Vietnam Business Law is a website managed by lawyers of Venture North Law Limited (VNLaw). Venture North Law Limited (VNLaw) is a Vietnamese commercial law firm. We won the Rising Law Firm of the Year Award at the Southeast Asia Law Awards for the years 2020 and 2021 held by The Legal 500. Very few Vietnamese law firms have achieved a similar regional recognition.
A copy of my book “A Brief Introduction on Vietnam Legal Framework” is now available for download for free here. Although the book was written a long time ago (in 2012), we believe it still contains useful information on Vietnam Legal Framework (especially for foreigners who have limited knowledge about the topic). Hope this could help you to kill some time when working from home during the coronavirus outbreak.
This is our final post relating the force majeure event in Vietnam. In this post, we will cover the effect of a force majeure event after the existence of a force majeure event is confirmed (see our earlier post here). This post is written by Nguyen Quang Vu and Tran Thuy Tien.
In summary,
A party affected by a force majeure event will be exempted from contractual liabilities. It is not necessary for a contract to have a separate force majeure clause for the affected party to claim force majeure.
The Commercial Law 2005 is not clear whether the default of an affected party must be caused by the force majeure event.
The law does not clearly allow a contract to be terminated on the basis of a prolonged force majeure. However, in case of a prolonged force majeure event, the Commercial Law 2005 allows the parties to refuse to perform the contract.
Pledge (cầm cố) of property is a transaction in which a party (the pledgor) handovers (giao) a property owned by the pledgor to the other party (the pledgee) to secure the performance of a obligation(s). The law does not clarify what action could be considered as “handover” of a property. Therefore, it is not clear whether one can use intangible asset such as the right to claim debt as a pledged asset.
On one hand, the definition of pledge suggests that the pledged assets must be tangible so that it can be handedover or delivered to the pledgee. In this regard, intangible asset cannot be pledged because it cannot be physically delivered from one party to another party.
On the other hand, other provisions of the law suggest that pledge over intangible assets could be permissible because:
In February 2020, the Ministry of Natural Resources and Environment (MONRE) issued a long-waited guideline regarding issuance Certificate of Land Use Rights, Ownership of Residential Houses and Assets attached to land (LURCs) for some new real estate products including condotel and resort villas. In particular, the MONRE confirms three important points below:
Condotel (condo-hotel) and resort villas are regarded as tourism residences (such as tourism appartment and tourism villas) under the Law on Tourism. Accordingly, the land used for the development of these facilities for service provision purposes is categorized as “commercial and services land”. The confirmation by MONRE is consistent with our earlier as discussed here.