Luat Viet

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Question :: I am a member of the Supervisory Commission (the Commission) of a public company which is unlisted and termed from 2007 to 2010. Until now, my term is still valid. In 2009, I was [not] invited to attend any meeting of the company’s Commission. Recently, I also did not attend the Commission’s meeting to produce the Commission’s Report for submission to the General Shareholder’s Meeting (the Meeting) year 2010 on April 9. I was informed that this Commission’s Report was built by the Commissions’ Director (the another member of the Commission also did not attend). I would like to ask you whether the operation of the Commission like that is legal or not? Is the Report mentioned above legal? What should I do to comply with the rights, duties and obligations of a Commission’s member?
Question :: I am a president of the Management Board (“the Board”) of a public company. As per regulations, the term of the Board, Supervisory Commission (“the Commission”) is five (5) years. Therefore, the first term of the Board, Commission is due on November 2010. However, in order to facilitate the voting of the Board, the Commission in the second term, the Board would like to submit the General Shareholder’s Meeting (“the Meeting”) with the latest on April 19, 2010 for renewal of the first term of the Board, the Commission until April 2011. So, the question is that is the renewal true or not? If the shareholders are not taken opinions directly at the Meeting, can the Board collect opinions indirectly from shareholders in writing? If the Meeting does not pass the renewal, how can the voting of the Board, the Commission be taken in compliance with laws?
Question :: Our company registers shares at the Securities Depository Central (SDC), but cannot deposit, of which my 10.000 shares. So, can I transfer directly 2.000 shares to my brother and compliment 2.000 shares to my wife?

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PART XI

DISPUTE RESOLUTION

With the substantial increase of investment activities in the past years, it is inevitable that complex commercial disputes also arise in larger numbers from the investment and business activities in Vietnam. Under the Vietnamese law, in particular the Law on Investment, foreign investors and foreign-invested enterprises have the right to select either the court of Vietnam, Vietnamese arbitrators, foreign arbitrators or the arbitrators appointed by the parties, to resolve the disputes concerning investment activities in Vietnam. With respect to the disputes between foreign investors and the State management authorities of Vietnam, the parties will have to refer the dispute to either an arbitration body or court of Vietnam. In Vietnam, the People’s court and arbitral bodies have jurisdiction over disputes related to investment or business. Each of them has independent organizational structure and separate rules and procedures for adjudicating disputes brought before them.

1. The Court of Vietnam – Judicial system and jurisdiction

There have been positive changes to Vietnam’s procedures for the promptly resolving disputes equitably and in compliance with the law. The court system of Vietnam is set up at various levels, with the Supreme People’s Court as the highest, and the provincial People’s Court, the district People’s Court and the Military Court. The district court as the court of first instance has jurisdiction over cases involving disputes relating to commodities trading; service supply; distribution; representatives and agents; consignment; hire, leasing and hire purchase; construction; technical consultancy; conveyance of goods and passengers by railway and road. The provincial court is the appellate court hearing cases in investment, financing, banking, insurance, sale & purchase of stocks and bonds, exploration and exploitation, transport by air and sea, technology transfer, intellectual property rights, disputes between the company and its members or among the members. Additionally, the disputes which involves a concerned party abroad (including foreigners, Vietnamese people not present in Vietnam and foreign agencies & organizations not having the office, branch, representative office in Vietnam at the time when the Court accepts the case for handling) or property abroad, or requires a judicial authorization to the consulate of Vietnam abroad also fall under the jurisdiction of provincial courts. The provincial court conducts appellate hearings or judicial review of cases which has been heard by the district court but the appeal or protest is lodged with the court later. The Supreme People’s Court is the highest judicial organ, in accordance with the appellate court order, to conduct trial of first instance judgments issued by the provincial People’s Court or under retrial and judicial review procedures, or to handle decisions which become legally effective but are found to be contrary to the law or the presence of new circumstances. Pursuant to the law of Vietnam, the court of Vietnam shall have exclusive jurisdiction over all disputes relating to real estate located within Vietnam regardless of the parties prior agreement otherwise.

