Hanoi-Vietnam: Precedent No. 08/2016/AL

Precedent No. 08/2016/AL

ꦺApproved by the Judicial Council of the Supreme People's Court of Vietnam on October 17, 2016, and published under Decision No. 698/QD-CA dated October 17, 2016, of the Chief Justice of the Supreme People's Court of Vietnam.

Source of Precedent:

🔜Cassation Decision No. 12/2013/KDTM-GDT dated May 16, 2013, by the Judicial Council of the Supreme People's Court of Vietnam regarding the commercial business case "Dispute over credit contracts" in Hanoi City between the plaintiff, Joint Stock Commercial Bank for Foreign Trade of Vietnam, and the defendant, Kaoli Pharmacy Joint Stock Company; concerned parties include Nguyen Thi Phuong, Nguyen Dang Duyen, and Do Thi Loan.

Position of Precedent Content:

🍰Paragraph 16 of the "Considerations" section of the aforementioned Cassation Decision.

Overview of Precedent Content:

- Situational Context of the Precedent:

ꦜIn credit contracts, the parties have agreed on loan interest rates, including in-term interest rates, interest rates charged on overdue debts, and the adjustment of loan interest rates by the bank or credit institution granting loans over different periods. At the time of the first-instance trial, the borrowing customer has not paid or has not paid enough principal and interest as per the credit contract.

- Legal solution:

ℱIn this case, the borrowing customer must continue to pay the bank or credit institution granting loans the unpaid principal amount, interest on the in-term principal (if any), and overdue interest on the unpaid principal amount at the rate agreed upon in the contract until the principal debt is fully paid. If the parties have agreed to adjust the loan interest rate according to the periods of the bank or credit institution granting loans, the interest rate that the borrower must continue to pay according to the court’s decision will be adjusted accordingly in line with the interest rate adjustment of the bank or credit institution granting loans.

Legal provisions related to the Precedent:

- Articles 471, 474, and 476 of the Civil Code 2005;

- Clause 2 of Article 91 of the Law on Credit Institutions 2010;

- Clause 1 of Article 1 of Circular No. 12/2010/TT-NHNN⛄ dated April 14, 2010, of the State Bank of Vietnam guiding credit institutions to lend in Vietnamese dong to customers according to agreed interest rates;

- Clause 2 of Article 11 of the Lending Regulations of Credit Institutions to Customers issued under Decision No. 1627/2001/QD-NHNN dated December 31, 2001, of the Governor of the State Bank of Vietnam, amended and supplemented by Decision No. 127/2005/QD-NHNN dated February 3, 2005.

Keywords of the Precedent:

𝄹“Interest rate”; “Unpaid principal”; “Credit contract”; “Interest rate adjustment”; “interest rate charged on overdue debts”.

CASE CONTENT

⛎According to the lawsuit petition dated July 20, 2010, and the documents and evidence in the case file, it is stated as follows:

🍒Joint Stock Commercial Bank for Foreign Trade of Vietnam - Thang Long Branch (hereinafter referred to as Vietcombank) and Kaoli Pharmacy Joint Stock Company (hereinafter referred to as Kaoli Company) signed four credit contracts, including: Credit Contract No. 03/07/NHNT-TL dated December 25, 2007; No. 04/07/NHNT-TL dated December 28, 2007; No. 144/08/NHNT-TL dated March 28, 2008; and No. 234/08/NHNT-TL dated May 27, 2008. These credit contracts were secured by assets, specifically the ownership rights of the house and homestead land use rights at:

