How to safeguard one's legitimate rights and interests in a bill (commercial acceptance) dispute?

Published:

2022-07-05

Commercial acceptance bills are endorsed by the company's reputation, and have gradually become one of the main tools for corporate financing due to their low threshold and easy operation. However, affected by the epidemic, market fluctuations, etc., commercial acceptance bills due acceptance difficulties, cash cost increase, there are also some areas of the glass association has issued a proposal, the initiative to uniformly reject commercial acceptance bills. However, under the general environment, many glass enterprises inevitably accept the commercial acceptance bill endorsed and transferred by the upstream company, and transfer it to the downstream enterprise again when the commercial acceptance bill is not due. When a commercial promissory note expires, if the acceptor is not able to accept it on time, how should the holder, the endorsement transferor and other parties protect their legitimate rights and interests? 1. the holder's right of payment request and bill recourse. Article 4 of the Bill Law clearly stipulates that "the right of the bill referred to in this Law refers to the right of the holder to request payment of the amount of the bill from the debtor of the bill, including the right to request payment and the right of recourse". The act of (I) an instrument is causeless, and the debtor of the instrument shall pay in full after the legitimate holder has prompted payment during the validity period. The holder's right to request payment of the bill, I .e., after the maturity of the bill, the holder shall request payment of the corresponding bill amount from the bill payer within the prescribed prompt payment period. A commercial promissory note with all necessary records and complete forms is a legal and valid instrument, and the payer shall pay in full after the bill of exchange is due and prompt payment within the validity period. Case: Supreme People's Court (2019) Supreme People's Court No. 166 Guotou Bio Jilin Co., Ltd. and Shanxi Hongdong Rural Commercial Bank Co., Ltd. Dispute over Claim for Bill Payment The court held that Hongdong Agricultural and Commercial Bank, as the holder of the ticket, claimed the right to the bill to the ticketing State Investment Biological Company, which was based on the law and should be supported. The note already states that "this bill of exchange has been accepted and is due for unconditional payment" and that the due date stated on it is December 28, 2015. As can be seen from the "Situation Note" issued by the State Investment Biology Company, Hongdong Agricultural and Commercial Bank has prompted the State Investment Biology Company for payment on January 6, 2016. In accordance with the provisions of Article 54 of the the People's Republic of China Bill Law: "If the holder prompts payment in accordance with the provisions of the preceding article, the payer must pay in full on the same day", the current Hongdong Agricultural Commercial Bank prompts payment behavior, has met the provisions of Article 53 of the the People's Republic of China Bill Law, the State Investment Biological Company is obliged to pay the holder in accordance with the bill in accordance with the law. (II) the right to the instrument is not exercised within two years after the maturity date of the instrument, the holder loses the right to the instrument, but has the right to return the interest in the instrument within the statute of limitations (three years) The holder's rights against the drawer and acceptor of the instrument shall be two years from the maturity date of the instrument, but the holder shall still have civil rights after losing the right to the instrument and may request the drawer or acceptor to return his interest equivalent to the amount of the unpaid instrument. Case: Jiangsu Xuzhou Intermediate People's Court (2020) Su 03 Min Zhong No. 6545 Anhui Education Publishing House and Bank of Communications Co., Ltd. Xuzhou Branch Dispute over Claim for Return of Bills The court held that Article 18 of the the People's Republic of China Bill Law stipulates that "if the holder loses the right to the bill because it has exceeded the statute of limitations of the right to the bill or because the bill is not recorded, he still has civil rights and may request the drawer or acceptor to return his interest equivalent to the amount of the unpaid bill." Anhui Education Press, as the holder of the bill, has lost the right to the bill, but its civil rights to the drawer and the acceptor have not been lost. Secondly, Bank of Communications Xuzhou Branch received all the bill payment, but it did not return the payment to the drawer Xuzhou Fusen Import and Export Co., Ltd. after the bill had passed the commitment period and the right period. The bank's continued holding of the bill constituted unjust enrichment. Finally, when Anhui Education Publishing House accepted the bill to Xuzhou Branch of Bank of Communications, it learned that the bill involved was still in the possession of the bank, and the bank's refusal to pay constituted infringement. Therefore, Anhui Education Publishing House claimed that the starting point of the statute of limitations for the interest of the bill should be April 1, 2020, the date when the prompt payment was rejected. The agency filed a lawsuit in the court of first instance in that year, xuzhou Branch of Bank of Communications shall pay 1 million yuan to the