Partner Binh Tran gave comments on the “Harmona Apartment purchasing” case

Disputes over out of the “Harmona apartment in Tan Binh district, Ho Chi Minh city” case  has got the community’s attention recently. To build a finance basement for the project, the investor mortgaged the right of land use and the property forming in the future at North Branch BIDV Saigon. After the implementation period of the project, the investor signed a sale contract for home buyers, did handover and home buyers also moved in. The main point is that home buyers have  fully paid for the investor. However, in May, the Bank announced that it will handle the mortgaged property as the mortgagor is an investor has violated the obligation to repay the debt. This made the resident there feel very nervous. Therefore, how is the rights of  people in the apartment protected ?

Let’s watch the video to see that how Mr. Binh Tran – Partner in charge of Real Estate practice group at LNT & Partners comments on this case along with FBNC:

 

LNT & Partners to win the title of National Law Firm of the Year for premiere Asia-Pacific Dispute Resolution Awards 2015

Asialaw Profiles, one of the most reputable legal publications in Asia and a daughter company of Euromoney Legal Media Group, has conducted an inaugural research for the law firms with dispute resolution practice. The research employs an intensive and independent methodology to assess and rank dispute lawyers as well as law firms, to provide an unbiased assessment on the legal prowess of such lawyers and law firms. On September 2015 at Ritz-Carlton Hotel in Hong Kong, an award ceremony took place to award such outstanding lawyers and law firms.

LNT & Partners is proud to announce that the firm is the winner of ‘National Law Firm of the Year’ for Vietnam, standing among the other prestigious and reputable law firms of other regions such as Mori Hamada & Matsumoto in Japan, King & Wood Mallesons in China, Kim & Chang in Korea and Drew & Napier in Singapore, to name a few.

Asialaw Asia-Pacific Dispute Resolution Awards 2015

In addition, for individual dispute lawyers, LNT & Partners would like to congratulate Dr. Thi Kim Vinh Nguyen for being a winner of Disputes Star of the Year. Dr. Vinh Nguyen is one of the co-lead partners for the firm’s Dispute Resolution Practice with Mr. Su Tran and is known for her profound knowledge and experience in representing clients in both courts and arbitrations.

Commenting on the firm’s and Dr. Nguyen’s achievements in the award, Ms. Quyen Hoang, the managing partner, says, “LNT & Partners is grateful to have won the award and would like to congratulate Dr. Nguyen for her winning the title. The firm would like to express a sincere appreciation for continued support and trust from our clients and promise to further our efforts in providing professional legal services to our clients”.

For the full list of winners, please visit: Asialaw Asia-Pacific Dispute Resolution Awards 2015

The New Law on Organization of People’s Court

Effective from 1 June 2015, the new Law on Organization of People’s Court (LOPC) was adopted by Vietnam‘s National Assembly on November 24, 2014. By the time the law becomes effective, its implementing Decrees and/or Circulars will also be ready.

This law aims to provide a detailed explanation for the functions, duties and powers of the people’s court. This review highlights the important changes in the hierarchical structure, duties and power of the Supreme people’s court.

1. Modification in structure of people’s court

In the past, there have been three levels of people’s court: the people’s court of rural and urban districts; capital city courts and the people’s court of the provinces and centrally run cities; and the supreme people’s court. Under the new LOPC, the structure of people’s court is divided into four adjudicating levels (LOPC: Art. 3):

  • The Supreme people’s court;
  • Superior people’s court;
  • Court of provinces and centrally-run cities; and
  • Court of rural districts, urban districts, town, provincial, cities and the equivalent.

The new LOPC has introduced a superior people’s court into the structure, which further leads to reforms to the duties and powers of other people’s court.

2. Modification in powers and duties of the Supreme people’s court and the Superior people’s court

Under the new LOPC, the Supreme people’s court consists only of the Judicial council (from 13 to 17 members including the Chief Justice, Deputy Chief Justices and other judges), assisting apparatus and training institutions. By removing the specialized and appellate court from the structure of people’s court, it is clear that the Supreme people’s court will reduce its powers over appellate trials.

There are four significant powers that have been entrusted to the Supreme people’s court (Art 20 of the new LOPC):

  • To supervise the adjudicating work of other courts;.
  • To make overall assessment of the adjudicating practices of the other courts, ensuring the uniform application of law is enforced in the conduct of trials;
  • To manage people’s courts organizationally and ensure independence of the courts from one another; and
  • To submit to the National Assembly laws and resolutions; to submit to the National Assembly Standing Committee ordinances and resolutions in accordance with the law.

Reflecting on the allocated powers of the Supreme people’s court, the cassation and reopening trial decisions of its Judicial council are of the greatest significance and importance, and come into enforcement immediately.

Furthermore, as for the appearance of the new Superior people’s court, its duties will be as follows:

  • To conduct appellate trials of cases in which the first-instance judgments, or decisions of people’s courts of provinces or centrally run cities within their territorial jurisdiction which have not yet taken legal effect, are appealed or protested against in accordance with the procedural law.
  • To conduct the trial according to cassation or reopening procedure of cases in which judgments or decisions of people’s courts of provinces, centrally run cities, rural districts, urban districts, towns, provincial cities, or the equivalent authority within their territorial jurisdiction which have taken legal effect are protested against in accordance with the procedural law.

