ASSIGNMENT 2

Group 5

Contents
LO3. Illustrate the potential impact of the law on a business. ............................................................... 2

P3. Using specific examples illustrate how company, employment and contract law has a ............. 2

1. Illustrate how contract law has potential impact upon business. .............................................. 2

2. Illustrate how labor law has potential impact upon business .................................................... 9

3. Illustrate how company law has potential impact upon business. ........................................... 12

P4. Suggest appropriate legal solutions for a range of business problems e.g. termination of ....... 15

P5. Provide justifications for the use of appropriate legal solutions ................................................ 15

P5.1: Contract ............................................................................................................................... 15

P5.2: Labor .................................................................................................................................... 16

P5.3: Company .............................................................................................................................. 17

LO4. Recommend appropriate legal solutions based upon alternative legal advice provided ............ 18

P6. Recommend legal solutions based upon a different country’s legal system and/or a............... 18

P6.1: Contract ............................................................................................................................... 18

P6.2: Labor .................................................................................................................................... 19

P6.3: Company .............................................................................................................................. 20

M2. Differentiate and analyze the potential impacts of regulations, legislation and standards. .... 21

M3. Assess the positive and negative impacts of legal solutions to business problems .................. 22

M4. Compare and contrast the effectiveness of these recommendations ...................................... 23

D2. Critically review and evaluate the use of appropriate legal solutions in comparison with
alternative legal advice. .................................................................................................................... 25

References ............................................................................................................................................ 27

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LO3. Illustrate the potential impact of the law on a business.
P3. Using specific examples illustrate how company, employment and contract law has a

1. Illustrate how contract law has potential impact upon business.

Introduce briefly the name, the business filed and the partners of all the chosen companies.
And, cite the source of information.

FPT

FPT is the leading company in Vietnam with over 17,000 employees and a market
capitalization of VND17,608 billion, which is among the largest private companies in Vietnam.
With the core business areas of the two fields of Internet Telecommunications and
information technology provided in 54 provinces across the country. In addition, FPT has
opened more than 16,000 colleges (FPT University). FPT has been present in 17 countries
around the world including Vietnam, Laos, Thailand, Cambodia, Singapore, USA, UK and
Japan. (FPT, 2016).

After more than 26 years of establishment, FPT is the leading company in Vietnam in such
fields as: software field (FPT Software), system integration, information technology service,
distribution and production of information technology products and retail of information
technology products. (FPT,2016).

Present one contract of the company involving one of: (The contract may or may not be in
a legal trouble in fact).

To illustrate the effect of contract law on business, the author selected a contract with legal
issues related to "Article of consumer protection". According to Clause 4.1 (obligations of
Party B) are two clauses protecting customers' rights. The contract was selected as a contract
to provide and use telecommunications services between individuals Kieu Hung Doan and
representatives of FPT customer service center Hoang Lan Huong.

Explain the form of contract and validity of the contract.

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Form: The form of contract is selected and shown in documents.

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Legality: The contract is selected as a contract to provide and use telecommunications
services. Party B is a service provider for Party A of the customer through the provision of a
wireless network. Based on the law of Vietnam, telecommunication services are legally
owned. Therefore, the contract between Kieu Hung Doan and representatives of FPT Hanoi
Customer Service Center Hoang Lan Huong met the legitimacy.

Consideration: In the contract of supply and use of telecommunication services, adequacy of

consideration is shown that: Mr. Kieu Hung Doan has increased the Fiber Home package to
receive the Fiber Family transmission rate. Party B provides services to Party A to receive
money and revenue for the company. In addition, Party A spent some money to get a fast
Internet connection, which is the amount paid by Party A to Party B; Party B sells the
telecommunication service to Party A and receives back the amount corresponding to that
package. Based on contract review theory, can be evaluated in the selected contract, the
interests of both parties are balanced.

Genuine consent : There is no envidence of fraud, misleading or threat.

Capacity: Mr. Kieu Hung Doan, born in 1967, can prove to A when he signs a contract over 18
years old. In addition, he was completely normal and not nervous, often with no signs of
drunkenness. Party B is the customer service center of FPT Hanoi. In the contract, there is a
legal stamp of FPT and the tax code is 0101778163. The contract is the head of marketing
department - Ms. Hoang Lan Huong, authorized under authorization number 03-2015/FPT-
TEL/QĐ-HĐQT dated 02/01/2015. This can prove that both A and B are able to sign contracts.

Supposing, if either of parties breach this Article, please describe the legal trouble which
may be arise out from the breach. Or, if the breach is real, let summarize how it damages
the company.