2. Arbitration

Except civil and labor disputes which must be brought before the court, arbitration has become the choice for many who view arbitration as an adequate avenue for resolving disputes as cases move through arbitration fairly quickly and the arbitrators have more experience and training in business laws. In addition the mechanism set up for ensuring execution of arbitration awards are increasingly become more efficient for resolving disputes. The arbitration body which is considered the most experienced and best recognized is Vietnam International Arbitration Centre (VIAC) at the Vietnam Chamber of Commerce & Industry (VCCI). Like other countries, the arbitration in Vietnam shall have jurisdiction to resolve disputes if agreed by the parties. Arbitration agreement may be stated in the contract or in a separate document prior to or after the dispute arises. It is however important to note that the agreement for resolving dispute by arbitration must specify a specific arbitration body to resolve disputes. If the agreement for arbitration fails to satisfy this requirement, the clause will become invalid and may not be enforced against one who does not want to have the dispute heard by an arbitration body specified in the agreement.

3. Recognition and enforcement of civil judgments and decisions of the foreign court and foreign arbitral awards in Vietnam

Civil judgments & decisions of a foreign court, foreign arbitral awards shall be enforced in Vietnam only if they are recognized and put into effect by the court of Vietnam. The recognition and enforcement of civil judgments & decisions of the foreign court in Vietnam are conducted based on the principle that: Vietnam and the country which have such civil judgment or decision have signed or acceded to international treaties on this matter; and The judgment does not fall into unrecognizable and unenforceable categories as stipulated by Vietnamese law. The court of Vietnam also considers the recognition and enforcement of foreign arbitral awards in Vietnam if such awards are declared in a country which has signed or acceded to international treaties on this matter with Vietnam. Vietnam has concluded New York Convention on recognition and enforcement of foreign arbitral awards and other agreements on legal assistance in civil matters with such countries as China, France, Russia and Republic of Belarus, etc. It should be noted that the court of Vietnam shall not review contents of the case or dispute which has been resolved by the foreign court or arbitrator, but only examine and compare the judgment or award with the attached document in accordance with the law of Vietnam so as to determine if the judgment or award is recognized and enforced in Vietnam. In some cases, foreign arbitral awards shall not be recognized and enforced in Vietnam. For instance, the parties signing the arbitration agreement are deemed incapable of signing, or the arbitration agreement becomes null and void, or the arbitral award is not in accordance with its jurisdiction nor come into effect, etc.

4. Coercive enforcement of judgments & decisions of the court and arbitral awards

In Vietnam, if the parties concerned fail to voluntarily comply with the valid judgment or award of the court and arbitrator, such parties shall be forced to obey by the body for legal execution. The body for legal execution works independently and is constituted of the legal execution divisions at provincial level, district level and military-zone level. With respect of the judgments and awards involving foreign elements and relevant to the intellectual property rights, awards by the commercial arbitrator shall fall under jurisdiction of the legal execution division at provincial level. Currently the pilot implementation of bailiff institution is being conducted in Ho Chi Minh City. It is a body capable of carrying out certain functions of the body for legal execution in respect to the execution of the court’s judgment or the arbitral award.

PREFACE

PART I. INVESTMENT LEGISLATION IN VIETNAM

PART II. ROADMAP OF OPENING VIETNAM SERVICE MARKET UNDER WTO COMMITMENTS

PART III. MERGER AND ACQUISITION IN VIETNAM

PART IV. INTELLECTUAL PROPERTY LAW AND TECHNOLOGY TRANSFER

PART V. LABOR

PART VI. BANKRUPTCY OF ENTERPRISE

PART VII. COMPETITION

PART VIII. TAXATION

PART IX. THE LAW ON LAND, REAL ESTATE AND CONSTRUCTION

PART X. FINANCIAL SERVICES

PART XI. DISPUTE RESOLUTION

PART XII. IMMIGRATION ISSUES

INDEX 1. DOUBLE TAX AVOIDANCE AGREEMENT ENTERED BY VIETNAM

INDEX 2. DOUBLE TAX AVOIDANCE AGREEMENT ENTERED BY VIETNAM

INDEX 3. FINANCIAL SERVICE MARKET

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