What are regulations on assumption of litigation rights and obligations regarding bad debts in Vietnam?
Hello Lawnet. What are regulations on assumption of litigation rights and obligations regarding bad debts in Vietnam? Thank you!
Pursuant to Article 7 of the Resolution 03/2018/NQ-HĐTP stipulating assumption of litigation rights and obligations in Vietnam as follows:
1. The purchaser of a NPL or a debt incurred from a NPL of a credit institution, branch of foreign bank, or bad debt purchaser/manager shall assume litigation rights and obligations from the seller as prescribed in Clause 4 Article 74 of the Civil Procedure Code.
2. If an involved party sells/purchases a NPL or a debt incurred from a NPL while the civil case is considered by the court under first-instance trial, appellate trial or under cassation procedure or reopening procedure, the court shall keep settling the lawsuit under general procedures. The court shall further identify the status of involved parties and entities assuming their litigation rights and obligations according to the debt purchase contract as follows:
a) An entity who purchases a part of NPL or a debt incurred from NPL shall assume the seller’s litigation rights and obligations and be considered as seller towards to purchased part of debt. The court shall indicate the purchaser as "entity assuming a part of litigation rights and obligations” from the seller (stating debt seller’s name) in litigation-related documentation;
b) An entity who purchases the whole of NPL or a debt incurred from NPL shall assume the whole seller’s litigation rights and obligations and be considered as a substitute for the seller. The court shall indicate the purchaser as "entity assuming litigation rights and obligations” from the seller (stating debt seller’s name) in litigation documentation;
c) From the date on which the court receives evidence proving that the debt purchase contract comes into force, which means that the purchaser starts establishing its ownership to the purchased property as per the law, the litigation documentation shall state the purchaser as the entity assuming rights and obligations from the seller.
For example: Joint-stock commercial bank A is a plaintiff in a case “dispute over obligation to transfer collateral”. While the court is settling the case, bank A sells the whole of NPL and right to request to transfer collateral to the limited liability company B. From the date on which evidence proving that purchaser starts establishing its ownership is received, the court shall consider company B as an entity assuming litigation rights and obligations from the plaintiff and litigation documentation shall be written as follows: “Plaintiff: Joint-stock commercial bank A, headquartered at …; limited liability company B, headquartered at …, which assumes litigation rights and obligations from bank A; legal representative of plaintiff is Mr. Nguyen Van C – Director of company B”.
Above are regulations on assumption of litigation rights and obligations in Vietnam.
Best regards!
