Viewpoint. Interpretation of the relevant content of the Civil Enforcement Law (Draft) and the realization of the bank's own claims.

Published:

2022-10-13

Foreword On June 21, 2022, the the People's Republic of China Civil Enforcement Law (Draft) (hereinafter referred to as the "Draft") was submitted to the Standing Committee of the National People's Congress for deliberation for the first time. On June 24, the draft was further open to the public for comments. The draft not only comprehensively sorts out the current implementation norms to make them more systematic, but also modifies the problems existing in the current norms and re-formulates new regulations on the problems that cannot be solved by the current norms. some of these provisions help banks better realize their creditor's rights. Contents and Interpretation of 2. Draft 1. Solving negative enforcement problems with enforcement objections "Draft" original text: Article 32 If the parties and interested parties believe that the people's court should perform the enforcement act but have not implemented it, they may submit a written application to the enforcement court to request the enforcement act before the end of the enforcement procedure. The people's court shall examine and handle the application within seven days after receiving the application for enforcement. If the reason is established, the execution shall begin; If the reason is not established, the applicant shall be notified in writing. After the people's court receives the application for enforcement, if the situation is urgent, it shall examine and deal with it within 48 hours; if the reason is established, it shall immediately start enforcement. If the applicant is not satisfied with the people's court's failure to review and handle the matter within the time limit or the notice made in accordance with the second paragraph of this article, he may file a written objection in accordance with the provisions of Article 84 of this law. Article 34 Where a people's court violates the provisions of this Law and causes losses to citizens, legal persons or unincorporated organizations, it shall pay compensation according to law. Interpretation: Solving the problem of negative enforcement through the enforcement objection system is one of the highlights of this "Draft. In addition, Article 174 of the "Draft" stipulates that "the people's court shall, after receiving the execution payment for the specific execution target, issue it to the applicant for execution in a timely manner", and Article 10 of the "Provisions of the Supreme People's Court on the Administration of Execution of Cash and Property" "The execution personnel shall, within 30 days from the date of receiving the notice of receipt of the execution payment from the financial department, complete the accounting of the execution funds, the settlement of the execution expenses, the notification of the applicant to receive and the distribution of the execution funds." The provisions of the law shall bear the corresponding legal consequences if the enforcement judge intentionally delays the execution, resulting in the reduction of compensation to the bankruptcy property. 2, clear lawyer investigation order system. The original text of the draft: Article 52 if the people's court is unable to inquire about a certain property information through the network information platform, and the applicant for enforcement cannot objectively obtain it by himself through entrusting a lawyer, he may entrust a lawyer to apply to the people's court for an investigation order. If, after examination, the people's court deems it really necessary, it may grant an investigation order to it. The investigation order is issued by the head of the executing agency. The investigation order shall contain the name of the lawyer, the number of the practice certificate, the practice institution, the name or name of the party, the case number, the specific investigation matters and the validity period. Where a lawyer conducts an investigation with an investigation order, the organization or individual concerned shall provide assistance. Refusal to assist, in accordance with the provisions of Article 75 of this Law bear the corresponding responsibility. If a lawyer abuses the investigation order by conducting an investigation beyond the scope of the investigation order, using the investigation order or the evidence obtained in a way contrary to public order and good customs, the people's court shall order it to return it, and may punish it with reference to the provisions of Article 62 of this law. Interpretation: Finding the debtor's property is one of the most important tasks of creditors in enforcement proceedings. Lawyers subjectively want to find more property of the debtor, but objectively do not have the power to check; the court has the power to check, but the court objectively does not have enough staff and time to check the contradictory situation. Regarding the lawyer investigation order, the current regulations do not stipulate that the higher people's courts in some areas have issued relevant judicial policies. There are currently two problems: First, there are no relevant regulations in individual areas, and creditors cannot apply for a lawyer's investigation order in these places. Second, in areas with relevant regulations, although creditors can apply for a lawyer's investigation order by entrusting a lawyer, due to the low level of effectiveness of the relevant regulations, the cooperation of the relevant departments is not too high, and the lawyer's investigation order cannot be fully effective. Article 52 of the draft stipulates the lawyer's investigation order in the form of law. At the same time, article 72 of the draft also specifically provides for penalties for organizations and individuals who fail to perform their obligations of assistance. 