12-05-26 MTParners
The Council of Judges of the Supreme People’s Court of Vietnam has resolved 18 civil and commercial issues, reaffirming the “gold-for-gold” repayment rule and tightening the interplay between default interest and contractual penalties in credit contracts.
On 28 April 2026, the Supreme People’s Court of Vietnam (TANDTC) issued Official Letter No. 250/TANDTC-PC announcing the results of online consultations on 51 difficulties in adjudication nationwide, including 24 criminal-law issues, 18 civil, civil-procedure and commercial issues, and 9 administrative issues. The document carries mandatory reference value for the entire court system to ensure uniform application of the law, particularly after the new regional people’s courts model became operational from 1 July 2025.
This is the most-discussed provision among lawyers and the public. Pursuant to Clauses 1 and 2 of Article 466 of the 2015 Civil Code, the Supreme People’s Court confirms: in disputes over a gold-loan contract, the court must order the borrower to return the exact quantity of gold borrowed, unless the parties have agreed otherwise.
Accordingly, the borrower has no right to unilaterally convert the obligation to repay gold into a cash obligation based on the gold price at the time of borrowing or at trial — unless a clear written conversion agreement exists. This guidance ends years of debate triggered by sharp gold-price swings, where borrowers cited the loan-date price to pay less while lenders demanded the higher price at the time of filing suit.
Notably, Official Letter 250 also clarifies that where the court orders repayment in gold (i.e., return of the original asset), default interest for late performance shall not apply, unless otherwise agreed. This is significant for borrowers in a rising-gold-price environment — the appreciation of gold itself is treated as adequate compensation to the lender.
Another key civil and commercial guidance in Official Letter 250 concerns interest and penalties in credit contracts. Based on Article 100 of the amended 2025 Law on Credit Institutions, Articles 7 and 12 of Resolution 01/2019/NQ-HDTP, Clause 1 of Article 25 and Clause 4 of Article 13 of Circular 39/2016/TT-NHNN, the Supreme People’s Court determines: where a contract already provides for in-term interest and default interest, the parties cannot further agree to a contractual penalty for late repayment.
This rule prevents “stacking” multiple payments on a single breach — since default interest already functions as compensation for late payment. Banks, finance companies and corporate borrowers should immediately review existing credit contracts, as overlapping penalty clauses may be invalidated by the courts.
In the cross-cutting criminal/civil category, the Supreme People’s Court clarifies how to calculate the amount confiscated to the State for usurious lending in civil transactions. Under point a, Clause 1 of Article 5 of Resolution 01/2021/NQ-HDTP dated 20 December 2021: if loans are independent, the principal of each transaction is summed; if a subsequent loan includes the principal and interest of an unpaid earlier loan, only the original principal is counted.
This approach avoids “double-counting” the same principal across multiple debt rollovers — a common technique used by loan-shark networks to legitimise extortionate interest rates.
Official Letter 250 arrives almost one year after the regional people’s courts model became operational (1 July 2025), when many civil-procedure and commercial rules underwent significant changes regarding first-instance and appellate jurisdiction. The Supreme People’s Court’s issuance of a comprehensive 51-issue Q&A set via the online Council of Judges conference is a timely move to keep the whole sector “in sync” on legal application.
For civil and commercial matters, the guidance targets the hottest issues in practice: disputes over asset-loan contracts, identification of counterclaims, repayment obligations and interest rates — all of which generate substantial caseloads at regional courts.
For individuals: the clear “gold-for-gold” principle reduces dispute risk when gold prices swing — but also puts borrowers at a disadvantage if no conversion agreement was negotiated upfront. Drafting a written gold-loan contract with clear repayment and conversion terms becomes critically important.
For credit institutions and businesses: review all credit-contract templates to remove penalty clauses overlapping with default interest. Legal teams must also update litigation and counterclaim procedures in line with Official Letter 250 — especially for large loan cases pending before regional people’s courts.
For individuals: when lending or borrowing gold, draft a written contract specifying the quantity, purity, type of gold (SJC bar, gold ring, 9999, etc.), term, interest rate (if any) and repayment terms (in gold, or cash conversion at a specified date). Without a conversion clause, repayment defaults to gold under Official Letter 250 and Article 466 of the Civil Code.
For credit institutions: audit all credit-contract templates and addenda to eliminate overlap between default interest and late-payment penalties. For corporate borrowers: proactively benchmark existing contracts against Official Letter 250 to protect rights in case of dispute.
In any dispute over an asset-loan contract before the courts, consult a civil-litigation lawyer from the very stage of preparing the complaint or written submission, as terms on agreed interest, contractual penalties and payment method may decide the outcome of the case.
MT & Partners Law Firm, with a team of lawyers experienced in civil litigation, asset-loan disputes, and credit and banking matters, is ready to advise clients on contract drafting, court representation, and protection of their rights under the latest guidance from the Supreme People’s Court of Vietnam. Contact us via hotline +84 987 140 772 or email info@mtpartners.vn.
(*) This article is for reference only and does not constitute specific legal advice.
Keywords: Official Letter 250/TANDTC-PC, gold loan repayment, Article 466 Civil Code, asset-loan disputes, credit contract 2026, default interest, contractual penalty, usurious lending, Resolution 01/2021/NQ-HDTP, Circular 39/2016/TT-NHNN, regional people’s courts, civil procedure, MT & Partners.
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