Case Law No. 81/2025/AL on Determining Civil Disputes Over Property Reclamation

Source of the Precedent:

Cassation Decision No. 13/2022/KDTM-GDT dated December 12, 2022, of the Council of Judges of the Supreme People's Court regarding the business and commercial case “Service Contract Dispute” between the Plaintiff, M Company, and the Defendant, A Joint Stock Company.

Location of the Precedent's Content:

- Paragraphs 5 and 6 of the “Court’s Assessment” section.

Overview of the Precedent's Content:

- Precedent Situation:

The parties entered into and executed a service contract, then agreed to terminate it. The plaintiff (the service provider) requested the defendant (the service user) to pay the service fees; the defendant agreed to pay but failed to do so, prompting the plaintiff to file a lawsuit in Court requesting the defendant to make the payment. The defendant requested the application of the statute of limitations for initiating legal proceedings.

- Legal Solution:

In this case, the Court must determine that the dispute between the parties is a civil dispute over property reclamation and that the statute of limitations for initiating legal proceedings does not apply.

Legal Provisions Related to the Precedent:

- Clause 2, Article 155 of the 2015 Civil Code.

Keywords of the Precedent:

“Service contract”; “Property reclamation”; “Non-application of the statute of limitations for initiating legal proceedings”.

CASE DETAILS:

According to the Petition dated November 26, 2018, and during the course of the case resolution, the plaintiff, M Company, presented the following:

On July 1, 2012, M Company and A Joint Stock Company (hereinafter abbreviated as Company A) signed a service contract, under which M Company would dispatch technical experts to provide services and technical guidance related to Company A's Kraft pulp production, based on the agreement of both parties and Japanese law (Article 9 of the Contract). From July 2012 to November 2012, M Company dispatched a total of 04 technical experts to Company A's factory.

On November 2, 2012, Company A sent Document No. 319/AHP-HCNS to M Company requesting the termination of the service contract; on November 23, 2012, M Company agreed, and the service contract was terminated on November 23, 2012. Due to the portions of work completed and in accordance with the agreement in Article 4 of the Service Contract, M Company issued a total of 06 commercial invoices for the service fees payable from July 2012 to November 2012 and expenses incurred after November 2012, specifically:

Table 1: List of Issued Commercial Invoices

No.	Commercial Invoice	Type of Expense	Date of Issue	Amount (Japanese Yen)
1	B743-0090	July 2012 Service Fee	15/11/2012	3,559,346
2	B743-0091	August 2012 Service Fee	15/11/2012	6,766,683
3	B743-0092	September 2012 Service Fee	15/11/2012	4,889,738
4	B743-0093	October 2012 Service Fee	05/12/2012	5,461,096
5	B743-0094	November 2012 Service Fee	07/01/2013	2,851,871
6	B743-0095	December 2012 Service Fee	05/03/2013	2,814,699
Total				26,343,433

After M Company issued the commercial invoices, Company A raised no objections to the content of these commercial invoices. On December 8, 2012, and March 27, 2013, meetings were held between M Company and Company A. In both meetings, the Chairman of the Board of Directors of Company A confirmed that payment would be made to M Company in accordance with the service contract. On June 1, 2013, Company A sent Document No. 10/AHP-MC-2013 to M Company, confirming once again that: “Based on the confirmation by our Chairman, we hereby affirm that Company A will pay the service fees to M Company.”

M Company continuously requested Company A to make payment by sending documents and official correspondence to Company A (such as Site Communication Documents No. SC-MC/AHP-2839, SC-MC/AHP-2842, and payment demand letters dated November 15, 2017, and May 23, 2018). However, Company A has not made any payment for the fees and expenses under the service contract, specifically the 26,343,433 Japanese Yen across the commercial invoices.