3. Modification of the property reporting system "Draft" original text: Article 46 If the people's court orders the person subject to execution to report property, it shall issue a property reporting order. Upon receipt of the property reporting order, the person subject to execution shall report in person on the specified date. If it is really difficult to report on the same day, it may apply to the people's court to change the date. Article 49 The people's court shall establish a database of the property reported by the person subjected to execution to register and store the contents of the report. With the permission of the people's court, the person applying for enforcement may inquire about the property and relevant information of the person subject to enforcement through the database. Interpretation: Banks should respond to this change and enrich the content of the non-performing loan management ledger in a timely manner. One is to use the deterrent power of the people's court to force the debtor to "show up" and make a good reminder. When the people's court notifies the debtor to report the property, it often notifies the creditor at the same time. On the other hand, the bank, as the enforcement applicant, can apply for the use of the property information that the person subject to execution has reported. 4, the provisions of the search for people to find the public security organs in the assistance obligations. Article 61 If the people's court decides to summon by arrest, it may notify the public security organ to assist in finding and controlling the detained person. Article 64 If a people's court decides to detain, it may notify the public security organ to assist in locating and controlling the detainee. Article 138 A people's court may notify relevant organizations to assist in locating or controlling motor vehicles. If the relevant organization discovers a motor vehicle when implementing road traffic safety management and other acts, it shall promptly notify the people's court and assist the people's court in controlling it in an appropriate manner. Interpretation: The enforcement measures of the court's enforcement agencies are very limited. In the investigation of people (summoning, detention) and searching for things (searching for motor vehicles), the enforcement agencies often need the assistance of the public security organs. Article 15, paragraph 2, and Article 16 of the current "Property Investigation Regulations" stipulate the obligation of public security to assist (the "relevant units" in the law should mainly refer to the public security organs), but the operation effect of the relevant provisions in practice is not ideal. In this regard, article 61, paragraph 3, article 64, paragraph 3, and article 138 of the draft stipulate the obligation of public security to assist in the form of law. In addition, Article 75 of the draft also stipulates the legal consequences of the public security organ's failure to perform the obligation of assistance. 5, modify the conditions for the transfer of the execution case to bankruptcy. Original text of the draft: Article 82 in the execution of monetary claims, if the person subject to execution meets the circumstances specified in Article 80 of this Law and the circumstances of debt liquidation stipulated in the bankruptcy law, the people's court shall rule to terminate the execution procedure and transfer the relevant materials of the execution case to the people's court of the place where the person subject to execution is located. The people's court of the place where the person subject to enforcement is located shall review it within 30 days from the date of receiving the relevant materials of the enforcement case, and shall generally rule to accept the bankruptcy application; if it is not accepted under special circumstances, it shall return the relevant case materials to the enforcement court and explain the reasons in writing. Interpretation: Articles 511 and 512 of the Judicial Interpretation of the Civil Procedure Law stipulate that when the person subject to execution has bankruptcy, if one of the persons applying for execution or the person subject to execution agrees, the execution court shall transfer the relevant materials of the execution case to the people's court of the place where the person subject to execution is located, and it shall decide whether to declare the person subject to execution bankrupt. Obviously, in the current norms, the bankruptcy proceedings of the executed person are initiated on the application of the parties. In response, the draft revised it to start in accordance with the authority of the court. Specifically, Article 82 of the draft stipulates that if the person subject to execution has bankruptcy, the court shall transfer the relevant materials of the execution case to the people's court where the person subject to execution is located, and the court shall generally decide to accept the bankruptcy application. Such a modification may help to solve the problem of unfair payment of creditors, but at the same time, it may also excessively infringe the right of the parties to dispose of them. Whether the Civil Enforcement Act will eventually be amended may need further argumentation. 