Justice Academy Director Phan Chi Hieu said it would be possible to apply provisions in the Civil Law, the Trade Law and Decree 17 on property auctions to sue the auction winners.

He said a contract came into effect following the auctioneers declaring a company had won four fossil wood artworks in an auction.

Under the Civil Law, the company had to pay the money or compensation if it refused to pay for the items, said Hieu.

The charity auction for flood victims in central Viet Nam took place in HCM City on November 11 this year. The event attracted the participation of the Miss Earth 2010 contestants and businesses.

Four items were auctioned, including a bronze drum, a 10-kg raw ruby, a gemstone painting and the set of four fossil wood artworks featuring dragon, unicorn, turtle and phoenix - the precious four as people used to call . All of the items were auctioned for very high prices.

However, it turned out that the auction winners for the bronze drum, the ruby and the gemstone paintings had made false bids and had no intention of paying their offered amounts. The company, which won the auction for the four fossil wood artworks at VND47.9 billion (over $2.3 million) also refused to pay for the items.

Fake bids at auctions had often been highlighted in local newspapers for nearly a decade, but the existing law remained short of specific sanctions to punish fake bidders, said Hieu.

Besides the concern about legal aspects of auctions and the responsibility of auction winners, Hieu also shifted the blame on a limited understanding about auction law.

"The auction organising board acted unprofessionally and the people who ran it lacked knowledge about auction law," said Hieu.

He was speaking at a seminar where participants focused on discussing the legal aspects of auctions for charitable purposes recently held in Ha Noi.

"Auctioneers allowed clients to auction by telephone but they had no way of verifying who the bidders were," Hieu explained.

Lawyer Nguyen Van Hau said the auction organising board would be able to sue the bidders who had won the auctioned items or could seek compensation for any losses.

He quoted the relevant Civil Law which stated that auction winners could only withdraw their acceptance immediately following the conclusion of the bidding at the closing price.

Judge Le Thi Bich Lan at the Ha Noi People's Civil Court said the auction fell between commercial and charity purposes. She said a pledge which was made during an auction must become a regulation in law.

Legal Aid Department Deputy Director Nguyen Thi Minh said the Justice Ministry had proposed to draft a law on auctioning two years ago but the National Assembly Standing Committee had not approved the suggestion.

She said an existing decree on auctioning needed to be supplemented because it had only helped avoid losses of public assets.

VietNamNet/Viet Nam News