How Do the Courts in Vietnam Determine Late Payment Interest in Commercial Disputes?
Recently, our firm handled a significant case that involved payment of a delinquent debt 05 years after the effective date of the judgment. The ruling of the court was that while the principle amount was payable, the late payment interest could not be collected due to lack of the required contractual terms and application of the relevant regulations. This Insight will avoid narrowly focusing on the specific facts of the above case. However, there were numerous points we discovered about disputes over late interest payments during the course of the litigation. We hope to share with you what we learned and inspire some tips in drafting contractual provisions concerning late payment terms and interest rates. In general, the interest rate is calculated differently depending on whether it is before or after the first-instance hearing and whether there is an agreement about the payment of interest or not. This Insight will help you understand how and what interest rate you should provide in contracts with your business partners in order to protect your bottom line in the event of a dispute over late payments. Essentially, the more carefully drafted and detailed the contractual terms and conditions regarding interest rates, the more likely the judgment/arbitral award will be in your favor. Without a meticulously drafted document, the legal regulations of Vietnam will be applied to the facts of each case with various and conflicting interpretations depending on the trier of fact. In order to protect your business in any future dispute arising from late interest payments, this Insight is a must-read. Please click to HERE to view the full insight.