How should enterprise merger disputes be resolved to effectively minimize legal risks?

Resolving enterprise merger disputes has become an increasingly common issue for the rapid growth of M&A activities. Many enterprises encounter conflicts relating to assets, liabilities, and representative authority after a merger. Understanding the applicable legal regulations and dispute resolution mechanisms in enterprise mergers enables enterprises to proactively prevent risks and safeguard their lawful rights and interests.

I. Current situation of resolving enterprise merger disputes in the present context

With M&A transactions, enterprise merger disputes are becoming more frequent and increasingly complex. Such disputes commonly involve assets, debts, tax obligations, shareholders’ rights, and conflicts of interest. The primary causes often arise from a lack of transparency in information disclosure, inaccurate valuation, and inadequately drafted agreements and appendices.

In practice, dispute resolution remains challenging due to prolonged procedures and the complexity of proving damages, leading many enterprises to prioritize negotiation, although such methods do not always achieve satisfactory results.

II. Overview of enterprise merger dispute resolution

1. What is an enterprise merger, and what is the role of dispute resolution in such a process?

Pursuant to Clause 1, Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), an enterprise merger refers to a process whereby one or more companies transfer all assets, rights, obligations, and lawful interests to the acquiring company, while the merged company ceases to exist. It is an important corporate restructuring activity aimed at expanding operational scale and optimizing resources.

In such a process, resolution in enterprise merger disputes plays a critical role in handling conflicts arising from issues such as asset allocation, debts, shareholders’ rights, or legal obligations. Timely resolution not only protects the rights and interests of the parties involved but also ensures that the merger proceeds smoothly and in compliance with legal regulations.

2. What is the statute of limitations for initiating legal proceedings related to enterprise merger disputes, and what should be noted regarding the limitation period?

Pursuant to Article 429 of the Civil Code 2015, the statute of limitations for initiating contractual disputes (including disputes arising from enterprise mergers) is three (03) years from the date on which the entitled person knew or should have known that their lawful rights and interests had been infringed.

The three-year (03) limitation period is a significant legal threshold that enterprises must closely monitor to ensure timely protection of their rights and interests. In addition, enterprises should proactively collect evidence and exercise their right to initiate legal proceedings at an early stage in order to avoid losing their legal remedies.

3. Who is the legal representative of an enterprise after a merger, and how are disputes regarding representative authority resolved?

Pursuant to Article 12 of the Law on Enterprise 2020 (as amended and supplemented in 2025), the legal representative of an enterprise is an individual representing the enterprise in exercising rights and obligations and participating in legal proceedings as a plaintiff, defendant, or person with related rights and obligations. Following a merger, the acquiring company continues its operation; thus, the legal representative shall be the person designated in the Charter of the acquiring company (which may consist of one or multiple legal representatives).

In the cases of disputes concerning representative authority (for example, signing appendices, performing obligations, or representing the company in litigation), the resolution shall be based on:

• The company charter to determine the person having lawful representative authority;
• Delegation and authorization regulations in cases where there are multiple legal representatives;
• Where authority is unclear, each legal representative may have representative authority and take corresponding responsibility in accordance with law.

Accordingly, after the merger, the legal representative is determined in accordance with the Charter of the acquiring company; where disputes arise, the competent dispute resolution authority shall rely on the Charter and applicable laws to determine the proper representative authority and related liabilities.

4. How are assets and obligations handled after a merger, and how are asset-related disputes resolved?

Pursuant to Point c, Clause 2, Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), upon completion of enterprise registration procedures, the acquiring company shall inherit all assets, rights, obligations, debts, labor contracts, and other property-related obligations of the merged company, while the merged company shall cease to exist.

In the cases of disputes relating to assets, the resolution shall be based on:

• The merger agreement and its appendices to determine the scope of transferred assets and obligations;
• The principle that the acquiring company inherits all obligations of the merged company;
• Legal provisions governing civil obligations and evidentiary documents proving ownership rights and financial obligations.

Accordingly, after the merger, all assets and obligations are transferred to the acquiring company. In the cases of disputes, the competent authority shall rely on the merger agreement and the principle of full succession of obligations to determine the relevant responsibilities.

III. Legal regulations relevant to enterprise merger dispute resolution

1. Which laws govern the procedures and processes relating to enterprise merger dispute resolution in Vietnam?

Merger activities and related dispute resolution are governed by various legal instruments, including the following main regulations:

• The Law on Enterprise 2020 (as amended and supplemented in 2025): Providing regulations on merger procedures, as well as the rights and obligations of the parties involved (particularly Article 201).
• The Civil Code 2015: Governing principles relating to contract formation, performance, and compensation for damages arising from disputes.
• The Law on Competition 2018: Regulating mergers from the perspective of economic concentration and competition control.
• The Law on Investment 2025: Governing merger transactions involving investors, capital contributions, or share acquisitions.
• The Civil Procedure Code 2015 (as amended and supplemented in 2025): Providing regulations on procedures for dispute resolution before the Court.

