Resolution No. 01/2003/NQ-HDTP dated April 16, 2003 of the Judge's Council of the Supreme People's Court guiding the application of Law to the settlement of some types of civil as well as marriage and family disputes

RESOLUTION

GUIDING THE APPLICATION OF LAW TO THE SETTLEMENT OF SOME TYPES OF CIVIL AS WELL AS MARRIAGE AND FAMILY DISPUTES

THE JUDGES' COUNCIL OF THE SUPREME PEOPLE'S COURT

Pursuant to the Law on Organization of the People's Courts;

In order to correctly and uniformly apply the law provisions to the settlement of civil as well as marriage and family disputes,

RESOLVES:

I. FOR DISPUTES OVER CIVIL CONTRACTS

1. Disputes over civil contracts with deposits

Under the provisions in Article 130 of the Civil Code, the agreement on deposit is a civil transaction; deposit, therefore, shall be valid only if it satisfies all conditions specified in Article 131 of the Civil Code and is made in writing (either in a separate document or inscribed in the principal contract). Where deposit-related disputes arise and the involved parties have no otherwise agreement on the handling of deposit, the handling shall be as follows:

a/ Where deposit is paid only to secure the entry into the contract or the performance of the contract or both, the party whose fault causes the non-entry or non-performance or invalidation of the contract shall have to pay a deposit fine under the provisions in Clause 2, Article 363 of the Civil Code.

b/ Where deposit is paid only to secure the entry into the contract, and breaches arise only in the contract performance process and make the contract performance impossible or the contract is detected to be invalid, deposit fines shall not be imposed. The settlement of disputes over contract breaches or the handling of invalid contracts shall follow general procedures.

c/ Where it is agreed by the involved parties or prescribed by law that if deposit is invalid, so is the contract, the contract shall be automatically invalid when the deposit is invalid. The handling of invalid deposits and invalid contracts shall comply with the provisions in Article 146 of the Civil Code.

For example: A and B enter into a house purchase/sale contract. When entering into the contract, they reach an agreement that B (buyer) must hand over to A (seller) a sport car as deposit to secure the entry into and the performance of the house purchase/sale contract on the condition that when the house purchase/sale contract is entered into and performed, such sport car will be included in the house purchase/sale amount and if A fails to receive such car for the reason that the deposit is invalid and, therefore, the contract is also invalid. When the performance of the contract starts, it is discovered that such car belongs to Mr. C (B's father), who refuses to let B include such car in the house purchase amount, which means that the deposit is invalid and in this case, therefore, the house purchase/sale contract is also invalid.

d/ For cases guided at Points a and c of this Section 1, if both involved parties are at fault or if force majeure events or objective obstacles emerge, deposit fines shall not be imposed.

2. Disputes over dwelling house purchase/sale contracts

2.1. Conditions for recognition of dwelling house purchase/sale contracts

Under the provisions in Articles 131 and 443 of the Civil Code, the Courts shall recognize dwelling house purchase/sale contracts only when such contracts satisfy all the following four conditions:

a/ The persons entering into the dwelling house purchase/sale contracts must have civil act capacity;

b/ The purpose and contents of the dwelling house purchase-sale contracts do not run counter to laws and social morality;

c/ The persons enter into the dwelling house purchase/sale contracts on an absolutely voluntary basis;

d/ The dwelling house purchase/sale contracts must be made in writing, with the certification of the public notary or the authentication of competent People's Committees according to the law provisions on notarization and authentication effective at the time the contracts are entered into.

It should be noted that for disputes over general civil transactions related to dwelling houses (including dwelling house purchase/sale contracts), which were established prior to July 1, 1991, the settlement thereof shall comply with the National Assembly Standing Committee's Resolution No. 58/1998/NQ-UBTVQH10 of August 28, 1998 on "dwelling house-related civil transactions established prior to July 1, 1991" and the guidance in Joint Circular No. 01/1999/TTLT-TANDTC-VKSNDTC of January 25, 1999 of the Supreme People's Court and the Supreme People's Procuracy guiding the application of a number of provisions of this Resolution.

