GUIDING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LAW ON BANKRUPTCY

This Resolution provides guidelines for implementing Article 8, Clause 14 Article 9, Article 70 and Article 104 of the Law on bankruptcy.

1. Overseas assets refer to assets defined in regulations of the Civil Code and located outside the territory of the Socialist Republic of Vietnam at the time when the petition for initiation of bankruptcy proceedings is entertained by the Court.

2. Overseas entities involved in bankruptcy proceedings consist of:

a) Individuals who are not present in Vietnam at the time the petition for initiation of bankruptcy proceedings is entertained by the Court;

b) Legal entities that do not have head offices, branches, representative offices or representatives as referred to by the laws in Vietnam at the time the petition for initiation of bankruptcy proceedings is entertained by the Court.

1. Complicated bankruptcy cases includes bankruptcy cases other than those mentioned in Points a, b, c Clause 1 Article 8 of the Law on bankruptcy, and cases where an enterprise or co-operative requested to initiate bankruptcy proceedings:

a) has at least 300 (three hundred) employees, or has at least VND 100,000,000,000 (one hundred billion dongs) of charter capital of;

b) is a credit institution, or a business or co-operative providing public utility products and services, or a business servicing national defense and security defined in laws;

c) is a state corporation, general company or a foreign-invested business;

d) has debts guaranteed by the Government or gets involved in the implementation of international treaties to which the Socialist Republic of Vietnam is a signatory, or written agreements on investment with foreign agencies or organizations;

dd) has a transaction subject to any claim for being declared invalid as referred to in Article 59 of the Law on bankruptcy.

2. Provincial people’s court may, at its discretion or upon the request of a district or higher-level people’s court, handle any of the complicated bankruptcy cases as regulated in Clause 1 of this Article for settlement.

3. Upon the receipt of a petition for initiation of bankruptcy proceedings for any of the cases regulated in Clause 1 of this Article, the district people’s court shall, based on regulations in Point c Clause 1 Article 32 of the Law on bankruptcy, send a written request, enclosed with the petition for initiation of bankruptcy proceedings and relevant documents and evidences, to the provincial people’s court having jurisdiction for consideration, and give written notices thereof to the petitioner for initiation of bankruptcy proceedings and the people’s procuracy of same level.

4. In case a petition for initiation of bankruptcy proceedings has been entertained by a district people's court within its jurisdiction but there is any change in residence or address of an involved entity or any new fact occurs while handling a bankruptcy case, which makes that case become one of the cases covered by Clause 1 Article 8 of the Law on bankruptcy and regulated in Clause 1 of this Article, the district people's court still remains competence to handle that bankruptcy case.

1. In course of settling bankruptcy cases, judges must consider applying precedents recognized by the Council of Justices of the Supreme People’s Court as regulated in the Resolution No. 03/2015/NQ-HDTP dated October 28, 2015 by the Council of Justices of the Supreme People’s Court on process for selecting, publishing and adopting precedents to similar bankruptcy cases.

2. Judges may refer to the Court’s bankruptcy decision, which has been already in force, or case precedents which are analogous to the case currently being handled, in order to ensure the consistent application of laws to the handling of bankruptcy cases.

1. During the handling of a petition for initiation of bankruptcy proceedings, any entity having eligibility and liability for filing a petition for the initiation of bankruptcy proceedings as prescribed in Article 5 of the Law on bankruptcy, the asset management officer, or the enterprise providing asset management and liquidation services, can request the People’s Court competent to handle that bankruptcy case to make a decision on imposition of one or a number of interim injunctive relief mentioned in Clause 1 Article 70 of the Law on bankruptcy to preserve the assets of the insolvent enterprise or co-operative, and ensure the legitimate rights and interests of the employees as well as ensure the handling of that bankruptcy case.

In emergency case, interim injunctive relief may be adopted at the same time a petition for initiation of bankruptcy proceedings is filed in order to prevent any serious consequences.

2. The following interim injunctive relief may be imposed as:

a) Decisions on granting permission to sell perishable goods, nearly-expired goods, goods unlikely to be consumed unless sold at the right time such as fresh foods, foods which are easily decomposed or hardly preserved; combustible, and explosive goods (such as petroleum, oil, liquefied petroleum gas and other combustible, and explosive substances); medicines, veterinary drugs and pesticides whose useful life remains less than 60 days; processed foods and other goods whose useful life remain less than 30 days; seasonal goods (such as seasonal consumable goods or goods served in public holidays or new year's festivals), luxury electronic products (computers, smart phones) and other goods and/or articles which shall be damaged, hardly be bought or whose useful life expires if they are not handled in a timely manner;

b) Decisions on granting permission for harvesting and selling farm products or other goods/ products in case farm products are at harvest time or other goods/products are hardly preserved for a long term;

c) Assets of an enterprise/co-operative shall be distrained if there are grounds that assets may be hided, destroyed or lost, or deteriorated.  In case distrained assets must preserve the status quo and kept in a sufficient and secret way, the distrainment and sealing must be executed at the same time.