agency for the benefit of the bill. After the (III) bill is refused payment at maturity, the holder has the right to recover its forehand. The right of recourse to an instrument is the right of the holder to request repayment of the amount, interest and expenses of the bill of exchange against his forehand (endorser, drawer and other debtors) when the bill of exchange is refused payment or non-acceptance at maturity or for other legal reasons. The right of recourse to an instrument is a second-in-place right and may be exercised only if the right to request payment is exercised against the payer and is not available. The person being pursued may be more than one person and shall be jointly and severally liable to the bearer, including all the forehand endorser, drawer, acceptor, guarantor, etc. It is important to note that the holder's recourse to the forehand is only six months from the date of rejection of acceptance or rejection of payment, compared to the two-year statute of limitations on the bill. Case: Shandong Wucheng County People's Court (2019) Lu 1428 Minchu 2604 Dezhou Tiansen Air Conditioning Equipment Co., Ltd. and China Railway Third Bureau Group Construction and Installation Engineering Co., Ltd., Jiangsu Youan Fire Engineering Co., Ltd. Shanxi Branch Bill Recourse Dispute The court held that the "refusal to pay" provision of Article 61 of the the People's Republic of China Bill Law included not only the situation where the payer expressly "refused to pay", but also the objective inability of the payer to perform its obligation to pay. The proof in the provision of "refusal to prove, reason for refund or failure to provide other legal proof within the prescribed time limit" is a proof of refusal to accept or refuse to pay. According to the announcement of Pagoda Petrochemical Group Finance Co., Ltd. on July 10, 2018 provided by the plaintiff and the fact that Pagoda Petrochemical Group Finance Co., Ltd. had not actually paid until the end of the trial, the plaintiff Dezhou Tiansen has actually been refused payment, so the bill involved in the case has actually been refused payment. Texas Tiansen, through continuous endorsement, obtained the bill involved in the case, is the legal holder of the bill. Defendant Jiangsu You'an Fire Shanxi Branch argued that the plaintiff Dezhou Tiansen claimed that the bill right had exceeded the six-month limitation period of the bill right, and the right of recourse was thus eliminated. The plaintiff, Dezhou Tiansen, submitted the notice of refusal to pay and the letter of reminder to each endorser of the bill involved in the case, stating that the company has the right of recourse, requesting the endorser of the bill involved in the case to bear joint and several liability for the payment, and submitted the mail receipt, which can prove that the plaintiff, Dezhou Tiansen, sent a notice of recourse to his forehand within six months from the date when the bill was actually refused to pay, therefore, the Court held that when Texas Tiansen issued a notice of recourse to the defendants in this case (I. e., when issuing a notice of refusal of payment of the bill of exchange and a letter of reminder of payment) did not exceed the six-month limitation period of the bill rights, Texas Tiansen could claim the bill rights against its forehand. The holder of a 2. may sue its direct forehand on the basis of the underlying legal relationship. In the case of the holder's direct forehand, the holder may claim rights on the basis of both the legal relationship of the instrument and the underlying legal relationship (the relationship between the contract of sale and purchase). If the parties fail to pay the price or remuneration, the other party may require it to pay the price or remuneration, and the law does not prohibit the seller who accepts the bill of exchange from requesting the buyer who delivers the bill on the basis of the underlying legal relationship to pay the purchase price separately, and the holder of the bill has the right to demand the payment of its direct forehand on the basis of the underlying legal relationship. However, it does not rule out the court's choice to reject the holder's claim for payment on the basis of the underlying legal relationship in order to protect the forehand's right of re-recourse. Case 1: Jinan Intermediate People's Court (2021) Lu 01 Min Zhong No. 952 Shandong Jigang Alloy Material Technology Co., Ltd. and Zhangqiu Xindongda Machinery Parts Co., Ltd. Dispute over Sales Contract The court held that the bill in question was currently in a non-repudiation recourse pending settlement. Because the bill involved in the case is an electronic bank acceptance draft, according to the current electronic commercial bill of exchange system, if the acceptor of this type of bill of exchange does not respond to the holder's prompt payment, the holder objectively cannot obtain proof of refusal through the electronic commercial bill of exchange system. Based on the relevant announcement issued by Pagoda Petrochemical Group Finance Co., Ltd., New Dongda Company also submitted materials to the acceptor Pagoda Petrochemical Group Finance Co., Ltd. on site, which has not been paid so far. In summary, the instrument should be deemed to have been "refused payment". The right of Xindongda Company to obtain the purchase price has not been realized, and has the right to request Jigang Alloy Company to pay the money based on the sales contract between the two parties. Case 2: Disputes over