Legal Newsletter | May 2023

Dear Valued Customers and Partners,

GV Lawyers would like to introduce you to Legal Newsletter Issue No. 05 of May 2023.

  • This newsletter will update the latest legal information on: (i) extension of the deadline for paying taxes and land rent in 2023, (ii) regulations on the reporting on high value transactions, (iii) carrying out the debt rescheduling for clients in need, (iv) a new Decree detailing a number of articles of the Anti-Money Laundering Law, and (v) additional regulations on business household registration
  • In the section “Legal Guidance“, we will keep you updated about the questions about tax policies and invoices such as: (i) Cases of using the itemized list when making invoices; (ii) Issuing value-added tax (VAT) invoices for goods temporarily imported for re-export; (iii) Handling the expenses on someone’s behalf that give rise to a difference; and (iv) Personal income taxes on employees as prize-winners.
  • Banks may immediately redeem corporate bonds, and the Government will increase base salary to VND 1.8 million/month from 01 July 2023 are notable information in the section “Good readings for you”,
  • The last part of the Legal Newsletter is, as usual, the list of selected latest legal documents.

We hope you will find this newsletter useful. To read the full Legal Newsletter, please click DOWNLOAD NEWSLETTER.



source https://gvlawyers.com.vn/legal-newsletter-may-2023/

Benchmark Litigation 2023 Asia Pacific Rankings

We are proud to announce that Global Vietnam Lawyers is once again being recognised by 𝗕𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸 𝗟𝗶𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝗶𝘁𝘀 𝟮𝟬𝟮𝟯 𝗔𝘀𝗶𝗮 𝗣𝗮𝗰𝗶𝗳𝗶𝗰 𝗿𝗮𝗻𝗸𝗶𝗻𝗴𝘀 for the following categories:

  • Commercial and transactions
  • International arbitration
  • Labor and employment

Congratulations to 𝗣𝗮𝗿𝘁𝗻𝗲𝗿 – 𝗠𝗿. 𝗗𝗶𝗻𝗵 𝗤𝘂𝗮𝗻𝗴 𝗧𝗵𝘂𝗮𝗻 who continues to be ranked as “𝗟𝗶𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻 𝗦𝘁𝗮𝗿”.

We are very thankful for our clients for your invaluable feedback, and are privileged to be able to guide businesses, high-net-worth individuals, families and philanthropists in all your legal needs.

For more information, please visit: https://gvlawyers.com.vn/benchmark-litigation-asia-pacific-2023-rankings/

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source https://gvlawyers.com.vn/benchmark-litigation-2023-asia-pacific-rankings/

Benchmark Litigation Asia-Pacific 2023 Rankings

We are proud to announce that Global Vietnam Lawyers is once again being recognised by Benchmark Litigation in its 2023 Asia Pacific rankings for the following categories:

  • Commercial and Transactions
  • International Arbitration
  • Labor and Employment

Congratulations to Partner – Mr. Dinh Quang Thuan who continues to be ranked as “Litigation Star”.

Benchmark Litigation is the definitive guide to the region’s leading dispute resolution firms and lawyers. The research is conducted through extensive interviews with litigators, arbitrators, dispute resolution specialists and their clients to identify the leading litigators and firms as well as examining recent casework handled by law firms and lawyers. They not only evaluate domestic, regional and international law firms in Asia-Pacific but aims to develop data and intelligence solutions for Asia’s legal decision-makers, business developers and marketers.

Once again, we are very thankful for our clients for your invaluable feedback, and are privileged to be able to guide businesses, high-net-worth individuals, families and philanthropists in all your legal needs.

For more information, please visit: https://benchmarklitigation.com/Firm/Global-Vietnam-Lawyers-Vietnam/Profile/105199#rankings



source https://gvlawyers.com.vn/benchmark-litigation-asia-pacific-2023-rankings/

Cập Nhật Pháp Luật Số 02 | Tháng 04 Năm 2023

Ngày 17/4/2023, Chính phủ ban hành Nghị định 13/2023/NĐ-CP (“Nghị định 13/2023”) về bảo vệ dữ liệu cá nhân. Nghị định này là khung pháp lý mới nhất về bảo vệ dữ liệu cá nhân và sẽ ảnh hưởng rất lớn đến các doanh nghiệp có nhu cầu thu thập, xử lý dữ liệu cá nhân của khách hàng hoặc người tiêu dùng. Nghị định 13/2023 áp dụng đối với mọi cá nhân, cơ quan, tổ chức Việt Nam hoặc nước ngoài trực tiếp tham gia hoặc có liên quan đến hoạt động xử lý dữ liệu cá nhân tại Việt Nam và có các nội dung quan trọng sau:

