Resolution of deposit contract disputes.

Nowadays, alongside explosive economic development, civil and commercial transactions occur on a daily basis between individuals and organizations both domestically and internationally. However, to ensure that such transactions proceed smoothly, as desired, and to bind the parties’ responsibilities in concluding and performing civil and commercial contracts, the parties often execute deposit contracts in accordance with the law.

BKC Law will analyze and guide our valued clients on resolving disputes arising from deposit contracts through the following article:

1. Legal Grounds for Resolving Disputes over Deposit Contracts

• Civil Code 2015
• Civil Procedure Code 2015
• Commercial Arbitration Law 2010

2. What is a Deposit Contract Dispute?

Pursuant to Articles 328 and 385 of the Civil Code 2015, a deposit contract is defined as follows: “A deposit is the act whereby one party (the depositor) delivers to the other party (the depositee) a sum of money, precious metals, gemstones, or other valuable objects for a certain period to secure the conclusion or performance of a contract.”

Accordingly, a deposit contract dispute refers to conflicts or disagreements over rights and interests among the involved parties concerning the contents of the deposit contract. Such disputes typically revolve around issues such as the validity of the deposit contract, performance of the deposit contract, time limit for performance, and deposit forfeiture/penalty.

3. Common Types of Deposit Contract Disputes in Ho Chi Minh City

• Disputes over deposit contracts for the sale and purchase of goods.
• Disputes over deposit contracts for the sale, transfer of land use rights and assets attached to land.
• Disputes over the legal validity of deposit contracts.
• Disputes over the performance of rights and obligations of the parties under the deposit contract.
• Disputes over the time limit for performance of the contract.
• Disputes over the deposit penalty amount and forfeiture sum under the deposit contract.
• Disputes over deposit contracts for house purchases.

4. Statute of Limitations for Initiating a Lawsuit to Resolve Deposit Contract Disputes

Pursuant to Article 429 of the Civil Code 2015, the statute of limitations for resolving deposit contract disputes is 03 years from the date the entitled person knew or should have known that his/her lawful rights and interests were infringed.

5. Methods for Resolving Deposit Contract Disputes in Ho Chi Minh City

a. Negotiation between the Parties

This is a traditional method for resolving commercial disputes directly between the parties, based on voluntary negotiation to eliminate conflicts of interest without the involvement of any third-party judgment or decision.

This method is the initial and simplest step for parties to resolve disputes. It offers maximum benefits by minimizing resolution costs, preserving business relationships, and avoiding any binding obligations from third parties.

However, the outcome of negotiation depends entirely on the parties’ agreement, and enforcement relies on their voluntary compliance without any compulsory execution by a third party or competent state authority.

b. Mediation in Deposit Contract Disputes

• Mediation at Court:

Mediation as a basis for resolving deposit contract disputes at court will be conducted when one of the parties files a lawsuit petition with the competent court and requests the court to perform conciliation procedures prior to accepting the case file. The disputing parties will proceed with mediation, negotiation, and agreement under the direction of a mediator. The sequence and procedures for mediation shall comply with the provisions of the Law on Grassroots Mediation.

• Mediation at Commercial Arbitration:

Pursuant to Clause 1, Article 3 of Decree 22/2017/ND-CP, commercial mediation is specifically defined as follows: “Commercial mediation is a method of resolving commercial disputes agreed upon by the parties, with the assistance of a commercial mediator acting as an intermediary to support dispute resolution in accordance with this Decree.”

Thus, mediation of deposit contract disputes is a method of dispute resolution in which the parties agree to select an agency, organization, or individual to act as an intermediary mediator.

c. Resolution of Deposit Contract Disputes by Commercial Arbitration

• Deposit contract disputes resolved by commercial arbitration;

Pursuant to Clause 1, Article 3 of the Commercial Arbitration Law 2010, commercial arbitration is specifically defined as: “Commercial arbitration is a method of dispute resolution agreed upon by the parties and conducted in accordance with this Law.”

Pursuant to the above, only deposit contract disputes arising in commercial activities between the parties, or where one of the disputing parties engages in commercial activities, may be agreed to be resolved by commercial arbitration.

The procedures and processes for commercial arbitration are agreed upon by the disputing parties and conducted pursuant to the Commercial Arbitration Law 2010. Resolution of deposit contract disputes by commercial arbitration is not required to follow the civil procedure rules under the Civil Procedure Code 2015.

• Regarding organization, management, and establishment of commercial arbitration:

This is an institutionalized form of arbitration established with ongoing management, operated regularly by experienced arbitrators to resolve commercial disputes.

It is a non-governmental organization independent of the state system, possessing legal personality, its own charter and seal, operating autonomously, and maintaining a fixed list of arbitrators.

• Forms of Commercial Arbitration in Vietnam:

Pursuant to the Commercial Arbitration Law 2010, there are two forms of dispute resolution: institutional arbitration (also known as permanent arbitration) and ad hoc arbitration.

Arbitral awards in commercial arbitration are final and binding on the disputing parties.

d. Resolution of Deposit Contract Disputes by the Court

In cases where negotiation and mediation fail or the parties do not choose negotiation or mediation, they may directly request the Court to resolve the deposit contract dispute.

Regarding the Court’s jurisdiction over commercial disputes:

Pursuant to Article 26 of the Civil Procedure Code 2015, civil disputes under the Court’s jurisdiction include disputes over civil transactions and civil contracts. Accordingly, deposit contract disputes fall under the Court’s jurisdiction.

• Jurisdiction by Court level:

The District People’s Court has first-instance jurisdiction over deposit contract dispute cases as prescribed in Clauses 1, 2, and 3, Article 35 of the Civil Procedure Code 2015.

The Provincial People’s Court has jurisdiction over deposit contract dispute cases as prescribed in Article 37 of the Civil Procedure Code 2015.

• Territorial jurisdiction:

Pursuant to Point a, Clause 1, Article 35 of the Civil Procedure Code 2015: The Court at the place of residence or work of the defendant (if an individual) or the place of the defendant’s head office (if an agency or organization) has jurisdiction to resolve first-instance cases concerning deposit contracts.

In addition, the parties may agree to request the Court at the plaintiff’s place of residence to resolve the case.

6. Procedures and Steps for BKC Law’s Deposit Contract Dispute Resolution Services in Ho Chi Minh City

After receiving the case details and requests from our valued clients, BKC Law will proceed with the following steps to resolve the matter:

Step 1: BKC Law receives the client’s case details, studies them, and provides advice on relevant legal provisions, while resolving any concerns. At the same time, we propose resolution options for the client to select and decide.

Step 2: If the client agrees to engage BKC Law’s services, BKC Law will execute a legal service contract with the client to proceed with case resolution.

Step 3: Assist the client in pre-litigation procedures or in collecting documents and evidence, supplementing and completing the file prior to filing the lawsuit.

Step 4: Guide and assist the client in drafting petitions, complaints, or lawsuit files to submit to the competent authority.

Step 5: Represent the client in working with committees, Courts, or competent state authorities to resolve the matter and protect the client’s rights and interests.

*Note: The duration for resolving deposit contract disputes will depend on the complexity of each case. However, for deposit contract disputes resolved at Court, the litigation period from filing the lawsuit to completion of first-instance resolution is typically from 04 to 06 months as prescribed by the Civil Procedure Code 2015.

The above is BKC Law Firm’s article on the resolution of deposit contract disputes in Ho Chi Minh City and common types of real estate (land-related) disputes currently occurring. Any inquiries or requests from clients will be received and addressed through our Company’s hotline.