The role of Lawyers in the enforcement of business and commercial judgments in Vietnam

Lawyer Nguyen Van Phuc and Lawyer Nguyen Nhat Duong (from HM&P Law Firm) wrote the article titled "The role of Lawyers in the enforcement of business and commercial judgments in Vietnam", published in the Vietnam Lawyer Magazine on July 23rd, 2023. Below is the English version:

In the course of doing business, it is inevitable that business and commercial disputes will arise. Most enterprises that have been litigants in business and commercial cases understand that the issuance of court judgments/decisions (“Judgment”) can only resolve part of the dispute, the rest depends on the enforcement process. If the outcome of the litigation proceedings helps to determine the winner - the loser of the dispute, the process of the Judgment is considered to be the stage where the parties must fulfill their obligations/responsibilities in relation to the Judgment. Therefore, it is very important stage for both the judgment debtor and the judgment creditor (for the purposes of this article, the judgment debtor and the mentioned judgment creditor are both legal entities). If the ultimate goal of Judgment enforcement is not achieved, the entire proceedings and the content of the Judgment may be considered somewhat meaningless to the judgment creditor. Therefore, at the enforcement stage, the role of legal persons, in particular the lawyers of the litigants, should be particularly emphasized. In this article, we will share some views on the role of lawyers in the enforcement of business and commercial judgments, based on practical experience as a lawyer of the judgment creditor.

1. Regarding the current situation of enforcing business and commercial judgments in Vietnam

At present, the enforcement of business and commercial judgments in Vietnam today is an extremely difficult and laborious process. According to the law, the judgment debtor has 10 days from the date of receiving the decision of judgment enforcement or being duly notified of the the decision of judgment enforcement to voluntarily execute the judgment[1]. However, most judgment debtors, when they reach this stage, are rarely comply voluntarily, then, the coercive judgment enforcement must be carried out by the judgment enforcement agency. The current difficulties and obstacles encountered at the judgment enforcement stage is due to the following four main reasons:

Firstly, the lack of cooperation by the judgment debtor. This is definitely one of the reasons encountered by most judgment creditors. It is very common for judgment debtors to actively disperse assets and change business registration information in order to turn their business into a completely new business. Also, in some cases, in order to prolong the time of execution of the judgment, the judgment debtors also carry out procedures of complaints and denunciations against the executors or the heads of the judgment enforcement agencies. This leads to the interruption of the judgment enforcement process and costs more money for the judgment creditors.

Secondly, the enforcement agency is overburdened. With an increasing number of cases, especially in key economic cities such as Ho Chi Minh City or Hanoi, the fact that an enforcer has to handle many cases at the same time makes the enforcement period longer. In addition, in order to enforce a judgment in one case, the enforcer must be extremely thorough and prompt is taking many necessary measures against the judgment debtor. Taking on too many cases at the same time makes the quality of judgment enforcement activities relatively low.

Thirdly, the lack of a data system for exchanging information on the judgment debtors among the competent authorities. In fact, in order to check the conditions of judgment enforcement, the enforcer has to cooperate with many different competent authorities to check and verify information, such as the Department of Planning and Investment, Department of Natural Resources and Environment, the Land Registration Office/Branch Office, the bank, etc. For each agency, the enforcer must work directly with that agency, with no linkage of information between these agencies, not to mention, in case the judgment debtor lacks cooperation and transfers assets, changes information as mentioned above, enforcement activities will be very difficult and time consuming.

Fourthly, there are also problems specific to each case. In addition to the above-mentioned difficulties and problems, for each case has its own problems to be face by the judgment creditor and the enforcer. For example, in cases where it is necessary to distrain land use rights but there is a difference in the actual area of the land compared to the information in the judgment, or the part of the land that is own by the judgment debtor has construction works of other individuals/organizations. These issues will prolong the judgment enforcement process and affect the rights and interests of the judgment creditors.

2. The role of lawyers in the process of enforcement of business and commercial judgments

i) Developing a strategy for the enforcement process

The formulation of a judgment enforcement strategy plays an extremely important role, determining the success or failure of the whole judgment enforcement process. Simply put, the lawyer’s role is to develop a judgment enforcement plan that is suitable to the actual situation of the case, to plan the tasks that the judgment creditor must perform, to participate real-life situations, and solutions for each situation. The development of a strategy for a judgment does not begin only at the time of the judgment comes into effect, but must be carried out by the lawyer right from the pre-litigation stage, that is, from the first receive of the client's case. Since in many cases, the end of the proceedings is also the time when the judgment debtor has completed the necessary work to disperse the properties and withdraw all the key personnel responsible for the legal responsibility  from the business operation as stated in the certificate of registration, the enforcement of the judgment will face many challenges, which may even make the entire enforcement of the judgment meaningless.