According to my assumption, as for the contract of providing and using telecommunication

services of FPT, in fact, there have been no legal issues. However, suppose that in the case of
customers who subscribe to Fiber Family service at high speed but the package speed is not
guaranteed as in the contract, the customer has the right to initiate a lawsuit. According to
Article 3.1 (rights of Party A) and Clause 4.1 (obligations of Party B) are two clauses protecting
customers' rights, if FPT breaches these two terms, the customer will have the right to sued.

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In addition, the quality of the device if fake, imitation or poor quality, which when detected
by the customer, the customer has the right to sue the company FPT (however, in this
contract, customers refuse to use; therefore, customers can not sue the corporation for this
reason).

Point out how the legal trouble make an impact on the company’s business.

If it occurs in practice, it will affect the business of the company such as: FPT is affected
prestige and style of the company; Secondly, FPT suffered from economic losses due to
payment of compensation and compensation to customers, lost the deal with major
equipment companies.

In Vietnam, individuals who are under 18 years of age are underage, so many things must be
approved by the legal representative. The Civil Code 2005 provides as follows:

- Persons, less than 6 years of age do not have civil act capacity. Civil transactions of persons
under 6 years of age must be established by the legal representative.

- Persons aged from full 6 to less than 15 years of age when establishing and carrying out civil
transactions must be approved by the legal representative, except for transactions in order
to meet the daily needs of their age or The law provides otherwise.

- In cases where persons aged between full 15 and under 18 years have personal property to
secure the performance of their obligations, they may themselves establish and perform civil
transactions without the consent of the representatives. by law, unless otherwise provided
for by law.

For example, Tran Van A just 17 years old, A wants to buy a house apartment, because buying
a apartment is a transaction involving real estate should A must be approved by the parents
as legal representative.

Please note that if the minor does not have a legal representative or the legal representative
does not meet the conditions for representation, the guardian will substitute his / her
representative to exercise the rights and obligations. are regulated by law.

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2. Illustrate how labor law has potential impact upon business
Foxconn

Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group, is a multinational
electronics contract manufacturing company headquartered in Tucheng, New Taipei, Taiwan.
It is the world's largest contract electronics manufacturer and the fourth-largest information
technology company by revenue. Foxconn manufactures electronic products for major
American, Canadian, Chinese, Finnish, and Japanese companies. Notable products
manufactured by Foxconn include the BlackBerry, iPad, iPhone, iPod, Kindle, Nintendo 3DS,
Nokia devices, Xiaomi PlayStation 3, PlayStation 4, Wii U, and Xbox One. As of 2012, Foxconn
factories manufactured an estimated 40% of all consumer electronics sold worldwide.

According to NewYork Times, Foxconn has been involved in several controversies. Foxconn
was criticized by labor activists, who accused the company of providing low wages and
allowing employees to work past legal overtime limits. Within 2010, there were 18 attempted
suicides by Foxconn employees resulting in 14 deaths in the same year. Total there are 24
suicides in Foxconn.

One of cases below:

SHENZHEN, China — The factory’s first death this year came on Jan. 23, 2010

The body of a 19-year-old worker named Ma Xiangqian was found in front of his high-rise
dormitory at 4:30 a.m. Police investigators concluded that he had leapt from a high floor, and
they ruled It was a suicide.

His family, including his 22-year-old sister who worked at the same company, Foxconn
Technology, said that he hated the job since November when he started — an 11-hour
overnight shift, seven nights a week, forging plastic and metal into electronics parts amid
fumes and dust. Maybe that was Mr. Ma’s job until, after arguing with his supervisor, he was
demoted in December to cleaning toilets.

Mr. Ma’s pay stub shows that he worked 286 hours in the month before he died, including
112 hours of overtime, about three times the legal limit. For all of that, even with extra pay
for overtime, he earned the equivalent of $1 an hour.

“The factory was always abusing my brother,” the sister, Ma Liqun, tearfully said.

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Since Mr. Ma’s death, there have been 12 other suicides or suicide attempts — eight men and
four women — on two Foxconn campuses in Shenzhen, where employees live and work.

Some workers complain about military-style drills, verbal abuse by superiors and “self-
criticisms” they are forced to read aloud, as well as occasionally being pressured to work as
many 13 consecutive days to complete a big customer order — even when it means sleeping
on the factory floor.

Although the legal limit in China is 36 hours of overtime a month, several workers interviewed
here said they regularly exceeded that limit.

(Barboza D., 2010)

Describe the legal trouble which may be arise out from employment issue

Foxconn violets Labour Law of the People's Republic of China 1995

Article 36 which states “The State shall practise a working hour system wherein labourers
shall work for no more than eight hours a day and no more than 44 hours a week on the
average.”

Article 38 which states “The employer shall guarantee that its labourers have at least one day
off a week.”

