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Recently, the authorities in key manufacturing hubs in the South of Vietnam, including Ho Chi Minh City, Binh Duong, Long An, and Dong Nai have issued orders requiring manufacturers to either create a production bubble or stop production until further notice. These orders were issued in response to a surge of COVID-19 cases in Vietnam since 27 April 2021, also known as the fourth wave.
For the production bubble, companies need to arrange that their employees eat, work and sleep at the manufacturing premises. Alternatively, the companies can arrange a one-stop accommodation for all employees and a vehicle to transit the employees from the accommodation place to the plants daily.
However, business owners were only given about 48-hours to make the necessary arrangements. Numerous companies could not meet the requirements and had to stop operations. These orders put many manufacturers at financial risk because they had to stop production, and also at legal risk as customers might start a lawsuit as delivery deadlines were not met.
The question is now if these administrative orders from the local authorities should be considered as a force majeure event or a basic change of circumstances under Vietnamese law.
If you would like to know the answer to the aforesaid question as well as learn about any alternative solution to deal with the issue at hand, please contact our Head of Dispute Resolution Practice – Ms Minh Nguyen at minh.nguyen@acsvlegal.com.
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Vietnam is a dynamic country with an economy that continues to grow and modernise and has a lot to offer. It is a unique country and provides extensive opportunities if you are willing to spend the time to understand the market and the people living and working in it.
Since Vietnam has joined the WTO in 2007, investment opportunities in Vietnam have developed immensely. Nevertheless, there are undoubtedly many challenges in doing business here, some of which we will touch upon the main points in our guide “Doing Business in Vietnam".
In this guide you can find information about:
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