Resolving Credit Agreement Disputes

12 February, 2026 8 Views

Credit Contract Disputes are a common issue in the financial sector, arising from disagreements between the lender (banks or credit institutions) and the borrower (individuals or enterprises) regarding the performance of contractual terms. These disputes may stem from breaches of payment obligations, differing interpretations of contractual provisions, or external factors such as changes in legal policies or economic conditions. Resolving credit contract disputes not only protects the legitimate rights and interests of the parties but also contributes to maintaining transparency and stability within the financial system.

Legal Provisions on Credit Contracts

Definition of a Credit Contract

A credit contract is a written agreement between the lender (a credit institution) and the borrower, whereby the lender transfers ownership of a specified sum of money to the borrower for a determined term and purpose, on the principle of full repayment of both principal and interest.

What Constitutes a Credit Contract Dispute?

A credit contract dispute refers to disagreements or conflicts arising during the performance of a credit contract between the lender (bank or credit institution) and the borrower (individual or enterprise). These issues may relate to non-compliance with payment obligations, inconsistent interpretations of contractual terms, or changes in economic or legal conditions.

Common Causes of Credit Contract Disputes

Breach of Payment Obligations by the Borrower

This is the most frequent cause of credit disputes. The borrower fails to repay on time or in full as committed, prompting the lender to take measures such as loan recovery or enforcement against secured assets.

Unclear or Insufficient Contractual Provisions

Some credit contracts are drafted in general terms, lacking specific regulations on the rights and obligations of the parties, handling of breaches, or force majeure events. This often leads to differing interpretations and conflicts during implementation.

Changes in Economic Conditions or Legal Policies

Inflation, economic downturns, or market fluctuations may cause difficulties for the borrower in fulfilling obligations. Changes in laws or financial policies—such as interest rate adjustments or regulations on collateral enforcement—may also create conflicts of interest between the parties.

Enforcement of Secured Assets

Disputes frequently arise when the borrower fails to perform as agreed, compelling the lender to enforce against collateral. Conflicts may occur regarding asset valuation, enforcement methods, or distribution of proceeds after enforcement.

Classification of Credit Contract Disputes

Disputes Concerning Credit Terms

– Ambiguous provisions: Contractual clauses with vague content leading to differing interpretations between the parties (e.g., application timing of preferential interest rates, methods for calculating penalty interest).
– Amendment or supplementation of terms: One party seeks to modify contractual provisions without prior agreement.
– Breach of contractual conditions: The borrower fails to meet requirements regarding collateral, cash flow for repayment, or proper use of loan proceeds.

Disputes Concerning Secured Assets in Credit Transactions

Current law provides for several security measures to ensure performance of obligations, including pledge, mortgage, deposit, guarantee, and unsecured credit (also referred to as security contracts).

In addition, Article 295 of the Civil Code 2015 sets forth the conditions for secured assets as follows:

The secured asset must belong to the securing party, except in cases of retention of property or retention of title.
The secured asset may be described in general terms but must be identifiable.
The secured asset may be existing property or property to be formed in the future.
The value of the secured asset may be greater than, equal to, or less than the value of the secured obligation.

Common disputes related to secured assets include:

The secured asset no longer exists in reality;
The value of the secured asset is insufficient to satisfy the secured obligation;
A single asset is used to secure multiple obligations, resulting in disputes among secured creditors;
The secured asset is not legally owned or used by the securing party, etc.

Principles for Resolving Credit Contract Disputes

The fundamental principle for resolving credit contract disputes is the agreement of the parties within the framework of current law.

First, the principle of respecting the parties’ will: Since the contract is established on the basis of voluntary agreement, dispute resolution should prioritize respect for the parties’ intentions and autonomy. Even when the dispute is brought before the Court, the parties are encouraged to mediate and reach an agreement before proceeding with formal legal steps.

Second, the principle of equality: All individuals and organizations are equal before the law; therefore, resolution of credit contract disputes must ensure fairness for both parties. In contractual relationships, the rights of one party are typically the obligations of the other, and vice versa; thus, the parties must be treated equitably to protect their legitimate interests.

Third, the principle of compliance with the law: Credit contracts are formed on the basis of law; consequently, dispute resolution must strictly adhere to current legal provisions. This is a key factor ensuring transparency and legality throughout the process.

Methods for Resolving Credit Contract Disputes

Negotiation

Negotiation is the preferred initial method due to its speed, cost-effectiveness, and preservation of business relationships. Through direct discussions, the parties can reach a mutually acceptable agreement without third-party intervention.

Mediation

Mediation involves an independent third party assisting the parties in seeking a harmonious resolution. This method offers flexibility, low cost, and reduces legal pressure on both sides.

Commercial Arbitration

Arbitration is considered an effective solution for complex credit disputes, especially those involving international elements. Its advantages include high confidentiality, expeditious resolution, and binding arbitral awards.

Litigation at Court

When other methods prove ineffective, litigation at court serves as the final recourse. Court proceedings are often complex and time-consuming but provide strong enforceability. This is a common choice for large disputes or those involving collateral enforcement.

Procedures for Resolving Credit Contract Disputes at Court

**Step 1:** Filing the lawsuit petition and payment of the court fee advance (pursuant to Resolution 326/2016/UBTVQH14);

**Step 2:** Upon receipt of the court fee advance receipt, the Court issues a notice of case acceptance;

**Step 3:** The Court conducts necessary procedures to bring the case to trial:
– Preparation of the case file;
– Determination of the parties’ status;
– Clarification of facts related to the case;
– Organization of sessions for inspection of submission, access, disclosure of evidence, and mediation.

The Court proceeds to trial:
– First-instance trial: Initial adjudication of the entire credit contract dispute;
– Appellate trial: The appellate court directly re-adjudicates the case where the first-instance judgment or decision has not yet taken legal effect, based on appeals or protests.

Support Services for Consultation and Resolution of Credit Contract Disputes at BKC Law

BKC Law provides comprehensive support and consultation services for legal issues arising from credit contracts. Our experienced team of lawyers assists clients in analyzing, negotiating, and resolving disputes related to credit agreements. We are committed to protecting our clients’ legitimate rights and interests, helping them achieve the best possible outcomes through litigation or negotiation with counterparties, thereby ensuring safety and transparency in credit transactions.

To receive free legal consultation at BKC Law, please contact our lawyers using the following information:

Telephone: 0901 3333 41
Email: info@bkclaw.vn
Branch in District 1: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City
Branch in Binh Tan: 41 Ten Lua Street, Binh Tan District, Ho Chi Minh City