Việt Nam courts should be more prepared to handle foreign investor v. State investment disputes

Việt Nam should not be too “scared or concerned” of legal disputes between the State and foreign investors, but the judicial system should be prepared to deal with such situations.

The remark was made by Vũ Thị Châu Quỳnh, deputy director general of the Department of Legislation, under the Ministry of Planning and Investment (MPI) at a workshop on dispute settlement between foreign investors and recipient countries held on Friday.

Amongst the concluded cases during 1987-2017, 37 per cent of cases were ruled in favour of the State and only 28 per cent in favour of the investor, she said, with the remaining either undecided or discontinued, citing the statistics by the United Nations Conference on Trade and Development (UNCTAD) and the Investor-State Dispute Settlement Navigator (ISDS), noting the figures represent the fact that the State has fared better in tribunals.

As Việt Nam becomes increasingly integrated into the global economy, risks of friction would increase along with the benefits the country could reap from foreign investment, said Caitlin Wiesen, Country Director of the United Nations Development Programme (UNDP) in Việt Nam.

She noted that bringing a dispute to court is usually the “last resort” of enterprises to ensure their rights and benefits.

“Therefore, the court plays a very important role in ensuring a fair business environment. The court’s adjudication must be fair, prompt and accurate,” she said.

Việt Nam has signed 66 bilateral investment treaties since 1990 and 12 free trade agreements, with one entering the final phase, and negotiations for three more are underway.

Nguyễn Thị Hoàng Anh, a Supreme Court judge, said all judicial agencies were told to review and amend the domestic legal system in line with provisions in the 11-country Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) that Việt Nam’s National Assembly ratified in November.

Previously, in 2014, the Government issued a decision on international dispute settlement mechanism, which set out tasks and collaboration processes between State agencies in handling these issues. The mechanism is applied when foreign investors file legal complaints against the Vietnamese Government at international tribunals, according to an international investment protection agreement Việt Nam has signed or the contract between the investor and the Vietnamese Government.

Việt Nam also amended its denunciation and complaint laws to facilitate the settlement of disputes, including ones with foreign entities, the judge said.

Also noting that to avoid costly and time-consuming disputes, Quỳnh of the planning ministry is reviewing bilateral investment treaties Việt Nam has signed with other countries, to eliminate outdated ones, better clarify the responsibilities of the State, include more exceptions to protect State’s rights and benefits and set out more detailed procedures on many matters.

However, she noted that whether foreign partners would concur with all the conditions Việt Nam set out would rely on the nature of bilateral relations, on a case-by-case basis.

The legal official said the most frequently occurring disputes have to do with land property, State-owned enterprises violating the contracts with private enterprises prompting the latter to file complaints against the State, the State revoking or refusing to grant investment licences, or legislation changes resulting in supposed damage to the enterprises.

Quỳnh also urged local courts to be prepared for common claims against the judicial process in disputes, including that fair and equal treatment has not been exercised, the court’s decisions are arbitrary and lacking sufficient legal basis and problems in procedures or issuance of the verdict.

Currently, foreign direct investment in Việt Nam accounts for 55 per cent of the country’s industrial input, 70 per cent of imports’ revenue and 18 per cent of tax collected. This sector also provides jobs for 3.7 million Vietnamese.

The workshop, aimed at judges of the province-level courts and Superior Courts – who handle the dispute verdicts – with updates on international experience in state-investor disputes, recommended practices in the legal procedures as well as Việt Nam’s obligations in following through on the various trade pacts it is a party to in handling these disputes.

The workshop is part of UNDP’s regional project ‘Promoting a fair business environment in ASEAN’, which targets Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Việt Nam.

Source: Viet nam News

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Google plans a representative office in Vietnam

A senior Google official says the tech behemoth is studying the process of opening a representative office in Vietnam.

Google senior vice president Kent Walker told Deputy Prime Minister Vuong Dinh Hue at a meeting Tuesday that the opening of a rep office in the country would follow the principle of ensuring that host country regulations do not contradict the firm’s international commitments.

A report on the government website chinhphu.vn also quoted Walker as saying that he agreed with the Vietnamese government on the need for cyber-security to ensure a stable society. Google will cooperate with authorities in achieving this goal, he said.