Article 41 which states “The employer can prolong work hours due to needs of production or
businesses after consultation with its trade union and labourers. The work hours to be
prolonged, in general, shall be no longer than one hour a day, or no more than three hours a
day if such prolonging is called for due to special reasons and under the condition that the
physical health of labourers is guaranteed. The work time to be prolonged shall not exceed,
however, 36 hours a month.”

Article 54 which states “The employer shall provide labourers with labour safety and
sanitation conditions meeting State stipulations and necessary articles of labour protection,
and carry out regular health examination for labourers engaged in work with occupational
hazards.”

(china.org, 2009)

Point out how the legal trouble make an impact on the company’s business

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Foxconn scandal has impacted on his partner Apple.

There are very large, very well known companies trading on the US exchanges that have lower
market caps than what Apple lost in a single day. Measured in that respect, what happened
on that single day was catastrophic to Apple's stock. That day when article about Foxconn was
published, it dropped by around $20. (StockRiters, 2012)

Foxconn Technology said after the published news that it would immediately raise the salaries
of many of its Chinese workers by 33 percent. Foxconn’s 33 percent increase in wages could
translate into even higher labor costs. Mr. Huang at Foxconn said the company had not yet
calculated its impact on profitability. (Barboza D., 2010)

“According to other Research by Chan, “Foxconn’s operating margins have declined steadily
over the past six years, from 3.7 percent in the first quarter of 2007 to a mere 1.5 percent in
the third quarter of 2012, even as total revenues rose in the same period with the expansion
of orders.”

Employment and Contract for services

A contract of employment is a formal agreement in which a company or organization hires a

person as an employee.

A contract for service generally states that a service provider will perform certain duties for a
business or organization, although the service provider is not actually an employee of the
hiring party.

To distinguish between these two concepts, we must use 3 main tests: Control test,
integration test, and the multiple test.

Control test is the test of the power to direct, manage, oversee and/or restrict the affairs,
business or assets of a person or entity.

Integration test the decisive question was whether the person is employed as part of the
business.

Multiple test is the test adopted by courts for deciding whether a contract is of or for service.
This is a three fold test: a contract of service requires duty to give personal service, the

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existence of a sufficient degree of control and the terms of the contract being consistent with
service

For example:

B works as worker for the construction company C. Job is constructing house.

=> EMPLOYMENT

D works as an independent contractor provides constructing service for company C.

=> SERVICE

3. Illustrate how company law has potential impact upon business.

Introduce briefly the name, the business filed and the partners of all the chosen companies.
And, cite the source of information.

Toan Thinh Forestry Products Co., Ltd was established on February 1-2, 1992 under Decision
No. 38 / GP-UB of People's Committee of Ho Chi Minh City with eight founding members. The
company is engaged in the processing and production of wood products for luxury customers
in Ho Chi Minh City. Company charter is based on the Company law of 1990 and the Capital
charter of the company is 100,000,000 VND, which is a huge money at that time.

Describe the legal trouble which may be arise out from company law issue

Since its establishment on October 8, 1997, the company has changed its members four times,
reducing the number of members to two (Nguyen Thi Bich Dao and Le Quang Chieu), each
member has 50% of charter capital. However, Company charter and Charter capital of the
company have not changed.

During the operation until 2003, there was a dispute between the members and the company
regarding the distribution of profits. The parties then failed to settle the dispute and Nguyen
Thi Bich Dao has filed a lawsuit against the company to request the withdrawal of capital
contribution or transfer to another member at negotiable price or the company close down.

Mr. Le Quang Chieu - the remaining member of the company did not agree to Ms. Nguyen Thi
Bich Dao because of the company charter. Specifically in point b, Article 7: "The transfer of
the capital shall be given priority among the members, if transferred to people outside the

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company, must be approved by a majority of the board members, equivalent to 80% of the
company's capital.”

However, at the appellate trial, the judge dismissed Mr. Le Quang Chieu that the charter of
the company was no longer in accordance with the Law on Enterprises 1999 stipulating the
transfer of capital contribution since 12-6-2001.

Specifically, according to Clause 2, Article 25, the Company Law of 1990 states: "The transfer
of capital shares between members shall be carried out freely. The transfer of capital
contribution to another person who is not a member must be approved by a group of
members representing at least three-fourths of the charter capital of the company. " At the
time of approval, Article 7 of Toan Thinh Company's regulations is in line with the Company
Law 1990.

However, in 1999, the Law on Enterprises replaced the Company Law, the transfer of capital
contributions of members was carried out in accordance with Articles 26 and 32 of the 1999
Enterprise Law. The 1999 Enterprise Law was no longer restricted the transfer of capital
outside the company must be approved by a group of members representing three quarters
of the charter capital.

