Chapter I
GENERAL PROVISIONS
Article 1.- Regulation scope
This Law prescribes the conditions and the submission of applications for opening of bankruptcy procedures; the determination of property obligations and measures to preserve property in bankruptcy procedures; the conditions and procedures for restoration of business operation, the procedures for property liquidation and bankruptcy declaration; the rights, obligations and responsibilities of the applicants for opening of bankruptcy procedures, of the enterprises and cooperatives requested for bankruptcy declaration and of the participants in the settlement of requests for bankruptcy declaration.
Article 2.- Subjects of application
1. This Law applies to enterprises, cooperatives, unions of cooperatives (cooperatives and unions of cooperatives are referred collectively to as cooperatives), which are established and operate according to law provisions.
2. The Government shall specify the list of, and the application of this Law to, special enterprises in direct service of defense and security; enterprises and cooperatives operating in the financial, banking, insurance or other domains, which constantly and directly provide essential public-utility products and/or services.
Article 3.- Enterprises, cooperatives which fall into the state of bankruptcy
Enterprises, cooperatives, which are incapable of repaying their due debts at creditors’ requests, shall be regarded as falling into the state of bankruptcy.
Article 4.- Effect of the Bankruptcy Law
1. The Bankruptcy Law and other law provisions shall apply when settling the bankruptcy of enterprises, cooperatives operating in the territory of the Socialist Republic of Vietnam, except otherwise provided for by international agreements which the Socialist Republic of Vietnam has signed or acceded to.
2. Where there appears the difference between the provisions of the Bankruptcy Law and the provisions of other laws on the same matters, the provisions of the Bankruptcy Law shall apply.
Article 5.- Bankruptcy procedures
1. The bankruptcy procedures applicable to enterprises and cooperatives which fall into the state of bankruptcy shall include:
a) The submission of applications for, and opening of bankruptcy procedures;
b) The restoration of business operation;
c) The liquidation of properties, debts;
d) The declaration of bankruptcy of enterprises, cooperatives.
2. After the decisions to open the bankruptcy procedures are issued, the judges, basing themselves on the specific provisions of this Law, shall decide to apply either one of the two procedures prescribed at Point b and Point c, Clause 1 of this Article or decide to shift from the application of procedures for restoration of business operation to the application of procedures for liquidation of properties, debts or declaration of bankruptcy of enterprises, cooperatives.
Article 6.- Interpretation of terms and phrases
In this Law, the terms and phrases below shall be construed as follows:
1. Guaranteed creditors mean creditors who have debts secured with properties of enterprises, cooperatives or the third persons.
2. Partially guaranteed creditors mean creditors who have debts secured with properties of enterprises, cooperatives or the third persons and the value of the security property is lower than such debts.
3. Unguaranteed creditors mean creditors whose debts are not secured with properties of enterprises, cooperatives or the third persons.
4. Lawful representatives of enterprises, cooperatives include the representatives at law and the representatives under authorization.
5. Bilateral contracts mean contracts where the contractual parties shall all have the rights and obligations; the rights of one party shall be the obligations of the other party and vice versa.
Article 7.- The courts’ jurisdiction
1. The people’s courts of rural districts, urban districts, provincial capitals, provincial towns (hereinafter referred collectively to as the district-level people’s courts) have the competence to carry out bankruptcy procedures for cooperatives which have already made their business registration at the district-level business registries in their respective localities.
2. The people’s courts of the provinces and centrally-run cities (hereinafter referred collectively to as the provincial-level people’s courts) have the competence to carry out bankruptcy procedures for enterprises, cooperatives, which have made their business registration at the provincial-level business registries in their respective localities.
In case of necessity, the provincial-level people’s courts may carry out the bankruptcy procedures for cooperatives which fall under the jurisdiction of the district-level people’s courts.
3. The provincial-level people’s courts of the localities where foreign-invested enterprises in Vietnam are headquartered have the competence to carry out the bankruptcy procedures for such foreign-invested enterprises.
Article 8.- Tasks and powers of judges who carry out the bankruptcy procedures
1. The carrying out of bankruptcy procedures at the district-level people’s court shall be undertaken by a judge, and by a judge or a three-judge team at the provincial-level people’s court.
