Settlemant of loan guarrantee contract disputes at the group credit institutions from the practice of cassation and reopening trial of the supreme people,s court

nd reopening procedures. 2. Overall assessment of research related to the thesis topic: It can be said that the domestic and foreign research on the guarantee institution is very exciting, as evidenced by a lot of scientific researches on this issue. There has been no research work on the real situation of the settlement of guarantee contract disputes through cassation and reopening activities of the Supreme People's Court. 3. Results of the research works that the author will inherit: The author inherits the point of view, guarantee is a human-related security measure, but in the process of developing many systems guarantee on things have also be accepted; Guarantee contract is an independent contract, not a sub-contract of a credit contract. 8 Regarding cassation and reopening procedures, the author inherits the view that it is necessary to hand over the authority to protest cassation and reopening for legally effective judgments and decisions of district People's Courts to the Chief of Provincial People's Courts; it is necessary to shorten the time limit for appeals and not specify cases to be extended to 5 years; to collect fees for cassation or reopening trial requests 4. Issues needed to study in the Thesis: It is necessary to study how guarantees still retain the human nature, while still being attractive to credit institutions; point out inadequacies in the settlement of guarantee contract disputes according to cassation and reopening procedures at the Supreme People's Court. Proposing solutions to complete and improve the efficiency of the settlement of disputes on loan guarantee contracts at credit institutions according to cassation and reopening procedures at the Supreme People's Court. 5. Research theoretical basis: 5.1. Research theory of the topic: - Theory of contracts in general and theory of loan guarantee contracts at credit institutions in particular; theory of protecting the rights and interests of the parties in loan guarantee contracts at credit institutions; Theory of risk prevention in bank credit guarantees; Theory of the litigants' right to self- determination, on protecting the legitimate interests of the involved parties in the case; Theory of the Court trial to ensure justice and fairness; Theory of the Court's independent adjudication guarantee 5.2. Research questions, research hypotheses of the topic The first question, is the legal system on loan guarantees at credit institutions complete, what issues are lacking in the law? Which regulations are not reasonable? Assuming that the theoretical basis of the law on loan guarantee at credit institutions in Vietnam is incomplete and noncomprehensive; Legal provisions on loan guarantee contracts at credit institutions are inadequate, flawed, scattered, and unsystematic; The second question, What issues often arise in disputes in loan guarantee contracts at credit institutions? What are the causes of these disputes? Assuming that the disputed contents are often related to the scope of guarantee obligations; measures to secure guarantee obligations; the time of performing the guarantee obligations. The reason is the lack of legal provisions and unclear agreement in the contract signing process. 9 The third question, has the applicable law on settlement of loan guarantee contracts at credit institutions been completed according to cassation and reopening procedures, are there any shortcomings? Assuming that the civil procedure law regarding cassation and reopening has not yet been completed, especially the time limit of cassation and reopening, the competence to appeal and the grounds for reviewing a protest against cassation review and reopening. The fourth question, is the current process of settling disputes on loan guarantee contracts at credit institutions in accordance with cassation and reopening procedures at Supreme People's Court appropriate, which limitations need to be overcome? Assuming that the procedures for receiving and accepting the application are not reasonable; the steps of conducting research, reporting the case are not really scientific. 5.3. Research approach: Research approach of this thesis is implemented from the points of view of civil procedure law on cassation, reopening and civil law on guarantee of the performance of obligations by guarantee measure. CONCLUSION OF CHAPTER 1 In this chapter, the author conducts an overview of the research works on books, newspapers, journals, ministerial scientific topics, doctoral dissertations, master theses, textbooks, reference books, Scientific seminars, articles of domestic and foreign authors on theoretical and practical issues related to the topic, and below are the preliminary conclusions: There have been a great number of authors conducting research on obligation security measures, but the number of separate studies on this kind of security measure is not much. There has been only two in-depth research works which are the author's Master Thesis and Pham Van Dam's Doctoral Dissertation. The studies on cassation and reopening procedures in civil procedures all adhere to the provisions of real law. The process of amending the actual law, regulations on cassation and reopening has changed more or less. There has not been any specific research work on the settlement of loan guarantee contracts at credit institutions in accordance with cassation and reopening procedures at the Supreme People's Court. 