Issue
The buyer accepted the production line but still owed VND 2.6 billion, claiming the machines were defective. There were signs the buyer was selling assets to pay other debts.
What HDS did
Reviewed the file, filed suit together with a request to freeze accounts; had the security deposit ready to submit within 48 hours; represented the client in court mediation; agreed a repayment schedule and asked the Court to recognize the settlement.
Result
The parties reached a mediated settlement and the Court issued a decision recognizing it; the client received the full VND 2.6 billion principal and VND 120 million interest.
Background
In 2/2025, the client signed a contract to supply a packaging line worth VND 4.2 billion to a food factory. In 6/2025, the parties signed an acceptance record with no defects noted. The buyer paid VND 1.6 billion, but the remaining VND 2.6 billion, due in 8/2025, was not paid, even though a debt reconciliation record was signed in 9/2025.
After repeated payment reminders, the buyer began claiming the machines were defective. In 12/2025, the client learned that the buyer was advertising part of the machinery for sale and that other creditors were demanding payment. The client worried that by the time a judgment was issued under the ordinary procedure, the buyer would have no assets left to enforce against.
Legal issue
On the payment obligation, the file was strong: a contract, acceptance record, invoices and debt reconciliation. There was no written complaint about defects during the warranty period. The contract chose the Court to resolve disputes, so the case fell under the regional People's Court where the buyer is headquartered.
Two points needed careful consideration:
- The penalty. The contract set a 12% penalty, but Article 301 of the Commercial Law caps it at 8% of the value of the breached obligation, so the maximum claim was VND 208 million. Late-payment interest was claimed separately under Article 306.
- Freezing the account. Clause 2, Article 111 of the Civil Procedure Code allows an interim emergency measure to be requested at the same time as filing suit in urgent circumstances. The judge considers it within 48 hours, but the applicant must post security under Article 136 and compensate for any damage if the request proves wrongful under Article 113.
HDS explained this risk clearly to the board. The freeze was therefore requested only up to the amount of the obligation, as required by Clause 4, Article 133, and not beyond it to apply pressure.
How HDS handled it
- Strengthening the evidence. Organized the contract, acceptance record, invoices, debt reconciliation and warranty correspondence. A bailiff prepared records of the machinery sale listings. The buyer's account number was identified from the payment orders already made, as the basis under Article 124.
- Preparing the security deposit. The client had the funds ready before filing, because the deadline to provide security in this case is no more than 48 hours from filing the request. The Court set the security at VND 150 million.
- Filing the lawsuit and the request at the same time. The Court issued a decision freezing the bank account within 48 hours. At the time of the freeze, the account held about VND 1.2 billion.
- Mediation. With the account frozen, the buyer proactively proposed negotiations. At the mediation session, the client agreed to waive the 8% penalty in exchange for the buyer paying the full principal and VND 120 million interest in 4 installments over 60 days.
- Recognizing the settlement and lifting the freeze. After 7 days from the successful mediation record, with neither party changing its position, the judge issued a decision recognizing the settlement under Article 212. This decision took effect immediately under Article 213. The client asked to lift the freeze under Point a, Clause 1, Article 138 so the buyer could pay the first installment of VND 1.2 billion, and received its security deposit back.
| Timing | Work done |
|---|---|
| 12/2025 | Lawsuit and request to freeze accounts filed |
| 12/2025 | The Court issues the freeze decision; the account holds about VND 1.2 billion |
| 01/2026 | The buyer proposes negotiations; a successful mediation record is made |
| 02/2026 | Decision recognizing the settlement; first installment of VND 1.2 billion received |
| 04/2026 | Remaining installments received in full |
Result
Within 4 months of filing, the client recovered the full VND 2.6 billion principal and VND 120 million interest. The case did not go to trial. If the buyer fails to pay on schedule, the client can still request enforcement under the recognition decision.
HDS also revised the client's template contract: the penalty within the 8% limit, a late-payment interest clause with a specific rate, and a deadline for quality complaints after acceptance.
Lessons for businesses
- Acceptance records and debt reconciliation are decisive evidence. Do not skip them while the counterparty is still cooperative.
- Freezing an account is a strong measure with a risk of liability for damages. Clear evidence and ready security funds are needed before filing.
- In commercial contracts, setting a penalty above 8% does not help you recover more.
Legal basis
- Civil Procedure Code 2015 (as amended): Clause 2, Article 111; Article 113; Clause 10, Article 114; Article 124; Clause 3 and Clause 4, Article 133; Article 136; Point a, Clause 1, Article 138; Article 212; Article 213.
- Commercial Law 2005: Article 300, Article 301, Article 306.
The client's name and identifying details have been removed to protect confidentiality. The results above relate to the specific file in this case and are not a promise for any other case.
