Force Majeure Or Change Of Circumstances?

ACSV Legal

31st July 2021

Recently, the authorities in key manufacturing hubs in the South of Vietnam, have issued orders requiring manufacturers to either create a production bubble or stop production until further notice. Is this force majeure or a change of circumstances?

Recently, the authorities in key manufacturing hubs in the South of Vietnam, including Ho Chi Minh City, Binh Duong, Long An, and Dong Nai have issued orders requiring manufacturers to either create a production bubble or stop production until further notice. These orders were issued in response to a surge of COVID-19 cases in Vietnam since 27 April 2021, also known as the fourth wave.

For the production bubble, companies need to arrange that their employees eat, work and sleep at the manufacturing premises. Alternatively, the companies can arrange a one-stop accommodation for all employees and a vehicle to transit the employees from the accommodation place to the plants daily.

However, business owners were only given about 48-hours to make the necessary arrangements. Numerous companies could not meet the requirements and had to stop operations. These orders put many manufacturers at financial risk because they had to stop production, and also at legal risk as customers might start a lawsuit as delivery deadlines were not met.

The question is now if these administrative orders from the local authorities should be considered as a force majeure event or a basic change of circumstances under Vietnamese law.

If you would like to know the answer to the aforesaid question as well as learn about any alternative solution to deal with the issue at hand, please contact our Head of Dispute Resolution Practice – Ms Minh Nguyen at minh.nguyen@acsvlegal.com.

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ACSV Legal

Vietnam
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ACSV Legal is a vibrant and dynamic, Vietnam based law-firm, located in Ho Chi Minh City. Not only do we have unparalleled domestic expertise, but we are part of the One Asia Lawyers’ international network with partner offices across Southeast Asia and the Pacific Rim.

We have one of the premier Corporate / M&A practices in Vietnam and we have extensive experience in private equity transactions with a strong commercial focus. We have advised various clients on (re-) structuring their businesses in the light of investments in or outside Vietnam.

Our clients are typically businesses within South-East Asia which are experiencing significant growth, as well as leading international and local corporations who need advice on a broad array of multi-jurisdictional transactions. We have advised our clients on matters in a wide range of sectors and industries such as healthcare, beauty and fitness, pharmaceutical, food and beverage, IT and technology, hospitality and leisure, education, retail, manufacturing and distribution, apparel and fashion, Fintech and payment services.

We have a team of experienced lawyers who are qualified in Vietnam, the UK, the US and Malaysia in civil and common law jurisdictions. The languages spoken at ACSV Legal include Vietnamese, English, German, Japanese, Italian, Dutch, French and Malay.

"The corporate team has vast cross-border expertise and is skilled in handling M&A mandates for large Vietnamese conglomerates."

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Legal 500 Asia Pacific 2020

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Legal 500 Asia Pacific 2018

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