Vietnam’s insolvency reform experience shared at regional forum

Monday, 2016-11-21 17:08:03
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The 10th Forum for Asian Insolvency Reform gathers over 100 international delegates and experts from eighteen countries and territories. (Credit: VNA)
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NDO—Vietnam promulgated the new Bankruptcy Law in 2014 and has been recognised by the international community for making progress in a range of areas, and the country is willing to share with others its perspective on its achievements in insolvency reform while continuing to learn from international practices to improve its relevant laws.

Chief Justice of the Supreme People’s Court Nguyen Hoa Binh made a statement underlining this point during the opening ceremony for the 10th Forum for Asian Insolvency Reform (FAIR 10) in Hanoi on November 21.

Hosted by the Supreme People’s Court in coordination with the International Association of Restructuring, Insolvency & Bankruptcy Professionals and the World Bank Group, the two-day event has gathered over 100 international delegates and experts from eighteen countries and territories in the field of business restructuring, recovery and bankruptcy.

This is a forum for exchanges between senior policymakers in the region in the field of legislation and law enforcement for the purpose of sharing information and experience, as well as setting cooperation mechanisms for insolvency.

Addressing the opening, Chief Justice Binh noted that in the last three decades, Vietnam has promulgated a new law on bankruptcy every ten years.

This was a regular process of updating the law to meet the practical demands of economic development and to ensure that the Bankruptcy Law would create a legal framework to promote economic development and social stability, he added.

The chief judge stressed that bankrupt institutions in Vietnam’s law aimed to effectively protect the legitimate rights and interests of creditors, debtors and labourers, as well as to ensure social stability.

Chief Justice of the Supreme People’s Court Nguyen Hoa Binh speaks at the opening of the 10th Forum for Asian Insolvency Reform in Hanoi on November 21. (Credit: vnmedia.vn)

At the same time, the law is also an effective tool to restructure the economy as it is seen as a filtering and elimination mechanism with which for weak enterprises to create a healthy business environment for investors, contributing to the maintenance of existing effective businesses.

Sticking to these objectives, the current Bankruptcy Law of Vietnam has included several innovations aimed at better clarifying the conditions for the opening of bankruptcy proceedings, simplifying bankruptcy procedures and strengthening mechanisms and facilitating conditions for corporate restructuring and recovery.

Simultaneously, the law has strengthened the rights of creditors and set up institutions for arbitration to assist the courts in insolvency restructuring and processing.

Since its inception more than twenty years ago, Vietnam’s Bankruptcy Law of 1993 has been amended and supplemented twice, in 2004 and 2014. In 2015, the number of applications for the opening of bankruptcy proceedings sent to courts increased by 184% against 2014.

FAIR was formed with the goal of maintaining and promoting policy dialogue on insolvency reform among policymakers in the region, in addition to monitoring and evaluating the progress made in insolvency reform in regional economies.

FAIR 10’s theme was the importance of bankruptcy reform to the restoration of macroeconomic stability.

With this theme in mind, participants at the forum have discussed other sub-themes, including the role of bankruptcy law in the region, institution-building for law enforcement and the development of bankruptcy laws.

In addition, delegates are also focusing on topics such as asset management companies, cooperation in the field of justice and courts and the development of judicial capacity.