The rep office announcement came as Vietnam’s cybersecurity law is set to take effect next month. The law requires digital businesses like Facebook and Google to open a representative office in Vietnam.

Deputy PM Hue said that he appreciated Google’s contribution to a draft decree on guidelines to implement the law and ensure cyber-safety and security.

"Vietnam’s market advantages and the adaptability of its young workforce will be attractive factors for Google to open a representative office in Vietnam," he said.

Meanwhile, a Google spokesperson told Reuters Wednesday: "We remain very excited to see how technology is being used by businesses and people in Vietnam. There are a number of different factors we look at before opening an office, but we have nothing to announce at this time."

Vietnam’s Cybersecurity Law, which was passed in June, requires tech businesses to store the data of Vietnamese users in Vietnam, and to provide this data to the Ministry of Public Security upon receipt of requests in writing, in cases where any infringement of the cybersecurity law is being investigated.

Seventeen U.S. lawmakers in July urged the CEOs of tech giants Facebook and Google to resist changes stipulated by the law.

However, Vietnam’s Ministry of Foreign Affairs reasserted that the cybersecurity law is designed to protect rights of organizations and individuals. 

- evnexpress -

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Application documents for grant of commercial bank establishment licenses are now released

The Circular No. 28/2018/TT-NHNN amending the Circular No. 40/2011/TT-NHNN was promulgated by the Governor of the State Bank of Vietnam on November 30, 2018.

Pursuant to this Circular, Article 14 in the Circular No. 40 specifies application documents for licenses for establishment and operation of commercial banks. 

The Circular No. 28 amends and supplements regulations on submission of criminal records of personnel of the control and management boards as follows:

- These criminal records must be issued by criminal record database authorities (Vietnamese nationals), competent authorities of Vietnam or other overseas countries (Non-Vietnamese persons);

- These criminal records must be issued no later than 06 (six) months before the date of submission of application documents;

- These criminal records must contain such information as criminal status, prohibition of holding office, establishing and managing enterprises and cooperatives. 

- Thuvienphapluatvn -

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Documentation requirements for grant of certificates of conformance to food safety regulations are now available

This is the highlight of the Circular No. 43/2018/TT-BCT on food safety administration within the scope of responsibilities assigned to the Ministry of Industry and Trade.

The Circular prescribes that, in case of application for initial issue of a certificate of conformance to food safety regulations, application documentation will be comprised of the followings:

- The completed application form No. 01a.

- The interpretation of facilities, equipment and appliances conforming to food hygiene and safety regulations prepared using the form No. 02a (applicable to manufacturing establishments), 02b (applicable to business establishments) or the form No. 02a and 02b (applicable to manufacturing and business establishments).

- The certificate of fitness for occupation/ the list of workers fit for work of the owner of the food manufacturing and business establishment and the person directly manufacturing and trading foods, issued by a district-level healthcare service provider (a duplicate copy attested by the applicant establishment).

- The certificate of completion of training in food safety knowledge/ the certificate of acquisition of food safety knowledge of the food manufacturing and business establishment and the person directly manufacturing and trading foods (a duplicate copy attested by the applicant establishment).

This means that the certificate of business registration/ the certificate of enterprise registration/ the certificate of investment in the food manufacturing and business industry will not be required in comparison with the application requirements prescribed in the Circular No. 58/2014/TT-BCT dated December 22, 2014 remaining in force to date.

The Circular No. 43/2018/TT-BCT will take effect on January 1, 2019.

Source: Thuvienphapluatvn

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The Regulations on Mediation in the Draft of Law on Mediation, and Dialogue in Vietnam

Over the past few years, the civil cases or administrative claims have been increasing on quantity as well as complex nature. There are opinions that, in reality, while Western countries choose negotiation or mediation as the first measure of dispute settlement, court is favored in Vietnam as main measure of dispute resolution in Vietnam. Theoretically, Vietnam legal system shows that the regulations on mediation, dialogue have been relatively formulated during the judicial reform process. To address the gap in reality, there are recent changes in regulations encouraging parties to use mediation and dialogue as dispute resolution. Recently, the Draft Law on Mediation, Dialogue at the Court has been published since 01 October 2018 for public opinions.