In fact, Toan Thinh Company at that time has only two members, each of whom is equal
(50/50), the provisions of the charter relating to the rate of 80% is not possible.

Toan Thinh Company has made many changes in its members, ownership ratio of each
member, changes in business registration but the company has not changed the company
charter to suit with the law, which cause big problems.

Point out how the legal trouble make an impact on the company’s business

The inconsistency between the company charter and the Law on Enterprises causes extremely
negative consequences for the business.

First of all, as a family business, the relationship between Nguyen Thi Bich Dao and Le Quang
Chieu became tense, leading to divorce in 2006.

Moreover, during the three years of the lawsuit, the operation of the company has been
stagnant. Inventory in the warehouse (with the nature of wood) must be destroyed

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completely because no partner to find businesses to consume products, estimated damage
up to 64 billion.

At present, the company only operates on a very small scale. Moving from luxury customers
to low-income customers, from high-grade wood to bamboo products. The owner of the
business also transferred to Ms. Trinh Dao, with only the amount of 11 billion for the whole
capital of the company.

In summary, the consistency between company charter and the law has an important role in
every bussiness. In all situations, the law is always has the highest power, then to the
standards of each industry and finally to the company charter.

Types of Companies in Vietnam:

Limited Liability Company: (one member or more than one member) A limited liability
company has the legal entities, participates in legal relations as an independent entity and
takes responsibility for its assets. The company has a limited liability regime, the members
are only responsible for the amount of capital contributed to the enterprise. The Company
can only mobilize capital through the capital contribution without issuance of shares or
bonds. A limited liability company has no more than 50 members

Joint Stock Company: A joint-stock company is a company has legal entities, in which the
charter capital is divided into equal parts called shares which are established and exist
independently. Shareholders are only responsible for the debt and other property obligations
of the company within the amount of capital contributed to the company, have the right to
freely transfer their shares to others, the minimum number of shareholders Three and
unlimited maximum number. Shareholding companies have the right to issue securities in
accordance with the law on securities.

Sole Proprietorship: This type of business is owned by an individual. The owner of the
business is solely responsible for all of his or her assets for all business activities (indefinite
liability). Private enterprises do not have legal entities, there is no separation between the
assets of business owners and enterprises.

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Partnership: A partnership is an enterprise with at least two members who are joint owners
of the company and jointly conduct business under a common name (partnership member).
In addition, the company also has a capital contributing member. Partnerships has legal
entities and can not be issued securities. The Company has two types of liability: limited
liability (for capital contributors) and unlimited liability (with general partner).

P4. Suggest appropriate legal solutions for a range of business problems e.g. termination of
contract, rescue from insolvency and liquidation.

Suggest a legal solution for the legal trouble of the contract.

The legal solution for the contract is to terminate the contract. If Party B, after signing the
contract with Party A, does not provide the speed line in accordance with the amount paid by
Party A to purchase Fiber Family Package, Party B shall be responsible for repairing and
correcting the line error transmission. In some cases, Party B is repairing the network or due
to force majeure, the Party A has the right to terminate the contract with Party B in violation
of Clause 3.16 of the contract.

Suggest a legal solution for the legal trouble of the employment issue.

Legal solution is compensation and improving working enviroment for this issue since the
company fails to take measures against the working conditions, which leads to the occurrence
of a serious accident, thus causing losses of lives and properties to labourers.

Suggest a legal solution for the legal trouble of the company issue

The company should dissolve and establish a new company.

P5. Provide justifications for the use of appropriate legal solutions

P5.1: Contract
Money: First, the issue of money is also an aspect of economics worth discussing. If FPT
violates the charter and terminates the contract, FPT must compensate the customer for all
damages, repair the line will cause damage to the company's budget. Financial costs will vary
widely, making it necessary for the accounting department to spend time rebuilding the

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budget and calculating profit and loss to ensure that FPT can maintain its position after the
juncture.

Reputation, Brandname: Second, trouble will directly affect the reputation of the center
manager, the higher leaders will no longer trust and entrust to the manager; or customers
who no longer trust the services of FPT Corporation, typically the prestige of the telecom
center will not be able to achieve full sales in the coming years.

Relationship with various stakehoders ( internal and external): Final, the relationship will be
affected much when the contract is in trouble. Internal stakeholders have the potential to
cause controversy, blame each other on who's fault; Employees no longer respect the
manager; Wages will be reduced so employees no longer care about the work, so the sales
decrease, leaving the company vulnerable to bankruptcy. External relationships are also
severely affected by the prestige and prestige of the corporation, customers or foreign
partners no longer trust and work with FPT; this also affects the revenue and quality of FPT's
telecom equipment and services.

