By Tu Hoang - The Saigon Times Daily
HANOI – The number of trade disputes in Vietnam may increase as hundreds of enterprises have become exhausted under the impact of prolonged economic woes, said lawyers and economic experts at a conference in Hanoi on Thursday.
Lawyer Chau Huy Quang from LCT Lawyers said construction, property, finance, goods purchase, service, commerce and investment were sectors suffering most in the economic slump, and enterprises active in such sectors had to face a high risk of trade disputes.
A property firm in HCMC is being sued by its foreign partner for not fulfilling its contract after receiving an investment of US$100 million five years ago to carry out a property project. However, this project cannot be completed due to the economic crisis.
“This firm has to appear in court regularly despite having no money to compensate,” Quang said.
Similarly, a plastic outsourcing firm has also failed to fulfill a contract signed with a partner due to the economic woes and owes many creditors debt worth a combined VND1 trillion, he added.
The bankruptcy and huge debts of enterprises have even led to human tragedies.
According to lawyer Vu Xuan Tien from VFAM Vietnam, a company director was found dead after avoiding creditors when his firm went bust. The creditors also could not collect their debts as relatives of the dead director refused the inheritance.
“The scale of many recent trade disputes has increased rapidly. The main cause of such disputes is the economic crisis, which has prevented enterprises from honoring their contracts,” Quang said.
From a macro perspective, Dr Nguyen Dinh Cung, vice director of the Central Institute for Economic Management (CIEM) at the conference voiced his concerns that the State might also be sued.
According to Cung, the value of FDI projects which have not been deployed or halfway executed has amounted to US$100 billion.
Besides, under the impact of the economic crisis, foreign-invested firms have gone bankrupt or suspended operations, project owners have returned to their countries, and there are disputes among workers, debtors and relevant agencies.
“The local authorities will have to solve these problems in a satisfactory way to avoid being sued,” Cung said.
Meanwhile, in addition to the economic crisis, lawyer Luu Tien Dung from YKVN Lawyers, an arbitrator of the Vietnam International Arbitration Center (VIAC), blamed the trade disputes on the awareness of enterprises.
Dung said that enterprises did not pay enough attention to dispute settlement terms when drawing up contracts and move slowly when there are disputes.
Dr Phan Chi Hieu, rector of the Hanoi Law University, said that when encountering disputes, enterprises should solve the disputes through negotiations, mediators, arbitration centers or courts. “I want to note that State administration and police agencies do not have the authority to solve trade disputes.”
VIAC with 153 arbitrators who are experts in many sectors is always willing to support enterprises in settling trade disputes, said lawyer Vu Anh Duong, VIAC’s general secretary.