Organization of Court Annexed Mediation and Dialogue in Vietnam

In order to implement mediation and dialogue at court, the Chief Justice of People’s Supreme Court issues the decision on establishing Mediation and Dialogue Center including Director, Deputy Director(s), Mediators. The Director is the head of Center appointed by one of two following measures: (1) the Chief Justice of the Court in the locality where the Center is located assigns the Judge to act according to the rotational regime; or (2) the Mediators elect among themselves. Human resources are mobilized to appoint Mediators selected from the followings: (1) retired Judges, Procurators, Investigators and other retired judicial officials; (2) Retired junior or senior officials; (3) Experts and other professionals with at least 10 years of experience in its work; and (4) Person with high prestige in society and satisfying the following standards:

– Being a Vietnamese citizen, residing in Vietnam, loyal to the Fatherland and the Constitution of the Socialist Republic of Vietnam, having good moral qualities, having strong political will and prestige in the community, honest, objective;

– Having good health to ensure the fulfillment of the assigned tasks;

– Having experience and capacity for mediation and dialogue;

– Volunteer for mediation, dialogue settlement.

In the situation of tight state budget and overload of work at Court, the mobilization of human resources not belonging to the State but meeting certain criteria for being Mediators is one of the necessary requirements to ensure the success of this regulation.

Scope of Court Annexed Mediation and Dialogue in Vietnam

Scope of mediation and dialogue under the provision of this Draft shall be applicable to civil and administrative disputes; request for recognition of voluntary divorces, child custody agreement, division of property upon divorce within the jurisdiction of the Court according to the provisions of the Civil Procedure Code, Law on Administrative Procedures or civil, administrative dispute requested by one or more parties to the Court annexed mediation and dialogue for settlement.

The Procedures for Court Annexed Mediation and Dialogue in Vietnam

Upon receipt of the lawsuit petition, petition for recognition of voluntary divorces, child custody agreement, division of property upon divorce as provided in Article 190 of the Civil Procedure Code, Article 119 of the Law on Administrative Procedures, the Court shall forward the petition, request and the documents and evidences enclosed to the court annexed Mediation and Dialogue Center when satisfying the following conditions: (1) The case falls under the jurisdiction of the Court; (2) The claimant, the defendant do not refuse the mediation or dialogue before the court accepts the case; and (3) The case shall not fall into the case which must not be mediated under the provisions of the Civil Procedure Code or which dialogues cannot be held under the Law on Administrative Procedures.

According to the prevailing laws, there are two types of conciliation: pre-litigation conciliation and conciliation in litigation proceedings. The conciliation process under Civil Procedure Code, Law on Administrative Procedures shall not be governed by the Law on Mediation and Dialogue. Therefore, mediation under this draft law is in the form of optional pre-litigation mediation.

Recognition and Enforcement of Court Annexed Mediation Settlement in Vietnam

After mediation or dialogue, the parties can request the Court to recognize the successful mediation or dialogue settlement. The decision to recognize or to not recognize a successful out-of-Court mediation result shall immediately take effect and shall not be appealed against according to appellate procedures (Item 8 of Article 419 of the Civil Procedure Code 2015), but can be protested according to cassation or reopening procedures under the provisions of the Civil Procedure Code. This provision is also recorded in the Draft of Law on Mediation, Dialogue. Out-of-court mediation results are recognized by the court and will be enforced by civil judgment enforcement agencies under law on enforcement.

From the international experience and the reality of Vietnam, the effective implementation of the mechanism of mediation and dialogue has great significance for the settlement of civil and administrative disputes, promotes consensus in society; reduces the number of cases workload, the demand to bring to trial; facilitates the Court to focus resources to further improve the quality of the trial.

Pilot Project of Court Annexed Mediation in Vietnam

Through the pilot project under decision No. 332/QD-TANDTC dated Mar 9th, 2018, Official letter No. 48/TANDTC-PC dated Mar 9th, 2018, and Official letter No. 72/72/TANDTC-PC dated Apr 16th, 2018 the Mediation and Dialogue Center in Hai Phong has received more than 2,500 petition and brought to mediation, dialogue nearly 2,400 applications. The project has been expanded to Hanoi, Ho Chi Minh City, Da Nang, Bac Ninh, Khanh Hoa, Long An. The results and experience of the project will be an important basis for the drafting of the Law on Mediation and Dialogue.

