Point of view... It is difficult to repay when borrowing money, and it is difficult to collect claims-how to prevent guarantors from "de-insurance" under the new rules of the Civil Code"

As the saying goes, "borrow three but not two, and save the emergency but not the poor". All natural and man-made disasters, red and white events, seeing a doctor and studying are the key points in life. They help each other to give timely help, but they do not save the poor. Otherwise, there will be a "rising rice and fighting rice hatred". The rescued party will take it for granted and lose its ability to save itself. In the end, it is difficult to save both sides. There is no shortage of examples around us for the purpose of profit, of course, in legal relations is not limited to borrowing, in practice all kinds of creditor's rights and debt relations are more complex, but the purpose of realizing creditor's rights is the same. Therefore, in order to prevent the debtor from becoming insolvent, a guarantor's guarantee is required, but the guarantor's "de-insurance" makes it difficult to realize the claim. In particular, the new guarantee rules of the Civil Code are not just as simple as presuming to be general guarantees, but if there is no clear ability to identify the various "pits" in the guarantee rules, it is considered absurd, and there will be only bitter tears left. 1. the Civil Code removes the rule that the guarantor of the unclear scope of the guarantee is liable for all debts, the creditor should first clarify the scope of the guarantee liability in the contract, so as to avoid the agreement falling into the pit of "limiting the scope of the guarantee". Article 21 of the former Guarantee Law stipulates that "if the parties do not expressly agree on the scope of the guarantee or the agreement is not clear, the guarantor shall be liable for all debts". However, this provision does not appear again in article 691 of the Civil Code, but lists the scope of the guarantee and provides that "if the parties agree otherwise, they shall agree in accordance with their agreement". Therefore, the rights are handed over to both parties of the guarantee contract again, and the creditor and the guarantor make a clear agreement. For example, if the debtor only assumes the guarantee responsibility for the main creditor's right, he cannot claim other losses to the guarantor. Even if the debtor has the ability to return the principal, the guarantee contract can also limit the scope of the guarantee to "interest, liquidated damages, damages and expenses for realizing the creditor's right". As a creditor, confirm the scope of the guarantor's guarantee and make a clear agreement to avoid disputes and limit the scope of its guarantee. 2. creditors claim their rights beyond the guarantee period, resulting in falling into the "de-insurance" of the guarantor. Article 692 of the Civil Code provides that "the period of guarantee is the period during which the guarantor is determined to assume the responsibility for the guarantee, without suspension, interruption or extension." Creditors can only claim rights to the guarantor within the period of the guarantee, beyond the period of the guarantee that the "de-insurance". The problem is how to determine the beginning and end of the guarantee period, which is more complex in practice. The Civil Code makes new rules to resolve disputes. The creditor and the guarantor may agree on a guarantee period, but the agreement shall meet the legal requirements. If the agreed guarantee period is earlier than or the same as the performance period of the principal debt, it shall be deemed that there is no agreement; what if there is no agreement? The guarantee period at this time is "six months from the expiration date of the performance period of the principal debt"; what if the performance period of the principal debt is unknown. This rule tells creditors to be clear about the scope of the warranty period and to be legally defined. If there is no agreement, it is necessary to look at the agreement on the period of performance of the main debt in the main contract, and if the main contract is also unclear about the period of performance, evidence of the request for performance of the debt from the debtor should be retained, and the guarantee period should be calculated strictly from that date. If the starting point of the guarantee period is calculated incorrectly, resulting in the passage of the guarantee period, the guarantor is "de-insured"! 3. creditors claim rights should distinguish between general guarantees and joint and several liability guarantees, across the "loss of guaranteed claims" pit. In the case of a general guarantee, the liability for the guarantee is incurred only if the creditor sues and the debtor is still unable to repay the debt. Therefore, the creditor needs to bring an action to the debtor during the guarantee period, and the guarantor can be held liable after obtaining an enforcement decision. Here there is the issue of the overlap between the creditor's statute of limitations and the warranty period, which is generally three years, but the warranty period is generally shorter, even six months when the agreement is unclear. Assuming a six-month guarantee period, the creditor files an action on the seventh month of the expiration of the principal obligation, at which point the failure to assert its rights during the guarantee period results in a "de-insurance". Therefore, the Civil Code clearly states: "If the creditor of a general guarantee fails to bring an action or apply for arbitration against the debtor during the period of the guarantee, the guarantor shall no longer be liable for the guarantee." In this regard, creditors can not only rely on the statute of limitations to look at the problem, must first verify the guarantee period, practice can not be ignored, otherwise lead to the loss of rights all lost! This is different in the case of joint and several liability guarantees, and if the period of guarantee and the statute of limitations are confused, it may be argued that since there is joint and several liability, it can be claimed against anyone. For the statute of limitations it will continue, but the guarantee period will not, because it is a constant period. If the creditor of the joint and several liability guarantee fails to claim the guarantee liability to the guarantor within the period of the guarantee, the creditor loses the guarantee claim and "loses the guarantee". That is to say, joint and several liability guarantee, the creditor must have a separate process of claiming rights to the guarantor, and need to strictly follow the guarantee period rather than the statute of limitations period. 4. creditors should distinguish between general guarantees and joint and several liability guarantees, pay attention to the statute of limitations of the guaranteed debt, and avoid the "statute of limitations" pit. The guarantee period and the statute of limitations are different rules, and the two exist at the same time in the guarantee debt, which is easy to confuse. The guarantee period is the period during which the guarantee creditor can claim the guarantee claim. During this period, the creditor's request to the guarantor to assume the guarantee responsibility is the exercise of the first claim for the guarantee debt. If the guarantor refuses to perform the guarantee debt (especially when the joint and several liability guarantee creditor directly requests to perform the guarantee debt), the creditor has the second claim right to guarantee the creditor's right, which is the limitation of action for the guarantee debt. If the creditor exceeds the limitation period, it will lose the possibility that the right to guarantee the claim will be supported by the court, and the same claim cannot be realized. 