Are representations and warranties considered as obligations under Vietnamese law?

Representations and warranties constitute an important building block in a contract. Unfortunately, Vietnamese contract law does not have a separate regime on representations and warranties. Accordingly, this gives rise to various questions concerning representations and warranties under Vietnamese law. The first question would be whether representations and warranties are considered as obligations of the person giving it.

In a book on Vietnam contract law, the author, a well-known business lawyer, considers that representations and warranties are statements of facts and are not undertaking to perform or not perform a specific task. Therefore, representations and warranties are not obligations under Vietnamese law. We have a different view on this.

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Written by Nguyen Quang Vu On In ,

Venture North Law's Legal Guide To Merger Control In Vietnam (2023 Update)

In December 2020, we published a comprehensive Legal Guide To Merger Control In Vietnam (see here). In April 2023, the Government established the Vietnam Competition Commission (VCC). On this occation, we update our legal guide to reflect the establishment of the VCC. The updated guide can be downloaded here.

The guide is updated by Le Minh Thuy.

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Written by Nguyen Quang Vu On In ,

Does tender offer requirement apply to an indirect acquisition of a Vietnamese public company via acquisition of its private parent?

There is no clear answer to the question since there is no clarification of what constitutes “indirect ownership” under the Securities Law 2019. In particular, among other circumstances, according to Article 35.1(a) of the Securities Law 2019, the tender offer regulations are triggered when (emphasis added):

Any investor and its related persons (except in case the investor and its related persons are investment funds and fund management companies) intend to purchase voting shares which results in the direct or indirect ownership of 25% or more of the total outstanding voting shares of a public company.

It is not clear whether:

  • The first reference to “voting shares” refers to voting shares of the relevant public company (the target company) or could refer to voting shares of any company; and

  • Owning shares of a company which owns shares in the target company could be considered as indirect ownership of shares in the target company.

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Written by Nguyen Quang Vu On In ,

Can the Board of a joint stock company make a decision if it cannot maintain the meeting quorum at the time of voting?

Under Article 157.8 of the Enterprise Law 2020, a meeting of the Board will be conducted where three quarters (3/4) or more of the total Board directors are in attendance. However, it is not clear whether (1) this quorum only needs to be satisfied at the beginning of the meeting or (2) this quorum must be maintained from the beginning to the end of Board meeting. If interpretation (1) is adopted then a decision approved by more than half of attending Board directors at the Board meeting is still valid even when the quorum is lost during the meeting (e.g. a director leaves the meeting).

Arguments supporting interpretation (1) include:

  • Article 157.8 of the Enterprise Law 2020 could be interpreted to mean that the quorum applies only at the beginning of a Board meeting. The Enterprise Law 2020 only provides that a Board decision will be passed if it is approved by more than half of the attending Board directors. There is no specific requirement that the quorum must be satisfied at the time of the voting or throughout a Board meeting. 

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Written by Nguyen Quang Vu On In , ,