Dispute Resolution

We have the local knowledge to apply the regulatory, economic, political and cultural context to legal issues and develop case strategies. We work with you to manage potential risk and implement the most effective solutions to reduce costly escalation

Apolat Legal excels in providing services in respect of dispute resolution with the participation of lawyers who have many years of experience in such legal practice area and have engaged in several serious disputes with reference to intellectual property, commercial, labor, real estate, …

The combination of both strategic approach and effective dispute resolution method helps Apolat Legal constantly achieve success in complicated cases. The consulting staff of Apolat Legal, with their professional qualification and high experience in litigation, arbitration and other dispute resolution forms outside of court, have received high trust from our clients and are considered one of the most high-qualified expert team in Vietnam by the community of professional.

We actively pursue all avenues of dispute resolution available and advise clients on choosing the method most appropriate to them and to a particular matter. Our main priority is to resolve disputes quickly and effectively with as little disruption to business as possible – recognition of this is central to how we approach any matter.

KEY CONTACT

Dinh Quang Long

Managing Partner

Pham Thi Thoa

Senior Partner

RELATED ARTICLES

Apolat Legal_Legal retainer service

Business activities of enterprises are always dependent on and regulated by relevant laws. For effective operation, enterprises need to well control legal risks arising from their operations. Large enterprises tend to build a legal team with good lawyers to help them apply for permits, provide legal advice and resolve labour disputes during their operation.

However, not all businesses have the financial resources to build their own legal department. For businesses that do not have their own legal team, legal retainer service of separate law firms will be the smart choice.

Understanding this issue, Apolat Legal offers businesses a comprehensive legal consulting service at a reasonable fee. Each business choosing the legal retainer service of Apolat Legal will be supported by a consistent team during the time of using service. By this way, Apolat Legal can clearly understand the clients and help the clients save time and avoid providing duplicated information. In addition, businesses only have to pay a fixed monthly fee to receive helpful advice from Apolat Legal for all day-to-day legal needs of business.

Legal retainer service of Apolat Legal includes but not limited to the followings works:

  • Answering, consulting on provisions, and policies of law and giving legal solutions for each specific matter according to the Client’s requirements in multiple practice areas such as investment, construction, real estate, bidding, enterprise administration, banking, security, insurance, commerce, labor, sales and other areas relating to the Client’s business operation (excluding financial and tax advice).
  • Examining, reviewing and confirming the legality of documentations which the Client have drafted or implemented in respect of business operation, giving legal advice for such documentations as required by the Client.
  • Supporting the Client in preparation of all documentation for contract negotiations or parleys (if requires).
  • Supporting the Client in drafting documentations relating to business transactions between the Client and any third party.
  • Consulting with the Client about business discussions, negotiations, parleys, claims, disputes or lawsuits with any third party or any competent State agency relating to the Client’s business operation. (Scope of consultancy excludes representing for the Client in implementation of specific matters or of claims at competent State agencies or of litigation procedures at Court or Arbitration).
  • Consulting with the Client about general solutions relating to each specific claim, dispute or lawsuit.
  • In case any Client’s partner needs our legal support, then, as the Client’s request or that of such partner, we shall consider whether providing our legal services for such partner or not; and if we choose providing, we shall be committed to not causing any damage to the Client or any conflict of rights and legal interests between the Client and such partner.
  • Supporting and consulting the Client on drafting the Charter, Internal Working Regulation, regulations relating to enterprise organization, management and administration and other essential documents during Client’s business operation.

By professional services, thoroughness and experiences in various legal fields, Apolat Legal is the trusted partner of all businesses.

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The right to select court in dispute resolution in Vietnam

The determination of Courts’ jurisdiction in resolving contractual disputes in general, civil contracts, business, and commercial contracts disputes, particularly, has an essential role in preparing files for the initiation, accepting the case, resolving disputes, and enforcing the judgment. For selecting the Court to resolve a dispute, firstly, it is necessary to determine whether the Court has the competency to resolve this dispute. If there are grounds to confirm that the dispute falls within the competency of Courts, the territories, court levels, and the plaintiff’s selection shall be considered then. The competency of the Court shall first be determined according to the passage of the plaintiff. In case the plaintiff refuses to perform this right, the jurisdiction of the Court is automatically selected according to the territories and Court levels.

