Problems in auctioning assets for enforcement of judgments

At the meeting with the Legal Committee of the Hai Duong Provincial People's Council on November 24, the Department of Civil Judgment Enforcement of the province raised a notable case of property for enforcement being auctioned and discounted many times but no one registered to participate, directly affecting the progress of the enforcement work.

CAS International Container Joint Stock Company (CAScon) in Lai Vu Industrial Park (Kim Thanh) must pay 1,550 billion VND to Vietnam Joint Stock Commercial Bank for Foreign Trade (VCB) for the principal debt under the credit contract. The loan collateral is the entire land use rights, factory, machinery and equipment of the company. The provincial Civil Judgment Enforcement Department has appraised the price at 296 billion VND, reduced the price, and auctioned it for the 5th time, but there are still no buyers and it is having to continue selling it for the 6th time.

Another case is the case of Hoang Gia Shipbuilding Joint Stock Company in Kim Lien Commune (Kim Thanh) having to pay Dong A Commercial Joint Stock Bank more than 82.8 billion VND (as of August 24, 2017). The assets securing the loan have been discounted and auctioned 4 times (as of the end of October 2023) but have not been successful.

According to the Department of Judgment Enforcement and Organization (Civil Judgment Enforcement Department of the province), the main reason for the difficulties in auctioning assets for judgment enforcement is due to the buyers' fear of having to go through complicated legal procedures when purchasing auctioned assets. Therefore, in some cases, the seized assets are valued close to the market price, or even lower, but when the registration period for auction participation expires, there are still no registrants.

The assets auctioned for enforcement of judgments are currently very diverse, including special assets (machinery and equipment) with very limited registration for purchase. At the same time, the seizure and auction of assets for enforcement of judgments are carried out very strictly according to the procedures prescribed by law. Therefore, in some cases, the enforcement agency must auction or reduce the price many times to be able to resolve the issue. This situation affects the time of enforcement of judgments, reduces the value of debt recovery, and increases the risk of loss for credit institutions.

In some cases, after a successful auction, the person subject to enforcement has an uncooperative attitude and does not hand over the property. The enforcement officers of the enforcement agency must persuade, mobilize, and even organize coercion to hand it over to the auction winner.

According to Mr. Nguyen Van Quy, Head of the Civil Judgment Enforcement Department of Hai Duong City, in reality, the enforcement of court judgments and decisions related to the credit and banking systems accounts for a large proportion of cases requiring enforcement. However, there are still many problems in the process of valuing and auctioning assets securing loans. Many mortgaged assets of enterprises, when depreciated, no longer have much use value to secure debt collection for credit institutions. Some enterprises have even ceased operations, their legal representatives have changed or evaded.

Although the Law on Property Auction, the Law on Civil Judgment Enforcement and the guiding documents have specific provisions on the auction of property for enforcement, the practical application of related regulations still faces many difficulties and needs to be further improved.

To resolve the above difficulties, when amending and supplementing the Law on Property Auction and the Law on Civil Judgment Enforcement, some opinions suggest that there should be separate regulations for auctioning property for enforcement of judgments of a special nature; at the same time, shorten the procedures for auctioning property for enforcement of judgments, clarify the responsibilities of property auction organizations and civil judgment enforcement agencies...