Serious damage to the bank
Submitting a petition to the National Assembly’s Judicial Committee, the Chief Justice of the Supreme People’s Court, the Prosecutor General of the Supreme People’s Procuracy…, Bank X (name withheld as requested) said it had received the Supreme People’s Court’s Supervisory Decision No. 10/2022/DS-GDT dated April 27, 2022.
According to the above decision, the supervisory level of the Supreme People’s Court annulled the Appellate Judgment No. 242/2020/DS-PT dated July 17, 2020, of the People’s Court of Ho Chi Minh City and judged again (scheduled for May 28, 2024).
This is a case of “Dispute over home ownership and land use rights” between the plaintiff, Mr. Nguyen Thanh Cong, and the defendant, Ms. Trinh Tu Toan, and related parties regarding the property of homeownership and land use rights at 317 Tran Binh Trong, Ward 4, District 5, Ho Chi Minh City.
After the Appellate Judgment No. 242/2020/DS-PT dated July 17, 2020, took effect, the last buyer of the property was Mr. Truong Cong Minh.
To make the purchase, Mr. Minh borrowed an additional 140 billion VND from Bank X, bringing the total to 220 billion VND for payment. The purchase was made according to the House Sale and Purchase and Land Use Rights Transfer Contract dated September 11, 2020, notarized at the Van Thi My Duc Notary Public Office. After payment and full payment of registration fees, the authorities updated Mr. Minh’s name on the Land Use Right Certificate and Home Ownership on September 15, 2020.
House at 317 Tran Binh Trong, Ward 4, District 5, Ho Chi Minh City
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Thus, in this case, Bank X emerged as a “party with related rights and obligations” in the stage after the Appellate Judgment No. 242/2020/DS-PT dated July 17, 2020, took effect for about two months, when it received a mortgage guarantee for Mr. Minh’s loan of 140 billion VND.
Bank X argues that it has sufficient legal grounds to prove that it is a third party in good faith and that the Ho Chi Minh City People’s Court of Appeal’s judgment in resolving disputes over this property before the bank received the mortgage could cause serious damage to Bank X and potentially lead to a loss of loan security, making loan maintenance and debt recovery difficult or impossible.
According to Bank X’s representative, the above petition was sent because the bank had previously submitted an Independent Request in the civil case, but the Appellate Court did not accept it.
Third Party in Good Faith
The legal basis presented by Bank X is that on September 22, 2020, the bank lent Mr. Truong Cong Minh 140 billion VND, with the loan security being the Homeownership and Land Use Rights at 317 Tran Binh Trong, Ward 4, District 5, Ho Chi Minh City, as stated in the Land Use Right Certificate No. BA 301092, registered under the number CH00424, issued by the People’s Committee of District 5 on March 17, 2010, and updated on September 15, 2020, as the property of Mr. Truong Cong Minh, according to the Mortgage Contract of Land Use Rights and Attached Assets No. 21295/20MN/HDBD dated September 22, 2020.
The above mortgage contract was notarized at the Hoang Xuan Ngu Notary Public Office in Ho Chi Minh City on September 22, 2022, and registered at the Chi Nhanh Van Phong Dang Ky Dat District 5 on September 23, 2020.
House at 317 Tran Binh Trong, Ward 4, District 5, Ho Chi Minh City
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At the time of receiving the above mortgage, the Appellate Judgment No. 242/2020/DS-PT dated July 17, 2020, had been in effect for over two months. In the period following the above appellate judgment up to the decision to grant the loan, there were no restrictive documents or warnings regarding transactions related to this property from any state management agency.
Moreover, the fact that the Chi Nhanh Van Phong Dang Ky Dat District 5, a state management agency at the grassroots level for land, accepted the registration of the secured transaction in the Land Use Right Certificate on September 23, 2020 (after the appellate judgment No. 242/2020/DS-PT had been in effect for over two months) clearly demonstrates this objectivity.
Meanwhile, over a year after the above appellate judgment, on September 9, 2021, the Supreme People’s Procuracy issued Decision No. 07/QD-KNGDT-VKS-DS to protest the Appellate Judgment No. 242/2020/DS-PT dated July 17, 2020, which was one of the reasons for the supervisory level to annul the appellate judgment and judge again.
Attorney Nguyen Tan Thi (Director of Hoa Sen Law Company, Ho Chi Minh City): According to legal regulations, the Appellate Council does not accept Independent Requests because it only has the right to: uphold the first-instance judgment; amend the first-instance judgment; annul the first-instance judgment in whole or in part and transfer the case file to the first-instance court for a new trial; annul the first-instance judgment and terminate the case (in case the litigant withdraws the lawsuit…), suspend the appellate proceedings (when the litigant withdraws the appeal, the Procuracy withdraws the protest…), and temporarily suspend the case. However, according to legal regulations, the appellate judgment takes effect from the date of its pronouncement. Therefore, if the transactions of the related party take place after the appellate judgment, it will fall under the case of a third party in good faith. Any subsequent judgment must protect the rights and legitimate interests of the third party in good faith. |
Bank X also argues that the bank’s extension of credit to Mr. Truong Cong Minh was based on his actual capital needs, proper use of capital, and receipt of a mortgage of property legally owned by Mr. Truong Cong Minh through a duly signed, notarized, and registered mortgage contract, in accordance with the law. Moreover, after the disbursement of the loan until now, Mr. Minh has fully complied with his responsibility to pay interest to the bank.
Therefore, Bank X believes that the judgments of the Appellate Court regarding this property must consider protecting the rights and legitimate interests of the bank as a third party in good faith, in accordance with the 2015 Civil Code and the Official Dispatch No. 64/TANDTC-PC dated April 3, 2019, of the Supreme People’s Court (announcing the results of direct answers to some difficulties in criminal, civil, and administrative proceedings) and Official Dispatch No. 02/2021/TANDTC-PC dated August 2, 2021 (answering some questions in adjudication).
Ngo Nguyen