 1. Lần đầu giới thiệu những khái niệm mới về dữ liệu cá nhân

Điểm đặc biệt của Nghị định 13/2023 là Nghị định này lần đầu tiên giới thiệu nhiều khái niệm pháp lý mới về dữ liệu cá nhân.

a. Dữ liệu cá nhân

Về tổng thể, dữ liệu cá nhân (DLCN) được hiểu là thông tin dưới dạng ký hiệu, chữ viết, chữ số, hình ảnh, âm thanh hoặc dạng tương tự trên môi trường điện tử gắn liền với một con người cụ thể hoặc giúp xác định một con người cụ thể. Xa hơn thế, Nghị định 13/2023 giới thiệu hai khái niệm mới hình thành DLCN bao gồm DLCN cơ bản và DLCN nhạy cảm.

DLCN cơ bản bao gồm họ, chữ đệm và tên khai sinh, tên gọi khác (nếu có); ngày, tháng, năm sinh; ngày, tháng, năm chết hoặc mất tích; giới tính; nơi sinh, nơi đăng ký khai sinh, nơi thường trú, nơi tạm trú, nơi ở hiện tại, quê quán, địa chỉ liên hệ; quốc tịch; hình ảnh của cá nhân; số điện thoại, số chứng minh nhân dân, số định danh cá nhân, số hộ chiếu, số giấy phép lái xe, số biển số xe, số mã số thuế cá nhân, số bảo hiểm xã hội, số thẻ bảo hiểm y tế…

DLCN nhạy cảm là DLCN gắn liền với quyền riêng tư của cá nhân mà khi bị xâm phạm sẽ gây ảnh hưởng trực tiếp tới quyền và lợi ích hợp pháp của cá nhân, như: quan điểm chính trị, quan điểm tôn giáo; tình trạng sức khỏe và đời tư được ghi trong hồ sơ bệnh án; các thông tin liên quan đến nguồn gốc chủng tộc, đặc điểm di truyền, đời sống tình dục; dữ liệu về vị trí được xác định qua dịch vụ định vị; thông tin khách hàng của tổ chức tín dụng…

Như vậy, DLCN cơ bản gần gũi với cách hiểu thông thường về thông tin cá nhân trực tiếp xác định một người, trong khi DLCN nhạy cảm rộng hơn, thể hiện cả xu hướng, quan điểm, thói quen, thậm chí là vị trí địa lý, …. mà những thông tin này hiện nay ít doanh nghiệp coi đó là thông tin cá nhân và ít quan tâm về pháp lý trong việc thu thập, xử lý và sử dụng các thông tin này.

b. Chủ thể dữ liệu

Chủ thể dữ liệu cũng là một khái niệm mới được giới thiệu trong Nghị định 13/2023. Chủ thể dữ liệu được định nghĩa là cá nhân được DLCN phản ánh. Như vậy, thông tin về doanh nghiệp sẽ không được coi là DLCN. Nói cách khác, chỉ có thông tin của cá nhân mới được điều chỉnh, và bảo vệ theo Nghị định 13/2023.

Với tư cách là chủ thể dữ liệu, cá nhân có 11 quyền trong Nghị định 13/2023, bao gồm: (1) Quyền được biết; (2) Quyền đồng ý; (3) Quyền truy cập; (4) Quyền rút lại sự đồng ý; (5) Quyền xóa dữ liệu; (6) Quyền hạn chế xử lý dữ liệu; (7) Quyền cung cấp dữ liệu; (8) Quyền phản đối xử lý dữ liệu; (9) Quyền khiếu nại, tố cáo, khởi kiện; (10) Quyền yêu cầu bồi thường thiệt hại; và (11) Quyền tự bảo vệ. Với những quyền chi tiết như trên, chủ thể dữ liệu có quyền rộng rãi hơn với các DLCN của mình, ở chiều ngược lại, các doanh nghiệp (được coi là Bên Kiểm soát và xử lý DLCN) sẽ khó khăn hơn rất nhiều trong việc thu thập, xử lý, chuyển giao DLCN. Ví dụ, chủ thể dữ liệu được phản đối Bên Kiểm soát DLCN, Bên Kiểm soát và xử lý DLCN xử lý DLCN của mình nhằm ngăn chặn hoặc hạn chế tiết lộ DLCN hoặc sử dụng cho mục đích quảng cáo, tiếp thị, trừ trường hợp luật có quy định khác. Trong trường hợp đó, bên Kiểm soát DLCN, Bên Kiểm soát và xử lý DLCN thực hiện yêu cầu của chủ thể dữ liệu trong 72 giờ sau khi nhận được yêu cầu, trừ trường hợp luật có quy định khác.