The Court of provinces and centrally-run cities no longer have the right to conduct a trial according to cassation or reopening of a case anymore, as those duties have now been allocated to the Superior people’s court. The remaining court does not change its duties.

  • Plan to apply the new LOPC

To implement the new LOPC, the National Assembly Standing Committee (NASC) issued Resolution No.81/2014/QH13 (Resolution No.81) on implementation of LOPC on November 24, 2014. Resolution No. 81 provided further clarification for adopting the new adjudicating levels as regulated in Resolution No.81.

Until the effective date of the new LOPC, the Chief Justice of the Supreme people’s court shall prepare the organization structure, personnel and other necessary conditions for the new adjudicating levels (Art 1.1 of Resolution No.81). The Judicial council of the Supreme people’s court has to transfer its duties and power to that which is newly established, in accordance with the new LOPC (Art 2.1 of Resolution No.81).

In the Meeting on May 14, 2015, NASC decided to establish three (03) main Supreme people’s courts (in Ha Noi, Da Nang and Ho Chi Minh City) based on the current appellate courts of the Supreme people’s court. This will ensure the adaptability related to the structural organization, facilities and personnel of the new Supreme people’s court established under the new LOPC.

By Vietnam Law Insight.

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us or visit the website: Http://LNTpartners.com

Eyeing the pitfalls of arbitral awards

Most legal jurisdictions recognise that employees within a company can sign a contract within the scope of their employment to bind the company to perform.

In contrast, in Vietnam, pursuant to the Civil Code, the only person that can bind and act on behalf of the company is the legal representative (or someone expressly authorised by the legal representative). The legal representative is usually the chairman of the board or the general director (equivalent to the president or CEO), and there can only be one legal representative per company.

The details of the legal representative are prominently recorded in the business registration certificate. In the context of international arbitration, this legal regime of limiting the power to bind a company to a single person has caused innumerable delays to the enforcement of arbitral awards in Vietnam, and in some cases, even non-recognition.

Foreign multinational corporations as well as smaller companies have lower level managers who negotiate and sign contracts which often contain dispute resolution provisions requiring the parties to finally resolve disputes through arbitration. In other words, the contracts are usually not signed by either the chairman of the board or the CEO. As such, when a dispute arises, the foreign party initiates arbitration against the Vietnamese party.  If it wins, the foreign party then proceeds to enforce the award in Vietnam by submitting an application to the Ministry of Justice, which is then forwarded to a local court with jurisdiction to hear the case. However, the foreign company soon learns that enforcing the award in Vietnam may be even harder than winning the award in the first place.

Under the New York Convention and Article 370 of the Civil Procedure Code 2004 (“CPC”), a Vietnamese court cannot re-adjudicate the merits of the underlying case. Instead, the court must enforce the arbitral award unless one or more of several recognised exceptions apply. In this context, the exception in question is the lack of capacity to sign. The Vietnamese debtor typically does not sign the agreement, so the foreign party must establish that the person who actually signed the contract was authorised to sign the contract containing the arbitration provision. The foreign party is then forced to go through a time-consuming process of finding the appropriate personnel to sign affidavits, to convene a board meeting, and to issue board resolutions to prove that the person who originally signed the contract was properly authorised.

However, even after jumping through all these hoops, it may not be enough. In a recent case, a court in Long An province refused to recognise an arbitration award because there was no proof that the signer was authorised to sign the contract prior to or at the time the contract was originally executed. This ruling is currently being appealed on other legal grounds.

While there are a number of counter legal arguments that can be made on the issue of capacity, a few practical solutions should substantially reduce the risks of non-recognition and avoid the delays associated with having to prove the legal capacity to enter a contract. The most obvious solution is to have either the chairman of the board or the highest executive officer sign the contract. This solution, however, may not be practical, especially for large companies that enter into many different contracts in many different locations around the world. Moreover, in certain jurisdictions, the signer is presumed to have read and understood the terms of the contract, triggering certain legal obligations and rights, which may not be favorable to the company if the chairman or the CEO signs an agreement that is unfamiliar to them.

Another solution is to create standard blanket written authorisations for employees who hold managerial roles and are in position to sign contracts. This authorisation will grant the employee in question the right to sign any and all agreements that are within the scope of his or her employment. This authorisation may be appended to each contract at the time of contract execution. The language granting the authorisation should not simply be in the form of a representation or warranty in the contract since the signer will still need to prove he or she was authorised to enter the contract in the first place.

In closing, this seemingly innocuous issue of capacity has befuddled many foreign companies seeking to enforce arbitral awards in Vietnam. A few thoughtful precautionary steps during the contract formation stage will remove a procedural defense that could prove fatal in Vietnam.

By Vietnam Law Insight, LNT & Partners.

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us or visit the website: Http://LNTpartners.com