On 8 April 2020, the Government of Vietnam issued Decree 44/2020/ND-CP regulating judicial enforcement proceedings in respect of criminal judgment debtors being Vietnam-domiciled corporate entities (Decree 44), effective 1 June 2020.
Of particular note is a statutory restriction under Article 21 of Decree 44 in a circumstance where a criminal judgment debtor being a company (Judgment Debtor) fails to discharge its payment obligations under a criminal judgment (Criminal Judgment), a relevant Vietnam enforcement agency (Enforcement Agency) would be entitled to attach and enforce the secured assets of the Judgment Debtor which have been duly mortgaged or pledged to a secured party pursuant to the terms of a valid and enforceable security agreement, provided that (1) the Judgment Debtor does not own any other assets or owns other assets that are not sufficient for the discharge of its payment obligations under the Criminal Judgment; and (2) the value of secured assets is greater than the aggregate of the value of secured obligations of the Judgment Debtor to the secured party and the cost of enforcement. The Enforcement Agency is required to serve an attachment notice on the secured party at least 2 days prior to the time for exercise of the attachment.
In our view, this new Vietnam legal authority has left a lot to be desired as it will have a far-reaching interference with existing Vietnam regulations on secured transactions in respect of the priority rules.
Hoang Le Hang
Business Development Manager
Tel: +84 24 3971 0888