In fact, many enterprises often prefer to use the legal services of law firms/law offices that have provided services during the litigation, because the lawyers of these firms have had certain research and knowledge about the whole case as well as about the judgment debtor. Continuing to accompany the client during the judgment enforcement phase helps to make the case resolution process smoother and more effective.

Therefore, the lawyer's initiative in developing strategies for effective judgment enforcement from the very beginning of the case and at the same time making adjustments throughout the entire until judgment enforcement process will help make judgment enforcement activities more convenient at the important stage of the case, which is the enforcement phase.

ii) Consultants

Similar to the work of formulating a strategy for the judgment enforcement process, the lawyer's consultation for the judgment enforcement process also takes place throughout the entire process from the time of receiving the case to the end of the judgment enforcement process. The lawyer's advisory role in the enforcement phase consists of three main aspects:

Firstly, the lawyer will advise on the rights and obligations of the parties, the procedural authorities and other third parties during the proceedings, in order to help the judgment creditor to carry out a number of necessary procedures for the case against the judgment debtor, thus laying the foundation for the judgment enforcement process in the future.

Secondly, the lawyer will advise on the rights and obligations of the litigants, the judgment enforcement agency and other third parties during the judgment enforcement stage, with special emphasis on the rights of the judgment creditor, because this is the basis for the judgment creditor to carry out the necessary procedures in this period. In addition, the lawyer's role is also reflected in advising the judgment creditor on the procedures to be carried out depending on the specific time and nature of each case, such as filing a request for judgment enforcement, a request for assistance in property verification, etc.

Thirdly, in addition to the above-mentioned consultation, an important aspect on which the judgment creditor needs the advice of a lawyer at this stage relates to the agreement and working process between the parties involved. In fact, the judgment enforcement does not completely depend on the judgment enforcement agency, but the judgment creditor himself/herself can completely take the initiative in certain tasks. In particular, the proactive agreement with the judgment debtor is a matter that we always present to our clients. In many cases, it is found through verification that the judgment debtor no longer has enough assets to enforce the judgment, then, the judgment enforcement agreement between the parties involved partly helps the parties to be temporarily satisfied to compete the judgment enforcement, or if the enforcement is completed before the enforcement agency issues enforcement decisions, it can reduce the enforcement fee payable[2], helping the parties to optimize their payable/collected money after the judgment enforcement period. However, the judgment enforcement agreement between the involved parties also has many potential risks for the judgment creditor, especially if the agreement is not made through the judgment enforcement agency. At that time, the judgment creditor's lawyer plays an extremely important role, particurly in advising on the agreement and reviewing the terms of the agreement to ensure the maximum interests of the judgment creditor.

iii) An authorized representative for the judgment debtor

The Law on Enforcement of Civil Judgments allows judgment creditors to have the right to authorize others to excecire their rights and obligations during the period of judgment enforcement[3]. At the same time, authorized representation is also one of the tasks within the scope of lawyer’s practice[4]. Therefore, in the enforcement stage of business, commercial judgment, lawyers can represent under authorization the judgment creditors to exercise their rights and obligations of the judgment creditor.

With this role, the lawyer can stay close to the case by directly carrying out the procedures related to judgment enforcement. In which, the most important are procedures for verifying the conditions of judgment enforcement, working directly with judgment enforcement agencies and judgment debtors. These are jobs that require a thorough understanding of legal regulations, flexibility in applying legal regulations, and practical experience in the process of working with relevant State authorities. With legal knowledge and practical experience, the lawyer can fully represent the judgment creditor to best perform the above tasks.

In addition, as mentioned above, judgment enforcement is a lengthy process, so the appearance of a lawyer in the role of an authorized representative helps the judgment creditor save a lot of time and resources of the enterprise, while still ensuing the thoroughness and quality of the resolution.

Unlike the regulations in the procedural stage, the lawyer in the judgment enforcement stage no longer acts as a defender of the legitimate rights and interests of the litigants[5], but as a protector of the rights and interests of the judgment creditor. Legally, the lawyer may take on the role of strategic planner, legal advisor or authorized representative for the judgment creditor to participate directly in the judgment enforcement process. However, the essence of the work that the lawyers is to protect the client’s rights and interests in the best possible way against certain difficulties and inadequacies of the current judgment enforcement activities.