2. Các biện pháp bảo vệ DLCN

Bảo vệ DLCN là hoạt động phòng ngừa, phát hiện, ngăn chặn, xử lý hành vi vi phạm liên quan đến DLCN theo quy định của pháp luật. Nghị định 13/2023 nêu rõ, biện pháp bảo vệ DLCN được áp dụng ngay từ khi bắt đầu và trong suốt quá trình xử lý DLCN, bao gồm 5 biện pháp sau đây:

  1. Biện pháp quản lý do tổ chức, cá nhân có liên quan tới xử lý DLCN thực hiện;
  2. Biện pháp kỹ thuật do tổ chức, cá nhân có liên quan tới xử lý DLCN thực hiện;
  3. Biện pháp do cơ quan quản lý nhà nước có thẩm quyền thực hiện theo quy định của Nghị định 13/2023 và pháp luật có liên quan;
  4. Biện pháp điều tra, tố tụng do cơ quan Nhà nước có thẩm quyền thực hiện; và
  5. Các biện pháp khác theo quy định của pháp luật.

Các biện pháp bảo vệ DLCN sẽ được áp dụng tùy vào hình thức của DLCN là DLCN cơ bản hay DLCN nhạy cảm. Một cổng thông tin quốc gia về bảo vệ DLCN sẽ được thành lập, ngoài mục đích cung cấp thông tin về các quy định pháp luật liên quan đến bảo vệ DLCN, cổng còn là nơi tiếp nhận thông báo vi phạm quy định về bảo vệ DLCN.

3. Chỉ được sử dụng DLCN để tiếp thị, quảng cáo nếu được khách hàng đồng ý

Theo Điều 21 của Nghị định 13/2023, các tổ chức, cá nhân kinh doanh dịch vụ tiếp thị, giới thiệu sản phẩm quảng cáo chỉ được sử dụng DLCN của khách hàng được thu thập qua hoạt động kinh doanh của mình để kinh doanh dịch vụ tiếp thị, giới thiệu sản phẩm quảng cáo khi có sự đồng ý của chủ thể dữ liệu. Đồng thời, việc xử lý DLCN của khách hàng để kinh doanh dịch vụ tiếp thị, quảng cáo cũng phải được sự đồng ý của khách hàng, trên cơ sở khách hàng biết rõ nội dung, phương thức, hình thức, tần suất giới thiệu sản phẩm.

4. Thu thập, chuyển giao, mua, bán DLCN mà không có sự đồng ý của chủ thể dữ liệu là vi phạm pháp luật

Điều 3.4 và Điều 22.2 của Nghị định 13/2023 không cho phép tổ chức, cá nhân mua bán DLCN dưới mọi hình thức. Do đó, việc thiết lập các hệ thống phần mềm, biện pháp kỹ thuật hoặc tổ chức các hoạt động thu thập, chuyển giao, mua, bán DLCN mà không có sự đồng ý của chủ thể dữ liệu là vi phạm pháp luật. Tùy theo mức độ vi phạm quy định bảo vệ DLCN, các cơ quan, tổ chức, cá nhân có thể bị xử lý kỷ luật, xử phạt vi phạm hành chính, hoặc xử lý hình sự theo quy định.

5. Chuyển DLCN ra nước ngoài

DLCN của công dân Việt Nam được chuyển ra nước ngoài phải có văn bản đồng ý của chủ thể dữ liệu trên cơ sở biết rõ cơ chế phản hồi, khiếu nại khi có sự cố hoặc yêu cầu phát sinh. Đồng thời, phải có văn bản thể hiện sự ràng buộc, trách nhiệm giữa các tổ chức, cá nhân chuyển và nhận DLCN của Công dân Việt Nam về việc xử lý DLCN.

Để chuyển DLCN ra nước ngoài, Bên chuyển dữ liệu (gồm Bên Kiểm soát DLCN, Bên Kiểm soát và xử lý DLCN, Bên Xử lý DLCN, Bên thứ ba) phải lập Hồ sơ đánh giá tác động chuyển DLCN ra nước ngoài theo quy định và gửi đến Bộ Công an (Cục An ninh mạng và phòng, chống tội phạm sử dụng công nghệ cao) trong thời gian 60 ngày kể từ ngày tiến hành xử lý DLCN. Nếu có yêu cầu cập nhật, bổ sung hồ sơ thì Bên chuyển dữ liệu phải hoàn thiện trong thời gian 10 ngày kể từ ngày yêu cầu.

Sau khi việc chuyển dữ liệu diễn ra thành công, Bên chuyển dữ liệu gửi văn bản thông báo đến Bộ Công an thông tin về việc chuyển dữ liệu và chi tiết liên lạc của tổ chức, cá nhân phụ trách.