5. creditors change the main creditor's debt contract without the consent of the guarantor, resulting in a "de-insurance" pit. The original Security Act provided that if the principal debt contract was changed without the consent of the guarantor, the guarantor would no longer be liable for the guarantee. The Civil Code, on the other hand, repeals this rule and adjusts it to the effect that if the debt is mitigated, the guarantor is still liable for the changed debt, and if the debt is aggravated, the guarantor is still liable for the debt to the original extent and is not liable for the aggravated portion. This change actually implements the principle of contract relativity and implements the basic value of protecting claims, because the main contract change is a change in the contract between creditors and debtors, and the guarantee that the two parties to the contract are creditors and guarantors, naturally can not add new obligations to the guarantor outside the main contract, and the obligation can only be reduced but not increased. It should be noted that if the change is made during the performance of the main contract obligation, does it affect the guarantor? Because the change has no effect on the guarantor without the written consent of the guarantor. The calculation of the guarantee period shall still be based on the original contract before the change. The Civil Code provides that "creditors and debtors change the period of performance of the main creditor's debt contract, without the written consent of the guarantor, the period of guarantee shall not be affected." The word "unaffected" has been confirmed. The guarantee period is still calculated according to the original contract. If the creditor changes the performance period with the debtor, but does not obtain the written consent evidence of the guarantor, it is easy to make mistakes in understanding, which will obviously lead to the wrong calculation of the starting point of the guarantee period and the occurrence of "disinsurance" after the guarantee period has passed. This is another big "pit" that creditors can easily ignore "! The above only lists the various pits that creditors are easy to ignore but lead to "de-insurance", but the legal guarantee rules are very complex and controversial, and creditors, debtors and guarantors use different rules to fight each other within their respective scopes. As a creditor is the main contract and guarantee contract witness, a careless loss, the loss is real money, creditors do need legal professionals to help identify, and make full use of legal rules, in order to complete a "thrilling leap", across the "out of insurance" pit!

2022-09-13

Viewpoint... The legal nature and case analysis of the pledge of highway toll rights.

Introduction As a public infrastructure, highways are owned by the state in accordance with the law, and highway toll rights are usually managed by the government as an administrative power. Since the reform and opening up of our country, in order to promote the construction of infrastructure, the construction mode of operating toll roads has gradually developed, that is, the government transfers the franchise rights of toll roads within a certain period of time to non-governmental economic organizations in accordance with the law, and it is responsible for the overall construction, Operation, maintenance and tolls, and then return the management rights after expiration. At present, China is in the development stage of infrastructure construction, all kinds of projects in the construction process, funding is always one of the problems to be solved. In the process of toll road construction, it is a common financing method in practice for toll road project investors to pledge the road toll right to the bank to obtain loan funds. From a legal point of view, what is the legal nature of this right to charge, and what legal risks will exist in practice? The Legal Nature of the Pledge of Highway Toll Right As a kind of right that can bring economic value, highway toll right should belong to the category of right quality right when establishing pledge guarantee. China's laws and regulations identify road toll rights as a type of accounts receivable, and Article 3 of the Uniform Registration of Movable Property and Rights Guarantees provides a general list of various accounts receivable: The accounts receivable referred to in these Measures shall include the following rights: Claims arising from the sale and lease of (I), including the sale of goods, the supply of water, electricity, gas and heating, the licensed use of intellectual property rights, and the lease of movable or immovable property; Creditor's rights arising from the (II)'s provision of services or labor services such as medical treatment, education and tourism; (III) the right to profit from infrastructure and public utility projects such as energy, transportation, water conservancy, environmental protection, and municipal engineering; Claims arising from (IV) provision of loans or other credit activities; (V) other contractual-based claims with monetary payments. It can be seen that the right of highway toll belongs to the content of the third paragraph of the article, in line with the concept of accounts receivable, can be applied to the legal provisions related to accounts receivable, such as the establishment of the right of highway toll pledge needs to be registered. With regard to the realization of the pledge of highway toll rights, the Supreme People's Court on the application of<中华人民共和国民法典>Article 61 of the Interpretation on the Guarantee System also has the following special provisions: The people's court shall support the pledgee's request to give priority to the payment of the funds in the specific account when the parties set up a specific account for the accounts receivable and the legal or agreed reasons for the realization of the pledge occur. The people's court shall support the pledge; the funds in the specific account are not enough to pay off the debts or no specific account has been set up, if the pledgee requests a discount or an auction or sale of the right to the proceeds of the project, etc., and gives priority to the payment of the proceeds, the people's court shall support it in accordance with the law. The right of highway toll is also special compared to the general right of quality. First of all, when the highway toll right is authorized to the highway project investors, the material basis for its existence is that the toll road has not yet been built, and its possible economic value can only be obtained through evaluation and other means, while the actual benefits can only be realized after it is opened to traffic. Secondly, when the highway project investors can start tolling through the highway tolling rights approved by the relevant departments after the completion of the highway, its value is not a one-time realization, but the need to collect tolling fees for passing vehicles within the approved period