Legal aspects: YES.

P5.2: Labor
Money: Compensation costs Foxconn about 360 000$ for workers families, also improving
working conditions means company needs to invest money for new equipment, care center
counselors and so on, including pay raises for workers. Its quite low amount for such big
company with 4.58 billion $ (2016) net income. It helps to prevent some troubles for firm in
the future.

Reputation: This scandal has damaged its reputation, and to quickly recover after those
incidents, the company needs to react to situation as fast as possible. Compensation and
attention to workers might be a great temporary solution.

Relationship with various stakeholders (internal and external)

Solution suggests several areas for improvement, such as better training for hotline staff and
care center counselors, as well as better monitoring to ensure effectiveness. Expanding
manufacturing operations to other parts of China so its workers can live closer to home also

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may help to improve relationship between the company and employees. Acting appropriately
to prevent further suicides can keep Foxconn partners less worry about the situation.

P5.3: Company
At the case of Toan Thinh Forestry Products Co., Ltd, if the company had considered to
establish new company in 2013, the company and its owners would had have the following
advantages:

Money: The restructuring of the organization is extremely necessary in the context of the two
main shareholders, Nguyen Thi Bich Dao and Le Quang Chieu, who are in conflict of interest.
If the business is dissolved and the company's assets are divided equally to two people, Le
Quang Chieu can continue to use the newly acquired assets to establish a new company.
Nguyen Thi Bich Dao can sell his property to a third party without violating any laws or
regulations of the business as well as Law on Enterprise. The property (mainly raw wood) of
two people will not be stagnant in the warehouse leading to the destruction and damage of
64 billion.

Brandname: With the nature of the business and the customer that the business serves,
keeping reputation is extremely necessary. Luxury items, especially wood products, require a
great deal of money. If the customer does not trust the business because of the scandal, the
business will not be able to rebuild the brand. The establishment of a new company in the
case of the dispute of the company Toan Thinh is completely reasonable. Customer retention
remains the same, businesses can briefly inform customers about the restructuring situation
of the company, avoid the psychological panic suspect in the customer.

Relationship with various stakeholders: In this case, the relationship that is most affected is
the relationship between the shareholders Nguyen Thi Bich Dao and Le Quang Chieu. This has
similarities with larger companies in Vietnam such as Tan Hiep Phat Beverage Group. Initially
the enterprise was also a family business, then scandal related to product quality, so Mr. Tran
Qui Thanh had to restruct the business to better match the situation at that time. Back to this
case, the establishment of the new business makes the relationship between Nguyen Thi Bich
Dao and Le Quang Chieu become less stressful. Two people may sell different items, but they
will no longer sue each other and not to end up with a divorce.

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Legality: The establishment of a new business makes the dissolution of the old business
becomes mandatory if Le Quang Chieu still wants to continue trading in high-grade wood.
Legally, this is absolutely true. However, the dissolution of the old company will undoubtedly
cause confusion in the division of assets of the business, which requires mediation to replace
the court to ease the tension between the two. In general, setting up a new business in this
case is completely legal.

LO4. Recommend appropriate legal solutions based upon alternative legal advice provided
P6. Recommend legal solutions based upon a different country’s legal system and/or a
different legal framework.

The difference between arbitration and conciliation

For arbitration, the parties shall select arbitrators. The selected arbitrators then shall resolve
the dispute and render an arbitration award which is final and binding. For conciliation, a
third party shall play the role of a conciliator in helping the parties to resolve the dispute
through negotiation.

The conciliator is not allowed to directly resolve the dispute and render a decision, but the
parties to the dispute themselves shall achieve an agreement with the help of the conciliator.

While an arbitration award is final, the agreement achieved through conciliation is not binding
on the parties. Therefore, if one party do not voluntarily implement the agreement, the other
can institute court or arbitration proceedings.

P6.1: Contract
Negotiation

Negotiation method and simplest method are used mostly in companies when litigation
occurs. There are a number of reasons why negotiation can be helpful. First of all, negotiating
can save the time of both the customer and the service provider. Second, the negotiator will
be the company's most trusted negotiator with the client, which can save the company's cost
of hire. Third, the negotiation procedure is quite simple. Ultimately, the effect is high because
both sides can respond and find solutions to the problem without compromising the interests
of the buyer, as well as the reputation of the service provider. In a nutshell, the mode of

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negotiation is beneficial for both parties when problems arise in order to solve the problem
peacefully.

