Dispute between Vietnamese and Foreign Companies, What is Applicable Law?

Best law firm in Vietnam specializing in international sales contract offer some advice for the applicable laws in the contract disputes between Vietnamese and foreign companies. Kindly contact to enterprise hotline 1900.599.979 for more support.

One of our Clients made a question that they are Vietnamese company and have long relationship in sales with foreign company. Due to this relation, based on the mutual trust, they dont enter in the international sales contract some articles about the applicable laws in case of international disputes.

Two companies start conflicts on the damage compensation because the damage is so huge. Value of international sales contract is normally considered with the numbers of billion Vietnam dong. Dragon Law with high experience lawyers in draft contract and resolve the contract dispute as the lawyers or the authorized representative lawyers is willing to support. Clients can consider information again at the Law on Civil 2015, Articles from 663 to 671.

First of all, Clients should know that civil relation involving a foreign element means any of the following civil relations:

- There is at least one of the participating parties is a foreign natural person or juridical person;

- The participating parties are Vietnamese natural persons or juridical persons but the basis for the establishment, modification or termination of such relation arose in a foreign country;

- The participating parties are Vietnamese natural persons or juridical persons but the subject matter of such civil relation is located in a foreign country.

And the limitation periods for civil relations involving foreign elements shall be determined according to the law applying to such civil relations.

I. Determination of Laws to Civil Relations to Foreign Elements

1. The international agreements to which the Socialist Republic of Vietnam is a signatory or Vietnamese law shall apply to civil relations involving foreign elements.

2. In case the international agreements to which the Socialist Republic of Vietnam is a signatory or a Vietnamese law stipulates that contracting parties have the right to select applied law, the law applied to civil relations involving foreign elements shall be determined according to the selection of the contracting parties.

3. If it fails to determine the applied law as prescribed above, the applied law is the law of the country that closely associates with the civil relations involving foreign elements.

II. Application Int'l Treaty in Civil Relations to Foreign Elements

1. In case an international treaty to which the Socialist Republic of Vietnam is a signatory contains regulations on rights and obligations of contracting participants in the civil relations involving foreign elements, such international treaty shall prevail.

2. In case an international treaty to which the Socialist Republic of Vietnam is a signatory contains provisions different from those in the Law on Civil 2015 and other laws in terms of applied law on civil relations involving foreign elements, such international treaty shall prevail.

III. Application of International Customary Practices

Contracting parties may select international customary practices in the case prescribed in Point I.2. If the application of such international customary practices is contrary to the basic principles of the laws of the Socialist Republic of Vietnam, Vietnamese laws shall prevail.

IV. Application of Foreign Laws

Where foreign law applies to a civil relation with different interpretations, the application must follow the interpretation of the competent authority in that country.

V. Scope of the Law to be Referred

1. The law to be referred to include regulations on determination of applied law and regulations on rights and obligations of participants in civil relations, other than the case prescribed in Point V.4.

2. Where the Vietnamese law is referred to, regulations of Vietnamese law on rights and obligations of participants of a civil relation shall apply.

3. Where law of a third country is referred to, regulations of that law on rights and obligations of participants of a civil relation shall apply.

4. With respect to regulations on Point I.2, the law selected by the contracting parties shall include rights and obligations of participants of the civil relation, and not include regulations on applied law.

V. Application Law of Countries Having Multiple Law Systems

If the law of a country having multiple legal systems is referred to, the applied law shall be determined according to the rules prescribed by such country's law.

VI. Non-application of Foreign Laws

1. The foreign law, notwithstanding being referred to, shall not apply in any of the following cases:

a) The consequences of its application are not inconsistent with the fundamental principles of the law of the Socialist Republic of Vietnam;

b) The contents of foreign law are not identifiable regardless of the adoption of necessary measures prescribed by procedural law.

2. In case the foreign law is not applied as prescribed in Point VI.1, Vietnamese law shall apply.

Should any inquiry, Clients can easy contact to prestigious law firm in Vietnam in company dispute resolution via:

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Dragon Law Firm - Hotline: 1900.599.979

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