Jurisdiction for bankruptcy resolution of the People’s Court

Bankruptcy is the state in which an enterprise or cooperative loses its ability to pay and is declared bankrupt by the People’s Court. So how is the jurisdiction for bankruptcy resolution of the People’s Court defined?

1. Legal basis

– Article 8 of the Law on Bankruptcy 2014;

– Articles 2 and 3 of Resolution No. 03/2016/NQ-HDTP of the Supreme People’s Court.

2. The jurisdiction for bankruptcy resolution of the People’s Court is defined as follows:

Firstly, the provincial People’s Court, or the municipal People’s Court under the central authority (collectively referred to as the provincial People’s Court) has the jurisdiction to resolve bankruptcy cases for enterprises registering for business, or conducting registration, cooperatives registering for business or conducting registration in that province in which fall under one of the following cases:

(1) Case 1: Bankruptcy cases involving offshore assets or individuals participating in offshore bankruptcy proceedings. Specifically:

(i) Offshore assets refer to those determined according to the provisions of the Civil Code to be outside the territory of the Socialist Republic of Vietnam at the time the Court accepts the petition to commence bankruptcy proceedings..

(ii) Participants in offshore bankruptcy proceedings shall include:

a) Individuals not present in Vietnam at the time the Court accepts the petition to commence bankruptcy proceedings;

b) Legal entities without a headquarter, branch, representative office, or representative as prescribed by the laws of Vietnam at the time the Court accepts the petition to commence bankruptcy proceedings.

(2) Case 2: Enterprises or cooperatives that are unable to pay with branches or representative offices in multiple districts, towns, and municipalities of different provinces.

(3) Case 3: Enterprises or cooperatives that are unable to pay with real estate in multiple districts, towns, and cities of different provinces.

(4) Case 4: Bankruptcy cases within the jurisdiction of the district People’s Court, or the city People’s Court of the province (collectively referred to as district People’s Court) that are referred to by the provincial People’s Court for resolution due to the complex nature of the case. Specifically:

(i) Complex bankruptcy cases refer to cases that do not fall under Case 1, Case 2, and Case 3 mentioned above, and the enterprises or cooperatives requested to initiate bankruptcy proceedings fall into one of the following cases:

a) Having 300 (three hundred) or more employees or having a charter capital of 100,000,000,000 (one hundred billion Vietnamese dongs) or above;

b) Being a credit institution; an enterprise or a cooperative providing public utility products, services; defense and security enterprises as prescribed by law;

c) Being an economic conglomerate, state corporation; enterprise with foreign investment capital;

d) Having debts secured by the Government or being related to the implementation of international treaties of which the Socialist Republic of Vietnam is a signatory, investment agreements with foreign agencies, and organizations;

đ) Being involved in transactions declared null according to Article 59 of the Law on Bankruptcy 2014.

(ii) The provincial People’s Court, either on its own or upon the request of the district People’s Court, shall have the authority to handle bankruptcy cases falling into the cases described in Section (i) of Case 4 mentioned above..

(iii) Upon receiving a petition to initiate bankruptcy proceedings falling into one of the cases described in Section (i) of Case 4 mentioned above, the district People’s Court, pursuant to point c, clause 1, Article 32 of the Law on Bankruptcy, shall draft a written request along with the petition, documents, and evidence to be submitted to the competent provincial People’s Court for consideration and resolution. At the same time, the district People’s Court shall send a written notice to the petitioner and the People’s Procuracy of the corresponding level.

(iv) In the event that the district People’s Court has properly accepted a petition to initiate bankruptcy proceedings within its jurisdiction but during the course of the bankruptcy resolution, there is a change in residence or address of the individuals involved in the proceedings, or the arising of new circumstances that place the bankruptcy case within the jurisdiction of the provincial People’s Court and fall into the cases described in Section (i) of Case 4 mentioned above, the district People’s Court continues to handle the case.

Secondly, the district People’s Court has jurisdiction to handle bankruptcy cases for enterprises or cooperatives with their main headquarters located in the district, town, city within that province and not falling under the jurisdiction of the provincial People’s Court for bankruptcy resolution.

This article is only for informational purposes. The content of this article does not constitute legal advice and should not be considered as detailed legal advice for specific cases. For more information on these issues, please contact us for specific support and advice.