ꦓ- No. 122 Doi Can, Doi Can Ward, Ba Dinh District, Hanoi City (parcels No. 46B+39C+37C, map sheet No. 19) under the ownership and use rights of Mrs. Nguyen Thi Phuong (according to Mortgage Contract No. 1678.2008/HDTC dated June 25, 2008; securing the loan and the maximum guarantee is 4,605,000,000 VND; the specific conditions for borrowing the said amount will be recorded in the bank's operational documents signed between Vietcombank and the guaranteed party (Kaoli Company) at Vietcombank's headquarters (Clause 1.3, Article 1); the value of the mortgaged asset is 4,605,000,000 VND as per the Asset Valuation Report No. 105/08/NHNT.TL; mortgage period is 5 years from the date the guaranteed party receives the loan; the contract is effective from the time of registration at the Land Use Rights Registration Office (Clause 10.1, Article 10). This contract was notarized by the Notary Public Office No. 3 in Hanoi on June 25, 2008, and certified by the Ba Dinh District Natural Resources and Environment Department registration office on July 10, 2008). On September 3, 2007, Mrs. Phuong and Vietcombank signed the Asset Mortgage Document Transfer Agreement with the content: “Both parties proceed to hand over the original documents of the secured assets to ensure the obligations of Kaoli Pharmacy Joint Stock Company at Vietcombank - Thang Long Branch; asset name: Ownership rights of the house and homestead land use rights at 122 Doi Can, Doi Can Ward, Ba Dinh District, Hanoi” (BL 52).

🐠- Group 13 Cluster 2, Nhat Tan Ward, Tay Ho District, Hanoi City under the ownership and use rights of Mr. Nguyen Dang Duyen and his wife, Mrs. Do Thi Loan (according to Mortgage Contract No. 1677.2008/HDTC dated June 25, 2008, securing the loan and the maximum guarantee is 1,250,000,000 VND; the specific conditions for borrowing the said amount will be recorded in the bank's operational documents signed between Vietcombank and the guaranteed party (Kaoli Company) at Vietcombank's headquarters (Clause 1.3, Article 1); the value of the mortgaged asset is 1,250,000,000 VND as per the Asset Valuation Report No. 106/08/NHNT.TL dated September 3, 2007 (Clause 3.1, Article 3); mortgage period is 5 years from the date the guaranteed party receives the loan; the contract is effective from the time of registration at the Land Use Rights Registration Office (Clause 10.1, Article 10); this contract was notarized by the Notary Public Office No. 3 in Hanoi on June 25, 2008, and certified by the Ba Dinh District Natural Resources and Environment Department registration office on July 1, 2008). On September 3, 2007, Mr. Nguyen Dang Duyen and Vietcombank - Thang Long Branch signed the Asset Mortgage Document Transfer Agreement with the content: “Both parties proceed to hand over the original documents of the secured assets to ensure the obligations of Kaoli Pharmacy Joint Stock Company at Vietcombank - Thang Long Branch; asset name: Ownership rights of the house and homestead land use rights at Group 13 Cluster 2, Nhat Tan Ward, Tay Ho District, Hanoi” (BL 58a).

💦Additionally, the loans under the mentioned credit contracts are also secured by assets, including houses and land belonging to Mr. Cao Ngoc Minh and his wife, Mrs. Doan Thi Thanh Thuy; house, and land belonging to Mr. Giang Cao Thang and his wife, Mrs. Duong Thi Sinh (already released); land use rights belonging to Mr. Chu Quoc Khanh; and house and land belonging to Mrs. Chu Thi Hong and Mr. Nguyen Van Minh.

𝔍In execution of the contracts, Vietcombank - Thang Long Branch disbursed the loan amounts to Kaoli Company as per the stated credit contracts. Kaoli Company only partially repaid the principal and interest. Vietcombank filed a lawsuit requesting the court to compel Kaoli Company to pay the remaining debt of these four credit contracts amounting to 8,197,957,837 VND (including principal debt of 5,457,000,000 VND, in-term interest of 397,149,467 VND, and overdue interest calculated until the date of the first-instance trial of 2,343,808,370 VND) and to dispose of the mortgaged assets of Mrs. Nguyen Thi Phuong; Mr. Nguyen Dang Duyen and Mrs. Do Thi Loan to recover the debt.

