What Are Procedures for Postponement at the First Instance Court?

  In case that civil lawsuit cannot be mediated or cannot conduct the mediation, the Judge shall hold the meetings for checking the handover, access, disclosure of evidences and mediation. In cases there are many parties in a case and some of them are absent but present parties agree to conduct the meetings and the conduct of the meeting does not affect rights and obligations of absent parties, the Judges shall conduct meeting between present parties. If parties request to postpone the mediation meeting until all parties attend, the Judge shall postpone the meeting. The Judges must notify postponement and re-open of meeting to the parties. The litigation lawyers could be the best advisors to the client to utilize the procedures for the best interests of their client depending on the situation.

In the first-instance court hearings, when being summoned duly the the Court for the first time, the parties or their representatives and defense counsels shall be present at the Court hearings. If any of them is absent, the Trial Panel shall postpone the Court hearings, unless such person requests for trial in his/her absence. The Courts must notify the postponement of the Court hearings to the parties, their representatives and defense counsels. When being summoned duly for the second time, parties or their representatives and defense counsels shall be present at the Court hearings unless they request for trials in their absence. If the absence is caused by a force majeure event or an objective obstacle, the Court may postpone the Court hearings, otherwise the Court shall handle as follows: (i) The absence of plaintiff without his/her representative shall be considered giving up the lawsuit initiation, thus the Court shall issue a decision to terminate the case resolution for his/her request for lawsuit initiation, unless such plaintiff requests for trials in their absence. The plaintiff may re-initiate lawsuits according to law provisions; (ii) If neither the defendant without counter-claims or a person with relevant interests and duties (relevant person) without independent claims nor his/her representative participates in the Court hearings, the Court shall conduct trial in their absence; (iii) If neither the defendant with counter-claims nor his/her representative participates in the Court hearings, such defendant shall be considered giving up the counter claims, thus the Court shall issue a decision to terminate the resolution for his/her counter claims, unless such defendant requests for trial in his/her absence. The defendant may re-initiate lawsuits for his/her counter-claims according to law provisions; (iv) If neither relevant person with independent claims nor his/her representative participates in the Court hearings, such person shall be considered giving up the independent claims, thus the Court shall issue a decision to terminate the resolution for his/her independent claims, unless such person requests for trial in his/her absence. Such person may re-initiate lawsuits for his/her independent claims according to law provisions; (v) If the defense counsels of the parties is absent, the Court shall conduct trial in their absence.

When the witnesses are absent, the Trial Panels shall decide to conduct trial or to postpone the court. The Trial Panels shall still conduct trial if the witnesses are absent but have earlier given their testimonies in person or sent their testimonies to courts. The presiding Judges shall make such testimonies public. The Trial Panels shall decide to postpone the Court hearings if the absence of the witnesses at Court creates difficulties or affects the objective and comprehensive resolution of the cases.

If the expert-witnesses are absent, the Trial Panels shall decide to conduct trial or to postpone the court. If the interpreters are absent without substitutes, the Trial Panels shall decide to postpone the Court hearings. If expert-witnesses or interpreters must be replaced, the Judges, the Trial panels or the Civil matter-resolving council shall issue decisions to postpone the Court hearings.

When any procedure participants are absent from Court hearings and it does not fall into the cases which the Courts must postpone the Court hearings, the presiding Judges must ask if there is any one requesting to postpone the Court hearings. If there is, the Trial Panels shall consider and decide to accept or not accept such request. In case of non-acceptance, the reasons must be clearly stated.

In addtion to absence and change of procedure participants, the change of procedure-conducting person may make the Court hearings be postponed. Firstly, in case of change of the Judge, People’s Jurors, Ombudspersons, Court clerks, procurators, the Trial Panels shall issue decisions to postpone the Court hearings.

Decision on postponing the Court hearings in above circumstances is made by Trial Panels and the time limit for postponing shall not exceed 01 month or not exceed 15 days, applicable to Court carried out under simplified procedure, from the day on which the decision to postpone the Court session is issued.

Having said that, the client could rely on the litigation lawyers for the solution in each case to protect the best interests if postponement procedures of the first instance trial could be applied.

How Violations of Fundamental Principles Causes Annulment of Arbitral Awards?

  Arbitration award is final and binding upon the parties. The arbitral award takes effect from the date of its issuance and is not subject to appeal and protest which is a feature of dispute resolution through commercial arbitration. Therefore, the regulations on annulment of arbitral award should be carefully implemented to closely monitor these awards, ensure compliance with the laws and protect the interests of the parties involved.  This is an important matters to discuss when lawyers specializing in dispute through commercial arbitration encounter when requested by the client to assist the enforcement of the arbitral awards under Vietnam laws.

Annulment of arbitral award also known as setting aside is means that the Court as a juridical authority is entitled to review such award upon request of parties in dispute in case there is a ground proving that the arbitral award belongs to one of the annulment cases under the laws. The competent court to take this action is the provincial court of locality at which the parties agree or at which the Arbitral tribunal given the award.

An arbitral award in contrary to the fundamental principles of Vietnam laws is one of five grounds to set aside. The Court is responsible for verifying and collecting evidences to determine whether or not to annul the arbitral award; the requesting party is responsible for other grounds.

Fundamental principles of Vietnam laws are the basic principles impacting the formation and implementation of Vietnam laws. Each law or code contains those principles on its own. Arbitration awards are respected by laws, however within the boundary permitted by laws to not infringe the interests of concerned parties and the national interests, which has been mostly referred to by the court.

When reviewing a request for annulment of arbitral award, the court shall determine whether the award violates any fundamental principle and how such principle concerns or bind the dispute settlement of arbitrator. The court shall set aside an arbitral award in case it contains decisions in contrary to any fundamental principle of Vietnam laws which are not abided by arbitral tribunal upon issue of the arbitral award and the arbitral award seriously infringe upon the interest of the state, the lawful rights and interests of either party or parties, third parties.

In order to apply this fundamental principle ground, the Court may review the application of substantive law decided by the Arbitral Tribunal, as such, the Court may review legal issues of case. In the meantime, Vietnam Courts are not entitled to review the substantive matters resolved by the arbitral tribunal when reviewing request of requesting parties, the Courts are permitted to refer annulment cases stipulated by laws and evidences proving its conclusion. Therefore, the above restriction conflicts with the ground which is annulment of arbitral awards caused by violation of fundamental principles of Vietnamese laws. In fact, to consider whether or not to violate the fundamental principles, the Courts seem to review the substantive matters of dispute to make an argument for its decision.

Hence to improve the efficiency and judicial system under Vietnam laws, it is expected that the fundamental principle ground to cause annulment arbitral award of arbitrator should be instructed in more detail in Vietnam laws to improve the independence of the Arbitral Tribunal and avoid the Vietnam Court trying to re-resolve the substantive matters.

How Non-voting Depositary Receipt Work?

 

 Decree No. 60/2015/ND-CP (Decree 60) amending and supplementing a number of articles of Decree No. 58/2012/ND-CP issued by the Government on May 26th, 2015 has lifted foreign ownership limit of the public enterprises (with conditions) and permitted enterprises operating in all sectors and areas without restriction on foreign ownership to self-set out limits of foreign ownership.

