforcement agency.

The above article on “Dispute resolution methods arising from Mortgage contracts” is presented by TNTP to readers. TNTP hopes this article provides valuable insights for readers.

Best regards,

Case law No. 50/2021/AL regarding the right to initiate a lawsuit to reclaim the property of the person to whom the property is delivered according to a legally effective judgment or decision

In judicial practice, there are still different views on the right to re-initiate a case when the Court has issued a decision to suspend the resolution of a civil case. Case law no. 50/2021/AL is an example of the Court determining whether the involved parties have the right to re-initiate the case. This is a case where a legally effective judgment or decision of the Court resolves the division of property, but this judgment or decision has not been enforced because the judgment creditor has not requested enforcement of judgment and has not received real property. When the statute of limitation for requesting enforcement of judgment expires, the person to whom the Court delivered the new property has a dispute to reclaim the delivered property according to the judgment or decision that has been issued. Hereinafter, TNTP will analyze the Court’s judgment more clearly in this case.

1. Contents of the case:

a) In the petition dated January 4, 2005, the plaintiff Mr. Nguyen Van N presented: He and Ms. Nguyen Thi T got married in 1963 and they have a house located on a plot of land in village B, Commune X (house no. 04 H street, area A, ward C, Hue city) with the area of 1,490m2. In 1968, Mr. N departed to the North. In 1975, Mr. N returned home, and Ms. T had another husband, so they divorced.

b) In Civil Court of Appeal No. 43/DSPT dated May 13, 1977, the People’s Court of Binh Tri Thien province granted Mr. N and Ms. T a divorce. Regarding the separation of property, Mr. N has the right to use a part of the land within the above land plot, which contains the grave of Mr. N’s father, with a boundary drawing drawn up by the Court attached to the judgment. After the appeal judgment took effect, Mr. N fulfilled his child support obligation, and the authorities divided the land according to the Court’s drawings.

c) In 2001, Mr. N returned to his hometown to build an ancestral house but Ms. T obstructed, so he sued to request that Ms. T return the property, which is land use rights according to the judgment, and restore the current state of the boundary as divided by the judgment.

d) The defendant, Ms. Nguyen Thi T, admitted to being married to Mr. N, then divorced according to Judgment No. 43 dated May 13, 1977. In 1968, Mr. N went to the North. In 1969, there was Mr. N’s death notice, so Ms. T married another husband. From the date of the judgment, the judgment creditor, Mr. N, did not file a request application for enforcement of the judgment, so Ms. T did not accept returning the land to Mr. N because she believed that the land was left to her by Ms. T’s father.

e) In First Instance Civil Judgment No. 08/2006/DSST dated June 21, 2006, the People’s Court of Hue City, Thua Thien Hue province decided:

Accept Mr. Nguyen Van N’s request to force Ms. Nguyen Thi T to return the land use rights of an area of 452.85m2 (with sides 37.5; 38.55; 36.14) which is the property established under Judgment No. 43/DSPT dated May 13, 1977, on which there is the grave of Mr. N’s father in plot number 42, cadastral map sheet number 28, with an area of 1,997.06m2 at house number 04, H street, area A, ward C, Hue city (location of Mr. N’s plot of land is attached in the drawing).

f) After the first instance trial, Ms. T appealed.

g) The Appellate Judgement No. 55/2006/DSPT dated December 11, 2006 of the People’s Court of Thua Thien Hue province decided:

Vacate the First Instance Civil Judgment No. 08/2006/DSST dated June 21, 2006 of the People’s Court of Hue City, Thua Thien Hue Province on the dispute over property rights and land use rights between the plaintiff, Mr. Nguyen Van N and the defendant, Ms. Nguyen Thi T. Suspended the resolution of the case. Return the petition to Mr. Nguyen Van N.

h) After the appeal trial, Mr. N complained.

i) In Appeal Decision No. 708/2009/KN-DS dated December 10, 2009, the Chief Justice of the Supreme People’s Court protested against Civil Appeal Judgment No. 55/2006/DSPT dated December 11/ 2006 of the People’s Court of Thua Thien Hue province, commented:

• Mr. N’s land use rights were determined in Appeal Judgment No. 43/DSPT dated May 13, 1977. Mr. N has the right to sue for the property in a new civil case. The Court of Appeal determined that Mr. N did not have the right to sue and returned the lawsuit to Mr. N, which was unreasonable.

• Requesting the Civil Court of the Supreme People’s Court to conduct a cassation trial to vacate the above-mentioned civil appeal judgment and vacate the First Instance Civil Judgment No. 08/2006/DSST dated June 21, 2006 of the People’s Court of Hue city, Thua Thien Hue province; delivering the case file to the People’s Court of Hue city, Thua Thien Hue province for re-trial under the provisions of law.

j) At the cassation trial, the representative of the Supreme People’s Procuracy agreed with the appeal of the Chief Justice of the Supreme People’s Court.

2. Comments of the Court:

• Based on the documents in the case file, there is a basis for concluding that Mr. Nguyen Van N and Ms. Nguyen Thi T got married in 1963. Mr. N and Ms. T have a house located on the plot of land in Village B, Commune X (now house number 04, Street H, Area A, Ward C, Hue City) area of 1,490m2. In 1968, Mr. N departed to the North. When Mr. N returned home in 1975, Ms. T had another husband, so they consented to a divorce.

