Scenario: a supplier delivers three lots of goods on 60-day credit terms with a retention-of-title clause. On day 40, bankruptcy proceedings open against the customer, with the goods still sitting intact in its warehouse. Can the supplier go and take its goods back, or must it simply queue as a creditor? The answer turns on whether ownership has passed — and the governing law is now the Law on Rehabilitation and Bankruptcy 142/2025/QH15.
The separation principle: what the debtor does not own is not in the pool
Bankruptcy distributes only assets belonging to the insolvent enterprise. Goods whose ownership has not passed to the enterprise — goods sold under retention of title, goods on consignment, leased goods, goods held for processing — are in principle not the debtor’s property, and the owner may claim them back instead of waiting for a distribution. The Law on Rehabilitation and Bankruptcy 142/2025/QH15 (in force 1 March 2026, replacing the expired Bankruptcy Law 51/2014/QH13) maintains this foundational logic in its asset administration and distribution mechanism.
The basis of recovery in a credit sale is the retention-of-title clause under Article 331 of the Civil Code 91/2015/QH13: the parties may agree the seller keeps ownership until the buyer has fully paid. Without that clause, ownership passes on delivery as a rule — and the supplier drops to a pure unsecured creditor.
The recovery procedure: work through the asset manager, never self-help
Entitled or not, the owner may not simply collect the goods once proceedings have opened — every asset movement is now under the asset manager’s control, supervised by the judge. The correct sequence: (i) file a written claim with the asset manager and the court, with ownership evidence (the contract with the retention clause, delivery records showing the goods unpaid, lot identification records); (ii) request separate inventory and sealing of the claimed goods so they are not sold with the general pool; (iii) if the asset manager refuses, ask the court to resolve the asset dispute within the proceedings.
Two practical risks erode recovery over time: the goods have been resold to a third party, or fed into production and mixed with other materials — the specific goods no longer exist to return, and the recovery right degrades into a money claim queuing like a debt. Filing the claim the moment the opening becomes known is what decides whether the goods are still intact.
Prevention for future credit sales
- Always include retention of title (Article 331 Civil Code 2015) in deferred-payment sales, with rights to inspect and reclaim on default;
- Make goods identifiable: record lot numbers, marks and storage location in delivery documents — unidentifiable goods cannot be reclaimed, however perfect the clause;
- Layer other security: bank guarantees, deposits or cumulative exposure limits by customer rating, so recovery is only the last line of defence;
- Watch insolvency signals: abnormal late payment, multiple supplier lawsuits, public tax arrears — trigger delivery stops and an immediate audit of stock held at the customer’s site.
Frequently asked questions
Our customer is bankrupt — can we reclaim delivered but unpaid goods?
Possibly, if ownership has not passed — typically where the contract has a retention-of-title clause under Article 331 Civil Code 2015 and the goods remain intact and identifiable. Without such a clause, ownership passed on delivery and you are left with a creditor’s claim.
Can we just go to the customer’s warehouse and take the goods?
You should not. Once proceedings open under Law 142/2025, assets are administered by the asset manager under court supervision. Self-help collection can be treated as interference with asset administration; file a written recovery claim with ownership evidence instead.
What if the customer already resold the goods to a third party?
The specific goods are gone, and the recovery right converts into a claim for value — usually a debt in the bankruptcy. Recovery of the goods themselves is harder still where a bona fide third party paid for them; hence the need to request sealing of the goods as soon as the opening is known.
How should a retention-of-title clause be drafted to work?
State that the seller keeps ownership until full payment, that goods must be kept separate and identifiable, that the buyer may not sell or pledge them before paying in full, and that the seller may reclaim them upon payment default. Without identifiability and separation, the clause is very hard to enforce.
Related articles
- Vietnam–Malaysia BIT and ISDS Rights: A Shield When Policies Shift
- Vietnam–Philippines BIT and ISDS Rights: A Shield When Policies Shift
- Disputes With Local Partners: Vietnam vs Thailand vs Indonesia
- International Rail Freight (Vietnam-China, Vietnam-Europe): Procedures
- Commercial Mediation: New Decrees and Practice
This legal analysis has been verified against current Vietnamese regulations and cross-border FDI transaction practices by the attorneys at FLAT LAW FIRM.