2.2. Settlement of a number of specific cases involving invalid dwelling house purchase/sale contracts

a/ Dwelling house purchase/sale contracts which breach the conditions guided at Points a, b and c, Sub-item 2.1 of this Item 2.

When dwelling house purchase/sale contracts breach one of the above-said conditions, on a case-by-case basis, the Courts shall apply the provisions of the relevant Articles from 136 to 138, from 140 to 145, and Article 146 of the Civil Code to declare such contracts invalid and handle the consequences thereof.

b/ Dwelling house purchase/sale contracts which breach the condition guided at Point d, Sub-item 2.1 of this Item 2.

For dwelling house purchase/sale contracts which are invalid due to dissatisfaction of the conditions on contract form, when disputes arise and one party or both parties request the Courts to apply Article 139 of the Civil Code to issue a decision to order one party or both parties to come to a competent State agency for carrying out procedures to complete the contract form within one month after the Courts issue such a decision. If either party is absent, this time limit shall be counted from the date the absent party receives such decision of the Court. If a force majeure event or objective obstacle occurs, the period when the force majeure event or objective obstacle exists shall not be included in that one-month time limit. Past one month, if the parties fail to come to a competent State agency to perform the procedures to complete the contract form, the Courts shall declare their contract invalid. The party that makes the contract invalid due to his/her/its breach of the form condition and failure to abide by the Court's decision must pay compensation for damage under the provisions in Article 146 of the Civil Code.

2.3. Time limit for requesting the Courts to declare dwelling house purchase/sale contracts invalid

The time limit for requesting the Courts to declare dwelling house purchase/sale contracts invalid is specified in Article 145 of the Civil Code. However, it should be noted that for the cases of invalid dwelling house purchase/sale contracts specified in Articles from 140 to 143 of the Civil Code, the one-year time limit is counted from the date when the dwelling house purchase/sale contracts are certified, notarized or authenticated.

2.4. Settlement of consequences of invalid dwelling house purchase/sale contracts

a/ Determination of fault

After declaring dwelling house purchase/sale contracts invalid, when settling consequences entailed by the invalid contracts, the Courts shall, in general principle, order the buyers to return the dwelling houses to the sellers; the sellers to receive back the dwelling houses and return what they have received from the buyers to the buyers. However, under the provisions in Clause 2, Article 146 of the Civil Code, if the party whose fault makes the dwelling house purchase/sale contract invalid causes damage, he/she/it must pay compensation to the other party; therefore, the fault of one party or both parties is determined as follows:

a.1. One party shall be regarded as being at fault if such party misleads the other party to believe that all conditions for dwelling house purchase are satisfied or the dwelling house sale is lawful.

Example of cases where the seller is regarded as being at fault: The seller shall be regarded as being at fault if he/she/it makes the buyer to believe that the seller has the dwelling house ownership right and the residential land use right or commits a deceitful act so that a competent State body grants the dwelling house ownership and residential land use right certificates, then uses these papers as proof to convince the buyer to enter into the dwelling house purchase/sale contract.

Example of cases where the buyer is regarded as being at fault: The buyer shall be regarded as being at fault if he/she/it deceives the seller into believing that the deposited property or the property used to fulfill the buyer's obligation is under the buyer's ownership and, therefore, enter into the contract or handing over the dwelling house to the buyer.

a.2. For dwelling house purchase/sale contracts which are invalid under the provisions in Articles 140, 141, 142 and 143 of the Civil Code, the provisions of the relevant articles shall be applied to determine the fault of the seller or the buyer.

a.3. Where a dwelling house purchase/sale contract is invalid due to both parties' faults, except for the case specified in Article 137 of the Civil Code, the Court shall determine the extent of each party's fault so as to determine each party's damage compensation liability commensurable to the extent of his/her/its fault.

b/ Determination of damage compensation liability

b.1. If both parties have equivalent faults causing their dwelling house purchase/sale contract invalid, each party shall be liable for half of the damage value; if their faults are not equivalent, the damage compensation liability shall be determined according to the extent of each party's fault.