2. Where the bankruptcy procedures are carried out by a three-judge team, one of those judges shall be assigned to act as the team leader.
The working regulations of the judges’ teams shall be prescribed by the chairman of the Supreme People’s Court.
3. Judges or judges’ teams (hereinafter called collectively as judges) have the tasks and powers to supervise and carry out the bankruptcy procedures. In the course of carrying out the bankruptcy procedures, if detecting criminal signs, the judges shall supply documents (the copies) to the people’s procuracies of the same level for considering the institution of lawsuits according to criminal procedures while proceeding with the bankruptcy procedures according to the provisions of this Law.
4. The judges are answerable to their chief judges and law for the performance of their tasks and the exercise of their powers.
Article 9.- Property-managing and -liquidating teams
1. Together with the issuance of decisions to open the bankruptcy procedures, the judges shall issue decisions on setting up property-managing and - liquidating teams to perform the tasks of managing, liquidating the properties of enterprises and/or cooperatives which fall into the state of bankruptcy.
2. A property-managing and -liquidating team is composed of:
a) An executor of the judgment-executing agency of the same level as team leader;
b) An official of the court;
c) A representative of the creditor;
d) The lawful representative of the enterprise or cooperative subject to the opening of bankruptcy procedures;
e) In cases where it is necessary that the representative of the trade union organization, the laborers’ representative, the representative of professional agencies join the property-managing and -liquidating team, the judge shall consider and decide thereon.
3. Based on the provisions of this Law, the legislation on civil judgment execution and other relevant law provisions, the Government shall promulgate the Regulation on organization and operation of the property-managing and -liquidating teams after reaching agreement with the Supreme People’s Court.
Article 10.- Tasks, powers and responsibilities of the property-managing and -liquidating teams
1. The property-managing and -liquidating teams shall have the following tasks and powers:
a) To make the lists of available properties of enterprises, cooperatives;
b) To supervise and examine the use of properties of enterprises, cooperatives;
c) To propose judges to decide on the application of provisional emergency measures to preserve the properties of enterprises, cooperatives in case of necessity;
d) To make lists of creditors and debt amount payable to each creditor; the debtors and receivable debt amounts of the enterprises, cooperatives;
e) To retrieve and manage properties, documents, accounting books and seals of the enterprises and/or cooperatives which are subject to the application of liquidation procedures;
f) To realize the plans on property division under decisions of judges;
g) To detect and propose judges to issue decisions to recover properties, property value or the difference of the value of the properties of enterprises or cooperatives subject to the application of liquidation procedures, which were sold or transferred illegally in the cases prescribed in Clause 1, Article 43 of this Law;
h) To execute the judges’ decisions to auction properties of the enterprises, cooperatives subject to the application of liquidation procedures strictly according to law provisions on auction;
i) To deposit money amounts collected from debtors and from auction of properties of the enterprises, cooperatives into accounts opened at banks;
j) To execute other decisions of judges in the course of carrying out the bankruptcy procedures.
2. The property-managing and -liquidating teams shall perform the tasks and exercise the powers prescribed at Points e, f, g, h and j of Clause 1, this Article according to law provisions on execution of civil judgments, other relevant law provisions and take responsibility before law for the performance of their tasks and the exercise of their powers.
Article 11.- Tasks, powers and responsibilities of the property-managing and- liquidating team leaders
1. The property-managing and-liquidating team leaders shall have the following tasks and powers:
a) To administer their property-managing and -liquidating teams in performing the tasks and exercising the powers prescribed in Article 10 of this Law;
b) To open accounts at banks to deposit money amounts collected from debtors and from the auction of properties of the enterprises and/or cooperatives subject to the application of liquidation procedures in necessary cases;
c) To organize the execution of judges’ decisions.
2. The property-managing and -liquidating team leaders shall take responsibility before law for the performance of their tasks and the exercise of their powers.
Article 12.- Supervising the law observance in the course of carrying out the bankruptcy procedures
The people’s procuracies shall supervise the law observance in the course of carrying out the bankruptcy procedures according to the provisions of this Law and the Law on Organization of the People’s Procuracies.
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