Nature of “voucher” business under Vietnamese law

In Vietnam, vouchers are now not only used as a method of promotion, but also as a kind of “product” sold by many e-commerce platforms. In particular, a voucher trader could sell vouchers to its users, which could be used for certain goods or services provided by certain suppliers. The users will then use the voucher to obtain the goods or services from the suppliers usually at a discounted price. As our analysis below will show, the legal nature of voucher business under Vietnamese law is unclear, and therefore business models based on trading of voucher could give rise to certain risks.

Voucher is not a kind of good or service

Although the law is silent on this matter, Vietnam governmental authorities seem to take the view that voucher is neither goods nor service:

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Written by Nguyen Quang Vu On In ,

Can “actual and direct loss” due to a breach of contract include losses incurred by non-defaulting party under another contract with a third party?

Under the Commercial Law 2005, the value of damage that the non-defaulting party could claim due to a breach of contract will comprise (i) the value of the “actual and direct loss” incurred by the non-defaulting party due to the defaulting party’s breach; and (ii) the “direct profits which the non-defaulting party would have earned” in the absence of such breach. Apparently, the amount that the non-defaulting party must compensate a third party (e.g. non-defaulting party’s customer) as a result of the breach of the defaulting party (Third Party Damage) is not considered as lost profits at (ii). However, it is not clear whether and how Third Party Damage could be included in “actual and direct loss” (Direct Loss) suffered by the non-defaulting party.

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Written by Nguyen Quang Vu On In ,

New Amendments to Vietnam Construction Law

The National Assembly has passed the Law Amending and Supplementing some Articles of the Construction Law 2014 (Construction Law 2020). The Construction Law 2020 will take effect from 1 January 2021 and contain some notable points as below.

1. Pre-feasibility study

Construction Law 2020 promulgates new projects that are subject to preparing a pre-feasibility study (Pre-FS). In particular, the projects that must prepare a Pre-FS include:

  • Projects of national importance. This requirement is the same under Construction Law 2014. Criteria to determine whether a project is of national importance is regulated under the Law on Public Investment 2019;

  • Group A projects financed by public investment capital (vốn đầu tư công). Construction Law 2014 requires all Group A projects to prepare the Pre-FS. Criteria to determine whether a project falls within the scope of Group A projects is regulated under the Law on Public Investment 2019;

  • PPP projects under regulations governing PPP projects. Construction Law 2014 does not specify the requirement of preparing the Pre-FS of a PPP project; and

  • Projects that are subject to obtaining in-principle approval from the National Assembly or the Prime Minister. Construction Law 2014 does not require these projects to prepare the Pre-FS. Under the Investment Law 2020, the Pre-FS can serve as the proposal for implementing a project.

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Written by Nguyen Quang Vu On In ,

Determination of a group of affiliated enterprises under Vietnam merger control regulations

“Group of affiliated enterprises” (Nhóm công ty liên kết) is an important concept under the merger control regulations in Vietnam. This is because this concept is used to calculate (1) the relevant notification thresholds (e.g., market share, revenue, or total assets) of an economic concentration, and (2) the market share of a party to an economic concentration. Unfortunately, Decree 35/2020 provides an unclear definition of a group of affiliated enterprises. In particular, Decree 35/2020 defines that a group of affiliated enterprises means a group of enterprises which are jointly subject to control and governance by “one or more of the enterprises” within said group, or which shares the same management.

The following issues may arise from the definition of a group of affiliated enterprises under Vietnamese merger control rules:

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Written by Nguyen Quang Vu On In ,