b.2. If it is the buyer's fault that makes the dwelling house purchase/sale contract invalid, the seller shall only have to return to the buyer the received money amount and the buyer must hand over the house (if already received) to the seller; if it is the buyer's fault that causes damage to the house or the house's dismantlement, he/she/it must compensate for the amount the seller had to spend on repairing, restoring the damaged or dismantled house to its original state. If the house's price decreases, thus causing loss to the seller, the buyer must compensate the seller for the price difference amount to be determined under the guidance at Point c, Sub-Item 2.4 of this Item.

b.3. If it is the seller's fault that makes the dwelling house purchase/sale contract invalid, the seller must return to the buyer the received money amount while the buyer must hand over the house to the seller (if already received). If there emerges any house price difference that causes loss to the buyer, the seller must compensate for the house price difference which shall be determined under the guidance at Point c, Sub-item 2.4 of this Item 2. Such difference amount shall be calculated in proportion to the amount already paid by the house seller

b.4. If in the period of management, the buyer has renovated and/or repaired the house, which increases the house's value associated with the land use right value, the seller, when receiving back the house, must pay to the buyer such increased value, except for cases where the buyer deliberately renovates and/or repairs the house despite the fact that such was protested by the seller or not permitted by a competent body.

c/ Determination of damage

c.1. When declaring a dwelling house purchase/sale contract invalid, the Court should determine damage which comprises:

The amount the seller has spent on repairing or restoring to its original state the house which has been dismantled or damaged by the buyer; the amount the buyer has spent on renovating and/or repairing the house, thereby increasing the house's value associated with the land use right. Where a dwelling house purchase/sale contract involves no deposit and the parties thereto have no otherwise agreement on the application of measures to fine contract breaches and on the damage compensation as prescribed in Article 379 of the Civil Code so as to secure the contract performance, the damage shall also comprise the money difference between the house' value associated with the land use right value as agreed upon by the parties and that at the time of first-instance trial, or other damages, if any.

c.2. To correctly determine the above damage, the Court must conduct the valuation of the house associated with the land use right value and determine the dwelling house damage as follows:

If the involved parties fail to reach agreement on the house's price, the land use right value and the damage value, the Court shall request specialized agencies to make such valuation or issue a decision to set up a valuation council. The house's price and the land use right value shall be determined according to the prices on the transfer market in the locality where exists the house and land in dispute according to each type of house and land at the time of first-instance trial. However, if the provincial-level People's Committees set specific land prices suitable to the land use right transfer prices on the local market or the lawfully operating real-estate transaction centers have posted up the land transfer prices in the localities, the Courts may base themselves on the prices set by the People's Committees or the prices posted up by the transaction centers to determine the house prices associated with the land use right value without having to set up valuation councils.

c.3. Responsibility to bear valuation expenses:

- The involved parties shall have to bear valuation expenses in proportion to their respective liabilities.

- If any party requests re-valuation, he/she/it must pay in advance valuation expenses. The Court shall decide which party has to bear valuation expenses on the basis of the trial result.

3. Settlement of disputes over the transfer of State-owned dwelling house-leasing contracts

3.1. Transfer of a State-owned dwelling house-leasing contract means an act whereby a person who has a contract on leasing a State-owned dwelling house no longer needs to use the house or for whatever reason and transfers such contract to another person. The sub-lessee of the dwelling house must pay to the transferor an amount and shall be allowed to carry out the registration procedures and sign a contract on renting such dwelling house area with the housing and land management agency.

