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Late Lotte license may cost law firm
Phuoc & Associates (P&P) law firm was taken to the Vietnam International Arbitration Centre on September 28, 2009 after it failed to obtain a license from the government to open a second retail branch for Lotte Vietnam on time.
It seemed simple enough. Right before opening its first retail branch in HCM City, Lotte Vietnam decided to open another branch at the Everich Building.
On October 1, 2007, Lotte signed the legal service contract with P&P, placing them in charge of following necessary procedures to obtain the operating license for its second retail branch.
Under the contract, Lotte committed to pay $20,000 to P&P right after the contract was signed and it would pay another $100,000 when P&P produces the government receipt for its application documents for the Everich branch. The remaining $30,000 would be paid when Lotte receives the license.
The contract clearly states that, besides the sum of $150,000, Lotte must pay fees and charges relating to the application as stipulated by law.
Under the contract, P&P must obtain the license within 5.5 months after the contract was signed, which was March 15, 2008. The contract allows an extension, but the license must be obtained no later than May, 31, 2008.
P&P did not acquire the license by May 31, however, and on June 15, 2009, Lotte sent a letter stating that it had decided to terminate their contract and asking the firm to refund $120,000.
A lawyer representing P&P, Nguyen Gia Huy Chuong, explained that P&P made great efforts, but the problem resulted from when Lotte changed its board chairman without informing them in advance. This forced P&P to spend an additional month on legal procedures.
When asked to make preliminary comments about the case, some HCM City Bar Association lawyers remarked that P&P had some “weak points” in the contract.
vietnamnet, vneconomy
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