The determination of which Court has competency to resolve disputes between the parties has a significant meaning, direct, and strongly affects the plaintiff’s whole process pursuing the case at the Court. Especially, flexible regulations on the Court’s jurisdiction by the plaintiff’s chose brings a lot of advantages for the plaintiff. In other words, in some circumstances, if the claimant satisfies the conditions as defined by law, he/she might actively constitute advantages such as the right to select the Court according to geographical needs. Regarding civil contracts, business and commercial contracts disputes, pursuant to Clause 3, Article 26, and Clause 1, Article 30 of the Civil Proceedings Code 2015, these disputes fall within the competency of Courts. The plaintiff may choose the courts in situations prescribed in Article 40 of the Civil Proceedings Code 2015, as follows:

(i) Firstly, where the place of residence, workplace of the defendant who is an individual, the head office of the defendant that is an organization is unclear, the plaintiff may submit the petition to the Court where the place of residence, workplace, or last known head office of the defendant is located or where the property of the defendant is situated. The last known address in this situation may be based on the residential address, temporary address, the police station’s address managing the area for individuals, the latest head office’s address announced on the National Business Registration Portal for organizations.

(ii) Secondly, where a dispute arises from the operations of a branch of an organization, the plaintiff may submit the petition to the Court where the organization’s head office or the branch is located. For instance, regarding disputes arising from civil contracts, business, and commercial contracts which are directly signed by the branch or by the organization to serve the branch’s business activities, the claimant has the right to file the case to the Court in the place where the head office is located or where the branch operates.

(iii) Thirdly, where the defendant has no place of residence, workplace, or the defendant is an organization without a head office in Vietnam, the plaintiff may file the lawsuit to the Court where his/her place of residence, workplace, or head office is located.

(iv) Fourthly, where the dispute arises from the contractual relationship, the plaintiff may submit the petition to the Court in the location where the contract is performed. Currently, the laws do not define or limit the scope of the concept “the place where the contract is performed.” Therefore, “the place where the contract is performed” means one, several, or all locations mentioned in the contract, the place where the parties perform entirely or part of the agreement, and there is no basis to determine one area or more. In fact, “the place where the contract is performed” may be defined as the actual places where the parties perform their committed rights and obligations. According to this interpretation, if the contract is performed in different places, the plaintiff may consider selecting the Court at the place where the transaction is largely performed and convenient for proving the petition for legal action.

(v) Lastly, where the defendants are individuals having residencies, workplaces, or the defendants are organizations with head offices in different localities, the plaintiff may file the lawsuit to the Court in the place where one of the defendants’ residence, workplace, or head office is located.

Despite of the regulations on the right of plaintiff to select the Court to hear the dispute, the rules on determining the Court by administrative levels (district or province) still apply and as regulated in Article 35, Article 37 of the Civil Proceedings Code 2015. This is the final step to figuring out precisely a court having competency to resolve the dispute. 

Based on the above analysis, the mutual agreement to select the Court in advance to resolve a dispute in the contract is only useful in case satisfies the following conditions: (i) the chosen Court is in the place where the plaintiff’ residence or head office , (ii) complying with the competency of Courts by administrative levels as regulated in Article 35, Article 37 of the Civil Proceedings Code 2015. 

 

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Legal issues to address when negotiating exclusive agency contracts

In the context of commercial activities are not merely direct sales or providing services as currently, the demand of establishing and expanding distribution systems, supply chains is increasingly getting the attention of business entities in many forms: establishing branches/locations of business, franchising, opening commercial agencies… In particular, the agency model is often prioritized due to cost-effective, advantages on time management, limited risks, and the possibility of quick expansion of the consumption of the goods, supplement service market.

In the process of providing consultancy services, reviewing agency contracts, especially exclusive agency contracts, Apolat Legal finds (realizes) that business entities often ignore small problems, however it  have a significant impact on the performance of contracts. With the context of this article, Apolat Legal points out some main legal issues that the parties need to be aware of when negotiating as well as drafting an exclusive agency contract under Vietnamese law to eliminate high-risks throughout the life of the contract.

1| The territorial range to be exclusive

As regulated in the Vietnam Commercial Law 2005, commercial agency activity means the activity whereby the principal and the agent agree that the agent, by its own name, sells/purchases goods or provides services of the principal to customers for remuneration[1]. Accordingly, the exclusive agency is a form of commercial agency whereby a sole agent is authorized by the principal to sell or purchase one or many items of goods or to provide one or many types of services within a given geographical area[2].

Therefore, the exclusive characteristic of the exclusive commercial agency can be represented and bound to the following factors:

  • The number of agents: Only one agent can obtain exclusive right in a territorial range that has been unified by the parties.
  • Exclusive territorial coverage: Exclusive territorial range can be a district, a province, an inter-province, an area, a country or even many countries, depending on the capacity of the parties.
  • Monopoly on the type of goods and services: The principals can distribute exclusively one/some or all of the products that they manufacture/are entitled to distribute.

