Coronavirus outbreak - Definition of Force Majeure Events under Vietnamese law

In the last few months, the Coronavirus (Covid 19) outbreak has adversely affected the health and lives of millions of Vietnamese people and billions of people all over the planet. The outbreak also hurts the commercial life of hundreds of thousands of Vietnamese companies. Inevitably, parties to commercial contracts will now have to consider whether they can be exempt from liabilities on the ground of force majeure if they cannot perform contracts due to Coronavirus outbreak.

In a series of posts, we will now discuss the force majeure regime under Vietnamese law and its connection with Coronavirus outbreak. The first post will address how a force majeure event is defined under Vietnamese law and whether the coronavirus outbreak could qualify as a force majeure event. This post is written by Nguyen Quang Vu and Tran Thuy Tien.

In summary,

  • On its face, the definition of force majeure event under Vietnamese law contains three usual elements of a force majeure event which are objectivity, unforeseeability, and irresistibility. However, it is not clear if the coronavirus outbreak could satisfy all the elements of a force majeure event under the Civil Code 2015.

  • In Vietnamese, “objectivity” (khách quan) means (1) something which cannot be controlled by people’s mind, or (2) something which is based on factual events. Accordingly, a self-induced event may still qualify as an event, which occurs in an objective manner.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In , ,

New guidance on registration of mortgage of land use right and construction works - Part 2

On 25 November 2019, the Ministry of Justice (MOJ) issued Circular 7 guiding some contents of mortgage of land use right and asset attached to land (Circular 7/2019). Circular 7/2019 will take effect from 10 January 2020 and replace Joint Circular 9 of the MOJ and Ministry of Natural Resources and Environment (MONRE) dated 23 June 2016 (Joint Circular 9/2016) on the same subject matter. In general, Circular 7/2019 only provides some guiding and supplementing provisions for Decree 102 of the Government dated 1 September 2017 (Decree 102/2017) rather than providing detailed guidance as Joint Circular 9/2016.

Registration that must be completed before the registration of mortgage of land use right and construction works

Circular 7/2019 regulates that following kinds of registration of change to land and/or asset attached to land or confirmation of change must be completed before a person can register a mortgage of land use right and construction works:

(i) the information relating to land parcel or land parcel area is inconsistent with the information on the Certificate due to land consolidation, measurement or re-determination of land area/size; and

(ii) the information relating to asset attached to land certified on the Certificate (including kind of house, name of building, number of floors, building area, use area) is inconsistent with the information on the new Certificate due to measurement or re-determination of area, construction, or repair.

In the past, if there is change in (i) above, such change can be registered at the same time with the mortgage registration.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,

Hyperlink cross-references in contracts in Vietnam

It is quite common to cross-refer to a document in a contract by placing an internet hyperlink to such document (e.g., privacy policy or website standard terms). This practice should be valid under Vietnamese law. This is because:

· Under the Civil Code 2015, a contract may have appendices attached to it which provide details on certain term and conditions of the contract. The law does not clearly regulate the form of the appendices of the contract and the word “attached to” has a broad interpretation that may be general enough to cover an internet hyperlink to the main contract.

· Article 119.1 Civil Code 2015 allows a civil transaction by way of electronic means in the form of data messages in accordance with the Law on E-transaction will be deemed to be written transaction. Under the Law on Electronic Transactions 2005, a contract can be presented in the form of data messages and still valid and binding.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,

A new resolution of the Supreme Court on borrowing interests in Vietnam

On 11 January 2019, the Supreme Court issued Resolution 1 guiding the application of several regulations on interest, interest rate and relevant penalty (Resolution 1/2019). Resolution 1/2019 will take effect from 15 March 2019. Below are some salient points of Resolution 1/2019

  • Resolution 1/2019 clearly states that the interest rate caps of the Civil Code 2005 and 2015 will not apply to credit contracts between banks and its customers. In the past, there has been long debate regarding whether the interest rate caps of the Civil Code 2005 and 2015 will apply to credit contracts.

  • If the interest rate, overdue interest on principal and overdue interest on interest are higher than the permitted cap, the exceeding interest which has been paid will be deducted from the principal of the loan.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,