Nghị định 13/2023 sẽ có hiệu lực từ ngày 01/7/2023.



source https://gvlawyers.com.vn/cap-nhat-phap-luat-so-02-thang-04-nam-2023/

Legal Alert No.02 | April 2023

On 17 April 2023, the Government issued Decree 13/2023/ND-CP (“Decree 13/2023”) on personal data protection. This Decree is the latest legal framework on personal data protection and will greatly affect enterprises in need of collecting and processing personal data from customers or consumers. Decree 13/2023 applies to all Vietnamese or foreign individuals, agencies and organisations directly involved in or related to personal data processing activities in Vietnam and contains important details as follows:

1. Introducing new concepts on personal data for the first time

A special feature of Decree 13/2023 is that this Decree introduces many new legal concepts on personal data for the first time.

a. Personal data

Collectively, personal data (PD) is understood as information in the form of symbols, letters, numbers, images, sounds or the likes existing in the electronic environment and associated with a particular person or helping to identify a particular person. Further, Decree 13/2023 introduces two new concepts on the creation of PD, including basic PD and sensitive PD.

Basic PD include the last name, middle name and birth name, other name (if any); date of birth; date of a person’s death or missing; sex; place of birth, place of birth registration, permanent residence, temporary residence, current residence, hometown, contact address; nationality; image of an individual; phone number, identity card number, personal identification number, passport number, driver’s license number, license plate number, personal tax identification number, social insurance number, health insurance card number …

Sensitive PD mean PD associated with an individual’s privacy that, when violated, will directly affect such individual’s legitimate rights and interests, such as: political and religious viewpoints; health status and private life recorded in the medical records; information related to racial origin, genetic characteristics, sex life; location data determined via location services; customer information kept by credit institutions…

Thus, basic PD are close to the conventional understanding of personal information that directly identifies a person, while sensitive PD are a broader concept showing trends, opinions, habits, even geographical location, etc. which few enterprises consider as personal information and their legal aspect enterprises do not care much about when collecting, processing and using this information.

b. Data subject

Data subject is also a new concept introduced in Decree 13/2023. Data subject is defined as the individual referred to by the PD. As such, information about an enterprise will not be considered PD. In other words, only personal information is regulated and protected under Decree 13/2023.

As a data subject, an individual has 11 rights as provided for in Decree 13/2023, including: (1) Right to know; (2) Right to consent; (3) Right of access; (4) Right to withdraw consent; (5) Right to delete data; (6) Right to restrict data processing; (7) Right to provide data; (8) Right to object to data processing; (9) Right to complain, denounce and initiate lawsuits; (10) Right to claim damages; and (11) Right to self-defend. With specific rights as aforesaid, data subjects have more rights with respect to their PD, in the opposite direction, enterprises (regarded as the PD Controller and Processor) will find it much more difficult to collect, process and transfer PD. For example, the data subject may object to the PD Controller, the PD Controller and Processor’s processing of its PD in order to prevent or limit the disclosure of PD or the use of PD for advertising and marketing purposes, unless otherwise provided for by law. In that case, the PD Controller, or the PD Controller and Processor must fulfill the request of the data subject within 72 hours after receiving the request, unless otherwise provided for by law.

2. Measures to protect PD

PD protection means activities to prevent, detect, ward off and handle violations related to PD in accordance with law. Decree 13/2023 clearly states that PD protection measures are applied from the very beginning of and throughout the processing of PD, including the following 5 measures:

  1. Management measure taken by organisations and individuals involved in PD processing;
  2. Technical measure taken by organisations and individuals involved in PD processing;
  3. Measure taken by competent state management agencies in accordance with Decree 13/2023 and relevant laws;
  4. Investigative and procedural measure taken by competent State agencies; and
  5. Other measures as prescribed by law.

PD protection measures will be applied depending on whether the PD are of basic or sensitive nature. A national portal on protection of PD will be established, in addition to providing information on legal regulations on PD, the portal is also a place to receive reports of violations of the regulations on PD protection.

3. PD can only be used for marketing and advertising with the customer consent

According to Article 21 of Decree 13/2023, organisations and individuals providing marketing and advertising services are only allowed to use PD of customers that they collect through their business activities to provide marketing and advertising services after the data subject’s consent has been obtained. At the same time, the processing of customers’ PD to provide marketing and advertising services must also be conducted with the customer’s consent on the basis that the customer knows the content, method, form and frequency of product advertising.

4. It is illegal to collect, transfer, buy and sell PD without the consent of the data subject

Articles 3.4 and 22.2 of Decree 13/2023 do not allow organisations and individuals to buy and sell PD in any form. Therefore, it is illegal to set up software systems, technical measures or organise activities to collect, transfer, buy and sell PD without the consent of the data

subject. Depending on the severity of violation of PD protection, agencies, organisations and individuals may be subject to disciplinary actions, administrative or criminal sanctions in accordance with law.