Therefore, dependent on trading strategies of the parties, the principal and the agent should   define clearly the scope of exclusive agreement concerning the territory and the kind of products can be distributed under the exclusive agency contract to exploit the potential of the market, as well as minimize risks. This issue is especially worth paying attention by principals, as to the extent agreed in the exclusive contract; they are only allowed to provide their goods/services for a sole agent. Therefore, the favourable or unfavourable of their business in the agreed scope is entirely dependent on the agent.

Here is a typical example on the exclusive scope mentioned above: Company X (the principal) and company Y (the agent) signed the exclusive agency contract in which Company Y will distribute the whole type of products that company X trading in the region of southeast of Vietnam (including Ho Chi Minh City, Ba Ria – Vung Tau Province, Binh Duong province, Dong Nai province, Binh Phuoc Province). Thus, under this agreement, the company X is only allowed to offer its products to Company Y, the delivering products to any other third party or even selling the products by Company X itself in the southeast region shall be considered as breaching the exclusive agency contract and infringe Company Y’s interests. However, in contrast, when Company X only allows Company Y to distribute exclusively the X1 product in the above-mentioned territory of the southeast region, then Company X still have full power to exploit other product lines without affecting the interests of Company Y.

Notwithstanding, principal also needs to clarify where it is specified by law that an agent shall be allowed to enter into an agency contract with a principal for a certain type of goods or service, such provision of law must be complied with[3].

2| The price of goods/services

As regulated by the law, agency remuneration shall be paid to agents in the form of commission or price margin unless the parties otherwise agree[4].

On the principals’ aspect, they always hope their agent to sell as many products as possible because they are also beneficial after all, therefore, the principals do not interfere with the price of the goods/services that the agent sells/provides to consumers. Nonetheless, there are some instances, but rarely, where principals will set the limit on the selling price of the product through making standard price, or the retail price specified to create a consistent image and product value.

On the agents’ aspect, originated from the “exclusive rights” in distributing products within a given territorial scope, they wish to sell products at the highest possible price to profit. Consequently, the agents should also clarify whether the agency contract is binding on the cost of the product or not to have appropriately negotiating options.

3| The condition on the minimum amount for ordering goods and supplying services

Normally, along with the benefit of being exclusive to sale of goods/supply services within specific territory, the agent will also bear an absolute pressure on the revenue of selling products or providing services. Namely, the principal binds the agent to the obligation of ordering a certain number of goods or supply services or achieve minimum sales criteria. These rules are often seen as the fundamental condition that the principals set to the agents when signing an exclusive agency contract. If this condition is not achieved, depending on the severe of breaches, the agent may not be entitled for remuneration, reward or discount or even terminated the contract.

On the other hand, the agent that they aim to sell as many products as possible to be able to gain more profits, can both enjoy the discount and remuneration from the principal without violating the contract. Therefore, in the process of negotiation and signing of the exclusive agency contract, the parties should pay close attention to this issue to balance the best interests between the parties because this is one of the main reasons for the dispute of exclusive agency contracts.

In addition to the above issues, the principal and the agent should also pay attention to the clauses of the delivery, payment term, return policy, duration of the agency during the process of negotiating exclusive agency agreement. Besides, if the principal is foreign traders, the Parties also need to refer to the list of imported goods, obligations, export and import procedures from Article 50 to Article 53 Decree 69/2018/ND-CP and the general provisions of commercial agency in current commercial law.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.

 

[1] Article 166 Commercial Law 2005

[2] Article 169 Commercial Law 2005

[3] Clause 7 Article 175 Commercial Law 2005

[4] Clause 1 Article 171 Commercial Law 2005

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Le Linh V. Phan Thi Co., Ltd: A Review Under The Law On Intellectual Property 2005

In the late of 2018, the dispute on the copyright related to the drawings of the four main characters named Ti, Suu, Dan and Meo in the comic series called “Than Dong Dat Viet” between Mr. Le Linh and Phan Thi Co., Ltd was officially heard at the first-instance court. According to the judgement, the trial panel recognized Mr. Linh (the plaintiff) is the sole artist of the characters and compelled Phan Thi Co., Ltd (the defender) to make a public apology as well as pay the attorney fee for the plaintiff. The decision of the first-instance panel has been remained by the appeal panel.

As the news said, both panels have accepted the request of the plaintiff due to two following arguments:

  1. Linh is the sole artist of the four main characters because he directly drew these ones on paper, the ideas of Ms. Hanh, the director of the Phan Thi Co., Ltd, was not protected as copyright.
  1. Although the panels recognized that Mr. Linh was being an employee of the Phan Thi Co. Ltd at the time he drew the characters and this company had the right to make derivative works on the basis of the labor relation, the company and Ms. Hanh violated one of the moral rights of Mr. Linh because of modifying and editing the original works of Mr. Linh.