Enterprise merger dispute resolution is therefore governed by multiple legal frameworks, with the Law on Enterprise 2020 (as amended and supplemented in 2025) serving as the principal legal foundation, supplemented by civil and procedural laws to ensure comprehensive dispute resolution.

2. Which regulations govern enterprise registration procedures after a merger, and how may dispute resolution mechanisms intervene if an application dossier is rejected?

Pursuant to Clause 2, Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), after the parties approve the merger agreement and the Charter of the acquiring company, the enterprise must implement enterprise registration procedures for the acquiring company in accordance with regulations on enterprise registration. Simultaneously, the merger agreement must be sent to creditors and notified to employees within fifteen (15) days. Upon completion of registration procedures, the merged company shall cease to exist, and all rights and obligations shall be transferred to the acquiring company.

If the registration dossier is rejected, the enterprise may request the business registration authority to provide explanations for the refusal, and may supplement and complete the dossier as required. If the refusal lacks legal grounds, the enterprise has the right to file a complaint or initiate an administrative lawsuit to protect its lawful rights and interests.

3. What are the common legal risks arising from mergers, and how does enterprise merger dispute resolution help minimize such risks?

In practice, enterprise mergers involve numerous legal risks, including disputes concerning unclear assets and liabilities, contingent tax obligations, conflicts among shareholder groups, or errors in valuation and contractual contents or appendices. These risks may not become apparent immediately but often arise after completion of the merger, thereby directly affecting the rights, interests, and operations of the enterprise.

To mitigate such risks, enterprise merger dispute resolution should be approached proactively and systematically, including: Conducting comprehensive legal due diligence prior to execution, drafting rigorous agreements with clear liability allocation mechanisms, and establishing transparent dispute resolution procedures. If disputes arise, the parties should prioritize negotiation and mediation based on a solid legal foundation, while remaining prepared to utilize judicial or arbitral mechanisms where necessary.

Therefore, dispute resolution is not merely a remedial measure for resolving consequences, but also a proactive legal tool enabling enterprises to control risks, protect their legitimate rights and interests, and ensure that the merger process is conducted safely and sustainably.

IV. Questions relating to enterprise merger dispute resolution

1. Can merger-related disputes be resolved through arbitration or court proceedings, and what are the advantages and disadvantages of resolving enterprise merger disputes through arbitration?

Enterprise merger disputes may be resolved either by the Court or by Commercial Arbitration, depending on the agreement between the parties in the contract. If the contract contains an arbitration clause, the dispute shall be resolved through arbitration; otherwise, the Court shall have jurisdiction to settle the dispute.

Arbitration offers several advantages, including prompt procedures and confidentiality, and arbitral awards are final and legal binding. However, its disadvantages include higher costs, applicability only where a prior arbitration agreement exists, and limited opportunities to challenge an arbitral award in the cases of errors.

Accordingly, enterprises should consider arbitration where rapid and confidential dispute resolution is required, while court proceedings may be more appropriate in cases where no arbitration agreement exists or where a multi-level review mechanism is necessary.

2. What are warranties and indemnities in a merger agreement, and how may compensation be claimed in enterprise merger disputes?

In enterprise merger agreements, warranty provisions constitute representations and commitments by the parties regarding the accuracy and truthfulness of information relating to assets, liabilities, and legal status, while indemnity provisions establish liability arising where one party breaches such commitments and causes damage to the other party. These mechanisms play an important role in allocating risks and protecting the parties’ interests in merger transactions.

Pursuant to Article 360 and Article 419 of the Civil Code 2015, a breaching party must compensate for all actual and direct damages incurred, unless otherwise agreed by the parties. On that basis, in the case of an enterprise merger dispute, the aggrieved party is entitled to request: (i) compensation for actual damages; (ii) application of contractual sanctions if stipulated in the agreement; and (iii) an order compelling the breaching party to continue properly performing its obligations or terminate the breached portion of the agreement.

Warranty and indemnity provisions therefore constitute an essential legal foundation for addressing risks in merger transactions. Where such provisions are drafted clearly and specifically, compensation claims may be enforced more effectively and efficiently in the event of disputes.

3. Are there any special regulations concerning tax obligations and financial reporting in mergers, and what should be noted when resolving tax-related merger disputes?