5. Transferring PD abroad

PD of Vietnamese citizens can only be transferred abroad with the written consent of the data subject on the basis that the data subject clearly knows how to feedback and complain in case of incidents or claims. At the same time, there must be a document reflecting the responsibility of, and binding on, organisations and individuals who transfer and receive PD of Vietnamese citizens.

In order to transfer PD abroad, the data transfer party (including the PD Controller, the PD Controller and Processor, the PD Processor, the Third Parties) must prepare a document on evaluation of the impact of transferring PD abroad as required by law and send it to the Ministry of Public Security (Division of Cyber Security and High-Tech Crime Prevention and Control) within 60 days of processing PD. If the data transfer party is requested to update or supplement the dossier, it must fulfill it within 10 days of request.

After PD are transferred successfully, the data transfer party must notify the Ministry of Public Security in writing of the data transfer and contact details of the organisation or individual in charge.

Decree 13/2023 will take effect from 01 July 2023.



source https://gvlawyers.com.vn/legal-alert-no-02-april-2023/

Legal Alert | April 2023

The Government has just issued Decree 10/2023/ND-CP dated 03 April 2023 (“Decree 10/2023”) amending and supplementing a number of articles of the decrees guiding the implementation of the Land Law. Notably, businesses, especially real estate businesses should pay attention to the new regulation on granting certificates of ownership of land-attached construction works with respect to the works used for tourist accommodation purposes (condotels, officetels, tourist villas and other construction works used for tourist accommodation).

1. Conditions for granting certificates of ownership of land-attached construction works with respect to the works used for tourist accommodation purposes

According to Decree 10/2023, for construction works used for the purpose of tourist accommodation as prescribed by the law on tourist activities on commercial and service land, if they fully meet the conditions prescribed by the law on land, the law on construction, and the law on real estate business, then the ownership of such construction works may be certified for the purpose of commercial or service land use.

2. Land use term for construction works used for tourist accommodation purposes

The land use term of construction works used for tourist accommodation purposes will be governed by Articles 126.3 and 128.1 of the Law on Land. Accordingly, the land lease term for commercial and service use does not exceed 50 years. Upon expiry of the term, if the land user wishes to continue using it, the State will consider extending the land use term but not exceeding the time limit specified above. The land use term in case of receipt of transfer of land use right, for types of land with definite use terms, will be the remainder of the land use term before the land is transferred.

3. Procedures for applying for certificates of land use rights and ownership of houses and other land-attached assets for construction works used for tourist accommodation purposes

After completing the construction works, the investor of the real estate business project whose construction works are used for tourist accommodation purposes must submit the following documents to the Department of Natural Resources and Environment:

  • Certificates of land use rights, ownership of houses and other land-attached assets; documents proving the fulfillment of financial obligations of the investor, in case there is a change in financial obligations, submit documents proving the fulfillment of financial obligations for such change (except for cases of exemption or deferred payment as prescribed by law).
  • Layout design drawings showing the current construction status and consistent with the signed contracts; Notice of construction authorities allowing the investor to test and accept work items or works, or approving the acceptance results for the work items or works to be put into use; a list of properties (works, work items, part of a work item) including the name of each property, land area, construction area for common use and private use of each property).

Next, the project investor will, on behalf of the buyer of the construction works used for tourist accommodation purposes, submit an application for a certificate of land use rights and ownership of houses and other land-attached assets or provide the buyer with necessary documents to carry out the application procedures.

Thus, Decree 10/2023 is considered as a solution to remove the legal “bottleneck” of the tourism real estate sector that has existed so far, since there has been no legal mechanism to recognise the ownership of tourism real estate (condotels, officetels, tourist villas and other construction works used for tourist accommodation). This can be considered a turning point to revive the tourism real estate market.

Decree 10/2023 will take effect from 20 May 2023.



source https://gvlawyers.com.vn/legal-alert-april-2023/

How Vietnam compensation rules ruin the rights of consumers in e-commerce transactions

GV Lawyers would like to introduce our valued readers an article by Ms. Pham Thanh Mai titled “How Vietnam compensation rules ruin the rights of consumers in e-commerce transactions” published on In-House Community site on 29 March 2023.

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1. Background and context of e-commerce in Vietnam

Online transactions are usually trivial, and dispute settlement, e.g., through mediation, arbitration, civil court, etc., costs time and money. This would prompt consumers to let it go, or spread warnings over the web as widely as possible, expecting this to serve as a deterrence to dishonest vendors. After all, who would give up a whole working day just to seek justice for, let’s say, a damage worth VND30,000 (USD1,2)?

But supposing a thousand consumers, instead of just one, become victims, the dishonest vendor will in this case acquire an illicit gain of VND30,000,000 (~USD1,200) without moving a finger. Bearing in mind that the revenue generated by the Vietnamese retailer e-commerce was predicted to reach USD16.4 billion in 2022[1], and will grow exponentially in the following years, such illicit gain would increase tremendously if the customers persist in reacting passively.

