Rang Dong Plastic lost the lawsuit against Sojitz, had to pay compensation of more than 178 billion VND

Rang Dong Holding must pay 157 billion VND in compensation and 21 billion VND in costs and interest for losing the lawsuit against Sojitz Planet - the unit that used to be their strategic partner.

Rang Dong Holding Joint Stock Company (RDP) has just announced unusual information about the results of the dispute with Sojitz Planet Corporation (belonging to Sojitz Group - Japan).

Accordingly, RDP must compensate Sojitz Pla-net Corporation for damages of about VND 156.9 billion and interest of 10% per year from April 1, 2020 to the payment date. In addition, the company must also pay SIAC fees of more than SGD 370,000, legal fees and other reasonable expenses of USD 586,000 and more than SGD 7,400 for the Japanese enterprise. The above fees are equivalent to more than VND 21 billion and bear interest of 5.33% per year.

In total, Rang Dong must pay about 178 billion VND, excluding interest. This is the legal consequence after the High People's Court in Ho Chi Minh City recognized and enforced the judgment of the Singapore International Arbitration Center (SIAC) on the dispute over the share purchase contract between RDP and a shareholder from Japan.

PVC flexible plastic production line of Rang Dong Holding. Photo: RDP — PVC flexible plastic production line of Rang Dong Holding. Photo: *RDP*

Sojitz Pla-net has cooperated since 2016 and has been a strategic shareholder of RDP since 2017. In September 2017, Sojitz signed a contract to purchase 5 million common shares, issued and fully paid for the purchase of shares at Rang Dong Long An Plastic Company from RDP with a purchase price of more than 174 billion VND. From here, disputes broke out.

After transferring the above shares, Rang Dong violated a number of post-transfer obligations. Therefore, Sojitz terminated the contract and requested this enterprise to refund 90% of the paid share purchase price, equivalent to nearly 157 billion VND. However, RDP did not refund and Sojitz filed a lawsuit with SIAC.

In July 2022, SIAC ruled that Sojitz won the lawsuit. The Japanese company then sent a document requesting Rang Dong to pay the above total of VND 178 billion plus interest, but was not satisfied. Sojitz continued to sue the Ho Chi Minh City People's Court to request recognition and enforcement of SIAC's judgment.

At that time, according to Rang Dong, the stock purchase contract drafted by Sojitz contained coercive provisions such as Rang Dong Long An Company had to sign labor contracts with 700 designated people and had to sign contracts with all designated customers.

During the dispute, RDP argued that Sojitz failed to prove that the company had committed a violation, that actual damage had occurred, and that RDP’s violation was the direct cause of the damage. In addition, Rang Dong asserted that SIAC’s ruling was contrary to many principles of the Vietnamese legal system.

After the first instance trial, the Ho Chi Minh City People's Court decided not to recognize the SIAC arbitration award. Sojitz appealed to the High People's Court in Ho Chi Minh City.

After the appeal hearing, the High People's Court in Ho Chi Minh City decided to recognize and enforce in Vietnam the SIAC arbitration award.

The two sides signed a comprehensive commercial cooperation agreement for Sojitz to supply raw materials, transfer technology, management systems and develop new products according to Japanese standards. The share transfer deal at Rang Dong Long An Company once helped RDP record a profit of 125 billion VND. Along with the deal, the two sides jointly invested in a factory project in Long An with a total capital of 32 million USD.

Siddhartha

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