Vietnamese law provides clear regulations regarding the handling of tax obligations in enterprise mergers under the mechanism of tax code termination and succession of obligations:

• Pursuant to Clause 3, Article 11 of the Law on Tax Administration 2025, the merged enterprise must terminate the validity of its tax identification number and may no longer use it in transactions. 
• Prior to termination of operations, the enterprise is required to fully complete all tax obligations, including tax declarations, tax payments, invoice settlement, and handling of overpaid or outstanding taxes (Article 15 of Circular No. 86/2024/TT-BTC).
• The dossier for termination of the tax identification number must be submitted to the tax authority within ten (10) working days from the date of the merger agreement, together with the merger agreement and relevant supporting documents (Article 14 of Circular No. 86/2024/TT-BTC).
• Where the merged enterprise has not fulfilled its tax obligations, such obligations shall, under the tax authority’s handling mechanism, be transferred to the acquiring enterprise if there is an agreement on succession of obligations (Article 16 of Circular No. 86/2024/TT-BTC).
• Simultaneously, under Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), the acquiring enterprise automatically succeeds to all property obligations, including tax obligations.

In dispute resolution practice, tax-related issues often arise if tax obligations have not been fully declared or finalized prior to the merger date; if there is ambiguity regarding the party responsible for outstanding tax liabilities; or if new tax obligations arise after completion of the merger procedures.

In such circumstances, dispute resolution must be based on a review of tax finalization dossiers and tax code termination dossiers, together with the contents of the merger agreement to determine the parties’ allocation of obligations. On that basis, the principle that the acquiring enterprise succeeds to the obligations shall be applied in order to accurately determine responsibility.

4. What are the legal consequences if shareholders’ meetings are not conducted in accordance with regulations prior to a merger, and what immediate actions should be taken in resolving enterprise merger disputes?

If an enterprise fails to organize a shareholders’ meeting or fails to obtain approval from the competent authority prior to the merger, such conduct constitutes a violation of regulations governing enterprise reorganization under current law. Specifically, under Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), a merger may only be conducted where there is a merger agreement and a resolution/approval issued by the company owner, Members’ Council, or General Meeting of Shareholders of the relevant enterprises. In the case of a joint-stock company, approval falls within the authority of the General Meeting of Shareholders and must satisfy the voting conditions prescribed under Article 145 of the Law on Enterprise 2020 (as amended and supplemented in 2025).

The legal consequence is that the merger resolution may be deemed invalid or declared null and void due to non-compliance with statutory procedures, processes, and authority requirements. It may result in risks that the merger transaction becomes subject to dispute, cancellation requests, or reimplementation from the beginning, while also leading to liability on the part of managers if damages are caused to shareholders or the enterprise.

Where disputes arise, the enterprise should immediately suspend implementation of the merger, review the legality of the entire approval process, and consider the possibility of reorganizing the meeting and obtaining approval in accordance with legal requirements in order to legitimize the process (where conditions still permit). At the same time, the enterprise should gather complete records, meeting minutes, and documents evidencing notice and voting procedures as grounds for dispute resolution.

5. How are third parties such as creditors or customers affected by a merger protected under the law, and how does enterprise merger dispute resolution support them?

Vietnamese law protects third parties such as creditors and customers in enterprise merger transactions through the mechanism of succession to all rights and obligations of the merged enterprise.

Specifically, pursuant to Article 201 of the Law on Enterprise 2020 (as amended and supplemented in 2025), the acquiring enterprise automatically succeeds to all lawful rights, obligations, and interests of the merged enterprise, including debts, contractual obligations, and financial liabilities toward customers. Furthermore, the provisions of the 2019 Law on Tax Administration (Clause 3, Article 11) and Circular No. 86/2024/TT-BTC, as analyzed above, also affirm that tax and financial obligations are not extinguished but are handled and transferred under the succession mechanism to ensure the protection of the State’s interests and those of related parties.

In practical dispute resolution, such a legal mechanism allows creditors and customers to require the acquiring enterprise to continue performing committed obligations. They may also initiate lawsuits or request arbitration or court intervention to compel performance where breaches occur. It helps ensure that the rights and interests of third parties are neither interrupted nor extinguished due to changes in the enterprise’s organizational structure.

V. Are you looking for a reputable legal expert to assist with enterprise merger dispute resolution matters?

In disputes arising from enterprise mergers, the involvement of a specialized legal firm is essential for risk control and the protection of the parties’ legitimate rights and interests. NPLaw Firm provides comprehensive consulting and support services in the fields of corporate law, mergers and acquisitions, and dispute resolution, including dossier review, risk assessment, representation in negotiations, and participation in litigation before courts or arbitration tribunals. With practical experience, NPLaw assists enterprises in identifying appropriate solutions, minimizing losses, and maximizing the protection of lawful interests throughout the dispute resolution process.

The above information is provided for reference purposes only. Should you require detailed advice regarding a specific case, please contact NPLaw Firm for prompt consultation and assistance.