Big C Vietnam and other retail companies have been dragged into a contract dispute between the supermarket and a building owner in Danang.
Big C’s Danang operations manager Nguyen Nu To Nga told journalists the supermarket company had signed a 40-year contract with Vinh Trung building owner Duc Manh 579 Corporation in 2006. However, the corporation, which also has apartments and the Vinh Trung Plaza hotel on site, decided to reclaim the ground on July 7.
She says Duc Manh locked down the stairs, blocked the underground parking and turned off the building’s water supply.
“Not only unilaterally terminating the contract, they also installed barricades to block the supermarket’s entrance.”
A motion about the dispute was filed earlier with the Vietnam International Arbitration Center (VIAC), says Nga.
As well as Big C, the building houses independent businesses such as a Medicare store, small concessions, a games parlour, two outlets of the national Highlands Coffee chain, KFC and Lotteria restaurants, a CGV cinema and a new hot-pot concept restaurant.
More than 200 workers from the building gathered in the afternoon of July 7, displaying banners asking for local authorities to intervene. Police were sent to the site.
However, the dispute goes back to November when the property company said it had sent termination documents to Big C, asking the supermarket to leave at the end of the year.
Duc Manh GM Nguyen Thi Chi says the 40-year Big C lease contract had been signed with French company Vindemia, a Casino Group subsidiary, with compensation of up to US$5 million in event of “illegal termination” by Duc Manh.
In April, Thai retail conglomerate Central Group paid US$1.14 billion to buy Groupe Casino’s Big C Vietnam business.
Asked why his company had let Big C run its store there for more than 10 years before acting, Chi says it had recognised the violation while reviewing the contract.
“We signed the contract with Vindemia, not Big C,” he says. “If they want to let another party use our property, they should have our permission.”
Fearing Big C would cause problems, they had to act in advance, says Chi.
Big C Hai Phong, the parent company of Big C Danang, says the only reason for the dispute is that Big C Danang is not the tenant on the contract.
Both parties have submitted documents to the VIAC.
In February, Duc Manh announced the withdrawal of retail spaces in the building, and the following month Danang authorities asked both parties to settle the matter through arbitration.
The matter is still in the hands of Danang authorities.