Distraining and sealing-up assets must be documented and distrained and sealed assets shall be managed by the entity that is requested to initiate bankruptcy proceedings, or asset management officer, or asset management enterprise, or the person who has the legal right to own and use such assets, or those in the custody of a competent civil judgment enforcement agency (if such assets are kept at a competent civil judgment enforcement agency) until a court’s decision is made;

d) Decision on blockage of bank accounts of an entity is made when that entity has accounts opened at banks, state treasuries and/or other credit institutions;

dd) Decision on blockage of assets kept by a custodian is made in case an entity's assets are being maintained by another entity;

e) Decision on sealing of store and/or fund, seizure and management of accounting books and relevant documents is made in cases where the store and/or fund, keeping and management of accounting books and relevant documents must be kept unchanged;

g) Decision on prohibition against transfer of rights over assets of an insolvent entity is made if there are grounds that rights over such assets will be transferred.

h) Decision on prohibition from change in current conditions of assets of an insolvent entity is made if there are grounds that the disassembling, assembling or other acts are executed to make change in current conditions of such assets resulting in deterioration of assets;

i) Decision on prohibiting other relevant entities from performing certain acts or forcing them to do certain acts is made when there are grounds that their acts may cause influence on the bankruptcy case and/or legitimate rights and interests of involved entities;  

k) Decision on compelling the employer to advance the salaries, wages, compensation, and occupational accident or disease benefits to the employees is made in necessary case to protect legitimate rights and interests of the employees with respect to their salaries, wages, compensation, and occupational accident or disease benefits as referred to by laws on labour, and occupational safety and hygiene;

l) Decision on imposition of other interim injunctive relief as referred to by laws is made if such measures are referred to by laws other than regulations in Points a, b, c, d, dd, e, g and h Clause 1 Article 70 of the Law on bankruptcy.  

3. Procedures for imposition, change, cancellation or implementation of interim injunctive relief; effect of decisions on imposition, change, cancellation or implementation of interim injunctive relief; complaints and handling of complaints about decisions on interim injunctive relief shall be governed by laws on bankruptcy, civil procedures and civil judgment enforcement.  

4. The court shall make a decision on cancelation of interim injunctive relief in the following cases:

a) The grounds for imposition of interim injunctive relief are invalid;

b) The court makes a decision on refusal to initiate bankruptcy proceedings;

c) The court makes a decision on suspension of bankruptcy proceedings;

d) The court makes a decision on suspension of procedures for resumption of business activities as referred to in Point a Clause 1 Article 95 of the Law on bankruptcy;

dd) The cancelation is made at the request of the requester for imposition of interim injunctive relief;

e) A decision on imposition of interim injunctive relief is made inconsistently with the laws.

5. Responsibility for improper imposition of interim injunctive relief:

a) The person requesting the court to employ interim injunctive relief shall assume responsibility under the law for his/her request. If the improper imposition of interim injunctive relief causes damage to the entity who is liable to such measures or the third party, the requester for such interim injunctive relief must make compensation as referred to by the civil laws;

b) The court that improperly imposes interim injunctive relief and causes damage to the entity being liable to such measures or the third party must make compensation as referred to in Clause 2 and Clause 3 Article 113 of the Civil Code;

c) Entities committing violations against the law during the imposition of interim injunctive relief shall be handled as referred to in Article 129 of the Law on bankruptcy.

1. Within 30 days from the day on which the asset management officer or the asset management enterprise makes a complete lists of creditors and debtors and the inventory of assets of a credit institution, the judge (or a group of judges) must perform the following acts before a decision is made to declare a credit institution bankrupt:

a) Verify the lists of creditors and debtors and the inventory of assets of that credit institution to ensure that they are properly prepared as referred to in Articles 64, 65, 67 and 68 of the Law on bankruptcy;

b) Verify the repayment of special loans which that credit institution has received from the State Bank of Vietnam or other credit institutions as referred to by the Law on credit institutions.

2. A decision to declare a credit institution bankrupt must include contents referred to in Article 108 of the Law on bankruptcy and decision on the repayment of special loans to the State Bank of Vietnam or other credit institutions (if any).

3. Within 10 working days from the date on which a decision to declare a credit institution bankrupt is made, this decision must be sent to the State Bank of Vietnam and its branch in province or city where that credit institution’s head office is located. At the same time the sending an announcement of decision on declaration of bankruptcy must be carried out as referred to in Article 109 of the Law on bankruptcy.

1. This resolution has been approved by the Council of Justice of the Supreme People’s Court on August 01, 2016, and shall take effect as of September 16, 2016.

2. Petitions for initiation of bankruptcy proceedings which have been entertained by the Court before the effective date of this resolution but are still pending shall be governed by this resolution.

This resolution shall not be used as the basis for making appeals against decisions to declare enterprise/co-operatives bankrupt that took effect before the effective date of this resolution.