Notable points regarding bankruptcy process involving foreign entities in Vietnam

Notable points regarding bankruptcy process involving foreign entities in Vietnam (Internet image)

Regarding this issue, Lawnet would like to answer as follows:

1. Notable points regarding bankruptcy process involving foreign entities in Vietnam

1.1 Foreigners involved in bankruptcy process

Any foreigner involved in the bankruptcy process must comply with the regulations of the Law on Bankruptcy of Vietnam.

(Article 116 of the Law on Bankruptcy 2014)

1.2 Judicial delegation of Vietnam People’s Court to foreign competent authorities

According to Article 117 of the Law on Bankruptcy 2014, the provisions on judicial delegation of Vietnam People’s Court to foreign competent authorities are as follows:

- The People’s Court shall implement the judicial delegation according to the judicial assistance treaty to which the Socialist Republic of Vietnam is a State Party or the principle of reciprocity during any bankruptcy settlement involving foreign entities.

- The procedures for the judicial delegation must comply with the regulations of the law on civil procedure and the law on judicial assistance.

Legal mandate means a written request of a competent body of Vietnam or a foreign country for the performance of one or a number of legal assistance activities under the provisions of the law of the concerned country or the treaty to which Vietnam is a contracting party.

Legal assistance is provided on the basis of the request of a competent body of Vietnam or a foreign country through legal mandate.

(Article 6 of the Law on Legal Assistance 2007)

1.3 Procedures for recognition and authorization to implement Decisions on bankruptcy settlement of foreign Courts

Pursuant to Article 118 of the Law on Bankruptcy 2014, the recognition and authorization to implement the Decisions on bankruptcy settlement must comply with the regulations on the judicial assistance treaty to which the Socialist Republic of Vietnam is a State Party and other regulations of the law on judicial assistance.

According to Article 15 of the Law on Legal Assistance 2007, procedures to receive and handle civil legal mandates of foreign countries as follows:

- Within ten working days after the receipt of legal mandate dossiers of competent bodies of the requesting countries, the Ministry of Justice shall record in the legal mandate book, examine the validity of the dossiers and transfer them to competent Vietnamese bodies for implementation. If the dossiers are invalid, the Ministry of Justice shall return them to competent bodies of the requesting countries and clearly state the reasons therefor.

- Within five working days after the receipt of competent Vietnamese bodies written notices on the performance of legal mandates, the Ministry of Justice shall transfer the notices to competent bodies of the requesting countries in accordance with the treaties to which Vietnam and the requesting countries are contracting parties or through the diplomatic channel.

- If the legal mandate cannot be performed or the time limit has expired but the foreign countries request or need to supplement relevant information or documents, the competent Vietnamese bodies performing the legal mandates shall notify in writing the Ministry of Justice thereof and clearly state the reasons therefor so that the Ministry of Justice shall notify such to the competent bodies of the requesting countries.

2. What are the procedures for implementation of Decisions on declaration of bankruptcy?

According to Article 120 of the Law on Bankruptcy 2014, the procedures for implementation of Decisions on declaration of bankruptcy are prescribed as follows:

- The civil execution authority shall issue the Decision on implementation and assign the bailiff to implement the Decision on declaration of bankruptcy within 05 working days from the issuance of an Decision on declaration of bankruptcy.

- After assigned by the Head of the civil execution authority, the bailiff shall:

+ Open an bank account held by the civil execution authority in charge of implementing the Decision on declaration of bankruptcy to send confiscated money of the insolvent entity;

+ Supervise the asset liquidation conducted by the asset management officer and asset management enterprise;

+ Enforce the asset confiscation and transfer the assets to the buyers under the regulations of the law on civil execution;

+ Redistribute the assets according to the Decision of declaration of bankruptcy after receiving the report of the asset management officer and asset management enterprise on the asset liquidation.

Nguyen Ngoc Que Anh

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