in order to realize the actual economic value of the highway tolling rights. Therefore, there is a long time difference between the acquisition of highway toll right and the realization of its economic value, which is a kind of expectation right, and there is also the risk that the right of toll can not be obtained or lost in the end. Typical case Treatment of Pledge when Highway Toll Right is Withdrawn [(2020) Chuanminzong No. 1514]] basic case] Linshui Agricultural Bank and Linshui Communications Development Company signed the "Maximum Mortgage Guaranteed Loan Contract", which stipulates that Linshui Communications Development Company needs a long-term loan for the 210 National Highway Project, the loan amount is 30,000,000 yuan, and the 210 line Linshui domestic road toll rights as collateral. In December 2012, the People's Government of Sichuan Province issued the Notice on Canceling the Toll Collection of Secondary Highway for Government Loan Repayment, which included the Dafosi Toll Station of Linshui National Highway 210 in the station publicity list of the notice. In the same month, Linshui Agricultural Bank, Linshui Communications Development Company and Linshui County Finance Bureau signed Linshui County Agreement on Cancellation of Secondary Highway Toll Repayment (Borrowing) of Government Loan Repayment, which specifies that after the Ministry of Finance subsidy funds and provincial assistance funds are transferred to the account of the Finance Bureau, Linshui Communications Development Company shall apply for appropriation, and Linshui County Finance Bureau shall allocate and repay the debts of Linshui Agricultural Bank within three months according to the proportion of the total funds. After the bad claim is transferred to a third party, the third party to the court to claim the right of priority compensation for the road toll. court view] The right to highway toll collection may be pledged in accordance with the law. Linshui Communications Development Company pledged the toll right of National Highway 210 to Linshui Agricultural Bank due to the need of the construction project, and registered the pledge in accordance with the law, the pledge of both parties shall be valid in accordance with the law, and the pledgee shall have the priority right to receive compensation for the pledge. Article 73 of the "the People's Republic of China Guarantee Law" "The right of pledge shall be extinguished due to the loss of the pledge. The compensation for the loss shall be treated as pledged property", in this case, the pledge shall be extinguished due to the loss of the toll collection right due to the cancellation of the government's loan repayment secondary road tolls, but the state shall be treated as pledged property due to the cancellation of the toll collection right by the central and provincial people's governments. comment] When the highway toll right is recovered, the right of quality is eliminated, but its effect can be extended to the subsidy arising from the recovery of the toll right, and its legal principle lies in the property subrogation of the security right. According to article 390 of the Civil Code, during the period of security, if the secured property is damaged, lost or expropriated, the security interest holder may give priority to the insurance, compensation or compensation obtained. Before the highway project was completed and opened to traffic, the highway toll right was recovered by the government before it was obtained. At this time, the toll right as a quality lost the possibility of generating economic value, so the toll right pledge lost its effect when the toll right was recovered. At this time, the built part of the highway does not produce use value, can not be counted as a real thing, but as a part of the highway, its value is only the value of the project that has been built. When the government takes back the highway toll right, it shall compensate the other party for the project funds according to the actual investment of the completed part. For this part of the compensation, it can be considered that in the ordinary movable property pledge, if the pledge has received compensation, insurance or compensation for loss, damage or expropriation, the compensation as a subrogation shall be the effect of the right of quality. </中华人民共和国民法典>

2022-09-06

Viewpoint... Bankruptcy proceedings and the lifting of height limit measures.

With the changes in the domestic and international economic situation and the need to optimize the domestic business environment, it has become a rigid policy to promote the merger, reorganization and liquidation of backward enterprises, and bankruptcy cases have also been included in the assessment indicators. the problem of legal application between bankruptcy procedures and measures to restrict high consumption has become more and more prominent, and the number of relevant legal consultation and enforcement objection agency cases has gradually increased. However, due to the lack of clear legal provisions, judicial practice is not uniform, this paper will be the debtor into the bankruptcy proceedings to be declared bankrupt, can lift the enterprise related personnel of the high limit measures to explore and analyze, with a view to providing reference for practical operation. The time node of the measure of lifting the high limit of the related personnel of the enterprise in the practice of 1. bankruptcy. The second paragraph of Article 2 of the provisions of the Supreme People's Court on restricting the high consumption of the person subject to execution (hereinafter referred to as the "provisions on restricting high consumption") stipulates that "if the person subject to execution is a unit, after the consumption restriction measures are taken, the person subject to execution and his legal representative, principal person in charge, person directly responsible for affecting the performance of debts and actual controller shall not carry out the acts specified in the preceding paragraph. Those who commit the acts specified in the preceding paragraph with personal property for private consumption may apply to the enforcement court. If the enforcement court's review is true, it shall be granted." Restricting high consumption and untrustworthy persons subject to enforcement are two different concepts, which are stipulated in the "Regulations on Restricting High Consumption" and "Several Provisions of the Supreme People's Court on Publishing the List of Untrustworthy Persons Subject to Enforcement" (hereinafter referred to as the "Regulations on Untrustworthy Persons Subject to Enforcement" "). Specific consumption restrictions include not taking planes, soft sleepers on trains, and second-class or above on ships; not spending in hotels, hotels, nightclubs, golf courses and other places above the star level; not purchasing vehicles that are not necessary for business operations; not traveling or vacations; not investing abroad; children are not allowed to attend high-fee private schools, etc. Generally speaking, after a company is included in the list of untrustworthy persons subject to enforcement and has been taken measures to restrict consumption, its legal representative, main person in charge, person directly responsible for affecting debt performance, and actual controller (hereinafter collectively referred to as corporate affiliates) may All can be taken by the court to restrict high consumption. Article 19 of China's Enterprise Bankruptcy Law stipulates that "after the people's court accepts the bankruptcy application, the preservation measures relating to the debtor's property shall be lifted and the enforcement procedure shall be suspended." However, the law does not clearly stipulate that when an enterprise enters bankruptcy proceedings, the related personnel of the enterprise can lift the measures to restrict high consumption. In practice, the related personnel of the enterprise usually apply for the lifting of the measures on their own or the administrator applies for the lifting of the measures to be dealt with by the people's court. However, there is no uniform mode of operation in local courts, such as most cases in the company is declared bankrupt, even after the end of the bankruptcy proceedings to lift the high limit measures, a few cases in the bankruptcy application stage can be lifted by the court support. 