HCM CITY — Exporters should carefully check the background of new customers and the terms before signing export contracts, a conference on risk management in international trade heard from bitter business executives.

Organised by the Handicraft and Wood Industry Association of HCM City (Hawa) in HCM City on Wednesday, the conference was held soon after a major trade dispute broke out between Czech furniture distributor Global Home S.R.O. and many Vietnamese woodworking companies.

Đồng Nai-based furniture maker Gia Hân Ltd Co had been the first to accuse Global Home of not making payments.

Nguyễn Hữu Ngọc, the company’s director, said Gia Hân signed a contract with Global Home to export furniture in 2012.

As of July last year the Czech company had owed his company US$493,000.

It had also ordered another consignment of wooden products worth $280,000 but failed to take delivery. As a result, the items remain in stock, causing his company losses, he said.

His executives tried to meet Global Homes CEO Otto De Jager many times, but the latter refused, saying his company had not paid because of quality problems.

Gia Hân has since complained to the provincial Police.

Executives of many other companies like Việt-Mỹ Co and Hà Nội-based Cửu Long Furniture Company said they are in a similar plight as Gia Hân.

Nguyễn Thế Truyền of Thiên Thanh Law Office, who provided legal consultancy to Gia Hân, said after seeing its contract with Global Home, he realised that many provisions were inimical to Gia Hân, including the fact it was in English and based on British law and the international arbiter in case of a dispute was in Hong Kong.

Instituting arbitration proceedings in Hong Kong would cost Gia Hân a lot of time and money, he said.

Truyền said many Vietnamese businesses only pay attention to the pricing and payment terms and not other provisions.

Phạm Ngọc Hưng, deputy chairman of the HCM City Union of Business Associations, said a dearth of new contracts means many businesses are happy to get whatever they can and so mainly pay attention to delivery date and payment and not other conditions.

Việt Nam has the International Arbitration Centre attached to the Việt Nam Chamber of Commerce and Industry, and businesses can choose it to resolve disputes.

Trần Quốc Mạnh, Hawa deputy chairman, said importers and exporters should have staff well versed in foreign trade.

They should consult lawyers if the contracts are large, he said, adding that they should pay close attention to dispute-related provisions.

Nguyễn Chiến Thắng, a former Hawa chairman, said firms need to carefully study information about new customers to ensure they do not deal with dubious companies.

Delegates agreed that business groups play a very important role in their industry and called for holding more meetings to share information or provide warnings to help their members avoid risks.

The Hawa office, where the meeting was going on, had a visitor at the same time: De Jager, who came to meet Huỳnh Văn Hạnh, another deputy Hawa chairman.

Hạnh said he had rejected Gia Hân’s charges and said it had been putting undue pressure on him, and furnished documents related to dispute with Gia Hân and other companies.

He had told the visitor that the association received complaints and documents from several Vietnamese companies though it does not have the power to resolve the disputes, he said.

De Jager promised to come again two weeks later to work with the association on the problem. — VNS