DIGITAL SIGNATURE IN VIETNAM

We have seen a ramp up in the e-commerce and online activities (online meetings, signing e-contracts, signing e-resolutions) in the covid-19 pandemic all over the world and Vietnam is no exception. This blog is to discuss some features of digital signature and authentication of digital signature under Vietnamese law.

1) In general, Vietnamese law recognizes the legal validity of e-contract and e-signature which satisfy the requirements at law. However, in certain cases, as a matter of practice digital signature (as opposed to other types of e-signature in general) may be specifically required since it is secured. Digital signature (chữ ký số) is a type of e-signature which is created by transformation of a data message using an asymmetric cryptosystem whereby the person having the initial data message and public key of the signatory may accurately verify (a) whether such transformation is created with a private key corresponding to the public key in the same key pair, and (b) whether the data message has been altered since the transformation (Article 3.6 of Decree 130 of the Government dated 27 September 2018 guiding the Law on E-transaction on digital signature and digital signature providing services (Decree 130/2018)).

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Written by Nguyen Quang Vu On

New Amendments to the Law on Laws 2015 in Vietnam

The National Assembly passed some amendments to the Law on Laws 2015 on 18 June 2020 which will become effective on 1 January 2021 (LPLD 2020). Below are summaries of the new amendments:

  • Two more types of documents are considered as “law” in Vietnam. They are (1) Joint Resolutions between the Standing Committee of the National Assembly, the Government, the Management Board of Central Committee Vietnamese Fatherland Front, and (2) Joint Circulars between Executive Judge of the People’s Supreme Court, the Chief Procurator of the Supreme People’s Procuracy, the State Auditor General, Ministers, Heads of ministerial agencies.

  • The new amendments clearly prohibit the promulgation of Joint Circulars between Ministers and Heads of ministerial agencies. The Law on Laws 2015 does not list joint circulars between Ministers and Heads of ministerial agencies as legal documents. This leads to the fact that despite various arguments on the legitimacy of this type of joint circular, many joint documents have still been enacted by Ministers or Heads of ministerial agencies.

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Written by Nguyen Quang Vu On In

A U-Turn About Preemptive Rights Of Existing Shareholders In Joint Stock Companies In Vietnam

For many M&A lawyers in Vietnam, the changes in the pre-emptive rights of existing shareholder in (at least non-public) joint stock companies (JSCs) come as a surprise. For 20 years, the Enterprise Law always provides that a shareholder has priority rights to purchase new shares issued by the JSC in proportion to its shareholding. However, under earlier versions of the Enterprise Law, the provisions on private placement of shares or public offering of shares by a JSC, where the JSC may issue new share to third party investors, do not require a waiver of preemptive rights by existing shareholders. Therefore, it becomes a market practice that private place of shares or public offering of shares (or convertible equities) do not require waiver of (or compliance with) preemptive rights by existing shareholders (see further discussions here and here).

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Written by Nguyen Quang Vu On In ,

Merger filling requirement arising from enforcement of security over shares or capital contribution under Vietnamese Competition Law

Under Competition Law 2018, in general, any economic concentration transaction (i.e., any M&A transaction) triggering the filing thresholds prescribed in Decree 35/2020 must be notified to National Competition Committee (NCC). Accordingly, enforcement of security over shares or capital contribution by a lender, which result in a change of control of the borrower, may be considered as an economic concentration and subject to merger filing requirements under Competition Law 2018. This could pose a serious timing problem for the lender (e.g., a Vietnamese bank or a foreign lender) (the secured creditors) in enforcing mortgaged/pledged shares or capital contribution in practice.

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Written by Nguyen Quang Vu On In , ,