25/07/2017, 15:57 PM

As already reported, the Supreme People's Court has issued a draft of 18 judgments, which are expected to be recognised as binding precedent. At a recent workshop taking comments in Ho Chi Minh City, some experts analyzed that some of the judgments were not convincing enough to be bind precendent. These observations are of essential reference for the Supreme People's Court to select qualified cases.

Controversy over foreign currency transactions

A controversial draft binding precedent is the Cassation Decision No. 03/2012 of the Supreme People's Court on the dispute over the contract of transferring the land use right in Thua Thien Hue. According to this case, when dealing with each other, the parties agreed to pay in Vietnam dong, but actual the payment is in foreign currency. The solution proposed to be binding precedent is that the transaction is not entirely invalid.

According to Judge Phan Thanh Tung (Deputy Chief of the Civil Court of the High Courts in Ho Chi Minh City), this solution is not typical and should not be used as a binding precendent. Because the contents of the draft lack the arguments to explain that the concerned provisions have different ways of understanding.  For the first criterion of a binding precedent is that it contains arguments to clarify the provisions of the law which raise different opinions, along with analysis, explanations oflegal issues, and point outs which principles or law tobe applied.

"Previously, in a summary report of the court, they found that transactions using foreign currencies, gold are determined to be invalid although there is no legislation to base on. Because the property is legally owned by the litigantsbut in the form of gold or foreign currency. It only violated the law on administrative license,"- he added.

Associate ProfessorMr. Do Van Dai (Head of Civil Law Faculty, HCMC University of Law) agrees with this case. Dr. Dai said that the current transactions in foreign currency are very popular, especially in USD. In fact, many of the courts also declare the transaction to be entirely invalid. The court at all levels citing the violations of regulations on foreign exchange management in payment to void the entire contract is not convincing. It is necessary to have a binding precendent to change this bad habit and the solution in the draft is convincing.

Dr. Dai said: "In this situation, only payment in foreign currency is a violation. So if the contract is invalid, the invalid part is only the payment in foreign currency. The remainder of the contract is still valid owing to Article 130 Civil Code 2015: "CA civil transaction shall be partially invalid when one part of the transaction is invalid but such invalidity does not affect the validity of the remaining parts." Therefore, if this precedent is approved, the scope of application for share transfer, car sale, etc. should be extended, not just limited to transfer of land use rights.

Land encroachment, forced to pay or not?

A draft binding precedent receiving opposing reviews is the Cassation Decision No. 363/2014 Sof the Supreme People's Court on land encroachment.

The draft mentioned: "That the invasion of other people's land needs forcing the return is correct. But it is necessary to specify which land can be returned to A and C, then B must return. And the land that has substantial houses built, which can not be dismantled, can be replaced by value ... ".

According to Dr. Dai, the construction of land encroachment is quite common. The Civil Code regulates to protect the rights of encroached landowners such as claiming property, stopping acts of illegal prevention... However, for the type of land encroachment while constructing dispute, there are no specific guidelines. Proposing a binding precedent for this case is necessary. However, the solution as the draft is not convincing. If this is used as a precedent, it will easily lead to abuse.

Mr. Dai analyzed that, the horizontal encroachment of 1.3 m is quite significant. If conceived as a binding precedent, this case may amount to misunderstanding that how much encroachment is still retained and does not need to be dismantled. They just have to pay the value of the land encroached for the landowner. Such thinking is not good at all, the person who wants to encroach will not hesitate to trespass on his neighbor's property. Also, the draft law does not mention whether the encroachers are in good faith or not.

Having the same view, Judge Tran Thi Cam Hong (Binh Chanh District People's Court, Ho Chi Minh City) also said that it is necessary to consider the factor whether the enroachment is in good faith or not. "Binh Chanh district is a hot spot for construction, the speed of urbanization is very high, maybe after one night, people have built a house. It will be dangerous if this draft is developed as the case law"- Mrs Hong worried.