🐼The defendant’s representative, Mr. Do Van Chinh, director of Kaoli Company, stated: He acknowledged that Kaoli Company still owed Vietcombank the principal, in-term interest, and overdue interest per the four Credit Contracts as Vietcombank had presented. He committed that the responsibility for repaying the debt under these four contracts was Kaoli Company’s and requested to repay in installments over five years.

📖If Kaoli Company failed to repay or did not fully repay the debt, and Vietcombank demanded the disposal of Mrs. Nguyen Thi Phuong, Mr. Nguyen Dang Duyen, and Mrs. Do Thi Loan’s secured properties, he suggested the court handle it according to the law. Mr. Chinh confirmed that Vietcombank disbursed the loans before signing Mortgage Contract No. 1678.2008/HDTC dated June 25, 2008, and Mortgage Contract No. 1677.2008/HDTC dated June 25, 2008. From June 25, 2008, until now, Kaoli Company did not take any new loans or sign any new credit contracts with Vietcombank.

𒐪Interested parties provided the following statements:

♛- Mr. Nguyen Van Nghi (representing Mrs. Nguyen Thi Phuong) stated: He did not agree with Vietcombank’s lawsuit against Kaoli Company and request for the liquidation of Mrs. Phuong’s assets if Kaoli Company failed to fulfill its debt obligations, because Mrs. Phuong signed the mortgage contract on June 25, 2008, and should not bear the responsibility for Kaoli Company’s loans with Vietcombank under the four credit contracts that Vietcombank is suing for. He requested the court to mandate Vietcombank to release the mortgage and return the Land Use Rights Certificate and House Ownership Certificate to Mrs. Phuong.

෴- Mr. Nguyen Dang Duyen and Mrs. Do Thi Loan jointly stated: They had signed the Mortgage Contract dated June 25, 2008, but this contract only guaranteed Kaoli Company’s loans at Vietcombank and would bear all responsibilities arising from the period after June 25, 2008, to April 25, 2009; as for all credit contracts signed before June 25, 2008, between Vietcombank and Kaoli Company, they would not bear any responsibility. According to Vietcombank, from after June 25, 2008, until now, Vietcombank had not signed any new credit contracts with Kaoli Company. Therefore, their legal responsibility had not arisen. They requested the court to mandate Vietcombank to release the mortgage assets according to the mortgage contract dated June 25, 2008, for them.

ꦚAt the First-Instance Judgment No. 32/2011/KDTM-ST dated March 24, 2011, the Hanoi People’s Court ruled:

🃏“1. Partially accept the claim of the Joint Stock Commercial Bank for Foreign Trade of Vietnam against Kaoli Company. Compel Kaoli Company to repay a total principal and interest debt to the bank amounting to 8,197,957,837 VND.

2. Reject the claim of the Joint Stock Commercial Bank for Foreign Trade of Vietnam to foreclose the assets, including the house ownership right and the right to use homestead land at parcel No. 46B + 39C + 37C, map sheet No. 19, located at No. 122 Doi Can, Doi Can Ward, Ba Dinh District, Hanoi, according to the Land Use Rights Certificate and House Ownership Certificate No. 10101132587 issued by the People’s Committee of Ba Dinh District on April 27, 2004, to Mrs. Nguyen Thi Phuong; and the house ownership right and the right to use homestead land at Group 13, Cluster 2, Nhat Tan Ward, Tay Ho District, Hanoi, according to the Land Use Rights Certificate and House Ownership Certificate at parcel No. 13+64A (part), map sheet No. 04 located at Group 13, Cluster 2, Nhat Tan Ward, Tay Ho District, Hanoi, according to the Land Use Rights Certificate and House Ownership Certificate No. 10103090899 issued by the People’s Committee of Hanoi on March 23, 2004, to Mr. Nguyen Dang Duyen and his wife, Mrs. Do Thi Loan.

𝓀The Joint Stock Commercial Bank for Foreign Trade of Vietnam is responsible for returning all documents concerning the house ownership right and the right to use homestead land and for processing the mortgage release procedures for Mrs. Nguyen Thi Phuong and Mr. Nguyen Dang Duyen, Mrs. Do Thi Loan.”