Sales Contracts between Shanghai Xinwang Iron and Steel Co., Ltd. and Ganzhou Jiang Tungsten Alloy Co., Ltd., No. 119, Jiangxi Provincial Higher People's Court (2020) The court held that under the condition that the electronic bank acceptance bill involved in this case has not been paid so far, the holder of the bill, Jiang tungsten alloy company, has two kinds of claim rights, namely, the claim right based on the legal relationship of the sales contract and the claim right of bill recourse based on the relationship of bill creditor's rights and debts. Jiang tungsten alloy company has the right to choose one of the bill rights or the cause creditor's rights to file a lawsuit. However, because the electronic bank acceptance draft is a certificate of rights to securities, so Jiang Tungsten Alloy Company in the cause of the claim of the right at the same time, should return the original bill to Xinwang Iron and Steel Company, in order to protect Xinwang Iron and Steel Company can be the former and the drawer, the acceptor to claim the bill rights. As the electronic bank acceptance bill in this case is still in a state of being unable to be returned to Xinwang Iron and Steel Company, in order to protect Xinwang Iron and Steel Company's bill recourse, the court does not support the lawsuit request of Jiang Tungsten Alloy Company to require Xinwang Iron and Steel Company to pay 6 million yuan corresponding to the bill involved in the case and to bear liquidated damages for overdue payment based on the legal relationship of the sales contract. Jiang Tungsten Alloy Company may exercise its bill rights in accordance with the law, and separately claim the bill rights to Baota Petrochemical Group Finance Co., Ltd., Xinwang Iron and Steel Company or its predecessors. 3. the right of re-recourse of the holder or the person against whom the claim is made. The right of re-recourse is the right of the bill debtor who has paid off the bill debt through the recourse of other bill rights holders, and after obtaining the bill, the right to seek recourse from its forehand. After the person against whom the recourse is made has paid off the corresponding bill, he may exercise the right of re-recourse against other bill debtors for a period of three months from the date of payment or the date on which the action is brought. However, as mentioned earlier, not all holders will claim in an instrument relationship, and it is not ruled out that the holder may claim payment in an underlying legal relationship and be supported by the court. The holder of the ticket sues its direct forehand with the basic legal relationship, and the settlement of the debt arising from the basic legal relationship objectively produces the result of the liquidation of the bill in question, and the holder shall deliver the bill in question to the forehand, who shall enjoy the right of re-recourse of the bill. Case: Zhejiang Xiaoshan District People's Court (2020) Zhejiang 0109 Minchu No. 7899 Angang Jingu (Hangzhou) Metal Material Co., Ltd., Hong Jianlong and Hangzhou Mingning Chemical Co., Ltd. Bills Dispute The court held that: the case involved in the electronic bank acceptance bill endorsement continuous, multi-leng new materials Co., Ltd. as the legitimate holder. Due to the fact that the electronic bank acceptance bill involved in the case cannot be paid when it is due, Duoleng New Materials Co., Ltd. sued Angang Jingu (Hangzhou) Metal Materials Co., Ltd. according to the dispute over the sales contract, and then Angang Jingu (Hangzhou) Metal Materials Co., Ltd. paid the corresponding amount to Duoleng New Materials Co., Ltd. according to the effective judgment. Although the payment was not based on the bill relationship, however, the settlement of the debt arising from the underlying legal relationship objectively allows the corresponding instrument debt to be settled. After paying off its debts, Angang Jingu (Hangzhou) Metal Materials Co., Ltd. enjoys the same rights as the ticket holder, so it has the right to recover from its forehand. 4. Summary The bill does have the advantage of its existence in market circulation, but there is also a real risk of paying more time and energy to get the corresponding amount of payment when the bill is due and the payer refuses to accept it. After the maturity of the bill, the holder shall prompt payment in time to avoid damage to his own rights. In the event that the instrument cannot be honored, the holder may claim payment from all debtors of the instrument on the basis of the instrument relationship, or may claim payment from its direct forehand on the basis of the underlying legal relationship. After being pursued by the holder, the forehand of the non-bill payer has the right of re-recourse, but it needs to be exercised within three months from the date of liquidation or the date of the lawsuit. It is worth noting that if the holder claims payment on the basis of the legal relationship, it is still controversial in practice whether the direct forehand has the right of re-recourse after the settlement of the debt. Our lawyers believe that after the direct forehand pays off the debt based on the basic legal relationship, the objective result of the bill involved in the case is paid off, the holder should deliver the bill to the direct forehand, at this time the direct forehand enjoys the right of re-recourse of the bill, the statute of limitations from the date of prosecution or liquidation.

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