2. the difference between the two opinions (I) objection: If a company enters bankruptcy proceedings but has not yet declared bankruptcy (or if the reorganization plan has not yet been approved), the law shall not be lifted. 1. Main reasons and basis The courts that hold this opinion mostly believe that according to the provisions of the Supreme People's Court on the publication of the information on the list of untrustworthy persons subject to enforcement (hereinafter referred to as the "provisions on untrustworthy persons subject to enforcement"), after the person subject to enforcement is taken to limit the height, the height limit can only be lifted under three circumstances: that is, the person subject to enforcement provides a guarantee, the person applying for enforcement consent or the performance is completed. If the person being executed is only in insolvency proceedings, it is not yet a statutory cause for which a consumption restriction order should be lifted. Furthermore, it is believed that the original intention of Article 19 of the Enterprise Bankruptcy Law is that after the bankruptcy court accepts the enterprise bankruptcy case, the enforcement court should suspend the civil enforcement procedure against the debtor's property, so that the bankruptcy court can conduct unified management of all the debtor's property., Change the price and distribution, so as to ensure that all creditors are paid equally and fairly. Therefore, the content of the stay of execution should refer only to the seizure, seizure, freezing, realization and return of the debtor's property, and does not include other indirect enforcement measures of a non-property nature of the debtor (e. g. restrictions on consumption, restrictions on exit, etc.). According to the Supreme People's Court on the application<中华人民共和国民事诉讼法>Article 513 of the Interpretation stipulates that "if the people's court in the place where the person subject to execution is domicile decides to accept the bankruptcy case, the enforcement court shall lift the preservation measures for the property of the person subject to execution. If the people's court in the place where the person subject to execution is domicile decides to declare the person subject to execution bankrupt, the enforcement court shall decide to terminate the execution of the person subject to execution. If the people's court in the place where the person subject to execution is domicile does not accept the bankruptcy case, the execution." The above provision is conditional on the decision to declare bankruptcy, as there is still the possibility of exiting the insolvency proceedings before the debtor is declared bankrupt. When the court makes a ruling declaring the bankruptcy of the executed enterprise, the enforcement court shall order the termination of the execution of the executed person. Upon termination of enforcement, all enforcement measures taken, including the consumption restriction order, shall be lifted. 2. Case Reference (1)(2021) Shanghai 0105 Zhihui No. 548: An Hongsong and Beijing Colas Chemical Technology Co., Ltd. Execution Ruling Letter for Disputes over Sales Contracts The purpose of the decision: This court believes that if the person subject to execution is declared bankrupt by the people's court of his domicile, the court shall rule to terminate the execution of the person subject to execution. The application of the bankruptcy administrator of the current executor is in accordance with the law, so the execution procedure in this case should be terminated. (2)(2019) Zhejiang No. 10 Zhifu No. 12: Zhejiang Mintai Commercial Bank Co., Ltd. Wenling Zeguo Sub-branch and Yangzhou Huidu Home Textile Co., Ltd. Other Cases Execution Review Execution Ruling Summary of the decision: The Court believes that, first of all, ...... if the executed enterprise only enters into bankruptcy proceedings, it does not yet belong to the statutory cause of the order of restriction of consumption should be lifted. Secondly, ...... The above-mentioned provisions are conditional on the decision to declare bankruptcy, because after the bankruptcy court accepts the bankruptcy application and before the declaration of bankruptcy, the debtor's enterprise as the executed person may still withdraw from the bankruptcy proceedings, and once the bankruptcy proceedings are withdrawn, the execution proceedings against the executed person may resume. Therefore, what should be lifted at this time is the preservation measures of the property of the executed person so that the bankruptcy proceedings can proceed normally, and the restriction of consumption measures that do not affect the normal conduct of the bankruptcy proceedings are not necessarily also lifted. Upon termination of enforcement, all enforcement measures taken, including the consumption restriction order, shall be lifted. Finally, in this case, according to the facts ascertained, the enforcement court had ruled to terminate the enforcement proceedings before the executor Huidu Company entered the bankruptcy proceedings, and the creditor's rights of the executor had not yet been realized, and the executor Huidu Company had not been ruled bankrupt. Therefore, there is no conflict between the bankruptcy liquidation procedure and the enforcement procedure as claimed by the applicant for reconsideration, and there is no legal basis for the termination of the execution of the executed person. There is no basis for the applicant for reconsideration to request the lifting of the consumption restriction order on the grounds that the executed person Huidu Company has entered bankruptcy proceedings and the applicant has also declared bankruptcy claims. (3)(2018) Ji 06 Zhiyi No. 158: An Hongsong and Beijing Kolas Chemical Technology Co., Ltd. Execution Ruling Letter of Implementation Review for Disputes over Sales Contracts Summary of Judgment: The Court believes that, although the Court ruled to accept the bankruptcy case of Baoding Tianwei Wind Power Blade Co., Ltd., it has not yet made a ruling on whether to pass the reorganization draft, nor does it have the conditions to lift the restriction on consumption order. (4)(2018) Zhejiang 0903 Executive No. 896 and 898: Zhang Xuefen and Li Zhikang Request to Confirm the Effectiveness of the People's Mediation Agreement Implementation Class Implementation Decision The main purpose of the decision: The person subject to execution has been declared bankrupt and the court has ruled that the case should be terminated. According to the Supreme People's Court<关于限制被执行人高消费及有关消费的若干规定>According to the provisions of Article 9, the decision is as follows: to lift the restrictions on the consumption behavior of Zhoushan Haiyu Aquatic Food Co., Ltd. The (II) agreed that after the court has made a ruling on the acceptance of the bankruptcy application, it may lift the consumption restriction measures against the executed person. 