And this is where consumer protection laws are supposed to come forward.

2. A glance at claimable damages under Vietnamese consumer protection laws

First of all, consumer protection laws come forward with damage compensation regimes.

From the standpoint of Vietnamese legislatures, compensation for damages resulting from violation of consumers’ interests is based on both contractual and non-contractual obligations. The relationship between consumers and vendors is contractual and reciprocal at the very essence. Vendors accordingly must ensure that the goods are delivered in the quantities and quality as promised to the consumers under a sale of goods contract. Where the vendors fail to do so, they are deemed to have breached the contract and thus are obligated to compensate for damages as per contract and perform remedial measures to the consumers, the aggrieved party.

In addition to contractual compensation, non-contractual one, or tortious liability, is to be taken into account when the vendors’ failure to ensure the quality of goods causes actual damage to the consumers as stated in Article 608 of the Civil Code 2015. Tortious liability arises when three elements are met: tort, actual damage, and causal link between the tort and the actual damage[2]. It is noteworthy that, unlike under the contractual compensation regime, the fault factor is taken into consideration when it comes to calculating compensable damages, not to determining whether the tortious liability arises. Put in simple words, the vendors cannot argue that they are not liable to their customers for the damage caused by defective goods because it is not in their intention to cause damage or that damage-causing is beyond their awareness. The involvement of tort liabilities provides a wider range of compensation claims by consumers.

Article 13 of the 2015 Civil Code sets out a cornerstone for civil compensation regime, in which those whose civil rights are violated are eligible for compensation for total damage. In line therewith, in section 1, Article 585 of the same Code, we will find the notion of damage compensated in full which means, according to Resolution 02/2022 of the Council of Judges of the People’s Supreme Court (“Resolution 02/2022“), all actual damage that must be compensated[3]. Damages caused to consumers can relate to their assets, health, and life, each of which the laws provide different calculation methods with detailed formulations[4]. However, the relevant wording in the 2015 Civil Code and Resolution 02/2022 on “all actual damage” seem to exclude consequential damage, or also commonly known as indirect damage.

Since no definition of indirect damage is provided in the Vietnamese laws, it may be useful to refer to a classic precedent, i.e.,  the Hadley v Baxendale (1854) Case where the court found that breaches of contract are recoverable if they either “may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself”, or may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it”. As you may see, the former quotation is a general description of direct damage while the latter one is of indirect damage.[5]

Let’s explore a scenario where a consumer buys a shirt from a vendor, having thereby entered into a verbal contract, to speak in law words. The consumer quickly becomes disappointed at the new shirt because its quality is poorer than the one described in the vendor’s advertisement. The consumer thereby requires compensation from the vendor for the shirt, which is worth VND300,000, because the shirt fails to “match the technical standards or norms, quality, quantity, features, usage, pricing or other contents that organizations or individuals trading goods and/or services already declared, posted, advertised or committed” pursuant to section 6 Article 8 of the 2010 Law on Protection Of Consumers’ Rights[6] [7]. But the vendor rejects the consumer’s claim and argues that he is innocent. The consumer then decides to exercise her rights under section 7 Article 8 of the said Law[8], by submitting the dispute to a competent court to have her own interests recognized and vindicated.

In the best-case scenario, after lengthy civil proceedings, the consumer is declared entitled to claim VND300,000 which is the only quantum ramifactus she can prove in court. Such a damage compensation is purely contract-based because she has not suffered any other damages related to her health, asset, or life from that poor-quality shirt, and hence no legal grounds for raising tortious liability, and the court excludes indirect damages.

3. What to expect?

Evidently, VND300,000 can barely cover the lawsuit costs, including the time and resources the consumer has to spend on preparing the litigation dossier, participating in a mediation with the vendor and the judge, transportation, lawyer fees, and other types of sundry expenses, which altogether may be regarded as indirect damage. But, as the laws stand, indirect damage is not accounted as “all actual damage”, such expenses cannot be acknowledged by the court, unless the consumer and the vendor accept by mutual consent, in the contract or elsewhere, that the case-losing party would bear such costs. Rejection of indirect damage may, at least in cases similar to the aforementioned, turn out to be unfair to consumers who very often are the vulnerable party due to lack of proper information[9].

The disadvantage of consumers as opposed to vendors acted as a motivation for adoption of the Law on Protection of Consumers’ Rights, and is still raised as a reason for supporting the new version of the said Law during recent debates at the National Assembly[10]. Supposing the Vietnamese legislators truly acknowledge such weaker legal position of the consumers, they should, in our opinion, also let the consequential damages be borne by vendors in case their contract breach is declared to be the origin of the damage caused to the consumers.