6, the scope of the executive staff and the distribution of power issues. The original text of the draft: Article 10 the executive body of the people's court shall be composed of judges, executors, judicial police and other personnel. Judges are responsible for handling all types of enforcement cases. The executive officer is responsible for handling enforcement cases, except for major matters that should be handled by judges in accordance with the law, such as detention decisions and fine decisions. The judicial police, under the command of judges and executors, participate in the implementation of the implementation. Persons handling enforcement cases shall not participate in the examination of relevant enforcement objections, reconsideration, outsider objections and other cases. The appointment, removal and management of the executive shall be carried out in accordance with the relevant provisions of the State. Interpretation: This article breaks down the rumors that the reform of my country's enforcement system may follow the example of the United States and other Western countries to separate the enforcement agency from the court. The enforcement power still belongs to one of the internal departments of the court, but the post of "executive officer" is added. The executive does not have the status of a judge and can only engage in the act of execution. 7, the implementation of the basis is not clear dispute correction issues. The original text of the draft: Article 14 shall be based on a clear subject of rights and obligations and the content of payment. If the basis of enforcement is not clear about the subject of rights and obligations or the content of payment, the enforcement court may require the making organ or institution to clarify by way of explanation, correction of ruling, supplementary judgment, etc. If it cannot be made clear through the above-mentioned means, the parties may apply for enforcement after obtaining a new basis for enforcement through litigation, arbitration, etc. Interpretation: This provision has clear practical guiding significance, that is, in practice, because the meaning of various effective legal documents is unclear and the enforceability is poor, the enforcement judge cannot directly enforce the legal documents, and it is often in a dilemma. Therefore, the applicant and the person subject to execution cannot reach an agreement on the completion of the execution, which causes the case to be delayed for a long time. At this time, the court may require the issuing institution to explain, correct or make up for it by means of supplementary judgment, which can be understood as in order to improve the efficiency of enforcement. 8. Issues relating to the amount of fines and the duration of detention The original text of the "Draft": Article 63 The amount of fines imposed on individuals shall be less than RMB 100,000; the amount of fines imposed on organizations shall be RMB 50,000 to RMB 1 million. The term of detention shall be not more than fifteen days. Interpretation: it is worth noting that for malicious evasion of execution, the draft increases the maximum fine limit. In view of the situation that the person subject to execution refuses to report property and continuously refuses to perform irreplaceable acts, he can be detained for many times, with a cumulative total of no more than six months, which has reached the minimum period of six months in prison. 9. Issues related to re-seizure and transfer of disposal rights The original text of the draft: article 110 real estate that has been sealed up may be sealed up again. The people's court that seals up first may, in accordance with the law, take measures such as price change and compulsory management of the seized real estate. The people's court that is sealed up later shall, after the seizure, promptly inform the person applying for enforcement that it may apply for distribution to the people's court that is the first to seal up or other people's court that has the power to dispose of it. If the people's court that was first seized fails to initiate the procedure of determining the reference price of the real estate within three months after the seizure, the people's court that was later seized may consult with the people's court that was first seized to transfer the right of disposal. Interpretation: this provision has a strong guiding significance in the judicial disposal of property, and provides an important basis for avoiding the abuse of the right of first seal. In order to accurately understand the provision, we can compare the reply of the Supreme people's Court on issues related to the first seizure of the court and the priority creditor's rights enforcement court to dispose of the sealed-up property. The first article of the reply is clear: "in the process of execution, the court that first seals up, detains or freezes (hereinafter referred to as" seizure ") shall be responsible for disposing of the seized property. However, if the creditor's rights that have entered the execution procedures of other courts have a superior security right and priority (the creditor's rights are hereinafter referred to as priority creditor's rights) to the sealed-up property, and the first sealed-up court has not issued an auction announcement or entered into the sale procedure for the sealed-up property, the priority creditor's rights enforcement court may request that the sealed-up property be transferred for execution." However, the reply is only aimed at cases of waiting for seizure with priority of compensation, and does not provide for the transfer of ordinary creditor's rights. In order to prevent abuse of the right of first seal, the Draft stipulates that ordinary waiting for seizure shall be transferred for disposal, and the "negative standby time" of the first seal shall be changed from 60 days to three months.

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