Decree No. 02/1999/ND-CP Amending and Supplementing Certain Provisions of the Investment Regulation under Build-Operate-Transfer (BOT) Contracts, Build-Transfer-Operate (BTO) Contracts, and Build-Transfer (BT) Contracts for Foreign Investment in Vietnam

DECREE OF THE GOVERNMENT

Amending and supplementing certain provisions of the Investment Regulation under Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO), and Build-Transfer (BT) Contracts,

BOT, BTO, and BT Contracts shall be applied

to foreign investment in Vietnam

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Law on Foreign Investment in Vietnam dated November 12, 1996;

At the proposal of the Minister of Planning and Investment;

DECREE:

Article 1. Amending and supplementing certain provisions of the Investment Regulation under BOT, BTO, and BT Contracts for foreign investment in Vietnam issued together with Decree No. 62/1998/NĐ-CP dated August 15, 1998 of the Government (hereinafter referred to as the Regulation):

1. Supplementing Clause 3 of the Regulation with a new subclause (subclause 3) as follows:

"3. Rights and obligations of the BOT Enterprise, the relationship between the BOT Enterprise and the foreign investor in implementing the project shall be agreed upon by the Parties in the BOT, BTO, or BT Contract. To confirm these issues, the Parties may agree in the Contract to implement one of the following methods provided that they comply with all the provisions of the BOT, BTO, or BT Contract:

a) The BOT Enterprise signs the BOT, BTO, or BT Contract together with the foreign investor to form one Party to the Contract;

b) The BOT Enterprise takes over the rights and obligations of the foreign investor related to the implementation of the project; the takeover must be formalized by a written agreement among the BOT Enterprise, the foreign investor, and the competent State agency; after being approved by the Ministry of Planning and Investment, this document will be incorporated as an integral part of the BOT, BTO, or BT Contract;

c) Another method approved by the Ministry of Planning and Investment."

2. Supplementing the end of Clause 1, Article 24 of the Regulation with the following paragraph:

"The Parties may agree in the BOT, BTO, or BT Contract on other main contents, including the right of the lender to take over part or all of the rights and obligations of the BOT Enterprise to implement the project (hereinafter referred to as the project takeover right) if the BOT Enterprise or the foreign investor fails to fulfill their obligations under the Contract or loan contract; provided that the lender must fully perform the corresponding obligations of the BOT Enterprise or the foreign investor stipulated in the BOT, BTO, or BT Contract and the Investment License. The conditions, procedures, and contents of exercising the project takeover right by the lender must be specified in the loan contract, loan guarantee document, or other agreements signed between the BOT Enterprise and/or the foreign investor and the lender and must be approved by the competent State authority."

3. Amending Clause 2 and Clause 3 of Article 24 of the Regulation as follows:

"2. To implement the BOT, BTO, or BT Project, the BOT Enterprise is entitled to conclude contracts for land lease, construction, installation of machinery and equipment, consulting services, inspection services, raw material procurement, product sales, major service provision, technical service provision, financing, collateral, mortgage, and other contracts in accordance with Vietnamese laws.

3. The Parties signing the BOT, BTO, or BT Contract and the Parties signing the guarantee contracts stipulated in Clause 2 of Article 10 of this Regulation may agree in the Contract on the application of foreign law, provided that such agreement does not contravene Vietnamese laws and is approved by the Ministry of Justice."

4. Amending and supplementing Clause 1 and Clause 3 of Article 25 of the Regulation as follows:

"1. Disputes arising between the competent State authority and the foreign investor or the BOT Enterprise during the implementation of the BOT, BTO, or BT Contract and the guarantee contracts stipulated in Clause 2 of Article 10 of this Regulation shall first be resolved through negotiation and mediation; if the dispute cannot be resolved through negotiation and mediation, the Parties may refer it to arbitration by an arbitral tribunal established by mutual agreement of the Parties."

"3. Disputes arising between the BOT Enterprise and foreign organizations or individuals during the implementation of the project, and disputes arising between the BOT Enterprise and Vietnamese economic organizations participating in the project, which are guaranteed by the competent State authority of Vietnam according to Clause 2 of Article 10 of this Regulation, shall first be resolved through negotiation and mediation; if the dispute cannot be resolved through negotiation and mediation, the Parties may refer it to resolution by the Vietnam Arbitration Center or an arbitral tribunal established by mutual agreement of the Parties or an arbitral tribunal established and operating in a third country.

Other disputes arising between the BOT Enterprise and Vietnamese economic organizations during the implementation of the project shall be resolved in accordance with Clause 2 of Article 102 of Decree No. 12/CP dated February 18, 1997 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam."

Article 2This Decree shall take effect fifteen days from the date of signature.

Article 3The Ministers, Heads of ministerial-level agencies, Heads of agencies under theGovernment, Chairmen Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).Provincial People's Committees directly under the Central Government areresponsible for implementing this Decree./.