Take the lawyer fees as an example. The prevailing Vietnamese laws generally prescribe that refunding of the case-winning party’s lawyer fees by the case-losing party is only accepted if as per parties’ mutual consent,[11] except otherwise prescribed by law, e.g., in the laws on intellectual property.[12] In both doctrine and practice, Vietnamese scholars and legal practitioners are divided on this lawyer fees topic as well. The judicial practice delivers various yet contradictory opinions in this regard: while the courts insist that lawyer fees must be excluded from compensation claims because the absence of lawyers does not obstruct civil proceedings and therefore lawyer fees are “add-on” expenses in essence[13], arbitration, on the other hand, tends to recognize lawyer fees as a reasonable cost to a certain extent and approve their reimbursement if requested.

We believe that reimbursement of lawyer fees should be extended to consumer protection. As consumers are in a disadvantaged position right from outset as compared to vendors, and particularly to enterprise-vendors, it would be fair to assume that they are in need of legal aid from professional and experienced counsels. Given that professional legal services are relatively high compared to the average income in Vietnam (roughly VND 7,500,000 (~USD 275) per month in 2022)[14], consumers with average or low income would find lawyer fees to be out of reach. They should be relieved of such a burden for the sake of due justice process for everyone.

Back to the Shirt Case, the consumer would be entitled to not only compensation for the value of the defective shirt of VND300,000 but also refunding of the lawyer fees incurred during the court proceedings. As a result, the dishonest vendor will be liable for disbursing much more than VND 300,000 for his defaulting on his responsibility. To a certain extent, such sanctioning would serve as a warning to the other vendors and deter them from such illicit business practices. On the macro level, it encourages transparent and fair consumption, reduces petty dispute cases and reduces the workload of the administrative authorities, inspectorates, and dispute settlement bodies.

Legislators nevertheless should not fully give vendors the same right as consumers in terms of indirect damage as discussed above, and set a limit on which type of indirect damage is claimable by vendors. This may seem unfair from the vendors’ side at first, but if vendors are fully granted such right, it will discourage consumers from seeking indemnity because of their limited resources, and the legislation then fails to redress the asymmetrical legal positions of vendors and consumers. Instead, vendors may claim non-contractual compensation for the consumers’ defamatory statements, and other fees if stated in the sale contract. At the end of the day, it is crucial to balance interests and rights between consumers and vendors, so that protection of consumers’ rights is not at the expense of the vendors’ legitimate rights and interests.

As the main theme of the Vietnamese Consumer Day this year is “Transparent Information – Safe Consumption”, making transparency in the provision of information to consumers the main target,[15] the legislation for protection of consumers’ rights should develop in the way of motivating the vendors to fulfill their statutory obligations and deter any intention of wrongdoings. When writing this article, we do not expect to see a mechanism that enables a consumer to return a newly-bought hat simply because the hat does not match the color of his/her hair[16]; we are just advocating for a set of measures that grant proper protection to e-commerce consumers and be more constructive and efficient than spreading complaints over the media and the web[17].

 

BIBLIOGRAPHY

  1. Legislation
  • Civil Code No. 91/2015/QH13, adopted by the National Assembly on 24 November 2015 (“Civil Code 2015”).
  • Civil Procedure Code No. 92/2015/QH13, adopted by the National Assembly on 25 November 2015 (“Civil Procedure Code 2015”).
  • Law No. 59/2010/QH12 on Protection of Consumers’ Rights, adopted by the National Assembly on 17 November 2010 (“Law on Protection of Consumers’ Rights”).
  • Law No. 50/2005/QH11 on Intellectual Property, adopted by the National Assembly on 29 November 2005, adjusted and amended by Law No. 36/2009/QH1, Law No. 42/2019/QH14, and Law No. 07/2022/QH15, adopted by the National Assembly on 16 September 2009, 14 June 2019, and 16 June 2022, respectively (“Law on Intellectual Property”).
  • Resolution No. 02/2022/NQ-HDTP on Guidelines For Application Of Some Provisions Of The Civil Code On Tort Liability, issued by the Council Of Judges of the Supreme People’s Court on 06 September 2022 (“Resolution 02/2022”).
  1. Journals and articles
  • Marques C, ‘Relations Between International Law and Consumer Law in the Globalized World: Challenges and Prospects’, in Wei D and Marques C (eds), Consumer Law and Socioeconomic Development (Springer International Publishing 2017)
  • Phan Thuong, ‘Đòi bồi hoàn tiền thuê luật sư, được không?’, Phap Luat (Ho Chi Minh City, 29 July 2011) <https://plo.vn/doi-boi-hoan-tien-thue-luat-su-duoc-khong-post85035.html> accessed on 20 March 2023.
  • Pham An, Duc Hoang, and Ha Quang Minh, ‘Bảo vệ người tiêu dùng như thế nào?’ Cong An Nhan Dan (14 October 2022) https://cand.com.vn/Chuyen-de/bao-ve-nguoi-tieu-dung-nhu-the-nao–i670401/ accessed on 20 March 2023.
  • Thao Nguyen, Chien Thang, ‘Quy định những vấn đề mới, đặc thù để bảo vệ vị trí yếu thế của người tiêu dùng’ Quan Doi Nhan Dan (Ha Noi, 25 October 2022) <https://ift.tt/K0ekA78> accessed on 20 March 2023.
  1. Reports and others
  • Hadley v Baxendale (1854) 9 Ex 341 (23 February 1854).
  • General Statistics Office, ‘Infographic social-economic situation 4th quarter and 2022’ (29 December 2022) <https://ift.tt/j1xL0ZS> accessed on 20 March 2023.
  • Vietnam E-commerce and Digital Economy Agency of Ministry of Industry and Trade, ‘Report of E-commerce in Vietnam 2022’ (Publishing House for Industry and Trade 2022).

