The Case
On 25 October 2018, the People’s Court of Ho Chi Minh City recognised and enforced a Singapore Magistrates’ Court judgment on a contract for sale and purchase of goods. The first-instance judgment was upheld on appeal to the High People’s Court in Ho Chi Minh City.
Background
It appears that the District Court in Singapore issued a judgment, in fact, a default judgment, No. DC 1169/2011/F on 24 November 2011 which ordered company CDK to pay company UMW a total of USD 84,718.15 and SGD 3,300 for disputes over a contract for sale and purchase of goods (Singapore Judgment). UMW, the judgment creditor, later applied to the People’s Court of Ho Chi Minh City for recognition and enforcement of the Singapore Judgment within the time limit under Vietnamese law, after fulfilling all procedural requirements such as legalisation and payment of fees. Company names are anonymized by publicly available information.
On 25 October 2018, the People’s Court of Ho Chi Minh City recognised and enforced the Singapore Judgment by applying the principle of reciprocity. CDK appealed. The High People’s Court in Ho Chi Minh City upheld the first-instance decision upon appeal.
Reasoning
First, it was mentioned that as the Singapore Judgment dealt with commercial disputes, it was eligible for recognition and enforcement in Vietnam.
Second, UMW’s application for recognition and enforcement of the Singapore Judgment shall be examined according to the principle of reciprocity. This is because Singapore and Vietnam have not signed any agreement on mutual legal assistance relating to the recognition and enforcement of each other’s judgments. Vietnam is also not party to any multilateral treaty on the recognition and enforcement of commercial judgments to which Singapore is party.
Third, CDK was absent from the proceedings in Singapore despite having been notified. Although it engaged a lawyer to participate in defense, the lawyer subsequently discharged himself, as a result of which the proceedings continued in the absence of CDK in accordance with Singapore law. This is not against the fundamental principles of Vietnamese law.
Fourth, the Singapore Judgment (and other accompanying copies and translations) were served on CDK at its headquarters in Ho Chi Minh City and were signed off by one Ms V who was an administrative staff of the company. The documents were addressed to one Ms B, a director of CDK. CDK subsequently argued that Ms V was merely a friend of Ms B. This argument was found to be unsubstantiated when verified against the service documents by the People’s Court of Ho Chi Minh City and oral confirmation by Ms V.
Fifth, another argument raised by CDK was that Ms B, who was the company’s legal representative when the purchase and sale contract disputed in the Singapore proceedings was signed, was no longer its legal representative when the Singapore Judgment was served. Instead, one Mr D, who is Ms B’s husband, was CDK’s legal representative at the time when the Singapore Judgement was served. However, Mr D self-testified that he was aware of the Singapore proceedings as early as 2011. Therefore, there is sufficient evidence to establish that the Singapore Judgment has been properly served on CDK. As the company did not take any measure to appeal in Singapore according to Singapore law, the People’s Court of Ho Chi Minh City decided to recognise and enforce the Singapore Judgment by applying the principle of reciprocity.
Analysis
While neither the first-instance court nor the appeal court seems to have fully explained the operation of the principle of reciprocity in Vietnam, it seems that the courts have been taking a relatively relaxed approach to reciprocity in recent times. In this judgment, for example, as the fundamental principles of Vietnamese law are not breached and the procedural requirements are also satisfied, courts in Vietnam have decided to apply the principle of reciprocity to recognise the Singapore Judgment. This appears to be the same approach taken subsequently in DBS Bank Limited v Ms Vu Thi Bich Loan Decision (No 1186/2016/QĐST-DS first instance and No 111/2017/QĐPT-KDTM on appeal) (DBS case) where another Singapore judgment was recognised and enforced.
It should be noted, however, it is still unclear whether this signals a permanent relaxation of attitude towards reciprocity in Vietnam. For one, Vietnam is not a common law jurisdiction where all precedents are binding. Instead, only cases specifically recognised by the Supreme People’s Court have precedential value to cases of similar circumstances. This judgment of the High People’s Court of Ho Chi Minh City is not one such recognised case. Second, both the current case and the DBS case are heard by the same courts in Ho Chi Minh City, therefore it will be a stretch to predict the attitude of other courts across Vietnam based on decisions coming out of one court.
ABLI would like to express its gratitude to YKVN, in particular, its team of Truong Nhat Quang, Nguyen Duy Duong and Vu Tuan Duc, for helping with translation of parts of the Vietnamese judgment, and will continue to watch developments in the country in relation to recognition and enforcement of foreign commercial judgments.
[1] Based on case citation and the amount of the judgment debt, we believe it is more likely that the Singapore Judgment was given by the District Court.
[2] ABLI thanks Associate Professor Beligh Elbalti of Osaka University for sharing a copy of this judgment with us.
[3] The team at YKVN opined that “typically, reciprocity is determined by Vietnamese courts by looking at whether foreign courts have recognised and enforced Vietnamese judgments. If the foreign court has not actually recognised and enforced a Vietnamese judgment, then Vietnamese courts can still consider recognition and enforcement of the foreign judgment based on whether it is likely that the foreign court would recognise and enforce Vietnamese judgments.” ABLI would like to advise readers that this position is not stated in the Vietnamese judgments of which we are aware and is also not adopted by academics who are authors of our publications, though it may offer reference in practice.
[4] Asian Principles for the Recognition and Enforcement of Foreign Judgments (Adeline Chong ed., Asian Business Law Institute, 2020) at p 72 fn 85.
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