[Scenario] Discovering your counterparty is dissipating assets mid-litigation: what to do?

Winning a lawsuit means little if the counterparty has already emptied its accounts by the time you win. In commercial disputes, it is not uncommon for defendants to exploit the months a court spends preparing a case — moving money, selling assets cheaply to relatives, or hollowing out the company. If you discover your counterparty dissipating assets during litigation, you need to react with procedural tools immediately, not wait until judgment day to think about enforcement. This article analyzes a typical hypothetical scenario and three response options under current Vietnamese law.

Table of contents

• 1. The scenario (hypothetical)
• 2. Legal questions
• 3. Analysis
• 4. Conclusion and recommendations
• 5. Extended questions
• References

1. The scenario (hypothetical)

The scenario below is hypothetical and for illustration only. Any resemblance in names or figures is purely illustrative.

• F1. Company A (claimant) has sued Company B (defendant) before the competent court, claiming VND 8 billion in outstanding goods payments plus late-payment interest under a sale contract. The court has accepted the case; it is in pre-trial preparation, and no hearing has been opened.
• F2. While awaiting trial, A notices three red flags: (i) B's bank account — previously used for receiving payments — is nearly empty after a series of transfers to the personal account of B's legal representative; (ii) B is advertising a factory in B's name at a price far below the local market; (iii) B has transferred the owner's capital contribution to an individual closely related to B's owner's family.
• F3. Apart from the assets in F2, A is not aware of any other B assets sufficient to secure enforcement if A wins.
• F4. As of the discovery, the court has applied no provisional urgent measures against B's assets.

The analysis below uses only facts F1–F4 as given, adding no new assumptions.

2. Legal questions

• Q1. When dissipation signs appear mid-litigation, what can the claimant ask the court to do immediately to "freeze" the assets?
• Q2. Are B's asset transfers during the lawsuit legally valid? Can A ask the court to declare them void?
• Q3. If A wins but B has already dissipated the assets, what legal tools remain at the enforcement stage?
• Q4. Can B's asset dissipation trigger criminal liability?

3. Analysis

3.1. Applicable legal framework

For facts F1–F4, the framework has four groups of rules:

• Civil procedure: Chapter VIII of the 2015 Civil Procedure Code on provisional urgent measures — Article 111 (right to request during case resolution), Article 114 (specific measures), Article 133 (procedure and time limit), Article 136 (counter-security the requesting party must provide). Applies to F1, F2, and F4.
• Civil law: Article 124 of the 2015 Civil Code on civil transactions void for being sham — applies to the asset transfers in F2; Article 131 on legal consequences of void transactions; Article 132 on the time limit for requesting a voidness declaration.
• Judgment enforcement: the 2008 Law on Civil Judgment Enforcement (amended 2014) on verifying enforcement conditions and coercive measures such as seizure and auction of assets — applies to F3 in the scenario where A wins.
• Criminal law: Article 385 of the 2015 Penal Code (amended 2017) on the offense of violating the sealing, seizure of property, or freezing of accounts — applies to Q4, under strict conditions on timing.

3.2. Option A: Request provisional urgent measures — the fastest reaction

What it is. Upon discovering the signs in F2, A files a request with the court handling the case to apply provisional urgent measures against B's assets, "freezing" the status quo before further transfers occur.

Legal basis. Article 111(1) of the 2015 Civil Procedure Code provides: during case resolution, a party may request the court handling the case to apply one or more provisional urgent measures to temporarily address urgent needs, protect property, preserve the existing state to avoid irreparable damage, and secure case resolution or judgment enforcement. With F1 (case accepted, not yet tried) and F2–F3 (assets at risk of disappearing, a future judgment potentially unenforceable), A's request squarely falls within this provision.

Measures fitting this scenario include:

• Freezing bank accounts of B (Article 114, clause 10) — stopping the outflow described in F2;
• Seizing disputed assets (Article 114, clause 6) and freezing the obligated person's property (Article 114, clause 11) — for the factory and other assets in B's name;
• Prohibiting transfer of property rights over disputed assets (Article 114, clause 7) — blocking the below-market factory sale and the capital transfer.