Although the Government has been facilitating foreign investor investing in the Vietnam stock market as well as Vietnam enterprises whom raise capital, the foreign investors still faced a number of challenges. The Decree 60 has taken effect since September 1st, 2015, but most public companies did not lift their foreign ownership limit over 51%. One of the reasons is that, the enterprises with 51% foreign ownership shall meet the statutory conditions and therefore have to follow the investment procedures applicable to foreign investors in accordance with the Law on Investment, Law on Securities and other guiding legislations. Having said that, Vietnam enterprises with over 51% foreign ownership shall be treated as foreign investor. These requirements shall significantly impact on business plans and procedures that an enterprise must comply and restrict them from doing business in some sectors. Accordingly, the daily purchase and sale of shares by foreign investors around the threshold of 51% of the charter capital makes it difficult to determine the legal status of an enterprise.

In order to facilitate the attraction of foreign capital inflows, the Government has been reviewing acceptance of non-voting depositary receipt (NVDR). The promulgation of the Enterprise Law 2020 effective from January 1st, 2021, initially recognized NVDR. Ordinary shares used as underlying assets to issue NVDR are called as underlying ordinary shares. Non-voting depository receipts have interest and obligations proportional to the underlying ordinary shares, excepting for voting rights. NVDR is a negotiable financial instrument issued by a third party which is a subsidiary of the Stock Exchange (Issuing Organization). The Issuing Organization will then hand over to investors all financial benefits attached stocks such as dividends, rights offering. This is a solution from other country that helps foreign investors to invest in public enterprises, even they such enterprises reached limit boundary of foreign ownership. NVDR can be converted into ordinary shares in case the public company has not yet reached foreign ownership limit.

How Copyright Related Rights Are Regulated?

  Copyright related rights (hereinafter referred to as related rights) means rights of an organization or individual to performances, audio and visual fixation, and broadcasts and satellite signals carrying coded programmers. Related rights shall arise at the moment of the above subject matters are fixed or displayed without causing loss or damage to copyright. Principally, related rights are protected by state agency even without the registration. However, the related right owner still may perform the registration procedures for being granted of copyright related right certificate by state agency. The copyright related rights registration could also be assisted by IP attorney in Vietnam.

Which individuals/organizations are eligible for protection of related rights?

The three following subjects are entitled for being protected copyright related rights (i) actors and actresses, singers, instrumentalists, dancers and other persons who perform literary and artistic works (hereinafter all referred to as performers); (ii) organizations and individuals who own performances; (iii) organizations and individuals who fix for the first time the sounds and images of performances or other sounds and images (hereinafter all referred to as producers of audio and visual fixation); (iv) organizations which initiate and carry out broadcasting (hereinafter referred to as broadcasting organizations).

The specific subject matters of copyright related rights which are protected under the law of Vietnam are:

Firstly, performance shall be protected if they fall into one of the following categories (i) it is made by Vietnamese citizens in Vietnam or abroad; (ii) it is made by foreigners in Vietnam; (iii) it is formed on audio and visual fixation; (iv) it has not yet been formed on audio and visual fixation but have already been broadcast (v) it is protected pursuant to an international treaty of which the Socialist Republic of Vietnam is a member.

Secondly, audio and visual fixation shall be protected if it falls into one of the following categories (i) it belongs to audio and visual fixation producers bearing Vietnamese nationality; (ii) it belongs to audio and visual fixation producers protected pursuant to an international treaty of which the Socialist Republic of Vietnam is a member.

Thirdly, broadcasts and satellite signals carrying coded programmers shall be protected if they fall into one of the following categories (i) they belong to broadcasting organizations bearing Vietnamese nationality (ii) they belong to broadcasting organizations protected pursuant to an international treaty of which the Socialist Republic of Vietnam is a member.

It is necessary to take note that the above subject matters are only be protected in the condition that they are not prejudicial to copyright.

If Client needs any more information or request for legal advice regarding copyright related right or other matters of intellectual property, IP attorney at ANT Lawyers could assist.

What Are the Conditions for Initiating an Anti-dumping Case?

 

 Anti-dumping measures as trade remedies are imposed to protect the domestic market against the unfair penetration and competition from foreign goods. GATT requires member countries to reduce tariffs as well as other non-tariff trade barriers on goods in general and to impose trade remedies in accordance with statutory conditions and procedures in particular.

The investigating authority must verify the satisfied conditions under regulations of the anti-dumping law and requests the Minister of Industry and Trade to issue a decision on the initiation of investigations. In order to comply with GATT and ADA, an anti-dumping investigation are initiated if (i) there is obvious evidence that import of dumped goods causes or threatens material injury to an established industry or materially retards the establishment of a domestic industry and (ii) organizations or individuals representing the domestic industry submit an application for the anti-dumping measures.

How to determine dumping actions and its consequences?

The dumping action is one of the conditions required as imposing anti-dumping measures.  A product is to be considered as being dumped (i.e. introduced into the commerce of another country at less than its normal value) if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. Besides, the anti-dumping measure shall not be imposed on a product whose dumping margin is not more than 2% of its export price.

The investigating authority must determine whether the domestic established industry is materially injured or threatened material injury or establishment of a domestic industry is materially retarded or not. The investigating authority of the importing country shall be liable for proving these factors based on specific evidences.

A causal link between the dumped imports and the alleged injury is required. The dumping of goods imported into Vietnam causes or threatens material injury to an established industry or materially retards the establishment of a domestic industry. Factors other than dumping of goods imported into Vietnam such as trade restriction policy, development of technology, export capacity and productivity of domestic manufacturing industry, etc., will not be considered as effect caused by the dumping of goods.

Whom could request for imposing anti-dumping measures?

Investigation is conducted upon request of imposing anti-dumping measures by organizations or individuals representing the domestic industry. Organizations or individuals are deemed as representation of domestic industry if: The total production of like products produced by the applicant(s) and domestic producers supporting the application is greater than those produced by domestic producers that opposite to the application; and the total production of like products produced by the applicant(s) and domestic producers supporting the application accounts for at least 25% of total production of like products produced by the domestic industry.

Upon receiving a sufficient dossier as prescribed by the laws, the investigating authority shall conduct the dossier appraisal within a certain time limit and recommend the Minister of Industry and Trade to decide whether the investigation is initiated or not.

If Client needs any more information or request for legal advice or potential dispute regarding trade remedies measures including, anti-dumping, countervailing duty and safeguard measures or international trade dispute matters, our competition, anti-dumping, and countervailing duty lawyers of International trade and tax practice at ANT Lawyers, a law firm in Vietnam always follow up anti-dumping cases and its development to update clients on regular basis.

How to Use Published Works Without Permission or Pay Royalties, Remuneration?

 

 According to regulation of current Law on intellectual property, copyright means rights of an organization or individual to works created or owned by such organization or individual. Copyright to a work includes moral rights and property rights. If other organization or individual wishes to exploit, use a part or the whole of works, they shall ask permission, pay the owner of copyright for royalties, remuneration according to both parties’ agreement or regulation of law. However, there are still cases of using works without having permission and/or without paying the author or owner of copyright for royalties, remuneration.

Cases of using published works without having permission, without paying for royalties, remuneration include:

-Making one copy for scientific research or personal teaching purposes.