1. Main reasons and basis The courts that hold this opinion mostly believe that under the normal operation of the company, the legal representative and senior management decide the daily operation of the company and grasp the assets and liabilities of the company, which can have a greater impact on the specific implementation. The purpose of the height limit is to prevent it from using unit property consumption in the name of an individual, or to use personal property consumption first and then reimburse public funds to circumvent the prohibitive provisions of the judicial interpretation. After entering the bankruptcy proceedings, the debtor's property is taken over by the administrator, the enterprise's related personnel lose control of the enterprise, there is no possibility of abusing the company's property for high consumption, and then take measures to restrict consumption has no sense of supervision and implementation; in addition, this is also in line with the spirit of the document of the Supreme People's Court on further strengthening the concept of good faith civilization implementation in the implementation work (hereinafter referred to as the "good faith implementation opinions") for implementing the concept of good faith civilization implementation and avoiding excessive implementation. 2. Case and Document Reference (1)(2022) Lu 11 Zhifu No. 19: Zhang Kai, Rizhao Baojing Automobile Sales Service Co., Ltd. Other Cases Execution Review Execution Ruling Summary of the judgment: The court believes that the executed person Rizhao Baojing Automobile Sales Service Co., Ltd. failed to perform the payment obligations determined by the effective legal documents within the period specified in the execution notice. The court took measures to restrict high consumption of the executed person in accordance with the law. As the main person in charge of the executed person's company, the court is in accordance with Article 1 of the "Several Provisions of the Supreme People's Court on Restricting High Consumption and Related Consumption of the Executed Person, it is not inappropriate to impose a height limit on it. If a citizen, legal person or other organization believes that he has been wrongly restricted in consumption, he may apply to the enforcement court for correction. If the original legal representative or the main person in charge applies for the lifting of the restriction on consumption measures against him, he shall provide evidence to prove that he is not the actual controller of the unit and the person directly responsible for the performance of the debt. In this case, the objector has submitted to the court evidence that he no longer holds the post of supervisor and manager of the company subject to execution and has terminated the labor contract relationship with the person subject to execution. At present, the person subject to execution has entered into the substantive merger and reorganization procedure. Even if the objector is still the main person in charge of the enterprise, because the person subject to execution enters the merger and reorganization procedure, it has lost the effect of forcing the person subject to perform the debt by restricting high consumption, starting from the concept of good faith and civilized execution, the restriction on consumption of dissidents should be lifted in accordance with the law. (2)(2021) Hunan 0822 Executive Supervisor No. 2: Hunan Linli Rural Commercial Bank Co., Ltd., Zhangjiajie Jinhao Hotel Investment Co., Ltd. and other loan contract disputes, supervision and execution decisions The main purpose of the judgment: the applicant, Hunan Linli Rural Commercial Bank Co., Ltd., and the executed Zhangjiajie Jinhao Hotel Investment Co., Ltd. and Jinhao Property Management Co., Ltd. issued a consumption restriction order against the executed Zhang Shuguang and Zhou Changshan on July 23, 2018. On June 22, 2021, the Sangzhi County Procuratorate issued the Sang Jian Min Zhi Jian [2021] No. 43082200004 Procuratorial Recommendation, recommending that the Sangzhi County People's Court lift the consumption restriction order against Zhou Changshan and Zhang Shuguang in accordance with the law. The Court held that the court had accepted the bankruptcy liquidation of Zhangjiajie Jinhao Hotel Investment Co., Ltd. and terminated the execution. Judging from the liquidation of the bankruptcy property by the court, the creditor's rights of 5 million yuan of Hunan Linli Rural Commercial Bank Co., Ltd. of the application executor were guaranteed with priority. From the concept of good faith execution, the restrictions on consumption taken by Zhou Changshan and Zhang Shuguang should be temporarily lifted. (3)(2019) Yue 01 Zhi Fu No. 247: Zhang Weimin, Qingyuan Huatai Construction Engineering Co., Ltd. and Guangzhou Suijing Real Estate Development Co., Ltd. Other Cases Subject to Execution Review The purpose of the decision: the purpose of the consumption restriction measures is to urge and punish the executed person to seriously implement and solve the problem of debt settlement. However, after the executed person entered the liquidation procedure, the external repayment affairs of the executed person Sui Jing Company were taken over by the liquidation team of Sui Jing Company in accordance with the law, and Sui Jing Company was no longer able to individually repay the executor of this case, and its legal representative also lost The right to urge the company to perform its obligations has no effect on its legal representative to restrict consumption. At the same time, according to the materials submitted by Zhang Weimin, the applicant for reconsideration, he had already resigned as the legal representative of Suijing Company and was approved by the shareholders' meeting of Suijing Company. It was only due to various factors that he did not change his registration in the industrial and commercial department, and he was not the actual controller of Suijing Company. Therefore, the re-implementation of consumption restrictions on Zhang Weimin, the nominal legal representative of Suijing Company, has lost its practical significance and should be lifted. (4) "Answers to Several Questions of the Guangdong Provincial Higher People's Court on Restricting Consumption and Inclusion in the List of Persons Subject to Enforcement of Dishonesty" (April 2020) Twenty-four, Q: After the executed person enters the bankruptcy proceedings, should the people's court lift the restrictions on consumption? A: Before the people's court makes a ruling on the acceptance of the bankruptcy application, it is not necessary to lift the consumption restriction measures against the person subject to execution; after making the ruling on the acceptance of the bankruptcy application, the consumption restriction measures against the person subject to execution shall be lifted. Feasibility analysis of the lifting of the high limit measures after the acceptance of the 3. bankruptcy petition. The