Procedure and time limit. The request must be accompanied by evidence of necessity: bank statements showing abnormal flows, asset listing information, capital transfer records, and documents on the relationship between B and the transferees. The judge assigned to the case must consider and decide within 03 working days of receiving the request (Article 133(2)); a refusal must be notified in writing with reasons.

Statutory cost. The requesting party must provide counter-security under Article 136(1): submit to the court a guarantee secured by assets of a bank or credit institution, or deposit money, precious metals, gems, or valuable papers as set by the court — equivalent to the loss or damage that could result from a wrongful application of provisional urgent measures. This is not a "fee" paid away, but security protecting the affected party and deterring abuse of the request right. The specific amount is set by the court case by case; the statute fixes no amount.

Strengths. The fastest option: the decision time limit is counted in working days, and once issued, B's money flows and further transfers are blocked immediately. It also lays the groundwork for later enforcement.

Risks and limits. If evidence of dissipation is weak, the court may refuse. Conversely, if a measure is applied but later found wrongful and causes damage to B, A may owe compensation — precisely why the law requires counter-security upfront. The quality of evidence attached to the request decides this option's success or failure.

3.3. Option B: Build evidence and seek voidness of the dissipation transactions — addressing the root

What it is. In parallel with Option A, A gathers evidence on B's completed asset transfers and asks the court to declare them void as sham transactions, bringing the assets back into the pool available for enforcement.

Legal basis. Article 124(2) of the 2015 Civil Code provides: a civil transaction established shamly to evade obligations toward a third party is void. Here, B selling the factory far below market to a closely related person, or transferring capital mid-lawsuit, are classic signs of sham transactions aimed at evading the payment obligation owed to A — the third party to those transfers.

The legal consequences of voidness follow Article 131: a void transaction creates no rights or obligations from the moment of establishment; the parties restore the original state and return what they received. One notable advantage: under Article 132, the time limit for requesting a court to declare a civil transaction void for being sham is not restricted, so A faces no time pressure of the kind affecting many other claims.

Evidence to gather. To prove "sham", A needs a systematic file: statements showing money moved to personal accounts right after the lawsuit; the gap between transfer price and market price; the close relationship between B and the transferees; evidence the "sold" assets remain under B's actual management and use; and the coincidence of transfer timing with the lawsuit's progress. Under procedural principles, each party must prove its claims; for evidence A cannot obtain alone (e.g., bank or registry records), A may ask the court to apply evidence-collection and verification measures under the Civil Procedure Code.

Strengths. This option addresses the root: assets already moved away have a legal path back, rather than merely blocking future transactions as in Option A.

Risks and limits. Proving "sham" and "purpose of evading obligations" takes time and a tight evidentiary record; B and the transferees will naturally object. Where the transferee is a bona fide third party — who did not know and had no duty to know of the dissipation purpose — the analysis becomes more complex and must be assessed case by case; the conclusions of this hypothetical cannot be applied mechanically.

3.4. Option C: Secure enforcement after judgment and consider criminal liability — the last layer

What it is. If A wins, A requests enforcement; the civil judgment enforcement agency verifies B's enforcement conditions and applies coercive measures such as seizure and auction of assets. In parallel, A considers reporting the dissipation conduct for potential criminal liability of the individuals involved.

Legal basis. At the enforcement stage, the Law on Civil Judgment Enforcement permits coercive seizure of the judgment debtor's assets where voluntary compliance fails. On criminal liability, Article 385 of the 2015 Penal Code (amended 2017) punishes the offense of violating the sealing, seizure of property, or freezing of accounts: a person entrusted with keeping or managing sealed or seized property or frozen accounts who consumes, transfers, swaps, conceals, or destroys the seized property faces non-custodial reform of up to 02 years or imprisonment from 03 months to 02 years; where the offense causes the judgment debtor to dissipate assets so that enforcement obligations of VND 100,000,000 or more cannot be performed, the penalty is imprisonment from 02 to 07 years.

A critical distinction. Two moments must be kept strictly apart: dissipation before any seizure, sealing, freezing decision or judgment — and dissipation after assets have been seized or accounts frozen. Article 385 covers only the second situation, where a competent authority's seizure, sealing, or freezing decision already exists. Moving money or selling assets while being sued but before any measure is applied (as in F2) does not automatically constitute this offense. Separately, deliberately failing to comply with an effective court judgment or decision may be considered for criminal liability for non-compliance with judgments under the Penal Code. This is why Option A matters beyond immediate blocking: it creates the precondition for criminal consideration if B keeps dissipating already-seized or frozen assets.

