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THE JUDGES' COUNCIL OF THE SUPREME
PEOPLE'S COURT
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
04/2003/NQ-HDTP
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Hanoi, May 27, 2003
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RESOLUTION
OF THE JUDGES’ COUNCIL OF THE SUPREME
PEOPLE’S COURT GUIDING THE APPLICATION OF A NUMBER OF LAW PROVISIONS TO THE
SETTLEMENT OF ECONOMIC CASES
THE JUDGES’ COUNCIL OF THE SUPREME PEOPLE’S COURT
Pursuant to the Law on Organization of the
People’s Courts;
In order to properly and uniformly apply law provisions to the settlement of
economic cases, aiming to protect the legitimate rights and interests of
involved parties, suitable to the practical situation of production and
business activities in the present context;
After obtaining the consents of the Chairman of the Supreme People’s Procuracy
and the Minister of Justice,
RESOLVES:
I.
DETERMINING INVALID ECONOMIC CONTRACTS
1. Under the provision at Point b, Clause 1,
Article 8 of the Ordinance on Economic Contracts, an economic contract shall be
considered totally invalid when "either of the parties to the economic
contract has no business registration as prescribed by law for the performance
of the jobs agreed upon in the economic contract." When applying this
provision, it is necessary to distinguish the following cases:
a/ In cases where upon entering into an economic
contract, either of the involved parties has not yet obtained business
registration and disputes arise between the involved parties in the course of
performing the economic contract, and by the time such disputes arise, the
party without business registration, when entering into such economic contract,
still fails to obtain business registration for the performance of jobs agreed
upon in the contract, such economic contract shall fall into the cases prescribed
at Point b, Clause 1, Article 8 of the Ordinance on Economic Contracts and be
considered totally invalid.
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b/ In cases where upon entering into an economic
contract, either of the involved parties has not yet made business registration
and disputes arise between the involved parties in the course of performing the
economic contract, and by the time these disputes arise, the party without
business registration, when entering into the contract, has already made
business registration for the performance of the jobs agreed upon by the
involved parties in the contract, such economic contract shall not fall into
the cases prescribed at Point b, Clause 1, Article 8 of the Ordinance on
Economic Contracts, and therefore, not be considered totally invalid.
For example: If in the example at Point a of
this Section 1, when settling the case, there are enough grounds to believe
that by the time the disputes arose, Company A had been made additional
registration of industrial construction, the economic contract shall not fall
into the cases prescribed at Point b, Clause 1, Article 8 of the Ordinance on
Economic Contracts and not be considered totally invalid.
2. Under the provision at Point c, Clause 1,
Article 8 of the Ordinance on Economic Contracts, economic contracts shall be
considered totally invalid when: "The persons sign such economic contracts
not according to their competence …"
In order to suit the spirit stated in Article
154 of the Civil Code, economic contracts shall not be considered totally
invalids if they were signed by persons who have no competence to sign but in
the course of performance, they are approved by the persons having the
competence to sign such economic contracts according to law provisions
(hereinafter called competent persons for short). Economic contracts shall be
considered as having been approved by competent persons if these persons know
that the economic contracts have been signed but do not oppose such signing.
The signing of economic contracts shall be
considered as having been known but not opposed by the competent persons in the
following cases:
a/ After the economic contracts are signed,
there are enough grounds to prove that the persons signing these economic
contracts have already reported the signing to the competent persons (such
reporting is expressed in the minutes of briefings of the directorate, the
minutes of meetings of the Members’ Councils or Managing Boards, or many
persons confirmed that the reporting had been really made…).
b/ The competent persons, through accounting as
well as statistical vouchers and documents, know that these economic contracts
have been signed and are being performed (having signed receipts,
ex-warehousing bills or revenues from and expenditures for the performance of
these economic contracts or accounting books of legal entities…).
c/ The competent persons have had acts which
prove that they have participated in exercising rights and obligations arising
under the agreements in the economic contracts (having signed documents
applying for extension of payment terms, having committed to perform the
contractual obligations, having signed document approving revenues,
expenditures or the final settlement of credits and debts related to the
performance of these economic contracts…).
d/ The competent persons have directly used
assets or profits earned from the signing and performance of the economic
contracts (having used cars for travel and/or business, which, to their knowledge,
have been obtained from the signing and/or performance of these economic
contracts; having used working offices obtained from the signing and/or
performance of economic contracts on property lease…).
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a/ If the economic contracts contain agreements
on prices and payment in foreign currencies between the involved parties while
either or both parties is or are not allowed to make payment in foreign
currencies, the economic contracts shall be considered totally invalid under
the provisions at Point a, Clause 1, Article 8 of the Ordinance on Economic
Contracts (the involved parties violate the State’s regulations on foreign
currency management). In this case, if either or both parties request the Court
to settle the cases, the Court shall declare the contracts invalid and settle
the consequences of invalid contracts according to general procedures.
b/ If the economic contracts contains agreements
on prices and payment in foreign currencies between the involved parties while
either or both parties is or are not allowed to make payment in foreign
currencies, but later the involved parties agree to make payment in Vietnam
dong or in the economic contracts, the involved parties agree to use foreign
currencies as price-determining currency (in order to stabilize the value of
the contracts) but make payment in Vietnam dong, these economic contracts shall
not fall into the cases prescribed at Point a, Clause 1, Article 8 of the
Ordinance on Economic Contracts and therefore not be considered totally
invalid.