• In Appellate Judgement No. 43 dated May 13, 1977, the People’s Court of Binh Tri Thien province granted Mr. N and Ms. T a divorce and decided on the responsibilities of raising children and dividing property. According to the decision in the judgment, Mr. N was entitled to a part of the land within the above land plot (with a boundary division diagram drawn up by the Court attached to the judgment). Due to working conditions far from home, Mr. N left the land in its original state. In 2001, Mr. N returned to his hometown to build an ancestral house, but Ms. T obstructed, neither side did not agree on the land boundary and Ms. T did not agree to return the land to Mr. N. Therefore, Mr. N sued to request Ms. T to return the land according to the legally effective Court of Appeal.

• Up to now, Ms. T is still the manager and user of the land that the People’s Court of Binh Tri Thien province assigned to Mr. N. According to Ms. T, Mr. N had not filed a request for execution of the judgment and the Appellate Judgment mentioned above had not been enforced. The statute of limitation for the enforcement of the judgment had expired according to the provisions of the law.

Key point of Case law: According to the law, Mr. N’s land use rights to the disputed land were determined in Appellate Judgment No. 43 dated May 13, 1977 of the People’s Court of Binh Tri Thien Province. The Court must not resolve the relationship between who is the legal landowner, but suing to reclaim property is a different legal relationship. If the statute of limitation for the enforcement of the judgment is still available, Mr. N has the right to request the judgment enforcement agency to force the land delivery according to Judgment No. 43 dated May 13, 1977 of the People’s Court of Binh Tri Thien province. However, now that the statute of limitation for requesting the enforcement of the judgment has expired, Mr. N has the right to sue to reclaim his property through a new civil case. In this case, if there is no basis to determine that Mr. N has given up his property rights, Mr. N’s request for a lawsuit must be accepted.

• The Court of Appeal determined that Mr. N did not have the right to sue and returned the lawsuit to Mr. N is unfounded. On the other hand, the Courts at all levels have not yet verified and reviewed land management and use, tax declaration and payment; Opinion of the competent State agency on whether or not to recognize the legal use rights for this land.

• The Court of First Instance accepted Mr. N’s request to force Ms. Mr. N’s father, but not taking the effort to preserve and repair the land for Ms. T as well as the amount of land tax Ms. T paid into account is not appropriate. The Court of Appeal vacated the first instance judgment of the People’s Court of Hue City to suspend the resolution of the case; returned the petition to Mr. N is not consistent with the law.

• Therefore, the appeal of the Chief Justice of the Supreme People’s Court has the ground for acceptance.

3. Comments on Case law:

• Regarding the prescriptive periods for requesting execution of the civil judgment:

– In Clause 1, Article 30 of the Law on Enforcement of Civil Judgments 2008 (“Law on ECJ”) stipulates: “Within 5 years after a judgment or ruling takes legal effect, the judgment creditor and judgment debtor may request a competent civil judgment enforcement agency to issue a judgment enforcement decision.”

– Thus, the statute of limitation for the enforcement of the judgment is 05 years. After this time, if the judgment creditor does not request the competent civil judgment enforcement agencies to issue a decision to execute the judgment, the judgment will be considered invalid, unless the judgment creditor can prove that he or she has a reason for not being able to request to execute the judgment on time (Clause 3, Article 30 of the Law on ECJ 2008).

In this case, Civil Court of Appeal No. 43/DSPT was issued on May 13, 1977, but until 2001, Mr. N returned to his hometown to build the ancestral house. According to the regulation, the final time that Mr. N has the right to request execution of a civil judgment is in 1982, which means the statute of limitation for the enforcement of the Civil Appellate Judgment No. 43/DSPT has expired.

• Regarding the right to sue to reclaim property through a new civil case:

– According to the Civil Appellate Judgement No. 43/DSPT dated May 13, 1977, the Court decided that Mr. N had the right to use a part of the land within the plot of land containing Mr. N’s father’s grave, which means this Judgement only records the separate of the land plot for Mr. N upon divorce. This is completely different from Mr. N suing to claim Ms. T when Mr. N was prevented by Ms. T from building an ancestral house, which means that suing to reclaim property – is a completely new lawsuit and is not related to the request to initiate a lawsuit to resolve a civil dispute (divorce).

– Article 256 of the Civil Code 2005 reads: “Lawful owners and/or possessors shall have the right to request the persons possessing, using or receiving benefits from the property under their lawful ownership or possession rights without a legal basis to return such property…”

– The request to sue for the return of property is a request that Mr. N has not submitted to the Court in previous cases. Therefore, it is unreasonable for the Appellate Court to vacate the first instance judgment and suspend the case resolution. At the same time, we also found that Mr. N returned to his hometown to build an ancestral house, which is a basis to consider and determine that Mr. N did not waive his property rights. Therefore, there is a well-founded basis to accept Mr. N’s request to sue for the return of property.

Above is TNTP’s article on “Case law No. 50/2021/AL regarding the right to initiate a lawsuit to reclaim the property of the person to whom the property is delivered according to a legally effective judgment or decision“. We hope this article will be helpful to our readers.

Sincerely,

TNTP & ASSOCIATES INTERNATIONAL LAW FIRM

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