author tends to think that the restriction of consumption is also an enforcement act in the enforcement procedure, which should be suspended in accordance with the law after the executed person enters the bankruptcy procedure. Therefore, after the enterprise enters the bankruptcy proceedings, the consumption restriction order imposed on the related personnel of the enterprise because of the debtor's breach of trust should be lifted. The reasons are as follows: First of all, in accordance with the principle of "lifting weights with lightness", the measures to restrict high consumption should be lifted with reference to the provisions on the list of dishonesty. Article 10, paragraph 1, of the provisions on the list of untrustworthy persons stipulates: "under any of the following circumstances, the people's court shall delete the untrustworthy information within three working days: (5) due to trial supervision or bankruptcy proceedings, the people's court shall, in accordance with the law, rule to suspend the execution of the person subject to breach of trust." According to this article, after the court decides to accept the bankruptcy application, the untrustworthy person may apply for deletion of the untrustworthy information accordingly. However, the scope of sanctions and deterrence of the dishonest list are significantly higher than the measures to restrict high consumption. According to the legal principle of "lifting weights to lighten the weight", after the court accepts the bankruptcy application, it should refer to the "Regulations on the list of dishonest" to lift the high limit measures for related personnel of enterprises. Secondly, from the legislative purpose, the restriction of consumption of enterprise related personnel is not a disciplinary measure for enterprise related personnel, but only to prevent enterprise property from being squandered and transferred by operators, thus increasing the difficulty of implementation in place. Once an enterprise enters into bankruptcy proceedings, the administrator will fully take over the enterprise's property and business matters, and accept the supervision of the people's court and creditors, effectively manage the enterprise's property, there is no possibility of abusing the company's property for high consumption, and then restrict its personal private consumption has no legal significance. Moreover, Article 3, paragraph 2, of the "Regulations on Restricting Consumption" and Article 17, paragraph 1, item 1, of the "Opinions on the Implementation of Good Faith Civilization" both stipulate that the private consumption of high-level personnel associated with enterprises is not within the scope of restriction. Third, the lifting of the restrictions on high consumption by the enterprise's affiliates after the bankruptcy petition is accepted will not harm the interests of creditors.</关于限制被执行人高消费及有关消费的若干规定></中华人民共和国民事诉讼法>

2022-09-05

Administrative Litigation Vision (VII) | Administrative Litigation Prosecution Time Limit

Foreword As one of the legal elements of administrative litigation, the prosecution period of administrative litigation is related to whether citizens, legal persons or other organizations can exercise the right of action in accordance with the law, and then safeguard their legitimate rights and interests, which is an important part of the administrative litigation system. The time limit of administrative litigation is different from the limitation system of civil litigation. For different types of administrative actions, the starting point and length of the prosecution period are not the same, which needs to be accurately grasped. The nature of the time limit for the prosecution of 1. administrative litigation. Administrative litigation does not apply the statute of limitations system of civil litigation, but the system of the time limit for prosecution. The time limit of administrative litigation is the legal time limit for the plaintiff to file an administrative lawsuit to the court and seek judicial relief. The system of time limit for prosecution is different from the system of limitation of action. First of all, in general, there is no suspension or interruption of the prosecution period of administrative litigation, only the delay of the prosecution period and the extension of the application under certain circumstances. Article 48 of the Administrative Litigation Law stipulates: "If a citizen, legal person or other organization delays the time limit for prosecution due to force majeure or other reasons that do not belong to him, the time delayed shall not be counted in the time limit for prosecution. If a citizen, legal person or other organization delays the time limit for prosecution due to other special circumstances other than those specified in the preceding paragraph, he or she may apply for an extension of the time limit within ten days after the obstacle is removed, and the time limit." Secondly, the time limit for prosecution in administrative litigation is one of the statutory prosecution requirements. The people's court should take the initiative to review it in accordance with its functions and powers. If the prosecution exceeds the statutory time limit without justifiable reasons, the court shall rule not to accept it. If the case has been filed, it shall rule to reject the prosecution. The Supreme People's Court on the application<中华人民共和国行政诉讼法>Interpretation of the "(hereinafter referred to as the" applicable interpretation ") article 69;" one of the following circumstances, has been filed, shall be ruled to reject the prosecution: ...... (II) beyond the statutory prosecution time limit and no administrative procedure law article 48 of the circumstances......" In the case of (2017) Supreme Law Application No. 5410, the Supreme Court held that the time limit for prosecution in the administrative procedure law is different from the time limit for litigation in the civil law. The time limit for prosecution in the Administrative Procedure Law is one of the statutory conditions for prosecution. If the prosecution period is exceeded, the procedural right to enter the entity will be lost. Since administrative cases are public law litigation, involving public interests and the stability of social management order, the people's court should review whether the prosecution meets the statutory conditions, including whether the statutory prosecution time limit is exceeded. It is not that the parties do not advocate that the people's court will not review the matter. 