🌼Additionally, the First Instance Court ruled on court fees and the rights to appeal for the involved parties as stipulated by law.

On April 4, 2011, Vietcombank filed an appeal.

🗹At the Appellate Judgment No. 148/2011/KDTM-PT dated August 17, 2011, the Appellate Court of the Supreme People's Court of Vietnam in Hanoi, pursuant to Clause 2, Article 275, and Clause 1, Article 276 of the Civil Procedure Code, ruled:

🔯“To amend the First-Instance Judgment No. 32/2011/KDTM-ST dated March 23 and 24, 2011, by the Hanoi People’s Court concerning the guarantee obligations of Mrs. Nguyen Thi Phuong and Mr. Nguyen Dang Duyen, Mrs. Do Thi Loan. Specifically:

🅠Rule: The Asset Mortgage Document Transfer Agreements dated September 3, 2007, between the Joint Stock Commercial Bank for Foreign Trade of Vietnam - Thang Long Branch and Mrs. Nguyen Thi Phuong, and Mr. Nguyen Dang Duyen, Mrs. Do Thi Loan are guarantee contracts (the record extracts No. 52, 58a).

♊Compel Kaoli Pharmacy Joint Stock Company to repay the Joint Stock Commercial Bank for Foreign Trade of Vietnam a total principal and interest debt amounting to 8,197,957,837 VND...

🐎In the event that Kaoli Pharmacy Joint Stock Company fails to fulfill its obligation or inadequately fulfills its debt repayment obligation to the Joint Stock Commercial Bank for Foreign Trade of Vietnam, the Joint Stock Commercial Bank for Foreign Trade of Vietnam has the right to request the Hanoi Civil Judgment Enforcement Department to dispose of the guaranteed assets according to the provisions of the Civil Judgment Enforcement Law to recover the debt as per the guarantor’s guarantee obligations.

🐓...From the date the judgment takes legal effect and the judgment creditor files a request for judgment enforcement, the judgment debtor must also pay interest on the delayed judgment enforcement amount at the basic interest rate announced by the State Bank corresponding to the time of delayed judgment enforcement.”

🧜Additionally, the Appellate Court ruled on court fees and the judgment enforcement.

𝔉After the appellate trial, Mrs. Nguyen Thi Phuong; Mr. Nguyen Dang Duyen and Mrs. Do Thi Loan submitted multiple petitions for reconsideration of the appellate judgment under the supervisory review procedure.

🙈At Supervision Complaint Decision No. 34/2012/KDTM-KN dated October 15, 2012, the Chief Justice of the Supreme People's Court of Vietnam proposed the Judicial Council of the Supreme People's Court of Vietnam adjudicate the case under the supervisory review procedure, thereby annulling the Appellate Judgment No. 148/2011/KDTM-PT dated August 17, 2011, by the Appellate Court of the Supreme People's Court of Vietnam in Hanoi; and return the case files to the Appellate Court of the Supreme People's Court of Vietnam in Hanoi for a re-appellate trial in compliance with the law.

At the supervisory review session, the representative of the Supreme People’s Procuracy agreed with the Chief Justice’s complaint decision.The Judicial Council of the Supreme People's Court determines:

ꦅConsidering the Land Use Rights and Attached Assets Mortgage Contracts to secure third-party bank loans (Notarized Number: 1677.2008/HDTC and 1678.2008/HDTC both dated June 25, 2008), it is observed:

🌜Both mortgage contracts for land use rights and attached assets to secure third-party bank loans do not clearly state to secure which loan under which credit contract and were signed after four Credit Contracts (No. 03/07/NHNT-TL dated December 25, 2007; No. 04/07/NHNT-TL dated December 28, 2007; No. 144/08/NHNT-TL dated March 28, 2008, and No. 234/08/NHNT-TL dated May 27, 2008) had been disbursed by Vietcombank - Thang Long Branch. According to Clause 1.3, Article 1 of the two above-mentioned Mortgage Contracts: “The detailed terms and conditions regarding borrowing and lending the above-mentioned amount (Secured obligation is the highest loan and guarantee amounting to VND 4,605,000,000; - Clause 1.2 Article 1 Mortgage Contract) will be specifically recorded in the Banking operations documents that Party B (Vietcombank - Thang Long Branch) and the guaranteed party will sign at the headquarters of Party B (Vietcombank - Thang Long Branch)” can be understood that Ms. Phuong, Mr. Duyen and Mrs. Loan's household only guaranteed Kaoli Company’s loans under credit contracts signed at Vietcombank's headquarters after the date of signing the mortgage contract (June 25, 2008), not the loans under the four Credit Contracts signed before.

🉐Vietcombank, based on Clause 6.2, Article 6 of the four above-mentioned Credit Contracts, which records (handwritten) the contents: “The detailed agreements on assets, rights, and obligations of the parties will be specifically determined in...Mortgage Contract No. 1677.2008/HDTC dated June 25, 2008, and Mortgage Contract No. 1678.2008/HDTC dated June 25, 2008” to request the Court to compel Ms. Phuong, Mr. Duyen, and Mrs. Loan’s household to be responsible for guaranteeing Kaoli Company’s loans under the four aforementioned Credit Contracts. However, this content, according to the representation of Vietcombank at the first-instance trial is “written by the Bank’s accountant.” At the first-instance trial, Mr. Do Van Chinh - Director of Kaoli Company stated: “Kaoli Company did not know about this additional writing” and “Did not agree with the Bank's foreclosure request. The assets of Ms. Phuong and Mr. Duyen, Mrs. Loan's household were added to the credit contracts by the Bank.”

ꦰMoreover, at the appellate trial, Ms. Nguyen Thi Phuong's authorized representative stated that she did not receive any credit contract from Vietcombank; while Mr. Duyen and Mrs. Loan’s household did receive the credit contract from Vietcombank. Thus, Mr. Chinh, Ms. Phuong, and Mr. Duyen and Mrs. Loan’s household did not know the handwritten content by the Bank’s accountant within the credit contracts, did not sign the credit contracts, so there is no basis to determine that the aforementioned credit contracts are secured by Mortgage Contracts No. 1677.2008/HDTC and 1678.2008/HDTC both dated June 25, 2008.

❀In addition to the two above-mentioned mortgage contracts, the case file includes two sets of documents related to asset mortgages: one set by Ms. Phuong and one set by Mr. Duyen and Mrs. Loan’s household; each set includes: Valuation Minutes of assets and Handover Minutes of assets all dated September 3, 2007; Registration request for mortgage (dated January 29, 2008, by Ms. Phuong; dated June 25, 2008, by Mr. Duyen and Mrs. Loan’s household). However, these Minutes and Registration Request Forms also do not specify securing which loan under which credit contract.

🅷The appellate court determined (briefly): “The handover minutes of mortgage, pledge, guarantee assets file between Vietnam Joint Stock Commercial Bank for Foreign Trade - Thang Long Branch, and Ms. Phuong, Mr. Duyen and Mrs. Loan’s household dated September 3, 2007, all contain contents of pledging, mortgaging, guaranteeing Kaoli Pharmaceutical Joint Stock Company’s obligations to the Bank...thus determining this is one contract...” And the appellate court adjudicated: “The handover minutes of mortgage, pledge, guarantee assets file dated September 3, 2007, between Vietnam Joint Stock Commercial Bank for Foreign Trade - Thang Long Branch and Ms. Nguyen Thi Phuong and Mr. Nguyen Dang Duyen and Mrs. Do Thi Loan’s household are guarantee contracts (records No. 52, 58a)” and “In the case that Kaoli Pharmaceutical Joint Stock Company does not fulfill or fully fulfill its obligations of debt repayment to Vietnam Joint Stock Commercial Bank for Foreign Trade, then Vietnam Joint Stock Commercial Bank for Foreign Trade has the right to request the Hanoi Civil Judgment Enforcement Department to handle the guaranteed assets in accordance with the provisions of the Law on Civil Judgment Enforcement to recover the debt according to the guarantor's guarantee responsibility.”