Strengths. Leverages the state's coercive machinery; creates strong deterrence against resistance to enforcement.

Risks and limits. This option depends entirely on A winning and on assets remaining to seize; it cannot undo damage already done if assets were moved away before Options A and B were applied in time.

3.5. Comparing the options

4. Conclusion and recommendations

Conclusion. On the given facts — the case in pre-trial preparation (F1), concrete and ongoing dissipation signs (F2), no other clear assets to secure enforcement (F3), and no protective measures yet applied (F4) — Option A is the priority response: fast, and matching the very purpose Article 111 of the 2015 Civil Procedure Code sets — "securing… judgment enforcement". Option B should run in parallel to address transactions already completed during the lawsuit. Option C is the later-stage layer once a judgment exists, and the basis for considering criminal liability if B keeps dissipating seized or frozen assets.

Recommended next steps.

1. Immediately collect and preserve evidence of abnormal money flows, asset transfer transactions, and the relationship between B and the transferees — the earlier the evidence, the more valuable.
2. Prepare the request for provisional urgent measures to the court handling the case, with evidence of necessity and a plan for counter-security under Article 136.
3. Review and add a claim for declaration of voidness of sham civil transactions to the scope of the pending case.
4. Do not take pressure tactics outside the procedural framework (threats, unlawful freezing, defamatory postings), as they may create liability for yourself.

Important note. The conclusion holds only for facts F1–F4 as given; changing one fact (e.g., the case already tried, assets already titled to a bona fide third party, or a seizure decision already issued) may change the analysis entirely. Real cases need individual assessment by counsel on the full file.

5. Extended questions

What if the assets have already been transferred to a bona fide third party? The analysis becomes more complex because the law protects bona fide third parties in certain circumstances. Each case must be assessed on its own facts: timing of the transaction, transfer price, the parties' relationship, and whether the transferee knew of the dissipation purpose. See the in-depth analysis of provisional urgent measures in commercial litigation (T-239).

If the counterparty moved money abroad, does freezing domestic accounts still matter? Freezing domestic accounts still matters for assets remaining in the country and for blocking further transactions. For funds already moved abroad, recovery depends on mutual legal assistance mechanisms and money-trail evidence, requiring individual assessment by counsel. See the civil and commercial judgment enforcement process (T-234).

What if the court refuses to apply provisional urgent measures? The claimant may complain against the refusal decision while continuing to gather and strengthen evidence of dissipation, then file a renewed request when new grounds arise. In parallel, assess overall enforceability using the pre-litigation enforceability checklist (T-245).

How does dissipation after an effective judgment differ from the scenario above? The matter then moves to the enforcement mechanism: the civil judgment enforcement agency verifies enforcement conditions and coercively seizes assets; dissipating already-seized or frozen assets may be considered for criminal liability under Article 385 of the Penal Code. See the enforcement process (T-234).

Can the court ban the counterparty's representative from leaving the country to stop asset dissipation? Article 114 of the 2015 Civil Procedure Code lists an exit ban against an obligated person among the available measures, but the conditions are narrow and case-specific. Not every case with dissipation signs qualifies; counsel must assess each case individually.

Is your situation different from these facts?

Every asset-dissipation case differs in discovery timing, asset types, and the evidence at hand. For an individual assessment of your real situation, contact FLAT Law Firm at hotline 0988424851 to describe your scenario and receive advice on the suitable option.

Language versions

References

• 2015 Civil Procedure Code (92/2015/QH13), effective 01/7/2016 — Articles 111, 114, 133, 136.
• 2015 Civil Code (91/2015/QH13), effective 01/01/2017 — Articles 124, 131, 132.
• 2025 Law on Civil Judgment Enforcement (106/2025/QH15) — in force, effective 01/7/2026.
• 2015 Penal Code (100/2015/QH13), amended 2017 (12/2017/QH14), effective 01/01/2018 — Article 385.

—