Legal Capacity of a Branch of a Company in Vietnam under the Civil Code 2015

Under the Civil Code 2015, the legal capacity of a branch is limited. To be specific, a branch cannot enter into contracts under its own name since it is not a legal person or a natural person. Also, while it is not entirely clear (see below), it is arguable that a branch can no longer be a representative of its parent company. Therefore, it is unsure whether a contract signed by a branch on behalf of the parent company is valid under the new regulations of the Civil Code 2015. This is because under the Civil Code 2015,

only natural persons and legal persons can enter into contracts under their names;
only a natural person or a legal person can become a representative for another person (either natural or legal); and
the Civil Code 2005 used to provide that a branch’s function includes representative function (chức năng đại diện theo ủy quyền). However, such a provision is now removed under the Civil Code 2015.

Mortgage or pledge of future assets in Vietnam

The Civil Code 2015 recognises that future assets can be used as security. Future assets are assets which do not exist at the time of creation of the relevant security or which exist at the time of creation of the relevant security but do not belong to the ownership of the relevant mortgagor or pledgor. However, it is not clear how a mortgage or pledge over a future asset which is not owned by the mortgagor at the time of creation of the mortgage or pledge could reconcile with the requirement that the mortgagor or pledgor must own the mortgaged assets under the Civil Code 2015.

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Confusion regarding time limitation under Vietnamese Civil Code 2015

Under the Civil Code 2015, the time limitation for making a claim is longer than that of the Civil Code 2005. For example,

Under the Civil Code 2015, a claim for breach of contract or for non-contractual damages now has a time limitation of three years commencing on the date on which the claimant knows or should have known that the claimant’s rights or interests have been violated. This is longer than two years under the Civil Code 2005. In addition, the two year time limitation period under the Civil Code 2005 may commence on a much earlier date (i.e. the date on which the claimant’s rights or interests have been violated).
Under the Civil Code 2015, a claim for an inheritance of an immovable property is 30 years instead of 20 years under the Civil Code 2005.

Confidentiality in arbitration proceedings in Vietnam

There is no mandatory confidentiality obligations applicable to parties to an arbitration proceeding in Vietnam. Under the Law on Commercial Arbitration 2010, dispute resolution by arbitration will be conducted in private unless otherwise agreed by the parties. But hearing in private does not mean that information exchanged by the parties during the hearing must be kept confidential. Law on Commercial Arbitration 2010 only expressly imposes confidentiality obligation on the arbitrators but not on other parties attending the hearing (e.g. experts, witness or even lawyers). Arbitration Rule 2017 of Vietnam International Arbitration Center (VIAC) has no particular confidentiality provision beyond making the arbitral hearing private.

Vietnam Business Law