-Reasonable quoting from a work in order to comment on or illustrate one's own works, without misrepresenting the author's views;

-Quoting from a work in order to write an article published in a newspaper or to use in periodical publications, in a radio or television broadcast or in a documentary, without misrepresenting the author's views;

-Quoting from a work in order to teach in school or university without misrepresenting the author's views and not for commercial purposes;

-Copying of a work in order to archive in library and research purposes;

-Performing a stage work or other art work in cultural meetings, communication or mobilization activities without collecting fees in any form;

-Directly audio-visual recording of a performance in order to report current news or to teach;

-Photographing or televising shaping work, architectural, photographic, or applied art work displayed at a public place in order to present images of such work;

-Translating a work into braille or other languages for the blind;

-Importing copies of another's work for personal use.

However, it should be noted that organization or individual using, exploiting works in above cases must meet the conditions: not causing damage to the normal exploit of works, not causing damage to copyright and owner of copyright; must provide information of  the author and the source and origin of the work. In addition, due to specific characteristics of of various types of works such as architectural works, shaping works and computer programs, cases of (i) making one copy for scientific research or personal teaching purposes and (ii) copying of a work in order to archive in library and research purposes, shall have permission and pay author or owner of copyright for royalties, remuneration according to both parties’ agreement or regulation of law.

Cases of using published works without having permission but paying for royalties, remuneration include:

-A broadcasting organization which uses a published work to make a broadcast which is sponsored, contains an advertisement or which collects fees in any form shall not be required to ask permission but must pay the owner of copyright for royalties or remuneration from using time. Level of royalties, remuneration or other material benefits and payment methods are agreed by parties; If the agreement can not be reached, it shall follow regulation of Government or shall file a petition to Court according to regulation of law;

-A broadcasting organization which uses a published work to make a broadcast which is not sponsored, no advertisement or which do not collect fees in any form shall not be required to ask permission but must pay the owner of copyright for royalties or remuneration from using time according to regulation Government;

Similarly, the use of a work in these two cases must neither affect the normal use of such works nor cause prejudice to the rights of the author or copyright holder, and must provide information being the author's name and the source and origin of the work. Besides, in case of using published work without having to seek permission but royalties or remuneration must be paid shall not be applied to cinematographic works.

If the client needs any other information, requires for further legal advice, or dispute with others on IP matters, our Vietnam IP attorney, copyright lawyers , we will be available for service.

What Rights Shareholder Holds in Joint Stock Company?

 

 Shareholders are individual or organization that owns at least one share of the joint-stock company and also are owner of the joint-stock company. Along with these roles, their interests are tied to business operations although they may not directly manage the day-to-day company affairs. In order to implement governance, the powers and responsibilities of each interest group such as shareholders, the board of directors, managerial personnel, etc. should be assigned based on the statutory principles and procedures.

According to the regulations on shareholders in the Law on Enterprise 2020, the rights of shareholders can be categorized into the following groups: economic rights, governance rights, information rights, and litigation rights.

Economic rights

Economic right is the right to gain all pecuniary interest with respect to the shares. The purpose of starting a business or investing in securities comes mainly from earning income or gaining profits. Economic rights accordingly include:

-Right to entitlement to dividends

-Right to transfer ownership

-Priority right to acquire the newly issued shares

-Right to entitlement to a portion of the assets after dissolution or bankrupt

-Appraisal Right

Among these above rights, right to entitlement to dividends and right to transfer ownership are the fundamental economic rights of a shareholder.

Dividend of common shares is determined according to the realized net profit and the dividend payment from the company’s retained earnings. Despite right to entitlement to dividends, shareholders are still subject to a number of limitations in law and in fact. Dividend entitlement is determined by the General Meeting of Shareholders based on the recommendation of the Board of Directors, after the company has fulfilled tax obligations and other financial obligations, contributed to reserve fund, paid for previous losses and met the solvency for all due debts and other property obligations. Dividend is not required to be distributed annually. Depending on the business situation, the General Meeting of Shareholders may decide to retain profits for reinvestment.

Besides dividend entitlement from the company’s operating results, shareholders can also gain profits by share transfer. This kind of investment is popular with respect of shares or securities of public companies, investors do not aim for corporate governance rights as well as dividend, they intend to earn benefits by the difference of the market values of stocks, especially when the stock value increases.

Governance rights

Modern corporate governance has two principles, one is to separate ownership and governance and to separate governance and management. It means that the major shareholders should not hold senior managerial positions in the company and Chairperson of the Board of Directors should not be assigned to other senior managerial positions such as General Director and/or Director.

Shareholders may be an individual or organization which they have their own different interests, goals and abilities. The separation between ownership and management makes the situation of whom the owner is and how the share get transferred not to affect the business operation. In the meantime, the separation helps gather professional managers to implement target intended by the company. According to the laws, members of the Board of Directors of a public company concurrently holding several executive titles must be reduced to the minimum to ensure the independence of the Board of Directors, specially the Chairperson of the Board of Directors shall not be the Director/General Director in a public company as of August 1^st, 2020. There are no similar rules applicable to joint stock companies which are not public company.

Attendance, speaking and voting at General Meeting of Shareholders are fundamental in governance right of common shareholders, applicable to all shareholders holding at least one share. ty. In principle, being a shareholder who holds shares of the company regardless of the number has equal rights to attend and vote at the General Meeting of Shareholders. By the General Meeting of Shareholders, the shareholders holding a certain number of shares can impact decisions on some matters such as election, dismissal, and removal of members of the Board of Directors and Controllers, amendment and supplementation of internal documents, major transactions, and others as stipulated in law on enterprise or charter. In addition to the above rights, the majority shareholders also have a number of other rights related to governance as follows:

The shareholder or group of shareholders holding at least 5% of the total number of common shares (charter may require a smaller percentage) is entitled to:

-Call a General Meeting of Shareholders

-Request Board of Controllers to inspect each specific matter relating to management, governance of company affairs if necessary

-Recommend matters to be included in agenda of General Meeting of Shareholders

-The shareholder or group of shareholders holding at least 10% of the total number of common shares (charter may require a smaller percentage) is entitled to nominate candidates for the Board of Directors, Board of Controllers

Information rights

Shareholders have the right to access documents and information of the company. In addition to the basic documents such as the charter, list of shareholders, meeting minutes and resolutions of the General Meeting of Shareholders, shareholders have the right to access to reports related to the business affairs.

However, some information is only reviewed by shareholders who own required percentage of share:

-Access and extract information on full name and contact address as specified in list of shareholders having voting right and list of shareholders having right to attend General Meeting of Shareholder; request to adjust his/her inaccurate information

-Access, extract and scan charter of company, meeting minutes of General Meeting of Shareholder and its resolution

-Access, extract and copy partial or whole list of involved persons and their contracts, transaction of which the company is other party, interests of Board of Directors, Controllers, Directors or General Directors and other managerial positions of company

-Access and extract minutes and resolutions of Board of Directors, annual or mid-year financial reports, reports of Board of Controllers, contracts and transaction approved by Board of Directors and other documents, excepting for documents related to company’s know-how and trade secrets (applicable to shareholder and group of shareholders who own at least 5% of total number of common shares, the charter may require a smaller percentage)

-Access profit and loss statements, finacial reports, governace and management assement reports; inspection reports of Board of Controllers (applicable to shareholder who own shares at least 1 consecutive year, the charter may require a smaller percentage)

Different to common joint stock company, a public company must annouce fully, accurately and promptly the periodic and extraordinary information on business, finance and governace. Other information must be annouced if it influences share price and investment decisions of shareholders and investors.