Company A is obligated to pay pursuant to Article 4 of the Service Contract. The payment deadlines are as follows:

Table 2: Invoice Payment Deadlines

No.	Commercial Invoice	Type of Expense / Date of Issue	Payment Deadline
1	B743-0090	July 2012 Service Fee (15/11/2012)	30/11/2012
2	B743-0091	August 2012 Service Fee (15/11/2012)	30/11/2012
3	B743-0092	September 2012 Service Fee (15/11/2012)	30/11/2012
4	B743-0093	October 2012 Service Fee (05/12/2012)	31/12/2012
5	B743-0094	November 2012 Service Fee (07/01/2013)	31/01/2013
6	B743-0095	December 2012 Service Fee (05/03/2013)	31/03/2013

As Company A breached its payment obligation, it must pay late payment interest at a rate of 10%/year pursuant to Article 3.5 of the Service Contract. M Company requests the Court to compel Company A to pay the sum under the commercial invoices of 26,343,433 Japanese Yen and the provisionally calculated late payment interest up to November 26, 2018, of 15,596,274 Japanese Yen. Converted into Vietnamese currency, this is equivalent to 8,762,510,504 Vietnamese Dong.

The defendant, A Joint Stock Company, presented that: They do not agree with M Company's lawsuit petition because the statute of limitations for initiating legal proceedings has expired, and requested the Court to apply the regulations on the statute of limitations to terminate the resolution of the case.

Under Decision on Termination of the Resolution of Business and Commercial Case No. 01/2019/QDST-KDTM dated November 30, 2019, the People's Court of Tuyen Quang Province decided:

1. To terminate the resolution of the business and commercial case accepted under case number 01/2019/TLST-KDTM dated January 7, 2019, regarding the “Service Contract Dispute” between the Plaintiff, M Company, and the Defendant, A Joint Stock Company.

2. Consequences of terminating the resolution of the case: The involved parties do not have the right to file a lawsuit to request the Court to resolve the matter again. Refund to M Company the entire amount of the first-instance business and commercial court fee advance paid, amounting to 58,381,255 VND under Court fee advance receipt No. 0000507 dated January 7, 2019, issued by the Civil Judgment Enforcement Bureau of Tuyen Quang Province (paid on their behalf by Q Law Firm Limited, Branch). Return the lawsuit petition and accompanying documents to the plaintiff (upon request).

On December 6, 2019, M Company filed an appeal.

Under Decision on the Resolution of Appeal against the Decision on Termination of Case No. 37/2020/QD-PT dated May 6, 2020, the High People's Court in Hanoi decided: To dismiss the appeal of M Company; to uphold Decision on Termination of the Resolution of Business and Commercial Case No. 01/2019/QDST-KDTM dated November 30, 2019, of the People's Court of Tuyen Quang Province. In addition, the appellate Court ruled on the court fees.

On August 21, 2020, M Company submitted a petition requesting a review under cassation procedures against the aforementioned appellate decision.

Under Cassation Protest Decision No. 24/2021/KN-KDTM dated December 23, 2021, the Chief Justice of the Supreme People's Court protested against Decision on the Resolution of Appeal against the Decision on Termination of Case No. 37/2020/QD-PT dated May 6, 2020, of the High People's Court in Hanoi; requested the Council of Judges of the Supreme People's Court to conduct a cassation trial, vacate the aforementioned business and commercial appellate decision, and vacate Decision on Termination of the Resolution of Business and Commercial Case No. 01/2019/QDST-KDTM dated November 30, 2019, of the People's Court of Tuyen Quang Province; and transfer the case file to the People's Court of Tuyen Quang Province for re-resolution in accordance with first-instance procedures as prescribed by law.

At the cassation hearing, the representative of the Supreme People's Procuracy agreed with the protest decision of the Chief Justice of the Supreme People's Court.

THE COURT'S ASSESSMENT:

[1] On July 1, 2012, M Company and Company A signed a service contract, under which M Company would dispatch technical experts to provide services and technical guidance related to Company A's Kraft pulp production, based on the agreement of both parties and Japanese law (Article 9 of the contract).