Who is the artist?

Firstly, the key explanation for the argument number 1 of the panels is the qualifying condition of a work to be protected, which states that a work will be granted a protection at the time it is expressed under a specific material form[1]. In other words, the IP law protects the expression of an idea rather than the idea itself. So, with the interpretation that artist is the person who directly forms the work[2], the conclusion stating that Mr. Linh is the sole artist is reasonable because, based on the evidence and the testimony of both sides, the drawings of the 04 main characters were made and completed by him.

Assuming that Ms. Hanh is a co-artist, then she must be proven that she fulfills the conditions to be recognized as a co-artist as prescribed by the law, which means Ms. Hanh must have evidently co-operated with Mr. Linh to draw the characters[3]. As the matter of fact, the evidence shows that Ms. Hanh only raises her ideas and opinions to Mr. Linh to perform the work, thus, she cannot be considered as the artist or the co-artist of the work under the prevailing regulation[4].

Should an idea be granted copyright protection? 

In common sense, “an idea” is intangible and subjective, and it sounds irrational to publicly protect a subject which is unable to be consistently described or expressed its appearance. Obviously, any person may have an idea about, for example “a beautiful girl”, but when it comes to the matter of drawing such idea on a paper, the appearance of the girl drew by a person may not be the same with that of the other. So, here is the problem, if an idea is protected, which “a beautiful girl” idea shall be granted the protection.

In the scope of international law, the Berne Convention defines that ““literary and artistic works” shall include every production in … whatever may be the mode or form of its expression…[5]. As it may be seen, the Convention clearly states that a work should be expressed in a mode or formed to be protected. Additionally, the IP law of several foreign countries such as United States[6], United Kingdom[7], Australia[8], … prescribes that a work shall only be granted copyrights if it is expressed in a material form.

Who is the owner of the copyrights?

Pursuant to the law on intellectual properties, “artist” and “the copyright owner” are two separate term because the owner of the copyrights, in addition to the artist, may be the organization who assign the artist to create the work (the relation between the artist and the organization is the labor relation).[9] Therefore, due to the fact that there was a labor contract between Mr. Linh and Phan Thi Co., Ltd and this company assigned Mr. Linh to draw the characters for the comic series, Phan Thi Co., Ltd is also recognized as an owner of the copyrights to the characters, in addition to Mr. Linh, which results in the right of the company to make derivative works from the original ones of Mr. Linh[10]. This explains why the judgements of the panels determine Mr. Linh is “the sole artist” rather than “the sole owner of the copyrights.

However, based on the set of evidence provided by the plaintiff and defender, the panels realized that the derivative works of Phan Thi Co., Ltd violated the integrity of the original appearances of Ti, Suu, Dan, Meo[11] because there are differences in the charisma, the drawn strokes and other angels of the characters between the originals and the derivative works. Hence, the panels have compelled Phan Thi Co., Ltd not to produce derivative works. In practice, it is difficult to determine whether or not an original is violated its integrity to the level that the honor and reputation of the artist is harm, because no benchmark is provided for such determination. The best way to choose where there is a dispute is to empower a specialized agency such as Copyright Office to examine and decide whether or not a derivative work violates the integrity of its original, and such decision shall be a legal basis for the final judgement of the Court.

In conclusion, in the case Le Linh v. Phan Thi Co., Ltd. the arguments and the judgements of the first-instance and appeal panel are in compliance with the prevailing regulations on intellectual properties. Besides, it is essential for Vietnamese creators to take the application for the recognition of the copyright into a serious consideration at the time the work is formed.

 

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.

 

[1] Clause 1 Article 6, Law on Intellectual Properties 2005.

[2] Clause 1 Article 6, Decree No. 22/2018/ND-CP.

[3] Clause 2 Article 6, Decree No. 22/2018/ND-CP.

[4] Clause 3 Article 6, Decree No. 22/2018/ND-CP.

[5] Article 1.1 of the Berne Convention.

[6] Article 102 Copyright Act of United States.

[7] Article 4(2)(a) Patents, Designs and Copyrights Act.

[8] Australian Copyright Council, “An Introduction to Copyright in Australia”

[9] Article 13 Clause 1 and Article 39 Clause 1, Law on Intellectual Properties 2005.

[10] Article 30 Clause 1 and Article 20 Clause 1, Law on Intellectual Properties 2005.

[11] Article 19 Clause 4, Law on Intellectual Properties 2005.

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