🐲The determination and decision of the appellate court above are baseless and unlawful. Because:

ꦍ- The handover minutes of the mortgage, pledge, guarantee assets file dated September 3, 2007, between Ms. Nguyen Thi Phuong (as well as Mr. Duyen and Mrs. Loan’s household) and Vietcombank - Thang Long Branch is not a guarantee contract as determined by the appellate court.

ꦦAt the appellate trial on August 17, 2011, the Vietcombank representative also only determined: “The handover minutes of assets, and asset valuation minutes are inseparable parts of the mortgage contract.”

♓- According to the handover minutes of mortgage assets, pledge, guarantee, asset valuation minutes, and representation of Vietcombank at the appellate trial, the date of file handover and asset valuation was September 3, 2007. While the mortgage contract between Ms. Phuong (as well as Mr. Duyen and Mrs. Loan’s household) with Vietcombank - Thang Long Branch was signed on June 25, 2008 (after the date of handover minutes and asset valuation minutes), so these minutes cannot be considered inseparable parts of the mentioned mortgage contract. The appellate court also determined: “The mortgage contract dated June 25, 2008...is not related to the handover file minutes...”.

🍌- According to the date recorded in the minutes and the representation of Vietcombank at the appellate trial, the date of file handover (original Certificate of house ownership and homestead land use rights) and the date of asset valuation was September 3, 2007, but in these asset valuation minutes, it states: “Based on the land price table at Hanoi districts issued with Decision No. 150/2007/QD-UBND dated December 28, 2007, by the Hanoi City People’s Committee” and this minute is an inseparable part of Mortgage Contract No. 1678.2008/HDTC and No. 1677.2008/HDTC dated June 25, 2008. Specifically, regarding Ms. Phuong's case, the homestead land use right value is determined based on the actual land price determination minute dated September 4, 2007, and the Mortgage Registration Request form dated January 29, 2008, by Ms. Phuong stating: “Mortgage Contract No. 1678.2008/HDTC signed on June 25, 2008.” Additionally, according to the representation and documents provided by Ms. Phuong, Mr. Duyen, and Mrs. Loan’s household, on September 3, 2007, Ms. Phuong's house and land were mortgaged at the Agriculture and Rural Development Bank Quang An Branch, Tay Ho District, released on January 11, 2008; and Mr. Duyen and Mrs. Loan’s household’s house and land were mortgaged at Vietnam Prosperity Joint Stock Commercial Bank - Thang Long Branch, released on January 16, 2008.

🤪With the evidence above, it can be concluded: the handover minutes of mortgaged, pledged, guaranteed property files, and the asset valuation minutes were not made on September 3, 2007, and the Certificate of house ownership and homestead land use rights was not delivered on September 3, 2007, nor was the valuation done on September 3, 2007, as represented by Vietcombank and accepted by the appellate court.

As of September 3, 2007, the mortgage, guarantee contract for assets as land use rights and attached assets must be notarized and registered as secured transactions under point a, Clause 1, Article 130 of Land Law 2003; point a, Item 1, Article 12 Decree 163/ND-CP dated December 29, 2006, and Subsection 2.4, Section 2 Joint Circular No. 03/2006/TTLT-BTP-BTNMT𒁃 dated June 13, 2006; it is not required to be notarized and it is not required to register as a secured transaction as determined by the appellate court.

𒊎The appellate court did not clarify if there were any other documents or evidence other than the above-mentioned materials to refer to the mortgage contracts signed by Ms. Phuong and Mr. Duyen and Mrs. Loan’s household being guarantees for Kaoli Company’s four credit contracts or not but concluded that the handover file minutes are guarantee contracts, which is not correct. Because these minutes cannot be guarantee contracts when considering both the formality and content of the document.

🍸- If there is a basis to assert that Ms. Phuong’s and Mr. Duyen and Mrs. Loan’s mortgage contracts dated June 25, 2008, secure the above-mentioned credit contracts, the guarantee contract of Ms. Phuong only secures the loan and the highest guarantee amount of VND 4,605,000,000; the guarantee contract of Mr. Duyen and Mrs. Loan’s household only secures the loan and the highest guarantee amount of VND 1,250,000,000. Meanwhile, the appellate court concluded the handover minutes of mortgage, pledge, guarantee assets file dated September 3, 2007, are guarantee contracts and adjudicated: “In the case that Kaoli Pharmaceutical Joint Stock Company does not fulfill or fully fulfill its obligations of debt repayment to Vietnam Joint Stock Commercial Bank for Foreign Trade, then Vietnam Joint Stock Commercial Bank for Foreign Trade has the right to request the Hanoi Civil Judgment Enforcement Department to handle the guaranteed assets in accordance with the provisions of the Law on Civil Judgment Enforcement to recover the debt according to the guarantor's guarantee responsibility” meaning that Ms. Phuong, Mr. Duyen, and Mrs. Loan’s household must be responsible for guaranteeing all the debts of Kaoli Company without clearly defining the guarantee responsibility of Ms. Phuong, Mr. Duyen, and Mrs. Loan's household, which is not correct.

♊Additionally, the first-instance court and appellate court ruled: “From the effective date of the judgment and the requesting for execution of a judgment, the judgment debtor must also pay interest on the late judgment execution amount based on the basic interest rate announced by the State Bank corresponding to the late execution period" is also incorrect. For bank loan amounts, besides the principal debt, due interest, overdue interest, and fees that the borrower must pay to the lender as defined in the credit contract up to the first-instance trial date, from the day following the first-instance trial date, the borrower must continue to shoulder overdue interest on the unpaid principal amount at the interest rate agreed upon in the contract until the principal amount is fully paid. If the credit contract has an agreement on adjusting loan interest rates from time to time by the lending Bank, the interest rate that the borrower must continue to pay to the lending Bank based on the Court’s decision will also be adjusted according to the interest rate adjustments of the lending Bank.

Given these reasons, based on Clause 3 Article 291, Clause 3 Article 297, and Article 299 of the Civil Procedure Code (amended and supplemented in 2011),

DECISION:

1. 𒀰Annul the Commercial Business Appellate Judgment No. 148/2011/KDTM-PT dated August 17, 2011, of the Appellate Court of the Supreme People's Court in Hanoi on the commercial business dispute over the credit contract between the plaintiff is Vietnam Joint Stock Commercial Bank for Foreign Trade and the defendant is Kaoli Pharmaceutical Joint Stock Company, and involved parties are Mrs. Nguyen Thi Phuong, Mr. Nguyen Dang Duyen, and Mrs. Do Thi Loan.

2. 🎶Remand the case file to the Appellate Court of the Supreme People's Court in Hanoi for re-examination in accordance with the law.

PRECEDENT CONTENT

𓂃“The first-instance court and appellate court ruled: “From the effective date of the judgment and the request for the execution of the judgment, the judgment debtor must also pay interest on the late judgment execution amount based on the basic interest rate announced by the State Bank corresponding to the late execution period" is also incorrect. Regarding bank loan amounts, besides the principal debt, due interest, overdue interest, and fees that the borrower must pay to the lender as defined in the credit contract up to the first-instance trial date, from the day following the first-instance trial date, the borrower must continue to shoulder overdue interest on the unpaid principal amount at the interest rate agreed upon in the contract until the principal amount is fully paid. If the credit contract has an agreement on adjusting loan interest rates from time to time by the lending Bank, the interest rate that the borrower must continue to pay to the lending Bank based on the Court’s decision will also be adjusted according to the interest rate adjustments of the lending Bank.”

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