Tuan Nguyen, Esq., CEDR Accredited Mediator

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Vietnam’s wind power tariffs attractive, but grid capacity a major concern

Vietnam’s new feed-in tariffs are attracting great interest in wind power, but investors are concerned about grid connection and purchase agreements.

The new feed-in tariffs (FIT) are expected to be attractive to domestic and foreign investors, Tommaso Rovatti Studihard, South East Asia sales director for wind power developer Vestas Asia Pacific, told VnExpress International.

The government recently approved tariff revisions under Decision 39 on support mechanisms for the development of wind power.

The decision, effective from November 1 this year, raises the tariffs from 7.8 US cents per kWh to 8.5 US cents for onshore and 9.8 US cents for offshore generation respectively.

"Electricity demand will grow at an estimated 8 - 10 percent a year from now to 2030. This represents realistic opportunities for investors," Studihard said.

Conjecturing that the national plan envisages adding 1,000 MW of wind power by 2020 and 6,000 MW by 2030, he said the targets are achievable.

"Vestas is excited about the Vietnamese market, probably this is the most promising market in the Asian region with very good wind resources," he said.

Vestas has so far put three wind power projects into operation in Vietnam and plans to have another project come online by 2019 and "do a lot more in the future."

Studihard noted that over the next three to five years there are huge opportunities in Vietnam to have some gigawatts of wind power, but the bankability of the power purchase agreement (PPA) remains an issue with many investors, especially international investors, and banks finding it a little difficult to be comfortable with.

There are no clear termination and force majeure clauses in the PPA, which hinders the attraction of foreign investment, especially from banks and credit institutions, he explained.

"One more problem is Vietnam’s weak grid capacity, which would become a bottleneck for developing wind and other renewables. The grid needs to be upgraded to tap the great potential Vietnam has for offerable, sustainable and reliable wind power."

Bui Van Thinh, CEO of the Thuan Binh Wind Power JSC (TBW), said having gained success in developing the 24MW Phu Lac wind power project in the central province of Binh Thuan, TBW is completing procedures to start construction of a 30MW wind power project in neighboring Ninh Thuan Province.

But the weak grid capacity is the biggest challenge to expanding renewables like wind and solar power, he said.

The transmission line near Phu Lac site could handle 100MW, compatible with two 50MW wind power projects.

Overload capacity is imminent once a solar power project connects with the transmission line, Thinh noted, citing the concerning fact that there are eight solar power projects in the locality approved to connect with the grid.

"The government should instruct the state-run Electricity of Vietnam (EVN) to install transmission lines to cope with the renewable power projects across the country, especially those in Ninh Thuan and Binh Thuan."

Ninh Thuan and Binh Thuan are central provinces that have the greatest potential for renewable energy in the country.

While 2,000 MW of solar power are proposed to be generated in Ninh Thuan, the local transmission line can only handle a few hundred megawatts. Thus, 110 kV or 220 kV transmission lines need to be installed before pushing the power to the 500kV transmission line and sending it to Ho Chi Minh City or Danang City, Thinh added.

Nguyen Van Thanh, deputy head of the Ministry of Industry and Trade’s Electricity and Renewable Energy Authority, said demand for energy, wind power in particular, has been growing rapidly.

The need for ensuring energy security but also sustainable development has changed Vietnam from an energy seller to buyer, with the country’s dependence on imported energy sources also rising, he said.

Vietnam also faces a shortage of primary energy, with coal imports posing many risks related to supply, price and transportation, he noted.

"Given that, efficient exploitation of new and renewable sources would play a key role in the country’s socio-economic development, energy security and sustainable development.

"The country is working diligently to draft policies for the efficient and economical use of energy, diversification of energy sources and increasing application of new and eco-friendly technologies," Thanh added.

Under the revised Power Development Plan VII, power stations in the country are expected to generate a total of 60,000 MW by 2020. Of these, coal-fired stations would make the largest proportion of 42.7 percent, followed by hydropower (30.1 percent), gas-fired plants (14.9 percent) and renewable energy sources (9.9 percent).

By 2030, the total capacity would soar to 129,500 MW, with coal and gas-fired plants accounting for 42.6 percent and 14.7 percent respectively, similar to the figures set for 2020. But the ratio of renewable energy sources is set to double to 21 percent by then.

Source: evnexpress

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