Litigation rights

The Law on Enterprises has provided a mechanism to request the Court or Arbitration to rescind the resolution of the General Meeting of Shareholders or sue the managerial personnels when they fail to fully and properly implement their tasks, including:

The shareholder or group of shareholders holding at least 5% of the total number of common shares (charter may require a smaller percentage) is entitled to:

-Request to rescind resolutions of the General Meeting of Shareholders when the orders and procedures of calling the meeting and making resolution of the General Meeting of Shareholders seriously violate the regulations of the Law on Enterprises and company’s charter

-However, the resolution of the General Meeting of Shareholders adopted by 100% of the total number of voting shares is legal and effective even when the orders and procedures of calling the meeting and adopting such resolution violates regulations of the Law on Enterprises and company’s charter.

-Request to rescind resolutions of the General Meeting of Shareholders when its provisions violates the laws or company’s charter

-The shareholder, group of shareholders holding at least 1% of the total number of common shares is entitled to:

-Sue members of Board of Directors, Directors, General Directors separately or jointly under certain circumstances

The Chairperson of Board of Directors or the Director or General Director usually acts as the legal representative of the company, representing the company to perform rights and obligations arising from the company’s transactions, representing the company to take proceedings before the court or arbitrator. However, when their interests conflict with those of the shareholders, shareholders have the right to initiate a lawsuit claiming benefits or compensation. The Law on Enterprise also permits shareholders to sue on behalf of the company when the above managerital personnels commit violations, causing damage directly to the company and indirectly to shareholders.

Not all shareholders have the right to sue for the above managerial personnels, only those who own at least 1% of the total number of common shares. This restriction makes sense with respect of public companies, in order to eliminate unfair competition actions conducted by minority shareholders who is controlled by the rival companies because amount of 1% in public company is not a small number.

Similar to a lawsuit against a manager, shareholder or group of shareholders is also required to own at least 5% of the total number of common shares to request rescission of the resolution of the General Meeting of Shareholders if there is violation on substantive law and procedural law. Accordingly, all resolutions of the General Meeting of Shareholders violating the substantive laws or the company’s charter are rescinded at the request of shareholders, but only serious procedural violations may be rescinded. There is no specific instructions for serious procedural violations at this time, the assessment will depend on personal perspective of the court and arbitrator.

When a Contract is Invalid Due to Non-compliance with Form?

  Generally, contracts for sale and purchase of goods and service contract shall be expressed in verbal or written form or established with specific acts. For types of contract which must be made in writing provided by law, such contract must comply with such form regulation. Particularly, contract for international purchase and sale of goods shall be conducted on the basis of written contracts or other forms of equal legal validity.

There are two cases of non-compliance with form: (i) form of contract is not in accordance with the law and; (ii) contract violates against regulations on notarizing or authorization. It should be noted that the form of contract shall be the conditions for its effectiveness in cases where it is provided by law. The time limit of requiring the court to declare a contract of non-compliance with form invalid is 02 years, from the establishment date of contract. After such time limit, if there is still no request for declaring contract invalid, such contract still remains valid.

When the contract is invalid, the general rule is restoring everything to its original state and returning to each other what have received. The non-compliance with form contract could be valid de facto contract if recognized by the Court's decision when one party or the parties has fulfill at least two third of the obligation contract. Obligations means work whereby one or more entities must transfer objects, rights, pay money or provide valuable papers, perform or not perform certain work for the interests of one or more other entities. However, one party or the parties fulfilling at least two third of the obligation contract will not naturally make such contract valid unless there is decision of the the Court to recognize such. Specifically, according to request of one party, after fully considering conditions mentioned above, the Court shall make a decision on recognizing the validity of such contract.

It is important for parties to have a proper contract with terms and conditions that provide sufficient details with consideration of the nature of the business transactions and the possible resolution when potential disputes arise.  Further, the law governing the contract and the dispute resolution clause which refers to court or arbitration choice should be as clear as possible to avoid confusion and extended time resolving the arisen disputes.

Legal consequences of the trademark with origin in Vietnam and designation EU registered under Madrid system after Brexit

  After 47 years being a member of EU, UK officially left EU on January 31, 2020. This is an almost half of century relationship, thus, there would be a number of arising confusion as well as the issue which is in need of negotiation to complete the process including trademark registration with origin from Vietnam.

                    How To Protect Trademark in Vietnam?

UK is the member of Madrid system from Dec 1^st, 1995, concurrently, EU has also officially become a member of this system since Oct 1^st, 2004.  According to the international trademark searching Madrid Monitor, there are 292 Vietnamese trademarks registered internationally designated EU which include both the trademarks during the examination period and granted certificate.

How is the fate of these trademarks after Brexit?

According to the guidance from Intellectual Property Office of UK (“IPO”), the owner or applicant of the trademark which submitted according to the Madrid system and designated EU need to note the following points:

International trade mark registrations protected in the EU (“EUTM”) under the Madrid Protocol will no longer enjoy protection in the UK after 1 January 2021. According to Brexit Agreement, IPO will create a system: “comparable UK trademark” in relation to each international (EU) trade mark designation. In case EUTM are still in the examination period, the applicant has the right to register that exact trademark in UK in the transition period from January 1^st, 2021 to September 30^th, 2021. In details:

Firstly, to the trademarks which has been protected, UK will:

-Be recorded in UK registration system;

-The recorded trademark will have the same legal status as the trademark protected according to UK law;

-Keep the submitting of the application as EUTM;

-Keep the priority date according to the Madrid system or seniority date according to UK law;

-Be recognized as independently existing trademark according to UK law and may be challenged, assigned, licensed or renewed separately from the original international registration.

However, it is noted that: (i) the Comparable trademarks will be created at no cost to the holder of the international trademark, except a minimal administrative burden will be placed upon the rights holder (ii) the applicant will not receive the trademark certificate, however, they could be searched for the trademark at GOV.UK.

Secondly, for the EUTM which are still in examination phase:

In case EUTM are still in examination phase, on January 1^st, 2021, the applicant has the following rights:

-Apply the trademark application in UK for EUTM during the transition, nine months from January 1^st, 2021 until September 30^th, 2021 as mentioned above;

-Keep the earlier filing date as EUTM;

-Enjoy other international priority claim effecting on EUTM in accordance with the seniority claim according to UK law.

However, it is noted that when applying the EUTM during the examination phase according to the UK trademark system then:

-The trademark applied in UK must be the same with the trademark in EU application which submitted previously;

-Goods/services required to protect of the trademark must be the same or included in the scale of EUTM.

In case the application submitted into UK does not satisfy the above criteria, the application would not enjoy the priority date or the priority claim of EUTM.

The application after having been submitted within that period and satisfies the criteria will be deemed as UK application and be examined according to UK law.

Scope of Chapter 9 – Investment in CPTPP Agreement

  CPTPP is a new-generation FTA covering many aspects in addition to the traditional areas such as trade of goods, services. Non-traditional areas such as labor, environment, intellectual property, etc. all have significant commitments and are specified in each chapter. Enterprises of state member must meet certain conditions applicable to each area to enjoy respective benefits. As for foreign investment, the host country has the right to refuse to apply benefits to foreign investors or its investment if they do not meet the requirements of the CPTPP.