10 Chapter 2 THEORETICAL ISSUES ON THE SETTLEMENT OF LOAN GUARANTEE CONTRACT DISPUTE AT CREDIT INSTITUTIONS IN ACCORDANCE WITH CASSATION AND REOPENING PROCEDURES 2.1. Concept and characteristics of a loan guarantee contract dispute at credit institutions 2.1.1. Concept and characteristics of loan guarantee contract at credit institutions It can be understood that the loan guarantee at the credit institution is that a third person can be an individual or organization (called the guarantor) committing to the credit institution to lend money (called the beneficiary) to perform the obligations on behalf of the borrowing individual or organization (called the guaranteed), if the guaranteed fails to perform, or perform improperly or incompletely, the obligation to pay when the debt is due. The parties may agree that the guarantor must perform the obligation only when the guaranteed is incapable of performing the payment obligation. The guarantor can also undertake to guarantee a part or all of the loan repayment obligation for the guaranteed. Features of loan guarantees at credit institutions: First, guarantee is a third party's commitment to perform an obligation on behalf of another person, if the obligor fails to perform or perform improperly. Second, guarantee is a human-related security measure: According to the division method of the ancient Roman law, civil law in some countries now divides property rights into two basic categories: First, the right to allow the subject to have direct control over things without going through the behavior of others (material rights or object rights); The second is the right to request another subject to perform a job (contrary to the right or also known as the human right). Third, a guarantee relationship exists in the form of a contract: The vast majority of scientists and the actual law system have basically agreed on the thesis, guarantee exists in the form of a contract. Fourth, guarantee contract is relatively independent: Although the object of loan guarantee contract at credit institution is the obligation arising from the credit contract. However, the guarantee contract is not a sub-contract but stands independent from the credit contract. Characteristics of loan security guarantees at credit institutions: In addition to the general features of the guarantee measures as mentioned above, 11 loan guarantees at credit institutions also have some distinct characteristics as follows: - Firstly, the beneficiary is always the credit institution: in the relationship that gives rise to the guaranteed obligation (amount of money), the lender is the credit institution, so the credit institution will be the beneficiary and in a guarantee relationship, this organization will be the beneficiary. - Second, the guaranteed obligation is a loan under a credit contract: The obligation to be guaranteed in this relationship is a loan from individuals and organizations at the credit institution through a credit contract. - Third, the guarantor is an organization or individual that is not specialized in guarantee activities: In this study, the author does not consider the bank guarantee operation. Therefore, the sponsor is an unprofessional organization or individual. 2.1.2. Concept and characteristics of a loan guarantee contract dispute at a credit institution: From the above concepts, we can conceptualize the guarantee contract dispute as follows, “Disputes on loan guarantee contracts at credit institutions are conflicts, disagreements between the guarantor and the credit institution arising in the process of entering into and exercising the rights and obligations in this contract”. - Features of a loan guarantee contract dispute at a credit institution: - About the subject in this contract dispute: Guarantee contract dispute is only a dispute between the guarantor and the beneficiary; For loan guarantee contracts at a credit institution, the special point is that the beneficiary is always the credit institution (the lender). - Dispute on a loan guarantee contract at the credit institution arises after the obligor's debt payment has arisen: only when one of the conditions giving rise to the guaranteed obligation does the guarantee obligation arise, then the dispute arises. - Regarding grounds for protest in accordance with cassation and reopening procedures: The grounds for the persons who are competent to protest according to cassation and reopening procedures, this type of dispute are caused by content violations but not procedural violations. - There has not been any case related to guarantee contract that has been resolved according to simplified procedures: By the end of 2019, the court system has not accepted and resolved any dispute of this type according to summary procedures. 12 2.2. Theoretical issues on the settlement of disputes on loan guarantee contracts at credit institutions according to cassation and reopening procedures: 2.2.1. Concept, characteristics of loan guarantee contract settlement at credit institutions. “Settlement of loan guarantee contract disputes at credit institutions is the activity of competent individuals, agencies and organizations to resolve disagreements and conflicts between credit institutions – the beneficiary and individuals and organizations (guarantor) to find the right solution on the basis of the law to clearly define the rights and obligations of the subjects in the guarantee relationship”. Characteristics of settlement on loan guarantee contract disputes at credit institutions: - Depending on the subject's conditions and the purposes of the parties to the guarantee contract, this dispute can be defined as a civil or business or commercial relationship. - Evidence in the settlement of a loan guarantee contract at a credit institution is fully provided with clear contents: Due to the specificity of this relationship, the beneficiary is always the credit institution, so the evidence is fully and clearly prepared. - Settled concurrently with credit contract disputes: The guarantee contract shall be settled in general in the credit contract performance request case, then the guarantor shall participate in the procedure as a person with related interests and obligations in the case. 2.2.2. Concepts, characteristics and contents of the settlement of disputes on loan guarantee contracts at credit institutions according to cassation and reopening procedures 2.2.2.1. Concepts and characteristics of the settlement of disputes on loan guarantee contracts at credit institutions according to cassation and reopening procedures: From different perspectives of approach, there are many different views on cassation and reopening in civil proceedings in general and for loan guarantee contract disputes at credit institutions in particular. However, in order to fully identify the nature of cassation and reopening procedures for loan guarantee contract disputes at credit institutions, it is necessary to clarify the characteristics of cassation and reopening procedures in civil proceedings. 