Priority payment right in secured transactions: Japanese experience and lessons for Vietnamese law

This article examines the legal problems surrounding priority payment rights in secured transactions in Vietnam, where the absence of a unified and coherent order of payment creates conflicts and uncertainty among creditors. Using doctrinal legal analysis and comparative examination, the study reviews existing Vietnamese regulations in the Civil Code and the Law on Bankruptcy and compares them with the Japanese Civil Code. The analysis finds that Vietnamese law lacks consistency and clear classification of priority claims, particularly when multiple creditors compete over the same secured assets. In contrast, Japanese law provides a systematic structure that distinguishes between general and specific priority rights based on asset types and claims. Drawing from the Japanese experience, the article proposes reforms to clarify payment priority rules in Vietnam. These recommendations aim to enhance legal certainty, balance stakeholder interests, and improve the efficiency of dispute resolution in secured transactions.