Chương 4 Luật Thương mại 1997: Chế tài trong thương mại và việc giải quyết tranh chấp trong thương mại

Chapter IV

COMMERCIAL REMEDIES AND RESOLUTION OF COMMERCIAL DISPUTES

Section 1. COMMERCIAL REMEDIES

Article 222.- Types of commercial remedy

Commercial remedies shall include:

1. Specific performance;

2. Penalty for breach;

3. Compensation for damage;

4. Cancellation of contract.

Article 223.- Specific performance

1. Specific performance is a remedy whereby the aggrieved party requires the exact performance of the contract by the breaching party or applies other measures to cause the contract to be performed and the breaching party shall have to bear any costs incurred.

2. Where the breaching party fails to deliver all goods or to provide services under the contract, it shall have to deliver all goods or provide services in accordance with the contract. If the breaching party delivers poor-quality goods or fails to provide services under the contract, it shall have to rectify the defects of the goods or services or to deliver substitute goods or provide services in accordance with the contract; and shall not be entitled to use money or goods of other types or other services as substitutes without the consent of the aggrieved party.

3. Where the breaching party fails to comply with the provisions in Clause 2 of this Article, the aggrieved party shall be entitled to purchase goods or receive services of the type stated in the contract from other parties as substitutes and the breaching party shall have to pay the difference if any.

4. Where the aggrieved party rectifies by itself the defects of the goods or services, the breaching party shall have to pay the actual reasonable expenses.

5. The aggrieved party shall have to receive the goods or services and make payment therefore if the breaching party has discharged its obligations stipulated in Clause 2 of this Article.

Article 224.- Extension of time limit for performance of obligations

The aggrieved party may extend the time limit by a reasonable period so that the breaching party performs its obligations.

Article 225.- Relationship between specific performance and other remedies

1. Unless otherwise agreed, when the remedy of specific performance is being applied, the aggrieved party shall not be entitled to apply other remedies, including penalty for breach, compensation for damage or cancellation of contract.

2. Where the breaching party fails to carry out the specific performance within the prescribed time limit, the aggrieved party may apply other remedies in order to protect its legitimate interests.

Article 226.- Penalty for breach

Penalty for breach is a remedy whereby the aggrieved party requests the breaching party to pay a certain penalty sum for breach of contract if it is so agreed in the contract or prescribed by law.

Article 227.- Grounds for claim of penalty

Penalty for breach arises on the following grounds:

1. Non-performance of the contract;

2. Improper performance of the contract.

Article 228.- Rate of penalty

The rate of penalty for one breach of contract or the total amount of penalty for more than one breach shall be agreed upon in the contract by the parties but shall not exceed eight per cent of the value of the obligation which is the subject of the breach.

Article 229.- Compensation for damage

1. Compensation for damage is a remedy whereby the aggrieved party requests the breaching party to pay damages as compensation for breach of contract.

2. The amount of damages covers the actual direct loss and the profit which the aggrieved party would have enjoyed if the breach had not been committed by the breaching party.

The amount of damages may not be higher than the amount of loss and the profit which would have been obtained.

Article 230.- Grounds for liability to compensate for damage

Liability to compensate for damage shall arise upon existence of all of the following elements:

1. Breach of contract;

2. Material loss;

3. Direct relationship between breach of contract and material loss;

4. Fault of the breaching party.

Article 231.- Obligation to prove loss

The party claiming the compensation for damage shall have to prove the loss and the amount of loss.

The breaching party is deemed to be at fault if it fails to disprove its fault.

Article 232.- Obligation to mitigate losses

The party claiming compensation for damage must take reasonable measures to mitigate losses, including the profits it would have enjoyed except for the breach of contract; if the party claiming compensation for damage fails to take such measures, the breaching party shall be entitled to request a reduction in damages equal to the amount of loss that could have been mitigated.

Article 233.- Right to claim interest on delayed payment

Where a breaching party delays making payment for goods or services or other fees, the other party shall be entitled to claim interest on such delayed payment for the period of delay at the interest rate applicable to overdue debts stipulated by the State Bank of Vietnam at the time of payment, unless otherwise agreed upon by the parties or prescribed by law.

Article 234.- Relationship between remedy of penalty for breach and remedy of compensation for damage

Unless otherwise agreed by the parties, the aggrieved party shall be entitled to choose either penalty for breach or compensation for damage as the remedy for a breach.

Article 235.- Cancellation of contract

The aggrieved party may declare cancellation of contract if the breach committed by the other party is a condition for cancellation of contract as agreed upon by the parties.

Article 236.- Notice of contract cancellation

The party canceling the contract shall have to immediately notify the other party of the cancellation of the contract; if it fails to do so and thereby causes damage to the other party, it must pay compensation.

Article 237.- Consequences of cancellation of contract

1. Following the cancellation of the contract, the parties shall not have to continue the performance of the obligations agreed upon in the contract.

2. Each party shall have the right to claim restitution of any benefits resulted from its performance of any obligations under the contract; if both parties have indemnity obligations, such obligations must be performed concurrently.

3. The aggrieved party shall be entitled to request the other party to pay compensation.

Section 2. RESOLUTION OF COMMERCIAL DISPUTES

Article 238.- Commercial disputes

A commercial dispute is a dispute arising from the non-performance or improper performance of a contract in commercial activities.

Article 239.- Forms of resolution of disputes

1. Commercial disputes must be first resolved through negotiations between the parties.

2. Parties to a dispute may agree to choose a body, organization or individual as the conciliation mediator.

3. Where negotiation or conciliation fails, commercial disputes may be resolved by an arbitration body or a court. The procedures for resolution of commercial disputes by arbitration or a court shall be in accordance with the rules of the arbitration body or court chosen by the parties.

Article 240.- Competence to resolve commercial disputes with foreign traders

Commercial disputes with foreign trader shall be resolved by Vietnamese courts, unless otherwise agreed by the parties or prescribed by international treaties which the Socialist Republic of Vietnam has signed or acceded to.

Article 241.- Time limit for lodging complaints

1. The time limit for lodging complaints shall be the period during which the aggrieved party is entitled to lodge a complaint against the breaching party. After expiry of such time limit, the aggrieved party shall lose its right to take legal action at the competent arbitration body or court.

2. The time limit for lodging complaints shall be agreed upon in the contract by the parties; where there is no such agreement, the time limit for lodging complaints shall be stipulated as follows:

a/ Three months from the date of delivery of goods for complaints about quantity of goods;

b/ Six months from date of delivery of goods for complaints about specifications or quality of goods; where goods are under warranty, the time limit for complaints shall be three months from the expiry of the warranty period;

c/ Three months from the date on which the breaching party shall have to fulfill its contractual obligations for complaints about other commercial acts, except for the case prescribed in Clause 4, Article 170 of this Law.

Article 242.- Statute of limitation for litigation

The statute of limitation for litigation applicable to all commercial acts shall be two years commencing from the moment the right to lodge complaints arises

Article 243.- Enforcement of court judgments and decisions and arbitral awards and decisions

1. Court judgments and decisions shall be enforced in accordance with the legislation on enforcement of civil judgments.

2. Arbitral awards and decisions shall be enforced in accordance with law.