For avoidance of doubt, investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include: enterprise, forms of equity participation in an enterprise, debt instruments and loans, intellectual property rights, etc. Requirements for enjoying foreign investment benefits are provided indirectly in the way of permitting State Members deny of benefits under some circumstances as stipulated in Article 9.15:

“Article 9.15: Denial of Benefits

1.A Party may deny the benefits of this Chapter to an investor of another Party that is an enterprise of that other Party and to investments of that investor if the enterprise:

(a) is owned or controlled by a person of a non-Party or of the denying Party; and

(b) has no substantial business activities in the territory of any Party other than the denying Party.

2.A Party may deny the benefits of this Chapter to an investor of another Party that is an enterprise of that other Party and to investments of that investor if persons of a non-Party own or control the enterprise and the denying Party adopts or maintains measures with respect to the non-Party or a person of the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise or to its investments.”

Most commitments in the Investment Chapter apply to only investors and its investment that come from CPTPP Member States. However, Vietnam may deny the benefits to an investor of State Member that is an enterprise and to investments of that investor if the enterprise:

• is owned or controlled by an individual or enterprise of a Non- State Member.
• is owned or controlled by an individual or enterprise of Vietnam.
• has no substantial business activities in the territory of any State Member other than Vietnam.

By the above permitted denial, the CPTPP applies investment benefits selectively, restricts individual or enterprise of a Non-State Member to taking advantage of benefits from CPTPP. When performing investment licensing procedures in Vietnam, foreign enterprises that come from State Member must present internal documents indicating the owner or controller to demonstrate that their business is out of permitted denial. Besides, these investors must have substantial business activities in the territory of any State Member other than Vietnam. It is necessary to wait for more guidance from the competent state authorities on implementation of CPTPP.

The CPTPP Agreement restricts investment under its protection. CPTPP protects investment which is in its territory of an investor of CPTPP State Member in existence as of the date of entry into force of CPTPP for those State Members or established, acquired, or expanded thereafter. Therefore, the investments ended or terminated prior to the effective date of CPTPP in Vietnam and host country will not gain the benefits under CPTPP.

In the meantime, the investor could also challenge the denial decision of the host country through the dispute settlement mechanism between investor and state (ISDS).

Vietnam has ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – CPTPP on Jan 14th, 2019. This Agreement include 11 countries New Zealand, Canada, Japan, Mexico, Singapore, Brunei, Chile, Malaysia, Peru, Australia and Vietnam.

When Should the Employer Send Notice of Termination of Labour Contract to Employee Before Contract Expiration?

 

Expiration is one of the circumstances which permit termination of labor contract under the Labor Code 2012. Accordingly, the employer must inform in writing to the employee of the terminating date of labor contract at least 15 days prior to the expiration. Termination of labor relationship in each circumstance must follow different conditions and procedures to ensure the interests and obligations of both employee and employer and avoid potential labor disputes.

Previously, an administrative penalty was applied to violations of the labor contract termination notice mentioned above. If the employer fails to inform the employee, the employer will be subject to a warning or a fine with amount from VND 500,000 to VND 1,000,000. However, the Decree 28/2020/ND-CP issued on March 1^st, 2020 by the Government has repealed sanction for this behavior.

If the employee continues to work upon expiration of labor contract, both parties will be required to sign a new labor contract within the next 30 days, otherwise the signed contract will become an indefinite-term. Failure of the employer to inform the labor contract termination to the employee does not mean that the labor relationship is automatically extended after the expiration. If both parties fail to sign a new labor contract within the next 30 days, but the employee still do normal assigned job and is paid a full monthly salary, an indefinite-term labor contract is deemed as entered into by them. Any disputes arising out then will be settled based on provisions of indefinite term labor contract and laws.

The Labor Code 2019 repealed the employer’s informing responsibility upon expiration of labor contract except in a few circumstances such as the employee being sentenced to imprisonment, disciplined, expelled, ..., the employer is required to inform the employee in writing the termination of the labor contract.

Penalties on Working Without Work Permit in Vietnam

  

Vietnam has become an attractive destination for foreigner investors due to the impressive development of socio – economic in recent years. This is such a good opportunity for Vietnamese enterprises to get cooperation in business with foreign partners.

To take advantage of the opportunities to be the pioneer and market share, many of them have demand in employees with good skills and qualifications. To meet these requirements, more and more companies hire foreign workers for specific positions which might lack of human resources within Vietnam territory.

According to Labor Code 2019, the employer wishing to recruit the foreign workers has to explain their labor demand to the People’s Committee of provinces and obtain written approval from this agency. Pursuant to this written approval, the employer shall submit the application for the work permit to the Department of Labor, War Invalids and Social Affairs of the province where the planned working place of such foreign workers is located.

A foreign employee means a person who has a foreign nationality and:

• Is at last 18 years of age and has full legal capacity;
• Has qualifications, occupational skills, practical experience and adequate health as prescribed by the Minister of Health;
• Is not serving a sentence; does not have an unspent conviction; is not undergoing criminal prosecution under his/her home country’s law or Vietnam’s law;
• Possessing a work permit granted by a competent Vietnamese state agency, except the cases specified in Labor Code.

Therefore, based on regulations of the Labor Code of Vietnam, except for the foreign employees exempted from work permit i.e. investor of company established in Vietnam, all of cases the foreign employees wishing to work in Vietnam shall be subject to work permit application. A foreign employee shall produce his/her work permit in Vietnam when carrying out immigration procedures or upon request of a competent state agency.

In case foreign employees who do not belong to work permit exemption being found working in Vietnam without work permit, that person shall be considered violation of the law of Vietnam. In addition, the employer that uses the violated employee without work permit shall be punished accordingly.

According to Decree No. 28/2020/ND-CP dated March 1, 2020 on administrative penalties for violations arising from labor, social insurance and sending Vietnamese workers abroad under contracts.

1. i) Foreign employee that working without work permits, except for the cases in which the work permit is exempt shall be expelled.
2. ii) Employers who employ foreign workers in Vietnam without work permits or written confirmations of their exemption from work permit requirements, or employs foreign workers holding expired work permits or written confirmations of exemption from work permit requirements shall be implied:
3. A fine from VND 30,000,000 to VND 45,000,000 if the violation involves 01 – 10 workers;
4. A fine From VND 45,000,000 to VND 60,000,000 if the violation involves 11 – 20 workers;
5. A fine From VND 60,000,000 to VND 75,000,000 if the violation involves 21 or more workers.

How Cross-Border Supply of Services Works?

 

 

Bilateral or multilateral free trade agreements between countries are formed majorly based on the WTO agreement system. In particular, GATS as an Agreement under the WTO system, is the first and only set of multilateral rules governing international trade in services. Ways or modes of trading services are basic provisions of GATS, including: Cross-border supply (mode 1), Consumption abroad (mode 2), Commercial presence (mode 3), Presence of natural person (mode 4). The categorization of modes covering its own regulations depends on the territorial presence of the supplier and the consumer at the time of the transaction.

According to GATS, cross -border supply means supply of a service from the territory of one Member into the territory of any other member, and supplier and consumer of a member do not present within the territory of other member. Consumption abroad means supply of a service in the territory of one Member to the service consumer of any other member. Presence of natural person means supply of a service by a service supplier of one member, through presence of natural persons of a member in the territory of any other member. It should be noted that cross-border supply of services is defined depending on each Agreement. Under CPTPP, cross-border supply includes modes 1, 2 and 4 above. In this article, cross-border supply is equivalent to mode 1, under GATS.

