Businesses want to sue power company for damages

So far, Electricity of Vietnam has been able to invoke force majeure to fend off lawsuits when it cuts off power without notice. This year, in the wake of catastrophic power outages in the Ho Chi Minh City region, its luck may have run out.

Lawyer Tran Huu Huynh, Head of the Vietnam Chamber of Commerce and Industry’s Legal Department, told reporters from Nguoi Lao Dong that VCCI’s annual reports regularly cite power outages as one of the biggest difficulties of businesses.

So far, the lawyer adds, no business has successfully claimed damages or even brought a case to the court

There are two reasons behind this, Huynh explains. First, Vietnam does not have a competitive power market: there is only one seller while there are many buyers. This means that even if customers sue the seller, they still have no choice but to do business with him.

Second, there are loopholes in the laws. The current regulations stipulate that in a case of force majeure, the electricity seller is exempted from paying compensation for losses caused by a power cut.

Force majeure is defined as objective conditions outside the control of parties to a contract, a situation that can neither be prevented or remedied. In Vietnam, Huynh comments, the term is given a very broad interpretation and is used by sellers to evade responsibility. “The recent drought is said to be the cause of power shortages. Every year, however, there are power outages, whether it is dry or wet. The notion of ‘technical factors’ is planted in the law and provides a handy excuse. That’s why people hesitate to sue the power company.”

Sentiment grows for a lawsuit

“The massive power cuts recently show that EVN has no regard for its clients,” complains Nguyen Duy Thanh, General Manager of Starview building at No 63 Nam Ky Khoi Nghia in district 1 of HCM City.

Just in the past week, Thanh adds, power was cut frequently and unexpectedly, making 200 people working at the building suffer. On May 28, there was no electricity all day long, from 6:00 am to 7.30 pm. The building’s elevator broke down because it stopped operation suddenly when power was cut.

The problem was that the HCM City Power Company, a unit of EVN, cut electricity without giving prior notice. Not until 10.30 pm on May 28 did Starview receive a notice. “They sent it [the notice] just for form’s sake, after they’d cut electricity for the whole day already,” Thanh grumbles, adding that he’s going to sue the power company for damages.

Lawyer Bui Quang Nghiem, a partner in the Nghiem & Chinh law firm in HCM City, believes that customers can successfully sue HCMC Power Company. According to Nghiem, their contract clearly stipulates that if buyers can prove the damages are the result of mistakes made by the seller, the seller must compensate the buyer.

Dr. Nguyen Mong Hung, Chairman of the HCM City Consumer Protection Association, notes that the power company regularly cuts electricity supply without prior notice, which means that it breaks its commitment to consumers.

Dang Hoang An, a deputy general director of EVN, admits that the damages caused by unexpected electricity cuts are ‘surely big’.

Hung said that the Consumer Protection Association will join and give support to consumers if they decide to sue the electricity provider.

Pham The Toan, Personnel Director of Cholimex, a state-owned company with food processing facilities in HCMC’s Vinh Loc Industrial Zone, says that in the last week, electricity was cut off for three days. Nearly 1000 workers had to stay off work. Due to the unexpected power outage, a great deal of frozen food got spoiled. Cholimex had to revise contracts with customers, because it could not deliver products on schedule.

Vietnamnet

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage