VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
2.7 Soil Pollution or Environmental Contamination The Law on Environmental Protection and the Law on Investment require that an investment or development project should involve envi - ronmental impact assessments or declarations with protection measures before implementa - tion. Vietnamese law (Article 15 of the Law on Environmental Protection 2020; and Articles 172 and 602 of the Civil Code 2015) expressly holds liable subjects causing environmental pollution that generates damage, and requires them to cease the acts of violation, apply remedial meas - ures and make compensation, even when they are not at fault. In addition, if there is serious contamination to the land with life-threatening effects, the land may be subject to expropriation by the competent authority. Although the party causing the contamination is held liable under the law, environmental issues are usually discovered after an acquisition, so the party most affected is the buyer – ie, the current owner/land user. Therefore, the buyer should conduct due diligence on environmen - tal issues in acquisition transactions to assess the risks and liabilities in this regard, and should incorporate proper clauses in the transaction documents to mitigate or exclude the risk of such liability. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law Provincial authorities apply master plans on land use, development and urban zoning every ten years and review these on a five-year basis. For example, a master plan provides land-use purposes that define where residential housing projects or industrial projects can be developed, and how high and how much the construction coverage is, etc. By law, this information is pub - licly accessible. However, in reality, it is usually
There are several remedies for buyers and sell - ers under Vietnam contract law – eg, specific performance, penalty, performance suspension, contract cancellation, unilateral termination and/ or damage compensation. These depend on what the parties agree in the document, and/or subject to the law. Any breach of the R&W constitutes breach of a contract. In breach of R&W, the aggrieved party may be entitled to seek remedy and compen - sation for damages actually incurred by them. While R&W insurance is not common in this juris - diction, it is nevertheless gaining in popularity for sellers in most high-value M&A transactions. If certain conditions as represented by the seller are not met, the contract may even be deemed void (ie, the seller is not duly incorporated under the relevant laws). 2.6 Important Areas of Law for Investors With respect to purchasing real estate, inves - tors are required to closely observe the laws on land and real estate trading governing specific aspects of purchase transactions and the laws on companies and on investment if real estate is acquired within the context of an M&A deal. If the real estate is a residential house or hous - ing project, the investors are further required to comply with the laws on housing. These may include laws enacted by the National Assembly, decrees or decisions issued by the government or Prime Minister, or circulars issued by ministries from time to time that provide guidance in implementing or clarifying certain provisions of the above laws. Since these are hard laws, they are binding and also govern real estate transactions.
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