The TV right dispute between AVG Group, the Vietnam Football Federation (VFF) and the Vietnam Professional Football Company (VPF) has become a focus of the local media in recent days.

One of the key points in the dispute is--who has the right to sell the broadcast right of football leagues, VFF or VPF? If it is VPF, what will happen to the 20-year TV right contract (2011-2030) between VFF and AVG?

Some lawyers said that if VPF owns Vietnam’s football leagues (thus it holds the broadcast right of these tournaments), the contract between VFF and AVG will be void because VFF sold the thing that it does not own. As a result, VFF and AVG will have no legal responsibility to each others. In this case, VFF will have to compensate for AVG under Article 137 of the Civil Code 2005.

This article does not analyze who holds football leagues, VFF or VPF, or who holds the TV right but only focuses on the legal aspect of the contract between VFF and AVG in case the seller does not hold the ownership of the thing that they sells. Specifically, if it happens, whether the contract is invalid or it will bring about other legal aftermaths?

Actually, Vietnam’s law on contract (like many other countries) does not stipulate that the contract will be invalid because the subject of contract does not belong to the ownership of one party in the contract, for example the seller.

A contract is considered void based on conditions on the ability of parties, defects in terms of will or violation of public order. In some rare cases, contracts are seen as invalid due to formalism violation. In Vietnam, contracts are also considered invalid because of initial impossibility.

In Vietnam’s law on contract, if the subject of contract belongs to the ownership of the third party, the buyer has the right to annual the contract and asks the seller to pay compensation (Article 443 of the Civil Code).

From legal aspect, this contract is valid. It is only annulled at the decision of one party (the buyer) based on their agreements or the law. This contract is different with an invalid contract because the invalid contract never and will never exist under the law.

In fact, many legal experts have inaccurate acknowledge of the consequences of invalid contracts in case the seller does hold the ownership of the subject that is sold.

In the dispute between AVG, VFF and VPF, in case the court decides that VFF is not the owner of football leagues so it does not have the right to sell the broadcast right, AVG performs its right of annulling the contract and ask VFF to pay compensation (based on Article 443 of the Civil Code 2005), the consequence of contract annual is unable to be carried out.

Because under Vietnamese laws, the aftermaths of an annulled contract is: the contract is void; involving parties have to give back what they have received from each others; involving parties returns to the state before the contract was signed.

However, this regulation cannot be applied for service or intellectual property transfer contracts like the deal between VFF and AVG. 

Specifically, AVG has aired the V-League (now Super League) from 2011. How can AVG and VFF “give back” the thing that they received from each other in the past?

Through this case, law makers need to amend related regulations.

Source: VNN