Ombudsman

In cases where the prestige of the telecommunication service provider has been lost, the
customer no longer trusts the negotiating representative of the company, the two parties will
use the ombudsman method. Ombudsman by the authorities to investigate companies and
organizations to protect customer and consumers. The advantage of an ombudsman is that
the ombudsman is the one who stands and can solve the problem between the two parties,
helping both parties clarify the wrong side of the other and make fair decisions. The procedure
of the uterus is also fast, accompanied by high efficiency. All of the above can make the
inspection method worth using after negotiation.

P6.2: Labor
Trade union:

Trade Union is an organization that represents the interests of workers. It regulates relations
between workers and the employer. The common purpose of trade union is maintaining or
improving the conditions of employment. Since the interests of the workers are not being met
and the firm does not pay enough attention to them, trade union is the great solution. An
employer is required by law to bargain in good faith with a union, although an employer is
not required to agree to any particular terms. But the situation is getting worse and any
improvement needs to be made. It starts with the formation of a bargaining unit, a group
represented by a union for dealing with an employer. Once an agreement is reached, a
collective bargaining agreement (CBA) is signed and an employer can’t change details of the
agreement wihout union’s approval. The procedure takes time because its not ADR but less
costly since the fee costs little amount of employee’s salary.

Negotiation:

Negotiation is a method by which parties settle differences. It is a process by which

compromise or agreement is reached while avoiding argument and dispute without the

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assistance of third parties. The procedure is very simple and less costly since attorneys and
expert witnesses are not hired. Negotiation at least not escalate the conflict, which is
especially important in situations where there is a continuing relationship. This solution also
saves time because negotiation can be scheduled by the parties as soon as they are all able
to meet together.

P6.3: Company
At the case of Toan Thinh Forestry Products Co., Ltd, shareholders should consider 2 ADR:
Mediation and Arbitration.

Mediation has the following advantages:

Save time and Lower cost: With its versatility, Mediation will help stakeholders save a lot of
time and money if they are pursuing lawsuits. For example, in this case, Toan Thinh takes up
to three years to pursue a lawsuit, too expensive price.

Easier Procedure: The Court has a more rigidly organized approach, with rules and procedures
in place. There are a number of highly technical factors that require the parties to be serious
about both the time and the trial process. When Mediation can be conducted in a variety of
settings, procedures can be negotiated and adjusted for flexibility and flexibility.

More efficiency: In mediation, disputants can talk, discuss, negotiate and discuss solutions
throughout the process. The mediation process provides an opportunity for each party to
express its views on the dispute. This is a very important step in settling disputes of mediation.
Mediation provides the opportunity for the parties to present, explain and apologize to each
other. The direct involvement of the disputing parties in mediation is essential as it promotes
the responsibility of the parties to their choices.

Remaining Relationship: Besides placing people at the center, mediation also focuses on the
aspect of maintaining relationships. This has the humanitarian meaning of dispute resolution.
The parties have the opportunity to express their feelings, express their interest in the future
relations between the parties.

Legality: Yes

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Arbitration has the following advantages:

Save time and Lower cost: With Arbitration, the parties can take the initiative in time and
place to resolve disputes help speed up the time to resolve disputes. The arbitration process
does not go through many levels of court judgment, so it is costly to spend time and money
on the business.

More efficiency: Having the right to choose a dispute resolution arbitrator allows the parties
to select experts who have the expertise and practical experience of the dispute, who has the
reputation of becoming a dispute resolution arbitrator. Nguyen Thi Bich Dao and Le Quang
Chieu can be assured of the quality of dispute resolution.

Remaining Relationship: The decision of arbitator is the same as that of the court which is
final and obligatory. This will ensure equality for both parties in the division of assets.

Legality: Yes

M2. Differentiate and analyze the potential impacts of regulations, legislation and
standards.
Vietnam national coal-mineral industries holding corporation ltd (Vinacomin) is a Vietnamese
mining company focuses on coal and mineral mining and has headquarters in Quang Ninh
Province. This corporation was established in 2005, based on Vietnam National Coal
Corporation and Vietnam Minerals Corporation.

In the Charter on organization and operation of Vietnam national coal-mineral industries

holding corporation ltd, according to Section 2: Obligations of Enterprises; Article 16: Business
Obligations of Enterprises with Clause 4: “Enterprises must abide by the state regulations on
the protection of natural resources and environment. Do not allow any exploitation activities
contrary to the regulations of the Ministry of Natural Resources and Environment.”

Article 8: Obligations of enterprises (Enterprise Law 2014) show that “Enterprises must
comply with the law on national defense, security, social order, gender equality, protection of
natural resources and the environment, the protection of historical-cultural sites and places
of interest.”

According to the regulations on environmental protection in Chapter 4, Circular No. 3/2016

/ TT-BTNMT issued by the Ministry of Natural Resources and Environment on October 14,

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2016, “Enterprises are required to protect and use properly and save natural resources,
especially mining enterprises.”