3.2. In applying Article 131, Clause 1 of Article 200 and Clause 3 of Article 494 of the Civil Code to settling disputes of this type, the Courts should bear in mind that:

a/ The transfer of State-owned dwelling house-leasing contracts must be made in writing.

b/ If the transfer of dwelling house-leasing contracts has been permitted in writing by the house and land management agency (at the time of entry into the contracts, before or during the Court sessions), the Courts shall recognize such contracts and order the involved parties to perform their obligations as agreed upon.

c/ If the transfer of dwelling house-leasing contracts is not permitted in writing by the house and land management agency (at the time of entry into the contracts, before or during the Court sessions), the Courts shall declare the contracts invalid and settle consequences of the invalid contracts according to general procedures.

d/ When settling disputes of this type, on a case-by-case basis the Courts shall request the house and land management agency to participate in court proceedings in the capacity of a party with related interests and/or obligations.

II. REGARDING MARRIAGE AND FAMILY DISPUTES

1. Inheritance in case of having no marriage registration

a/ Where the spousal relation had been established prior to January 3, 1987, if one spouse dies, the other spouse shall be allowed to inherit the deceased spouse’s heritage according to the law provisions on inheritance.

b/ Where a man and a woman lived together as husband and wife sometime between January 3, 1987 and January 1, 2001 and meet all condition for marriage under the provisions of the 2000 Marriage and Family Law, they shall be obliged to register their marriage within a time limit of two years from January 1, 2001 to January 1, 2003; therefore, if one spouse died prior to January 1, 2003, the other spouse shall be allowed to enjoy the deceased spouse's heritage under the law provisions on inheritance. If after January 1, 2003 they had not yet registered their marriage and one spouse died, any inheritance dispute, pending new regulations of competent State bodies, shall be handled by the Court as follows:

- If the case has not yet been accepted for handling, it shall not be accepted;

- If the case has been accepted and its handling is underway, the Court shall issue a decision to temporarily suspend the handling.

2. Divorce involving foreign elements

2.1. For cases where Vietnamese citizens residing in the country apply for divorce from Vietnamese citizens staying abroad

In settling cases of this type, the following should be distinguished:

a/ For cases where judicial entrustment brings no result because the respondent lives in exile, is not managed by any agency, has no clear address and, therefore, is uncontactable, the Court shall request the respondent's next of kin to send to the respondent the claimant's testimony and advise his/him to send to the Court his/her testimony or documents necessary for the settlement of the case. Then, the Court may base itself on such testimonies and documents to conduct trial according to general procedures.

b/ If the respondent lives abroad without any address and information or conceals his/her address from the claimant living in Vietnam, this case shall be handled as follows:

- If the respondent lives abroad without any address and information (even his/her next of kin have no idea about his/her address or information), the Court shall issue a decision to temporarily stop the settlement of the case under the provision at Point c, Clause 1, Article 45 of the Ordinance on Settlement of Civil Cases and explain to the claimant that he/she is entitled to request the district Court of the place where he/she permanently resides to declare the respondent missing or dead under the law provisions on declaration of missing persons or declaration of dead persons.

- If via the respondent's next of kin, the Court knows that he/she still contacts his next of kin at home but his/her next of kin refuse to supply the respondent's address or information to the Court and to comply with the Court's request to ask the respondent to send his/her testimony to the Court, then this case can be regarded as the case where the respondent deliberately conceals his/her address, refuses to give testimony and supply necessary documents. After the Court has made such request for the second time, if the respondent's next of kin still refuse to supply his/her address and information to the Court and to comply with the Court's request to inform the respondent thereof, the Court shall try the case in the absence of the respondent according to general procedures. After the trial, the Court should immediately send to the respondent's next of kin a copy of the Court's judgment or decision for delivery to the respondent and at the same time post up other copies at the commune-level People's Committees of the place where the respondent last resided and of the place where his/her next of kin reside so that the respondent can exercise his/her right to appeal in accordance with the provisions of the procedural legislation.

2.2. For cases where both parties are Vietnamese citizens who married abroad under the foreign laws now return to Vietnam and apply for divorce

In settling cases of this type, the following should be distinguished:

a/ For cases where the parties have the marriage certificates granted by competent authorities in the countries which have signed with Vietnam legal assistance agreements or consularly legalized under the provisions of Vietnamese laws.