13 Characteristics of cassation and reopening: The first characteristic is that the subjects of cassation and reopening are judgments and decisions of the courts which have taken legal effect: Judgments and decisions that have taken legal effect can be: Decision recognizing the agreement of the involved parties; First-instance and appellate judgments and decisions of People's Courts at all levels; decisions of cassation and reopening of High-level People's Courts. The second characteristic is that the Cassation and reopening panel determine serious mistakes and violations of law in the judgment; assessing the grounds containing new facts that fundamentally change the content of the Court's decision. The serious mistakes and violations in the effective court judgments or rulings may be the errors in the contents or the proceedings. The third characteristic is that the review of judgments and decisions must be based on the appeal of the competent persons. Procedures for cassation and reopening are conducted on the basis of protests of competent persons within the time limit prescribed by law against legally effective court judgments or rulings with serious mistakes. 2.2.2.2. Content of cassation and reopening of disputes on loan guarantee contracts with credit institutions: - Regarding the right to request cassation: (1) The first mechanism is that in the court system, the errors must be discovered by themselves in order to promptly resolve them. (2) The secondary mechanism, in addition to the self- discovery of the Court system, other agencies, organizations and individuals also have the right to detect and recommend review according to cassation and reopening procedures. - Regarding the basis of cassation and reopening: cassation and reopening grounds are the bases for review according to cassation and reopening procedures. Depending on the legal system of each country whether it is divided into cassation and reopening or combined in a procedure, these grounds are different. - Regarding the time limit for requesting review of a judgment or decision: The time limit for requesting review of a legally effective decision is the period of time when a person with the right to request cassation or reopening has the right to file a request for review of the judgment and the decision taking legal effect according to cassation and reopening procedures. - Regarding the jurisdiction of cassation and reopening: Jurisdiction of cassation and reopening means the powers to consider and decide on cassation and reopening panel on cases that have protested according to cassation and 14 reopening procedures. - Regarding the jurisdiction of the Cassation and reopening board: Vietnam's procedural law stipulates that the cassation trial panel has the following rights: Not to accept the protest and to uphold the legally effective court judgment or decision; abrogate the Court's judgments or rulings which have taken legal effect and uphold the legal judgments or rulings of the lower courts which have been canceled or modified; cancel part or all of the legally effective Court's judgments or rulings for re-trial according to first-instance procedures or re-trial according to appellate procedures; cancel sentences or rulings in effect and suspending the resolution of the case; amend part or the whole of the legally effective Court's judgment or ruling. - Specific issues in the settlement of disputes on loan guarantee contracts at credit institutions according to cassation and reopening procedures compared to other procedures: - There is no need to verify, gather more evidence, but can evaluate and decide at the Cassation Review Panel (the judgment can be revised, no need to cancel for re-resolution). - Due to the specific characteristics of the credit institution's money business, the parties are willing to mediate to quickly end the case. - The research and appraisal of documents of examiners, leaders of the Department of Inspection Director and the next authorized persons do not take much time. - Many loan guarantee contracts are related to the property to guarantee the guarantee obligation. CONCLUSION OF CHAPTER 2 The basic guarantee concept is agreed in main points such as the nature of the guarantee, the form of existence. However, there are still differences, such as the guarantee obligation is legally binding or vice versa. Loan guarantee contract disputes at credit institutions are a special and very important kind of dispute, even more important than the settlement of credit contract disputes. Cassation and reopening procedures are special procedures, aimed at detecting and correcting errors in legally effective judgments of the first- instance and appellate courts in the application of laws, as well as new facts that have been discovered that cannot be known in the proceedings. 15 Chapter 3 LEGAL STATUS OF CASSATION AND REOPENING FOR DISPUTES ON LOAN GUARANTEE CONTRACTS AT CREDIT INSTITUTIONS FROM THE REALITY OF THE SUPREME PEOPLE'S COURT 3.1. Current status of the law and practice in settling disputes on loan guarantee contracts at credit institutions in Vietnam: Guarantee for loans at credit institutions are based on the provisions on guarantees in Civil Code in 1995, 2005, 2015 and Decree no. 163/2006/ND-CP dated December 29, 2006. 