Moreover, Article 6 of Chapter I of the Law on Environmental Protection and also contains
similar contents.

As we can see, the Charter on the organization and operation of Vinacomin is totally in line
with the regulations on environmental protection promulgated by Vietnamese law. The first
sentence of the Clause 4 has shown that “Enterprises must abide by the state regulations”,
this means the Charter of Vinacomin is based on the law and in all cases the law must be
applied before the company's charter.

In fact, we can choose one typical case of Hon Gai Coal Company, one of which companies in
the corporation, has violated regulations on environmental protection when exploiting coal
mine in area 4B, Ha Phong Ward, Ha Long City, Quang Ninh Province.

In the 2005 floods, the dam was overflowing for a long time. This causes the amount of rock
and soil from the Coc Sau mine to fall down to the people’s house. People have suggestions
but the company still ignored. After the dam collapse, Cau Sau Coal Company compensated
each household for just VND 3 million.

The dumps are overloaded, causing a great risk of landslide when it rains. This hinders the
lives of people as well as serious damage to the environment and landscapes in area 4B. The
situation has remained unresolved until now, and it is clear that the practice of applying the
company's regulations and the laws on environmental protection in Vinacomin is limited.

M3. Assess the positive and negative impacts of legal solutions to business problems
Advantages and disadvantages of legal solution (dissolution and establish new company) in
the case of Toan Thinh Forestry in the field of wood production in Ho Chi Minh City.

As a big company in the field of wood production in Ho Chi Minh City, the dispute of Toan
Thinh made the its suppliers and partners fall into a difficult situation when there is no output
for the raw wood material. Nearly 1,300 hectares of forest equivalent to 260000 m3 of wood
fell into storage in Toan Thinh's warehouse within 3 years. Toan Thinh's customer system is
also extremely large with luxury customers. According to Mr. Chieu, the customer list of his
company has up to 5000 people, including more than 1000 regular customers.

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Advantages: The dissolution of the company and the establishment of a new company would
help reduce the inventory quality, along with Mr.Chieu still retain customers for the new
company. Damage will not reach the VND 64 billion. In addition, the number of employees
working in the company is worth discussing. At that time, the company had a total of 57
employees. The current number is only 18. If the shareholders decided to dissolve the
company and Mr. Chieu opened a new business, surely the number of employees did not
decrease so much because the salary for employees does not occupy a large part of the
capital, the purchase of raw wood and machinery is much more than the salary of employees,
this can be negotiated in the process of dissolution of the company.

Disadvantages: The dissolution of the company and the establishment of a new company only
partly retain the prestige of Toan Thinh, not completely bring the trust of customers,
especially the rich and difficult customers. Moreover, the person who directly involved in
selling and consulting clients was Nguyen Thi Bich Dao. Le Quang Chieu's founding of the new
company may not receive positive response from customers.

Dissolution takes place depending on the arrangement between the parties. This makes Mr.
Chieu can not immediately start a new business because inventory and machinery are also
subject to dispute among shareholders. This also caused the production process to stagnate
causing damage to the involved parties of Toan Thinh.

In conclusion, the dissolution of the company and the establishment of a new company brings
both advantages and disadvantages to the field of wood production in Ho Chi Minh City.

M4. Compare and contrast the effectiveness of these recommendations

At the case of Toan Thinh Forestry Products Co., Ltd, shareholders should consider 2 ADR:
Mediation and Arbitration.

Both Mediation and Arbitration have advantages and disadvantages, here is a comparison
between the two solutions according to the factors:

Save time: Arbitration resembles a mini-trial, which can make it a slow grind and parties have
no ability to speed things along. When people use mediation, their conflicts are resolved in a
fraction of the time. Therefore, the use of Mediation will make the parties less time-
consuming.

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Lower cost: Mediators are usually people who have a close relationship with both parties.
While the cost of the arbitration will certainly be greater, in this case, the use of Mediation
will be less expensive than in arbitration.

Easier Procedure: The mediation process is agreed upon by the parties, while the arbitration
process has to be followed by the direction of the arbitral tribunal. This makes the mediation
process easier in every case.

More Efficiency: During the mediation process, the mediator will help the parties understand
the views of the other party without deciding who is right or who is wrong and the final
decisions are always depend on two side. When resolving a dispute by arbitration, the final
decision-maker is an arbitrator based on the law and events that have caused the dispute. In
the case of Toan Thinh, if we have to choose what ADR are more effective, that is the
Mediation. Because shareholders are husband and wife, the family disputes should be made
through mediation methods that will achieve more results and less stress than the arbitration.