When participating in GATS, members make commitments for market access with respect to each mode of service supply and sub-sector. The GATS provides a set of general principles that all WTO members must adhere to, which there is no unnecessary barriers applied to trade. However, GATS expressly recognizes the rights of member governments to manage and regulate the supply of services in pursuit of their own policy objectives. GATS also does not interfere in internal affairs ad policies of members. Therefore, the governments absolutely have the right to decide and adopt their trade policies. The enterprise of a member must comply with domestic regulations in the territory of other member where they conduct business and trade in services and refer to that Member's Schedule of Specific Commitments to understand market access obligations and national treatment.

Most sub-sectors do not restrict market access and national treatment for foreign suppliers providing cross-border services in Vietnam (legal, accounting, auditing, tax, architecture, advertising, management consulting, ...). Although the market access is not restricted, it does not mean that the foreign suppliers freely provide services in Vietnam without satisfaction of conditions or without the consent of the competent state authorities. To consider this mater and have a correct understanding, the national treatment principal should be reviewed, it requires that each member shall accord to services and service suppliers of any other member the treatment no less favourable than that it accords to its own like services and service suppliers. Having said that, in the event that a member maintains business conditions for the domestic services and service suppliers, these conditions may also apply to the foreign services and service suppliers.

Such as accounting service business, foreign service suppliers are not restricted in market access and national treatment under the Schedule of Specific Commitments in Services. It means that a foreign accounting firm can provide accounting services to a Vietnamese enterprise. However, accounting service is a conditional business applicable to domestic firms. According to the national treatment principle, Vietnam has the right to impose similar conditions on foreign suppliers. Reference to the provisions of Vietnamese laws, the foreign accounting firm must fully meet the conditions of head office and personnel to be licensed its business in Vietnam. Further, there are tax liabilities arisen which obligations of registration and declaration depend on particulars of transactions.  It is suggested that international trade lawyers are consulted to avoid potential disputes or non-compliance of cross-border supply of services.

What Procedures for Conciliation and Settlement of Land Dispute?

  Land dispute is one of the most complicated problems which arises regularly in daily life in Vietnam. Land dispute is very diverse, which may be dispute over land use right, ownership of house attached to land use right related to inheritance, divorce, transfer and transformation transaction, leasing, sub-leasing, mortgage, etc.

What is land dispute?

Land dispute means a dispute over the rights and obligations of land users among two or more parties in a land relationship.

In case of conflict over land, what should parties do to settle dispute? Land dispute can be settled in two resolutions, in court or settlement procedures at state administrative agencies.

Firstly, no matter what resolution parties choose, conciliation procedure at commune-level People’s Committee of the locality where the disputed land is located is mandatory condition and procedure. In particular, if conciliation by parties cannot be achieved, the parties may send a petition for conciliation to the commune-level People’s Committee of the locality where the disputed land is located. The conciliation procedure carried out at the commune-level People’s Committees shall be completed within 45 days from the date which the commune-level People’s Committees receives a petition for settlement of land dispute. The conciliation may take place only when all the disputing parties are present. If any of the disputing parties is absent for the second time, the conciliation shall be regarded as unsuccessful.

If the conciliation at a commune-level People’s Committee fails, land dispute shall be settled according to one of the following two cases. Firstly, the land dispute in which the party possesses a certificate or any of the papers prescribed in Article 100 of Land law and the dispute over assets attached to land shall be settled by the People’s Court. Secondly, regarding the land dispute in which the party does not possess above papers, the parties may choose between the following two options of settlement: filing a written request for dispute settlement with a competent People’s Committee or filing a lawsuit with a competent People’s Court in accordance with the law on civil procedures.

Regarding the second case, when the party choose to settle at competent People’s Committee, the chairperson of the district-level People Committee is responsible for the settlement of disputes among households, individuals and communities. If the parties disagree with the settlement decision, they are entitled to claim with the chairperson of the provincial-level People’s Committee or to file a lawsuit at a People’s Court in accordance with the law on administrative procedures.

In case one party is an organization, a religious institution, an overseas Vietnamese or a foreign-invested enterprise, the chairperson of the provincial-level People’s Committee is responsible for the settlement. If the parties disagree with the settlement decision, they are entitled to file claim with the Minister of Natural Resources and Environment or to file a lawsuit with a People’s Court in accordance with the law on administrative procedures. It should be noted that the legally effective decision on dispute settlement must be strictly abided by the parties. If the parties fail to comply, the decision shall be enforced.

The settlement of land disputes in which the disputing parties have no certificate or any of the papers prescribed in Article 100 of the Land Law and Article 18 of Decree 43/2014/ND-CP detailing a number of articles of the land law shall be based on the following grounds: Evidences on the origin and use process of the land presented by the disputing parties; Actual land areas currently used by the parties in addition to the disputed land area and the average land area per household member in the locality; Conformity of the current use status of the disputed land with land use plans already approved by competent state agencies; Preferential treatment policies toward persons with meritorious services to the State; Regulations on land allocation, land lease and land use rights recognition.

It is suggest to consult with land dispute lawyers for advice and representation at early stage for dispute avoidance or dispute resolution.

What are Conditions for Cancellation of Contract?

 

 When entering into a contract, the parties in a contractual relationship always aim for certain interests and purposes. However, in reality, the contract is not always implemented seriously and in good faith. According to Vietnam laws, parties are entitled to cancel the contract to protect rights and interests. Therefore, it is not rare for a party to request to cancel the contract in order not to be bound by the contract. However, it should be noted that the right of cancellation is only applied in some certain circumstances which stipulated by the law. This is to limit arbitrariness of cancelling the contract.

The basic condition for cancelling the contract is the breach. However, it should be noted that not all breaches of contract will result in cancelling the contract. This is stipulated in both of general law and specialized law. According to Commercial law 2005 (“CL”), the sanction of cancelling the contract is applied in case of breaching act be a condition for the cancellation of the contract as agreed upon by the parties or in case of substantial breach of contractual obligations from a party. Specifically, contractual breach means the failure of a party to perform, to fully or properly perform its obligations according to the agreement between the parties or the provisions of CL. Substantial breach means a contractual breach by a party, which causes damage to the other party to an extent that the other party cannot achieve the purpose of the entry into the contract. Civil Code 2015 (“CC”) also stipulates correspondingly but it uses the term “serious breach”: “A party has the right to cancel the contract and shall not be liable to compensate for damage in the following cases: (i) A breaching act of one party is a condition for the cancellation of the contract as agreed upon by the parties; (ii) The other party seriously violates the obligations in the contract; (iii) Others circumstances as provided by law. Serious violation means the failure to fulfill obligations properly by a party which make the other party cannot achieve the purpose of the entry into the contract”. However, currently there is no specific guidance on identifying the substantial breach of contractual obligations and the serious breach of contractual obligations. Therefore, determining whether a party's breach is considered as a substantial breach of contractual obligations or a serious breach of contractual obligations will be within the competence of the jurisdiction.

A lawfully concluded contract may be canceled when a party breaches its basic contractual obligations. After cancelling the contract, such contract shall be invalid from the time it is entered into, and the parties shall not have to continue performing their contractual obligations, except for their agreements on their post-cancellation rights and obligations and resolution of disputes. The parties shall have the right to claim benefits brought about their performance of their contractual obligations. If parties have indemnity obligations, their obligations must be performed concurrently. Where it is impossible to make the indemnity with benefits which one party has enjoyed, the obliged party must make the indemnity in cash. Breached parties are entitled to claim damages.

