Vietnamese enterprise loses lawsuit against foreign shareholder, must pay 157 billion VND

Rang Dong Holding Joint Stock Company (stock code RDP) has just announced unusual information about the decision to resolve the appeal and protest against the decision to resolve the request for recognition and enforcement in Vietnam of a foreign arbitration award by the High People's Court in Ho Chi Minh City. Accordingly, Rang Dong lost the lawsuit against the foreign shareholder and had to pay back nearly 157 billion VND along with related fees and charges.

Rang Dong must return nearly 157 billion VND to foreign partners and fees and charges related to the lawsuit.

Specifically, on August 24, the High People's Court in Ho Chi Minh City opened a public appeal hearing on the commercial business case between Sojitz Pla-net Corporation (under the Sojitz Group - Japan) and Rang Dong. In 2016, Rang Dong signed a comprehensive commercial cooperation agreement with Sojitz. Accordingly, Sojitz will provide raw materials, transfer technology, management systems and develop new products according to Japanese standards for Rang Dong. In 2017, Rang Dong and Sojitz held a strategic shareholder signing ceremony.

The foreign partner's application stated that on September 8, 2017, Sojitz and Rang Dong signed a share purchase contract. Accordingly, Sojitz purchased 5 million common shares, issued and fully paid for the shares at Rang Dong Long An Plastic Joint Stock Company with a purchase price of more than 174 billion VND.

After transferring the above shares, Rang Dong violated a number of obligations regarding the fulfillment of post-transfer conditions. Therefore, based on the share purchase contract, Sojitz exercised the right to terminate the contract and requested Rang Dong to immediately refund 90% of the paid share purchase price, equivalent to nearly VND 157 billion. However, Rang Dong did not refund, so Sojitz initiated a lawsuit at the Singapore International Arbitration Center (SIAC).

Rang Dong Plastic lost lawsuit against foreign shareholder, compensated 157 billion VND

On July 6, 2022, the SIAC Arbitration Council issued arbitration award No. 090 and decided that “Plaintiff Sojitz won the case” and Rang Dong lost the case. Defendant Rang Dong must pay Sojitz nearly VND 157 billion as compensation for damages and must pay Sojitz an interest of 10%/year on the amount of VND 157 billion, calculated from April 1, 2020 to the payment date. At the same time, Rang Dong must also pay the fees and charges of the arbitration council as well as the administrative fees and charges of SIAC in the amount of SGD 371,564 for Plaintiff Sojitz; must pay Sojitz legal fees and other reasonable expenses in the amount of USD 585,974 and SGD 7,414. For both of the above amounts, Rang Dong must pay interest from the date the judgment is issued until payment at the rate of 5.33%/year.

After that, Rang Dong complained and in the Decision of First Instance to resolve the request for recognition and enforcement in Vietnam of the foreign arbitration award No. 090 dated January 10, 2023, the People's Court of Ho Chi Minh City decided "Not to recognize arbitration award No. 090". However, on January 16, 2023, Sojitz filed an appeal against the entire decision of first instance. After consideration, the High People's Court in Ho Chi Minh City decided, accepted Sojitz's appeal, recognized and enforced in Vietnam arbitration award No. 090.

Source: https://thanhnien.vn/doanh-nghiep-viet-thua-kien-co-dong-ngoai-phai-tra-157-ti-dong-185230926171106739.htm