Firms may breach exporting contracts
Firms may breach exporting contracts
Production slowdowns are putting some exporters at risk of breaching contracts and potentially triggering trade-related disputes, said Central Institute for Economic Management deputy director Nguyen Dinh Cung at a conference in Ha Noi yesterday.
"Disputes will readily occur when relevant parties, as a result of these disadvantageous economic conditions, can't perform or perform contracts inadequately," Cung said.
He also warned that the country needed to be cautious in implementing policies to bailout or assist certain industries as such policies posed a potential conflict with commitments under international agreements.
Viet Nam Lawyers Association chairman Pham Quoc Anh agreed, noting that the failure of domestic enterprises to enhance their transparency in doing business was "dangerous in the context of integration."
Domestic enterprises were often at a disadvantage when international disputes arose as they lacked caution in signing and performing contracts and dealt with problems tardily, commented Luu Tien Dung, an arbitrator at the Viet Nam International Arbitration Centre. He urged firms to increase their awareness of legal mechanisms for dispute resolution.
Of 10,000 companies surveyed by the General Statistics Office in April, 4.3 per cent had halted production and operations and were facing bankruptcy or dissolution.
About two-thirds of these said they had been struck by falling domestic demand, while over half had found it difficult to access sources of capital, and just under half had faced difficulties acquiring raw materials.
About 40 per cent said high interest rates remained a barrier to accessing credit. Cung noted that up to 80 per cent of domestic companies were now subject to interest rates of 17 per cent or more, and only about half were able to qualify under preferential lending policies.
More than half of the enterprises involved in manufacturing, construction, retail and telecommunications also said that high inflation had greatly hindered their operations.
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