Uncertainties regarding merger filing involving regulated companies in Vietnam

Article 13 of Decree 35/2020 sets out two different sets of merger filing threshold. In particular, the one provided under Article 13.2 (Special Threshold) applies to transactions involving regulated companies such as credit institutions, insurance companies, and securities companies (Special Company), whereas the remaining one under Article 13.1 (Regular Threshold) applies to transactions involving remaining types of companies (Regular Company). The two sets of different merger filing thresholds give rise to various uncertainties for a M&A transaction involving a Special Company.

First, in the case of a transaction involving a Special Company and a Regular Company, it is not clear if a merger filing must be made when:

  • Situation 1: The Regular Company does not trigger the Regular Threshold but the Special Company triggers the Special Threshold; or

  • Situation 2: The Regular Company triggers the Regular Threshold and the Special Company triggers the Special Threshold; or

  • Situation 3: The Regular Company triggers the Regular Threshold but the Special Company does not trigger the Special Threshold.

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Written by Nguyen Quang Vu On In ,

Could contractual options be considered as derivative securities under new Securities Law 2020?

Contractual option agreed privately between two parties is unlikely to be considered as a type of derivative securities under the new Securities Law 2020 and Decree 158/2020. This is because Decree 158/2020 has substantially reduced the scope of underlying assets (tài sản cơ sở) of derivative securities subject to securities regulations. Under the old Securities Law 2006 and Decree 42/2015, a private contractual option could still be considered as a derivative securities under the securities regulations.

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Comment
Written by Lawyers VNLaw On In ,

Sending of notices under VIAC’s rules

A party to an arbitral proceedings under VIAC’s rules must send its notice and other submission to VIAC which will then forward the notice and submission to the other parties to the proceeding. This is different from SIAC’s rules which allow each party to send notice and submission directly to each other with a copy to SIAC. This arrangement is not effective and could give rise to potential challenges if VIAC does not handle the sending of notices and documents correctly.

Rule 3.2 provides that VIAC will send notices and documents to the parties at the addresses provided by the parties. If a party provides VIAC with more than one address (e.g., office addresses and email addresses, or addresses of the respondent and their counsels), then it is not clear if VIAC should send notice and documents to all the addresses provided to it or VIAC only needs to send notice and documents to only one of the addresses provided to it. The wording of Rule 3.2 seems to suggest that VIAC should send notices and documents to all addresses provided to it by the parties.

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Comment
Written by Nguyen Quang Vu On In

Requirement for contracting parties’ consent in case of de-merger of a Vietnamese company

It is not clear whether, in case of a de-merger of a Vietnamese company, the remaining company must comply with the procedures for transferring contractual rights and obligations under the Civil Code 2015 including obtaining consents from its contracting parties. Under Enterprise Law 2020, a limited liability company or a joint stock company (remaining company) may be de-merged by the following mechanics:

· transferring a part of assets held by remaining company to a new company; and/or

· transferring a part of the rights and obligations of remaining company to new company.

And the remaining company continues to exist after the de-merger.

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Comment
Written by Nguyen Quang Vu On In ,