3.1.1. Regarding the form of guarantee contract: For credit institutions, guarantee commitments must always be made in writing, can be made separately or jointly in credit contracts or contracts on pledge or mortgage of property to secure the guarantee obligation. (Clause 1 of Article 10). The content often in dispute is, the contract is not made in accordance with the nature of the security relationship (the guarantee relationship is a guarantee, but the parties make a contract to mortgage the property of a third party); the guarantee commitment is not made in the form of a contract; The guarantee contract has a term agreeing on measures to secure the security obligation with specific properties, but this contract is not notarized, authenticated or registered for security transactions etc. 3.1.2. Regarding the scope of guarantee obligations: An obligation may be partially or wholly guaranteed by agreement or by law; An obligation may be partially or wholly guaranteed by agreement or by law; if there is no agreement and the law does not specify the scope of security, the obligation is deemed to be fully secured, including the obligation to pay interests and compensate for damage. 3.1.2.1. Disputes in case the quantity of guarantee obligations is determined in terms of quantity: Although in the guarantee contract, the parties clearly agree that the scope of the guarantee obligation is a specific amount, but does not specify whether this amount is the total amount of guaranteed obligations or just the principal amount guaranteed. 3.1.2.2. Regarding the cases in which the guarantee obligation scope is not determined in quantity: Upon the expiration of the disbursement term as agreed in the guarantee contract, the Bank and the borrower sign an annex to extend the loan term for an additional 1 year to receive the additional loan amount, without the consent 16 of the guarantor, so the amount incurred over the period of the contract addendum is not within the scope of the guaranteed obligation. Another form of dispute is that although in the guarantee contract, the parties have limited the time giving rise to the guarantee obligation, at the same time, there is an additional agreement, “the detailed conditions for borrowing and lending the above amount (specific number) will be specified in the banking documents that the borrower, the guarantor and the Bank will sign at the head office of the Bank”. 3.1.2.3. Regarding interest rates: Interest overlapping: Interest is understood as calculating interest on the unpaid interest. During the period when the Civil Code 2005 took effect, many courts, when resolving disputes on credit contracts, accepted credit institutions' requests to calculate interest or penalties for interest in due date but customers did not pay. Regarding responsibility to share interest rate on overdue debts due to the fault of failure to fulfill the obligation to sell off assets to recover debts of the Bank: the borrower requests the credit institution to take responsibility for damage to the damaged collateral, damage and overdue interest on the debt due to the failure of the obligee to handle the property to recover the debt when the guarantee obligation arises. 3.1.3. Legal issues of the collateral securing the guarantee obligation: There are many different types of disputes regarding the legal status of the property securing the obligation to guarantee, but by the nature that the guarantor uses the common property to mortgage to secure his guarantee obligation without the consent of the co-owner or the collateral is no longer under the ownership of the guarantor; property means a house and land use rights that the guarantor is entitled to under the decision of the legally effective judgment, with no name on that property but used as collateral to secure the guarantee obligation. Land use rights are granted to the household, but when mortgaged to secure the guarantee obligation, the consent of all members of the Household is not agreed. Common property of husband and wife, but only one party signs the contract to mortgage the whole property to secure the guarantee obligation. 3.1.3.1. Disputes related to the additional loan relationship: The basic content of this relationship is that the owner of the property has a need to borrow money, so ask other individuals or organizations to borrow money, and at the same time use his property to secure that loan. The borrower borrowed a larger amount than the property owner needed to borrow and kept the difference. 17 3.1.4. Other disputes: - The bank incorrectly evaluates assets to mortgage to secure the guarantee obligation: the property the parties agree to use to secure the guarantee obligation is asset A, but when conducting the valuation, the parties mistakenly value asset B. - Guarantee for the obligations formed in the future: - Conditional guarantee: In a specific case, the guarantor mortgages the property to secure the guarantee obligation for the loan at the Bank, provided that the borrower is allowed to supplement the loan after the loan is finalized. 3.2. Legal status of cassation review and reopening of disputes on loan guarantee contracts at credit institutions - Regarding the discovery of legally effective court judgments or rulings, they need to be reviewed according to cassation and reopening procedures: According to the statistics of the Department of Director and Inspection II of the Supreme People's Court from 2015-2019, 100% of the cases of disputes on loan guarantee contracts at credit institutions being protested according to cassation and reopening procedures are requested by involved parties. (It can be submitted directly or indirectly through other organizations and individuals). - Provisions on the person competent to appeal to cassation review Compared with the 2004 Civil Procedure Code amended in 2011, the 2015 Civil Procedure Code has the following new points: Chief justices of provincial-level people's courts and heads of provincial-level people's procuracies no longer have the authority to protest according to cassation and reopening procedures against effective judgments or rulings of district-level people's courts; instead, the authority of the Chief Justices of the Supreme People's Court and the Chief Procurator of the Supreme People's Procuracy by territory has the right to appeal to the jud