Remaining Relationship: Mediations may be closed-sided sessions with each party, while
arbitration proceedings are required to be attended by two parties. The advantage of these
closed mediations is that mediators can grasp the hidden issues that direct discussion can not
see. This is the way shareholders can keep their relationship after dispute. At this case,
Mediation is better than Arbitration.

In conclusion, at the the case of Toan Thinh Forestry Products Co., Ltd, Nguyen Thi Bich Dao
and Le Quang Chieu should choose Mediation as an alternative dispute resolution to get a
best result for their asset and relationship.

For instance, the results of the Sixth CEDR Mediation Audit show that the UK mediation
market has grown by 9% in the 2016. The current size of the civil and commercial mediation
market is estimated as being in the order of 950 cases per year which include community or
family mediation. This is a huge number to compare with total of 347 arbitrations were
referred to the LCIA (The London Court of International Arbitration) about family disputes.
Success mediation rates for family dispute cases are also very high, up to 86%. This proves the
effectiveness of reconciliation to the defense of conflicts of interest, particularly those
relating to family matters.

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D2. Critically review and evaluate the use of appropriate legal solutions in
comparison with alternative legal advice.
D2.1

Globalization, international economic integration and trade liberalization are emerging issues
in the world economy. That means that the application of foreign law is inevitable in Vietnam,
to protect the legitimate rights and interests of the parties and promote economic
development.

Although Vietnamese law has used a number of regulations that allow the use of foreign law
in some cases, it is still very limited. In this situation, the use of arbitration as an alternative
to the courts is seen as an extremely effective method, in particular disputes involving foreign
elements. Another ADRs such as Mediation, Conciliation, Ombudsman or Trade Union are no
institutions suitable for the economy with foreign elements such as Vietnam.

Article 14 of the Commercial Arbitration Act in 2010 provides for the "Law on Application of
Dispute Settlement" as follows: “For disputes without foreign elements, the arbitral tribunal
shall apply the Vietnamese law to settle the dispute. For disputes involving foreign elements,
the arbitral tribunal shall apply the law chosen by the parties, usually the foreign arbitral
tribunal or the arbitration council in Vietnam which has extensive experience in dealing with
foreign cases.”

In fact, in recent years the use of arbitration to resolve commercial disputes has become more
common in Vietnam, not only through the number of disputes resolved, but also through the
diversity on the field of disputes.

Since the Commercial Arbitration Act of 2010 has come into force by 2014, the total number
of disputes resolved at arbitration centers in Vietnam is 879, nearly the same as the total
number of cases in the previous 10 years.

According to the statistics of the Vietnam International Arbitration Center, the number of
foreign dispute cases accounted for about 51% of the total number of cases settled at this
center, this means the participation of foreign arbitrators and foreign lawyers in arbitration
is essential. At present, Vietnam has 11 arbitration centers with 325 arbitrators, of which 17
are foreign arbitrators. Settle disputes in the following areas: contracts for the purchase of
goods, insurance, information technology, construction, distribution, agents, energy, etc.

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In conclusion, Arbitration is the most suitable ADR for the situation of Vietnam economy
nowadays.

D2.2

In legal solutions of business disputes such as terminating the contract, establishing a

company, contributing capital or dissolving the company, the dissolution solution of a
company is being used most popular in Vietnam.

For instance, in 2011, the total number of enterprises having to dissolve or stop operating
was 53.9 thousand, increasing by 24.8% against 2010; Of which, the number of enterprises
officially dissolved was 7.6 thousand, up nearly 15% compared to 2010. In 2013, 60.7
thousand enterprises were dissolved and stopped operation.

Nearly, the number of enterprises ceasing to operate indefinitely in April 2018 increased
sharply by 71%, while enterprises completing dissolution procedures increased by 74% over
the same period last year. According to the General Statistics Office (GSO), over the past four
months, the number of dissolved enterprises has reached nearly 31,000, of which bankrupt
enterprises have a capital of less than VND10 billion, accounting for 91.4%.

The following are cases where the business usually chooses to dissolve:

First of all, the main cause is the loss of business, enterprises have many difficulties in the
process of operating because of not mobilizing capital and finance to continue operating.

Secondly, due to limited capacity of management and operation of enterprises and

individuals, the lack of experience in managing and operating enterprises has led to a decline
in the business situation of enterprises that cannot grow.

Third, due to other reasons such as lack of capital for business, not finding market or being
on sale or waiting to reorganize the type of business.

Fourthly, due to the difficulty of the economy, the competitiveness decreases, the demand
for the market is low so many businesses tend to be clustered, seeking to merge together to
increase their power or be competed by competitors, and cannot continue to operate so it is
forced to dissolve the business.

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