In conclusion, from the regulation of law, it can be seen that nature of contract is to benefit for the parties and not to be canceled. The cancellation is very serious so the contract can only be canceled in some certain conditions. The contract cannot be canceled as a sanction if there is no contract breach. Simultaneously, the party requesting cancellation also needs to know that such request is only accepted if there is enough foundation to affirm that the other party has substantial breach of contractual obligations or the serious breach of contractual obligations.  Parties encountering potential dispute should consult with dispute lawyers in Vietnam for proper resolution.

How Amendment to Contracts Can be Made?

 

 Once a contract is made legally, contracting parties shall implement and such contract is respected by third parties. As stated in Civil Code 2015 (“CC”): “Each commitment or agreement that does not violate regulations of law and is not contrary to social ethics shall be bound by contracting parties and must be respected by other entities”. However, in the implementation process, the contract can be amended, which means, rights and obligation of parties can be amended accordingly.

Due to the fact that the contract is result of before agreement, amendment shall follow certain conditions. According to laws, parties may agree to amend a contract. Enterprises need to pay attention to some following issues when amending the contract in the implementation process:

Firstly, entities participating in contract amendment is the matter which enterprises need to notice. Both contract and supplemental agreement are made on behalf of the parties, which means between two juridical persons. In reality, juridical persons only carry out transactions through representatives, it may be legal representative or authorized representative. Therefore, entities participating in contract amendment shall be representative of juridical persons. A civil transaction entered into and performed with a third person by a representative in accordance with his/her scope of authorization shall give rise to rights and obligations of the principal. Regarding consequence of civil transactions made by unauthorized persons or by representatives beyond scope of representation, such civil transactions shall not give rise to rights and obligations of the principal or not give rise to rights and obligations of the principal with respect to that part of the transaction which exceeded the scope of representation, except for any of the following cases: (i) The principal recognizes the transaction or gives consent; (ii) The principal knows it without any objection within an appropriate time limit; (iii) It is the principal's fault that the other party does not know or is not able to know that the person entering into and performing the civil transaction therewith was unauthorized or beyond his/her scope of representation. In above circumstances, the unauthorized person must fulfill the obligations to the person with which he/she transacted or the obligations owning to the person with which he/she transacted in respect of the part of transaction which is beyond the scope of representation, unless such person knew or should have known that the representative was unauthorized or the scope of representation was exceeded but still transacted. A person having transacted with above representative has the right to terminate unilaterally the performance or to terminate the made civil transaction or to terminate the civil transaction with respect to that part which is beyond the scope of representation or with respect to the entire transaction and to demand compensation for any damage, except that such person knew or should have known that that the representative was unauthorized or the scope of representation was exceeded or the case of which the principal recognizes the transaction or gives consent. If above representatives and the other party in a civil transaction deliberately enter into and perform such transaction and thereby cause damage to the principal, they must jointly compensate for the damage.

Form of agreement on amending contract is the second matter which needs to be taken into consideration. Amendment shall comply with the form of the initial contract. For instance, if the initial contract is made in written, notarized, certified, registered, the amendment shall follow such forms. The form of contract shall be the conditions for its effectiveness in cases where it is provided by law. Therefore, the form of amended contract shall be the conditions for its effectiveness in cases where it is provided by law. In invalid contracts, the general rule is restoring everything to its original state and returning to each other what have received. The condition for the contract of non-compliance with form recognized by the Court's decision is that one party or the parties has fulfill at least two third of the obligation contract. However, not one party or the parties fulfilling at least two third of the obligation contract will naturally make such contract invalid but there must go through the Court. Specifically, according to request of one party, after fully considering conditions mentioned above, the Court shall make a decision on recognizing the validity of such contract. This principle also applies to contracts amendment. It is important that parties to consult with lawyers at early stage to anticipate matters of dispute and clearly have clauses drafted to avoid potential future disputes.

What is Statue of Limitation for Initiating Legal Action According to Arbitral Procedures?

 

 Arbitration law always set the the limitation period for request of dispute resolution. This means that the law applies a specific period for parties to bring the dispute to the arbitration. According to law on arbitration 2010 (“LOA”), unless otherwise provided by specialized law, limitation period for initiating legal action according to arbitral procedures is two years from the time of infringement of lawful rights and interests.

There is no regulation in arbitration law regarding consequence of expiration of limitation period, but Civil Code 2015 (“CC”) stipulates that: “if such time limits expire, the right to initiate such legal action shall be lost”. Arbitration council shall not resolve expired requests, which means council shall not judge which parties is right or wrong. Therefore, enterprise needs to request within the statutory time limits in order to be resolved. If not, the request shall not be considered although there was request and related fees. In addition, it should be noted that the Court only applies time limits regulation at the request of a party or the parties provided that such request is filed before the first trial court of first instance makes a judgment, a decision on settlement.

However, there has been cases of non-applicability of limitation periods. Specifically, a limitation period for initiating legal action for a civil case shall not apply in any of the following cases: (i) Request for the protection of personal rights not associated with property; (ii) Request for the protection of ownership rights, unless otherwise provided by Civil Code or relevant laws; (iii) Dispute over land use right as prescribed in the Law on land; (iv) Other cases as provided by law. For instance, dispute over reclaiming deposited property is under case of non-applicability of limitation periods. Specifically, deposited property still belongs to ownership of depositor although the property had been transferred to depositary and reclaiming property is a measure protecting the right of property ownership, while dispute over the protection of ownership rights is under case of non-applicability of limitation periods.

In practice, the time between the time period of filing a lawsuit and the time period of infringement of lawful rights and interests can be longer than two years if there is time periods excluded from limitation periods for initiating legal action or there is re-commencement of limitation period for initiating legal action.

The time period during which one of the following events occurs shall be excluded from limitation periods for initiating legal action: (i) An event of force majeure or other objective hindrance which renders the person with the right to initiate legal action for a civil case or make the request not able to do so within the limitation period; (ii) The person with the right to initiate legal action for a civil case or to make the request is a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity, and does not yet have a representative; (iii) The representative of a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity has not yet been replaced in case that the representative being natural person dies or the representative being juridical person ceases to exist or in case that the representative, for good reasons, cannot continue his/her representation.

The limitation period for initiating legal action shall re-commence in any of the following cases: (i) The obligor has acknowledged part or all of its obligations to the plaintiff; (ii) The obligor has acknowledged or fulfilled part of its obligations to the plaintiff; (iii) The parties have become reconciled. The limitation period for initiating legal action for a civil case shall re-commence from the date following the date on which the above event occurs. Having said that, it is important to consult with dispute lawyers for the effective dispute resolutions should dispute arise.

What Are Responsibilities of the Seller for Inadequate Delivery of Goods?

 

 Delivering and receiving goods are basic obligations of the parties when performing the Contract for purchase and sale of goods. Specifically, in accordance with the law, when buying and selling goods, the seller must deliver goods and relevant documents, as agreed in contracts on quantity, quality, packing and preservation modes and other contractual terms.

In cases where there is no specific agreement, the seller is obliged to deliver goods and relevant documents according to the provisions of the Law on Commerce. At the same time, the Buyer is obliged to receive the goods as agreed and perform reasonable actions to help the seller deliver the goods.

