An international sales contract is a sales agreement involving foreign elements. Hence, determining the competent authority to resolve disputes in such contracts is more complex than domestic sales contract disputes. The jurisdiction to resolve these disputes is based on two primary sources of law: international treaties to which Vietnam is a signatory and national laws. Jurisdiction is determined in the following order: international treaties to which Vietnam is a signatory take precedence, and Vietnamese law applies if no international treaty is applicable.
1. Jurisdiction to resolve international sales contract disputes according to international treaties to which Vietnam is a signatory
According to international treaties to which Vietnam is a signatory, specifically the Mutual Legal and Judicial Assistance Treaty signed by Vietnam, the jurisdiction of Vietnamese courts to resolve International sales contract disputes can be determined based on several criteria:
– Court of the place of contract conclusion or contract execution: If the dispute is about a contract that was concluded or is to be performed on the territory of the contracting party, the court of that party has the authority to resolve the dispute (Article 18 of the Treaty on Mutual Legal Assistance in Civil and Criminal Matters between the Socialist Republic of Vietnam and the People’s Republic of China, effective in 1999).
– Court of the Plaintiff’s Permanent Residence or Headquartered: For disputes related to contracts, the court where the plaintiff permanently resides or has its headquartered has jurisdiction if there are objects of disputes or assets of the defendant located in that territory (Article 36 of the Treaty on Mutual Legal and Judicial Assistance in Civil and Criminal Matters between the Socialist Republic of Vietnam and the Russian Federation, effective in 2012).
– Court of the Defendant’s Permanent Residence, or Residence or Headquartered: For disputes related to contracts, the jurisdiction belongs to the court where the defendant permanently resides or has its headquartered (Article 36 of Treaty on Mutual Legal and Judicial Assistance in Civil and Criminal Matters between the Socialist Republic of Vietnam and the Russian Federation, effective in 2012) or the court where the defendant resides or has its headquartered (Clause 3 Article 28 of the Treaty on Mutual Legal Assistance in Civil and Criminal Matters Between The Socialist Republic of Vietnam and Democratic People’s Republic of Korea, effective in 2004).
2. Jurisdiction to resolve international sales contract disputes according to Vietnamese Law
Under Vietnamese law, the jurisdiction of Vietnamese courts over international commercial disputes, including International sales contract disputes, is determined in two stages: (i) determining the general jurisdiction of Vietnamese courts over the dispute and (ii) determining the specific Vietnamese court with jurisdiction over the dispute.
2.1. Jurisdiction of Vietnamese courts over international sales contract disputes
According to Clause 1 Article 469 of the Civil Procedure Code 2015, Vietnamese courts have general jurisdiction to resolve International sales contract disputes in the following cases:
– The defendant is an individual who resides, works or lives for a long term in Vietnam. Besides the common International sales contract contracts between businesses, it is also quite common for International sales contracts to be signed between individuals and businesses. Vietnamese courts will have jurisdiction over International sales contract disputes if the defendant is a foreigner or a Vietnamese who resides, works or lives for a long term in Vietnam in Vietnam.
– The defendant is an agency or organization which is headquartered in Vietnam or has a branch or a representative office in Vietnam, in cases related to the operation of the branch or representative office in Vietnam of such agency/organization. Disputes are under the jurisdiction of Vietnamese courts if the defendant is a business in either of these situations: (i) The business has its headquarters in Vietnam; or (ii) The foreign business has a branch or representative office in Vietnam.
– The defendant has properties in Vietnam. Proceedings at the location of the defendant’s properties facilitate the enforcement of judgments.
– Cases related to International sales contracts which are established, changed or terminated in Vietnam, objects of which are properties in Vietnam or the contract is performed in Vietnam. This regulation can be interpreted in two ways: (ii) Vietnamese courts have jurisdiction if all stages of the International sales contract’s establishment, modification, or termination occur in Vietnam; or (ii) Vietnamese courts will have jurisdiction if any one of these stages occurs in Vietnam.
– Cases related to International sales contracts which are established, changed, or terminated outside of Vietnam’s territory but involve rights and obligations of Vietnamese agencies, organizations, and individuals or agencies, organizations, and individuals that are headquartered or reside in Vietnam.
Moreover, Point c Clause 1 Article 470 of the Civil Procedure Code 2015 recognizes the parties’ agreement to choose a competent court. Specifically, Vietnamese courts have specific jurisdiction to resolve International sales contract disputes if the parties have agreed to choose to settle according to Vietnamese law or International treaties to which Vietnam is a signatory and the parties agreed to choose Vietnamese Courts.
2.2. Specific Vietnamese courts with jurisdiction over international sales contract disputes
For International sales contract disputes under the jurisdiction of Vietnamese courts, the specific court with jurisdiction is determined as follows:
According to Points b Clause 1 Article 35, Clause 3 Article 35, and Point a Clause 1, Article 37 of the Civil Procedure Code 2015, International sales contract disputes involving at least one party or properties in foreign countries or which must be judicially entrusted to representative agencies of Vietnam overseas or to foreign courts, competent agencies will be settled by the People’s Courts of provinces.
This concludes the article “Jurisdiction to resolve international sales contract disputes at Vietnamese courts” that we present to our readers. We hope this article is useful for those interested in this issue.
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