II.
HANDLING OF INVALID ECONOMIC CONTRACTS
Point a, Clause 2, Article 39 of the Ordinance
on Economic Contracts prescribes: "The involved parties shall have the
obligation to return to one another all properties they have received from the
performance of contracts. In cases where it is impossible to return such
properties in kind, they must return them in cash, provided that such
properties are not confiscated according to law provisions." When applying
this provision, it is necessary to distinguish the following cases:
1. For properties being movables:
a/ The received properties can be returned in
cases where the parties receiving properties from the performance of the
economic contracts have not yet exploited or used these properties, and still
maintain their quality, functions and utility. The returned properties shall
not be accepted if they are not the very property received from the performance
of such contracts even though they are of the right categories, quality,
function and utility, except for cases where the parties reach otherwise
agreements not contrary to law provisions.
b/ The properties received from the contract
performance cannot be returned in kind when they fall into one of the following
cases:
b.1. They have been put into exploitation or
use;
b.2. They have been lost or damaged;
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b.4. Their quality, functions and utility cannot
be maintained due to the faults of the property-receiving parties (for example:
the property recipients failed to preserve the properties in strict accordance
with regulations);
b.5. One or several parts of the properties have
been lost and cannot be restored to their original conditions when received.
c/ In cases where the received properties cannot
be returned in kind as guided at Point b of Section 1, the property-receiving
parties shall only have to make cash payment to the property-delivering parties
at the prices agreed upon by the involved parties, except where the parties
reach otherwise agreements not contrary to law provisions.
d/ For cases of returning the received
properties being foreign currencies, the foreign currency-receiving parties
shall have to return to the delivering parties the received foreign currency
amounts converted into Vietnam dong at the buying exchange rate between the
foreign currencies and Vietnam dong announced by the State Bank at the time of
receiving such foreign currencies without having to pay interests, except for
cases where the parties reach otherwise agreements not contrary to law provisions.
2. For properties being real estates or land use
right
In general principles, properties being real
estates or land use right shall be handled by forcing the parties receiving the
properties from the performance of economic contracts to return them to the
property-delivering parties.
In cases where the property-receiving parties
have dismantled, repaired, renovated or made investment in, thus raising the
value of, these properties, they shall, on a case-by-case basis, be forced to
restore the initial conditions of, or dismantle the properties or make cash
payment to the other parties, expect for cases where the involved parties reach
otherwise agreements not contrary to law provisions.
3. Responsibility to bear damage incurred when
the economic contracts are considered totally invalid
Under the provision at Point c, Clause 2,
Article 39 of the Ordinance on Economic Contracts, in cases where economic
contracts are considered totally invalid, the involved parties shall have to
bear incurred damage regardless of the seriousness of their faults.
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Under the provision at Point g, Clause 1,
Article 39 of the Ordinance on Procedures for Settlement of Economic Cases, the
Courts shall issue decisions suspending the settlement of economic cases when:
"There have been Court decisions starting the procedures for the
settlement of the requests to declare the bankruptcy of enterprises which are
the parties involved in the cases." When applying this provision,
attention should be paid to the following:
1. In order to ensure the legitimate rights and
interests of the involved parties in cases where the Courts issue decisions
suspending the settlement of economic cases on the grounds that there have been
Court decisions to carry out the procedures for the settlement of the requests
to declare enterprise bankruptcy, but later the Courts issue decisions
suspending the settlement of the requests for declaration of enterprise
bankruptcy, if the involved parties re-initiate lawsuits for the economic cases
for which they have filed lawsuits earlier and are subject to suspension, the
Courts shall accept and handle the cases according to general procedures.
2. The statue of limitations for initiating
lawsuits in these cases shall be six months as from the date the Courts issue
decisions suspending the settlement of the requests for declaration of
enterprise bankruptcy, except for cases where the statute of limitations for
initiating lawsuits is otherwise provided for by law.
For cases where the Courts have issued decisions
suspending the settlement of the requests for declaration of enterprise
bankruptcy before the effective date of this Resolution, the statute of
limitations for initiating lawsuits shall be counted as from the effective date
of this Resolution.
IV.
IMPLEMENTATION EFFECT OF THE RESOLUTION
1. This Resolution was adopted by the Judges’
Council of the Supreme People’s Court on May 27, 2003 and takes effect 15 days
after its publication in the Official Gazette.
The guidance on matters in this Resolution,
which were provided by the Supreme People’s Court before the effective date of
this Resolution, are hereby annulled.
2. For economic cases for which the Courts have
accepted to handle but the first instance, appeal, supervisory or review trial
has not yet been carried out, this Resolution shall apply to the handling
thereof.
3. For court judgments and decisions which took
legal effect before the effective date of this Resolution, this Resolution
shall not be applied to lodge protests according to supervisory or review-trial
procedures, except for cases where there are other grounds for protesting.
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ON BEHALF OF THE JUDGES’ COUNCIL OF THE SUPREME PEOPLE’S COURT
CHIEF JUDGE
Nguyen Van Hien