2. time limit for prosecution of different administrative acts (I) time limit for prosecution of specific administrative acts Article 46 of the "Administrative Litigation Law" stipulates: "If a citizen, legal person or other organization directly files a lawsuit in a people's court, it shall file it within six months from the date when he knows or should know that an administrative act has been made. Except as otherwise provided by law. If a case filed for real estate has been filed for more than 20 years from the date of the administrative act, and other cases have been filed for more than five years from the date of the administrative act, the people's court will not accept it." Article 65 of the applicable interpretation stipulates: "if a citizen, legal person or other organization does not know the contents of an administrative act made by an administrative organ, the time limit for prosecution shall be calculated from the date when he knows or should have known the contents of the administrative act, but the maximum time limit for prosecution shall not exceed the time limit stipulated in the second paragraph of Article 46 of the administrative procedure law." The first paragraph of Article 64 of the applicable interpretation stipulates: "if an administrative organ fails to inform a citizen, legal person or other organization of the time limit for prosecution when making an administrative act, the time limit for prosecution shall be calculated from the date when the citizen, legal person or other organization knows or should know the time limit for prosecution, but the maximum period from the date when the content of the administrative act is known or should be known shall not exceed one year." 1. The starting point of the time limit for the prosecution of administrative proceedings. According to the provisions of the law, when the administrative organ informs the time limit for prosecution, the starting point is when the citizen, legal person or other organization knows or should know the content of the administrative act; if it is not informed, it shall start from the date when the time limit for prosecution is known or should be known. It should be noted that the time limit for prosecution of administrative cases starts from the date on which the content of the administrative act is known or should be known, rather than from the date on which the illegal administrative act is known or should be known [see (2016) Supreme Law Application No. 1798]; The people's court cannot take the date on which the accused administrative act is signed as the starting point for the time limit for prosecution, however, the day after the date of service shall be taken as the starting point to calculate whether the prosecution of a citizen, legal person or other organization exceeds the statutory prosecution period [see (2015) case No. 1727 of the Bank of China]; The starting point of the maximum prosecution period shall be calculated from the date of the administrative act. 2. The length of the administrative litigation prosecution period. According to the provisions of the law, when the administrative organ informs the time limit for prosecution, the time limit for prosecution of administrative litigation shall be subject to two time limit conditions at the same time: six months from the date when the citizen, legal person or other organization knows or should know the content of the administrative act, and does not exceed the maximum time limit for prosecution. In the case that the administrative organ does not inform the time limit for prosecution, the time limit for prosecution needs to apply three time limit conditions at the same time: six months from the date when the citizen, legal person or other organization knows or should know the time limit for prosecution, and the maximum time limit for prosecution shall not exceed one year from the date when the citizen, legal person or other organization knows or should know the content of the administrative act. The above prosecution period needs to be met at the same time, otherwise the right to seek judicial relief will be lost. The time limit for the prosecution of the (II) request to confirm the invalidity of the administrative act. Whether the action to confirm the invalidity of an administrative act is limited by the time limit for prosecution, Article 94 of the interpretation of application stipulates: "if a citizen, legal person or other organization sues for the revocation of an administrative act, and the people's court finds that the administrative act is invalid after examination, it shall make a judgment confirming the invalidity. If a citizen, legal person or other organization sues to confirm that the administrative act is invalid, and the people's court considers that the administrative act is not invalid, and after explanation, if the plaintiff requests to revoke the administrative act, it shall continue to hear the case and make a corresponding judgment in accordance with the law; if the plaintiff requests to revoke the administrative act but exceeds the statutory time limit for prosecution, it shall rule to reject the lawsuit; if the plaintiff refuses to change the claim, the judgment." Article 162 stipulates: "If a citizen, legal person or other organization files a lawsuit against an administrative act made before May 1, 2015 and requests confirmation that the administrative act is invalid, the people's court shall not file the case." In the case of (2020) Supreme Law Bank No. 341, the Supreme Court held: "A major and obviously illegal administrative act is an invalid administrative act, which is absolutely invalid from the beginning and does not have legal effect due to the passage of time. The parties may file a request for confirmation of invalidity at any time for administrative acts made after May 1, 2015, and are not limited by the time limit for prosecution. At the same time, in order to avoid the abuse of the parties to confirm the invalid claim to circumvent the prosecution time limit system, the plaintiff party should prove that the accused administrative act is invalid, and the defendant party may also present evidence to deny the other party's claim. The people's court shall examine whether the administrative act is invalid, and if it considers that the administrative act is invalid, it shall not be limited by the time limit for prosecution; if it considers that the administrative act is not invalid, the people's court shall explain it to the plaintiff. It has been explained that if the plaintiff changes the request for revocation of the administrative act, the people's court shall continue to hear and review whether it meets the time limit for the revocation of the lawsuit. If the time limit for the statutory lawsuit is exceeded, it shall rule to reject the lawsuit; if the plaintiff refuses to change the request, the judgment shall reject the lawsuit. request." Therefore, an action to confirm the invalidity of an administrative act is not limited by the time limit for prosecution. (III) time limit for prosecution of administrative omission Article 47 of the administrative procedure law stipulates: "if a citizen, legal person or other organization applies to an administrative organ for the performance of its legal duties to protect its personal rights, property rights and other legitimate rights and interests, and the administrative organ fails to perform it within two months from the date of receiving the application, the citizen, legal person or other organization may bring a lawsuit to the people's court. Where laws and regulations provide otherwise for the time limit for administrative organs to perform their duties, such provisions shall prevail. Citizens, legal persons, or other organizations request administrative agencies to perform their statutory duties to protect their personal rights, property rights and other legitimate rights and interests in emergency situations. If the administrative agency fails to perform, the filing of a lawsuit is not subject to the time limit specified in the preceding paragraph." Article 66 of the applicable interpretation stipulates: "if a citizen, legal person or other organization, in accordance with the provisions of paragraph 1 of Article 47 of the Administrative procedure Law, brings a lawsuit against an