Under the provisions of the Government's Decree No. 83/1998/ND-CP of October 1998 on civil status registration (hereinafter referred to as Decree No. 83 for short), the marriage of the involved parties should be recorded in the registry book; therefore, if the marriage of the involved parties has not yet recorded in the registry book, the Court shall request them to carry out procedures for recording in the registry book as prescribed in Decree No. 83 before accepting to settle the divorce. If the involved parties fail to comply with such request of the Court but still request the Court to settle their case, the Court shall not recognize them as husband and wife; if they additionally request the Court to settle matters related to children and/or property, the Court shall settle them according to general procedures.

b/ For cases where the parties have the marriage certificates granted by competent authorities in the countries which have not yet signed with Vietnam legal assistance agreements, but not yet consularly legalized under the provisions of Vietnamese laws.

In this case, according to the provisions of Decree No. 83, the marriage registration certificate must be consularly legalized and the marriage should be recorded in the registry book; therefore, if the parties' marriage registration certificate has not yet been consularly legalized nor has their marriage been recorded in the registry book, the Court shall request the involved parties to complete the procedures for consularly legalization and for recording their marriage in the registry book before accepting to settle the case. If the involved parties fail to carry out such procedures but still request the Court to settle their case, if they additionally request the Court to settle matters related to children and/or property, the Court shall settle them according to general procedures.

2.3. For cases where Vietnamese persons residing abroad married foreigners and their marriages have been recognized in Vietnam, now such Vietnamese persons return home and their foreign spouses apply for divorce

a/ Where the foreign spouses currently living abroad apply for divorce from the Vietnamese persons who still bear Vietnamese nationality and are residing in Vietnam, the Courts shall accept to settle these cases but in applying laws thereto, they should distinguish the following:

- If foreigners are citizens of the countries with which Vietnam has signed legal assistance agreements containing provisions different from those of the 2000 Marriage and Family Law, the Courts shall apply the provisions of such legal assistance agreements to settling their cases; if such agreements contain no different provisions, the Courts shall apply the 2000 Marriage and Family Law.

- If foreigners are citizens of the countries with which Vietnam has not yet signed legal assistance agreements, the Courts shall apply the 2000 Marriage and Family Law to settling their cases.

- In divorce cases, the settlement of properties being immovables situated abroad shall comply with the laws of the countries where exist such immovables.

b/ For cases where Vietnamese citizens residing in the country apply for divorce from foreigners residing abroad

If Vietnamese citizens apply for divorce from foreigners who have returned to their countries after their marriages and kept no contact with the Vietnamese citizens, the Courts shall accept to settle their cases.

Under Article 18 of the 2000 Marriage and Family Law, husband and wife are obliged to take care of and help each other, together build up a happy family; therefore, if the foreign spouse returns to his/her country without fulfilling the husband-wife obligations as prescribed, the period when he/she has no contact with his/her spouse being a Vietnamese citizen is one year or longer, and his/her spouse, their next of kin and competent bodies (the Vietnamese diplomatic mission in the foreign spouse's country, competent authorities of the country where the foreign spouse is a citizen) also have no information nor address of the foreign spouse after investigating and verifying the address he/she declared when carrying out entry/exit procedures and the address he/she declared in the marriage certificate when making marriage registration, this case shall be regarded as the case where the respondent deliberately conceals his/her address and, therefore, divorce shall be accepted.

III. IMPLEMENTATION EFFECT OF THE RESOLUTION

1. This Resolution was adopted by the Judges' Council of the Supreme People's Court on April 16, 2003 and takes effect fifteen days after its publication in the Official Gazette.

The Supreme People's Court's guidelines issued before the effective date of this Resolution on matters guided in this Resolution are hereby all annulled.

2. For civil as well as marriage and family cases which the Courts have received but not yet brought for first-instance trial, appellant trial, supervisory trial or review trial, this Resolution shall be applied to the settlement thereof.

3. For the Courts' civil as well as marriage and family judgments and decisions which took legal effect before the effective date of this Resolution, this Resolution shall not be applied to protests according to supervisory or review procedures, except where such protests are filed on otherwise grounds.