When one party signs a credit contract with a bank and the bank refuses to disburse funds as agreed, the borrower easily falls into a passive state, losing financial opportunities and incurring costs. In this situation, businesses or individuals need to clearly understand their rights, legal steps and strategies for handling credit contract disputes to effectively protect their rights.
First of all, it is necessary to determine whether the bank actually breached the contract or not. Some cases where the bank refuses to disburse funds may be reasonable (according to agreement or binding conditions) such as:
The contract has binding conditions (must have collateral, credit rating verification, additional documents) but the borrower does not fully meet the requirements before disbursement.
There are high risk signals from the customer (bad credit information, serious changes in financial situation) that the bank relies on the "reserve disbursement rights" clauses in the contract.
Legal regulations or internal bank regulations trigger the right to suspend disbursement (for example, credit conditions depend on market fluctuations or risk management policies).
However, if the bankthere is no clear legal basisrefuses to disburse funds, which may constitute a breach of the credit contract — thereby giving rise to a right to claim compensation or sue.
Some common disputes related to disbursement are: the bank overdue the deadline, unreasonable document requests, non-transparent "attachment of secondary conditions" or modifying the request after the contract has been signed.
Read the terms carefullydisbursementdisbursement conditionsdisbursement deadlineand conditions attached to the credit contract.
Determine whether the bank has breached its obligations (for example, not disbursed within the contract period, not clearly stating the reason for the violation, or not providing written notice).
Check the conditions that the bank cites to refuse disbursement to see if they violate the agreement or the law.
Compare documents exchanged, emails, official dispatches, and notices between the two parties to serve as evidence for the bank's unreasonable refusal.
Before turning to a legal solution, you should take a "notice" step with the bank:
Send an official letter requesting the bank to disburse money in accordance with the contract, clearly stating the deadline and the reason you think the bank is in violation.
If the bank continues to be evasive or silent, retain the sending record, confirmation of sending, confirmation of receipt by the bank - this is important evidence if the dispute has to be taken to court or arbitration.
According to the principle of priority in resolving civil disputes and credit contracts, the parties should make efforts to negotiate or conciliate first.
Appoint a representative (possibly a lawyer) to negotiate with the bank, propose disbursement plans in stages, adjust or do additional procedures if objective reality arises.
If mediation is successful, make a new agreement to avoid future conflicts.
However, if the bank does not cooperate in mediation, you have the right to move to stronger measures such as lawsuits or arbitration.
2.4.1. File a lawsuit in court
Identifycourt jurisdiction: if the credit contract is civil, jurisdiction is at the People's Court according to the territory (where the bank has a branch or headquarters); If it is of a business or commercial nature, it shall comply with the Court's regulations on business and commercial cases.
Checkstatute of limitations for filing a lawsuit: According to regulations, the statute of limitations for suing a civil contract dispute is 3 years from the date of knowing or should have known that the right was infringed (including interest). If the credit contract has a commercial transaction element, the statute of limitations may be 2 years.
Prepare a set of documents: credit contract, disbursement request letter, sending record, receiving bank confirmation, email exchange, documents of incurred expenses...
During the trial, request the Court to force the bank to make disbursement or to compensate for damages due to delayed disbursement, including interest, damage, and reasonable costs incurred.
2.4.2. Referee
If the contract has a clausecommercial arbitration(both parties have committed to resolving disputes through arbitration), you can choose arbitration:
The arbitrator can issue an award that is binding and has the same coercive value as a court judgment.
However, if the request relates to disbursement (which is a banking obligation), the arbitrator may be limited in its power to handle collateral or enforcement measures – you need to check for deviations in jurisdictional boundaries.
If the court and the arbitrator hear the matter at the same time, there may be an issue of overlapping jurisdiction – in which, one party may have the settlement suspended or refused due to a different settlement.
In case the delay in disbursement causes great damage or there is a risk of not being able to recover benefits if waiting for a lawsuit/arbitration, you can requestThe court applied temporary emergency measures(for example, forcing the bank to temporarily disburse funds, seal assets, freeze related accounts).
Note: the court can refuse if there is no clear legal basis.
If the arbitrator requests emergency relief, the arbitrator can ask the court to make a supporting decision – if the court refuses, an appeal can be made.
Subject of dispute: If the bank transfers the credit contract to a third party, the determination of who has the right to sue must be clear – the transferor needs to prove that it has handed over the legal debt function.
Guaranteed asset value: if the credit contract is linked to collateral, the bank can invoke the right to handle the asset - this leads to additional disputes about handling authority, valuation, and ownership of the collateral.
Inconsistency in the law: many regulations on interest rates, fees, damage calculation... between the Civil Law, the Law on Credit Institutions and guiding decrees are still inconsistent.
Delay in proceedings: In fact, many credit cases last long due to complications in collecting evidence, procedural problems or confusion between civil and business contracts.
Lack of evidence: if you do not keep records of official dispatches, emails, confirmation of sending/submitting documents... it is easy for the court or arbitrator to reject your request due to lack of supporting evidence.
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