Vietnamese plastics company loses lawsuit to Japanese partner

By Tat Dat   September 27, 2023 | 04:00 pm PT
Vietnamese plastics company loses lawsuit to Japanese partner
Inside a factory of plastic manufacturer Rang Dong. Photo courtesy of the company
Plastic manufacturer Rang Dong Holding has lost a legal case to Japan’s Sojitz Planet and must pay back VND178 billion ($7.30 million) it made selling shares to the foreign firm.

The payment must also include interest, a Ho Chi Minh City court ruled.

Sojitz Planet and Rang Dong became strategic partners in September 2017 when the foreign company purchased five million shares of the local firm for a total of VND174 billion.

The Japanese company, however, claimed that Rang Dong violated certain terms after the share transfer, which forced Sojitz to terminate the contract and demand that Rang Dong to return 90% of the shares it had paid for, or nearly VND157 billion.

Rang Dong did not comply. Sojitz then sued the company at the Singapore International Arbitration Centre (SIAC).

The center ruled in favor of Sojitz in July last year, after which the Japanese firm brought the matter to the People’s Court of Ho Chi Minh City and demanded that SIAC’s ruling be upheld.

Rang Dong told the court that there were unreasonable terms in the contract it signed with Sojitz, such as requiring it to sign employment contracts with 700 people that Sojitz appointed.

Sojitz also was not able to prove that Rang Dong directly caused any damage, and the local court ruled that SIAC’s decision went against many principles of Vietnamese law.

Thus, the People’s Court of HCMC ruled in favor of Rang Dong and did not require it to uphold the SIAC ruling.

Sojitz, however, appealed and brought the case to a higher court in HCMC, which then ruled in its favor.

Rang Dong, therefore, has to pay VND178 billion plus interest to Sojitz.

Rang Dong was established in 1960 as one of the first plastic manufacturers in Vietnam. The company was equitized in 2005.

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