[2] From July 2012 to November 2012, M Company dispatched a total of 04 technical experts to Company A's factory. On November 2, 2012, Company A sent Document No. 319/AHP-HCNS to M Company requesting the termination of the service contract. On November 23, 2012, M Company and Company A agreed to terminate the service contract effective from November 23, 2012.

[3] M Company issued 06 commercial invoices for service fees payable from July 2012 to November 2012 and expenses incurred after November 2012, totaling 26,343,433 Japanese Yen. Company A was obligated to pay the final invoice before March 31, 2013.

[4] On June 1, 2013, Company A issued Official Letter No. 10/AH-MC-2013, signed by Mr. Phan A1, Deputy General Director, reaffirming that Company A would pay the service fees to M Company in accordance with the content of the prior meeting on May 31, 2013, between M Company and Company A, specifically: “Following the confirmation by our Chairman, we hereby affirm that Company A will pay the service fees to M Company. Such payment will be made immediately after the expenses incurred by both sides are finalized and agreed upon.”

[5] Thus, the parties had agreed to terminate the performance of the contract, and Company A had determined its obligation to pay the sum under the commercial invoices of 26,343,433 Japanese Yen and the late payment interest. This means the parties were no longer in a contract dispute; therefore, M Company's lawsuit requesting the Court to compel Company A to pay the aforementioned sum must be determined as a civil dispute over property reclamation. The Court of First Instance and the Court of Appeal were incorrect in determining the disputed legal relationship as a business and commercial “Service Contract Dispute”.

[6] Pursuant to Clause 2, Article 155 of the 2015 Civil Code, the statute of limitations for initiating legal proceedings does not apply in this case. The Court of First Instance and the Court of Appeal failed to fully and accurately evaluate the aforementioned facts of the case, and incorrectly accepted Company A's request to apply the statute of limitations under Clause 2, Article 184 of the 2015 Civil Procedure Code, thereby applying Point e, Clause 1, Article 217 of the Civil Procedure Code to terminate the resolution of the case contrary to the law.

For the prominent reasons,

DECISION:

Pursuant to Point a, Clause 2, Article 337; Clause 3, Article 343; and Article 345 of the 2015 Civil Procedure Code;

1. To accept Cassation Protest Decision No. 24/2021/KN-KDTM dated December 23, 2021, of the Chief Justice of the Supreme People's Court.

2. To vacate Decision on the Resolution of Appeal against the Decision on Termination of Case No. 37/2020/QD-PT dated May 6, 2020, of the High People's Court in Hanoi, and vacate Decision on Termination of the Resolution of Business and Commercial Case No. 01/2019/QDST-KDTM dated November 30, 2019, of the People's Court of Tuyen Quang Province regarding the business and commercial case “Service Contract Dispute” between the Plaintiff, M Company, and the Defendant, A Joint Stock Company; to transfer the case file to the People's Court of Tuyen Quang Province for re-resolution in accordance with first-instance procedures as prescribed by law.

The cassation decision shall take legal effect from the date of its issuance.

CONTENT OF THE PRECEDENT

“[5] ... the parties had agreed to terminate the performance of the contract, and Company A had determined its obligation to pay the sum under the commercial invoices of 26,343,433 Japanese Yen and the late payment interest. This means the parties were no longer in a contract dispute; therefore, M Company's lawsuit requesting the Court to compel Company A to pay the aforementioned sum must be determined as a civil dispute over property reclamation. The Court of First Instance and the Court of Appeal were incorrect in determining the disputed legal relationship as a business and commercial “Service Contract Dispute”.

[6] Pursuant to Clause 2, Article 155 of the 2015 Civil Code, the statute of limitations for initiating legal proceedings does not apply in this case. The Court of First Instance and the Court of Appeal failed to fully and accurately evaluate the aforementioned facts of the case, and incorrectly accepted Company A's request to apply the statute of limitations under Clause 2, Article 184 of the 2015 Civil Procedure Code, thereby applying Point e, Clause 1, Article 217 of the Civil Procedure Code to terminate the resolution of the case contrary to the law.”