Vietnam: Guidance on elaboration of compensation for damage specified in Decree No. 139/2017/NĐ-CP

Specifically, according to the Circular No. 03/2018/TT-BXD of the Ministry of Construction of Vietnam, the compensation for damage will be paid under the agreement between the investor and the aggrieved party. In case the parties fail to reach an amicable settlement, the compensation for damage shall be paid in accordance with provisions of the Civil Code.

If an adjoining building has collapsed or is facing collapse, the investor is obliged to suspend the execution and immediately implement measures for moving people and assets in such adjoining building to safer places. The investor is obliged to provide leased houses for the aggrieved parties and pay rental thereof. Leased houses must be convenient for traveling with appropriate area and ensure social infrastructure so that the aggrieved parties may stably live. If an aggrieved party self-rents a house (whose facilities are similar to his injured apartment), the investor is obliged to make payment for house rental and relocation costs to such aggrieved party.

If the investor and the aggrieved party fails to reach an amicable settlement and the case is submitted by either party to the Communal People’s Committee for settlement after the administrative violation has been officially recorded, such case will be settled as follows:

- Within a maximum period of 05 working days from the receipt of the written complaint, the Chairperson of the Communal People’s Committee shall conduct conciliation;

- Over the permitted period of 07 working days from the date on which the conciliation is unsuccessful or failed by default of a party, the Chairperson of the Communal People’s Committee shall conduct a pre-conciliation;

- If either party is absent from the pre-conciliation without giving legitimate reasons, the Chairperson of the Communal People’s Committee shall decide to hire a qualified consultant with legal status to determine the amount of compensation for damage. The investor shall cover the costs of hiring consultant. After the amount of compensation has been determined, the Chairperson of the Communal People’s Committee shall request the investor to transfer such amount of money to the escrow account owned by the Communal People’s Committee. The investor shall continue executing the construction works only when the full amount of compensation as determined has been transferred to the prescribed escrow account;

- If two parties fail to reach an agreement on the amount of compensation for damage, they shall agree to hire a qualified consultant with legal status to determine the amount of compensation as prescribed. In case two parties fail to reach an agreement on selection of a consultant or disagree on the amount of compensation calculated by the consultant, the Chairperson of the Communal People’s Committee shall hire another consultant to determine the amount of compensation for damage. The investor shall cover the costs of hiring consultant. Based on the results provided by the hired consultant, the Chairperson of the Communal People’s Committee shall request the investor to transfer the determined amount of compensation to the escrow account owned by the Communal People’s Committee. The investor shall continue executing the construction works only when the full amount of compensation as determined has been transferred to the prescribed escrow account;

- Either party has the right to take the other to the Court if disagreeing on the determined amount of compensation for damage.

In particular, the investor that is not liable to an administrative penalty is encouraged to pay compensation for damage.

The violating entity shall continue executing the construction works only when the parties have reached an agreement and completed payment of compensation for damage or fully complied with procedures for settling the case.

View more details at Circular No. 03/2018/TT-BXD of the Ministry of Construction of Vietnam, effective from June 12, 2018.

-Thao Uyen-

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