[1] Vietnam E-commerce and Digital Economy Agency of Ministry of Industry and Trade, ‘Report of E-commerce in Vietnam 2022’ (Publishing House for Industry and Trade 2022).

[2] Article 2 of Resolution 02/2022.

[3] Item (b) section 1 Resolution 02/2022.

[4] Articles 580, 589, and 590 of the 2015 Civil Code.

[5] The recoverable indirect loss should not be too remote as well, but due to the scope of our article, we could not discuss this matter this time.

[6] Please note that, as of the date of our article, a new version of the Law on Protection Of Consumers’ Rights has been under discussion by the National Assembly and expectedly to be adopted soon.

[7]to require compensation if the provided goods or services do not match technical standards or norms, quality, quantity, features, usage, pricing or other contents that organizations or individuals trading goods and/or services already declared, posted, advertised or committed”.

[8] 7. Being entitled to complain, denounce and take a lawsuit or propose social organization to take a lawsuit in order to protect their rights under the provisions of this Law and other provisions of law involved.”

[9] Claudia Lima Marques, ‘Relations Between International Law and Consumer Law in the Globalized World: Challenges and Prospects’, in Dan Wei and Claudia Lima Marques (eds), Consumer Law and Socioeconomic Development (Springer International Publishing 2017).

[10] See Thao Nguyen, Chien Thang, ‘Quy định những vấn đề mới, đặc thù để bảo vệ vị trí yếu thế của người tiêu dùng’  Quan Doi Nhan Dan (Ha Noi, 25 October 2022) <https://ift.tt/K0ekA78> accessed on 20 March 2023.

[11] Article 168, clause 2, 2015 Civil Procedure Code.

[12] Sections 4 and 5 Article 198, of the Intellectual Property Law.

[13] Phan Thuong, ‘Đòi bồi hoàn tiền thuê luật sư, được không?’, Phap Luat (Ho Chi Minh City, 29 July 2011) <https://plo.vn/doi-boi-hoan-tien-thue-luat-su-duoc-khong-post85035.html> accessed on 20 March 2023.

Even though this article was released in 2011, we have not found any precedents discussing reimbursement of lawyer fees other than those in the intellectual property laws aspect, and during our practice of law, we observe that the courts likely have not shifted this perspective.

[14]See General Statistics Office, ‘Infographic social-economic situation 4th quarter and 2022’ (29 December 2022) <https://ift.tt/j1xL0ZS> accessed on 20 March 2023.

[15] Articles 12 and 13 of the Law on Protection of Consumers’ Rights.

[16] Indeed, consumers in Europe may cancel and return goods bought online within 14 days, for any reason and without a justification, but not applied for any type of goods or services. < https://ift.tt/wTGpEbS> accessed on 20 March 2023.

[17] Pham An, Duc Hoang, and Ha Quang Minh, ‘Bảo vệ người tiêu dùng như thế nào?’ Cong An Nhan Dan (14 October 2022) https://cand.com.vn/Chuyen-de/bao-ve-nguoi-tieu-dung-nhu-the-nao–i670401/ accessed on 20 March 2023.

The authors give interesting insights into how the enforcement of laws on protection of consumers’ rights is not so pro-consumer, and why Vietnamese consumers prefer seeking support from media rather than from official settlement bodies.



source https://gvlawyers.com.vn/how-vietnam-compensation-rules-ruin-the-rights-of-consumers-in-e-commerce-transactions/

Legal Newsletter | May 2023

Dear Valued Customers and Partners, GV Lawyers would like to introduce you to Legal Newsletter Issue No. 05 of May 2023 . This newslette...