If the Seller fails to deliver insufficient goods, they must deliver the goods in accordance with the contract. In case the Seller fails to deliver the goods as agreed, the Buyer has the right to purchase the goods from another person for replacement according to the goods specified in the contract and the Seller must pay the difference and relevant expenses, if any; reserves the right to repair the defect of the goods by itself and the Seller shall pay actual and reasonable expenses for the rectification.

The Buyer has the right to request to apply for penalty if agreed in the contract. The penalty for a breach of a contractual obligation or the aggregate fine level for more than one breach shall be agreed upon in the contract by the parties but must not exceed 8% of the value of the breached contractual obligation portion.

In the contract, where a contract-breaching party delays making payment for goods or payment of service charges and other reasonable fees, the aggrieved party may claim an interest on such delayed payment at the average interest rate applicable to overdue debts in the market at the time of payment for the delayed period, unless otherwise agreed or provided for by law.

Thus, when the Seller fails to comply with the commitments as in the contract, the Buyer has the right to initiate a lawsuit requesting a court to force the Seller to return the received amount of goods equivalent for the goods not yet delivered, interest due to late payment, contract fines, compensation for damage as required. In case the parties do not agree to penalty for violation, the Buyer only has the right to claim damages. In case the parties agree to fine for violation, the Buyer has the right to apply both the sanction of the violation and the forced compensation for damage, unless otherwise provided by law.

For the determination of civil liability when violating the sale and purchase contract, according to law, each juridical person must bear civil liability for the civil rights and obligations established and performed in the name of the juridical person by its representative. Each juridical person must bear civil liability by recourse to its property; shall not bear civil liability for its members with respect to civil obligations established and performed by such members not in the name of the juridical person, unless otherwise prescribed by law. A member of a juridical person shall not bear civil liability of the juridical person for the civil obligations established and performed by such juridical person, unless otherwise prescribed by law. Therefore, if the Seller breaches the contract, the legal entity being the Seller is responsible to pay the Buyer and the legal person is not responsible for that legal entity.

It is important to engage lawyers at an early stage of the dispute for consultation on effective dispute resolution.  It is also advised, when entering into the Contract for purchase and sale of goods, the Seller needs to understand the basic legal provisions on its rights and obligations. The Buyer also needs to know clearly about the obligations of the Seller in order to be able to prevent the risk that arises when one of the parties breaches a fundamental contractual obligation.

Regulations on opening individual payment account by electronic method

 

 On December 4, 2020, the State Bank of Vietnam issued Circular No. 16/2020/TT-NHNN amending and supplementing a number of articles of Circular No. 23/2014/TT-NHNN dated August 19, 2014 of The Governor of the State Bank of Vietnam guides the opening and use of a payment account at a payment service supplier. Accordingly, the State Bank has supplemented instructions to open individual payment accounts by electronic method.

Banks and/or foreign bank branches that open payment accounts by electronic method must develop, promulgate and publicize the process and procedures for opening payment accounts by electronic method in accordance with regulations of the law, include at least the following steps: collect information about the application for opening a payment account as prescribed; check, compare and verify customer identification information; warn customers about actions not performed in the process of opening and using payment accounts opened electronically; provide the customer with the content of an agreement to open and use a payment account as prescribed and enter into an agreement to open and use a payment account with the customer; notify customers of the number, the name of the current account, the transaction limit through the current account and the date of commencement of operation of the checking account to the customer.

Banks and/or foreign bank branches shall evaluate on technological conditions to assess risks, determine the scope of use and decide to apply transaction limits via customers' checking payment account by electronic method but must ensure that the total transaction value limit (debit) through that customer's payment accounts does not exceed VND 100 million/month/customer.

Banks and/or foreign bank branches may decide to apply a transaction limit via an electronic payment account that is higher than the above limit in one of the following cases: banks, foreign bank branches apply video call to collect, check and verify customer identification information in the process of opening payment accounts to ensure efficiency such as identification and verification of customer information through face-to-face methods; banks and/or foreign bank branches apply the technology to check and compare customers' biometric characteristics with citizen biometric data through the citizen identification database; after the bank, foreign bank branch has implemented the identification and verification of customer information through face-to-face meeting with the account holder; money transfer transactions for electronic savings and term deposits for the account holders at such banks, foreign bank branches; in cases where banks, foreign bank branches are allowed to actively debit the customers' payment accounts as prescribed.

Opening payment accounts by electronic method specified in this Article does not apply to joint payment accounts, individual customer who is foreigner; a person who is aged between exactly 15 and nearly 18 years and does not have his/her incapacity or restricted capacity for civil acts; a person who is under the age of 15, has restricted capacity for civil acts or is incapable of civil acts as defined by the Law of Vietnam is entitled to open a current account via his/her legal representative; a person who has limited cognition and behavioral control as defined by the Law of Vietnam may open a current account via his/her guardian.

This Circular takes effect on March 5, 2021.

Preferential import and export tariff according to EVFTA for the period 2020-2022

 

 On September 18, 2020, the Government issued Decree No. 111/2020/ND-CP on Vietnam's Preferential Export Tariffs and Special Preferential Import Tariffs to implement the Free Trade Agreement between The Socialist Republic of Vietnam and the European Union (EVFTA Agreement) for the period 2020-2022.

Accordingly, the Decree stipulates the Preferential Export Tariff, the Special Preferential Import Tariff of Vietnam to implement the EVFTA Agreement and the conditions for enjoying preferential export tax rates and special preferential import tax rates according to this Agreement.

The preferential export tariff specified in Appendix I to this Decree includes product code, description of goods, and preferential export tax rates for different stages when exporting to a territory under the EVFTA Agreement, including: European Union member territories; United Kingdom of Great Britain and Northern Ireland for each code.

Goods exported from Vietnam to which the preferential export tax rates are applied must satisfy the following conditions: to be imported into any territory specified in the EVFTA Agreement, including member territories of the European Union, United Kingdom of Great Britain and Northern Ireland; have transport documents (copy) showing the destination is the above territories; have the import customs declaration of the export consignment of Vietnamese origin imported into the aforesaid territories (the copy and translation in English or Vietnamese in case the language used on the declaration is not English).

Vietnam's special preferential import tariff for the implementation of the EVFTA Agreement is specified in Appendix II to this Decree, including product code, description, and special preferential import tax rates according to stages are imported from the European Union member territory; United Kingdom of Great Britain and Northern Ireland; The Principality of Ando; The Republic of San Morocco and the Socialist Republic of Vietnam (Goods imported from non-tariff zones to the domestic market) for each product code.

Imported goods eligible for special preferential import tax rates under the EVFTA Agreement must satisfy the following conditions: in the Special Preferential Import Tariff specified in Appendix II to this Decree; be imported into Vietnam from the member territory of the European Union; United Kingdom of Great Britain and Northern Ireland; The Principality of Ando; Republic of San Mary; and the Socialist Republic of Vietnam (Goods imported from non-tariff zones to the domestic market); meeting the rules of origin of goods and having proof of origin in accordance with the provisions of the EVFTA Agreement.

The provisions of this Decree only apply to goods exported from Vietnam to the the United Kingdom of Great Britain and Northern Ireland and goods imported into Vietnam from the United Kingdom and Northern Ireland for the period from August 1, 2020, to the end of December 31, 2020.

This Decree takes effect from the date of signing.