administrative organ for failing to perform its statutory duties, it shall file a lawsuit within six months from the date of expiration of the time limit for the administrative organ to perform its statutory duties." According to the provisions of the law, the starting point of the litigation period is the date when the administrative organ performs its statutory duties. Unless otherwise provided by laws and regulations, the performance period is in principle two months from the date of receipt of the application, and the prosecution period is six months from the starting point. However, there is no clear provision in the current law on the time limit for prosecution when administrative organs perform their statutory duties in accordance with their powers. In general, as long as the statutory duties to be performed by the administrative organ ex officio still exist legally and effectively, the administrative organ shall continue to bear the burden as an obligation, which shall not be eliminated by the administrative organ's failure to perform. The statutory duties that the administrative organ should perform ex officio shall not be changed into the statutory duties that should be performed in accordance with the application by the administrative counterpart, that is, the time limit for prosecution stipulated in Article 47 of the Administrative Procedure Law is not applicable in this case [see (2020) Supreme Law No. 332]. Time limit for prosecution of administrative reconsideration decisions by (IV) Article 45 of the Administrative Litigation Law stipulates: "If a citizen, legal person or other organization refuses to accept the reconsideration decision, he may bring a suit in a people's court within 15 days from the date of receipt of the reconsideration decision. If the reconsideration organ fails to make a decision within the time limit, the applicant may bring a suit in a people's court within 15 days from the date of expiration of the reconsideration period, unless otherwise provided for by law." Article 31 of the "the People's Republic of China Administrative Reconsideration Law" stipulates: "The administrative reconsideration agency shall make an administrative reconsideration decision within 60 days from the date of accepting the application; except that the administrative reconsideration period stipulated by law is less than 60 days. If the situation is complicated and the administrative reconsideration decision cannot be made within the prescribed time limit, it may be appropriately extended with the approval of the person in charge of the administrative reconsideration organ, and the applicant and the respondent shall be notified; however, the extension period shall not exceed 30 days at most." If the reconsideration organ informs citizens, legal persons or other organizations of the time limit for filing a lawsuit, if it is not satisfied with the reconsideration decision (including the decision not to accept the case) made by the reconsideration organ, the starting point of the litigation time limit shall be the date of receipt of the reconsideration decision; if it is not satisfied with the reconsideration organ's inaction, the starting point of the litigation time limit shall be the date of expiration of the reconsideration time limit, which is generally 60 days. The time limit for reconsideration shall be 15 days from the starting point. If the administrative body for reconsideration fails to inform the citizen, legal person or other organization of the time limit for filing a lawsuit, the starting point of the time limit for filing a lawsuit shall be the date on which the citizen, legal person or other organization knows or should have known the time limit for filing a lawsuit, and the time limit shall be 15 days, but the maximum period shall not exceed one year from the date on which the content of the reconsideration decision is known or should be known. Article 58 of the "Applicable Interpretation" stipulates: "The laws and regulations do not stipulate that administrative reconsideration is a necessary procedure for filing an administrative lawsuit. After a citizen, legal person, or other organization applies to the reconsideration agency for administrative reconsideration, and the reconsideration agency agrees to withdraw the reconsideration application. If a lawsuit is filed against the original administrative act within the statutory prosecution time limit, the people's court shall file a case in accordance with the law." According to the provisions of the law, if an application for reconsideration is withdrawn, the time limit for the prosecution of the original administrative act shall apply to the prosecution of the original administrative act. (V) time limit for prosecution of administrative agreements Article 27 of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Agreement Cases stipulates: "The People's Court shall apply the provisions of the Administrative Procedure Law when trying administrative agreement cases; if there are no provisions in the Administrative Procedure Law, reference shall be made to the provisions of the Civil Procedure Law." Article 25 stipulates: "if a citizen, legal person or other organization brings a lawsuit against an administrative organ for failing to perform in accordance with the law or failing to perform an administrative agreement in accordance with the agreement, the limitation of action shall be determined with reference to the norms of civil law; if a lawsuit is filed against an administrative organ for changing or rescinding an administrative agreement, the time limit for prosecution shall be determined in accordance with the Administrative procedure Law and its judicial interpretation." Therefore, the provisions of Article 46 of the Administrative Procedure Law on the fixed duration of litigation can be applied to the period of litigation of administrative agreements, as well as the provisions of the Civil Code on the termination and interruption of the statute of limitations. In the case of (2021) Liao 10 Xing Zhong No. 60, the court of first instance held that according to the provisions of Article 25 of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Agreement Cases, if a citizen, legal person or other organization fails to bring a lawsuit against an administrative organ in accordance with the law or fails to perform an administrative agreement in accordance with the agreement, the limitation of action shall be determined with reference to civil legal norms. This case is a case in which the plaintiff sued the administrative organ for failing to perform the administrative agreement as agreed. According to the provisions of this article, the provisions of the civil procedure law on the interruption of the limitation of action shall be applied. The plaintiff in this case has been claiming rights until the prosecution, so the limitation of action is interrupted, and the defendant's opinion that the case exceeds the limitation of action is not supported. Although the court of second instance revoked the ruling of the court of first instance, the reason was that there was evidence to prove that the people's Government of Anping Township had fulfilled the resettlement agreement signed by both parties, and the appellee's first instance application to change the housing resettlement to monetary compensation had no factual basis, rather than exceeding the litigation period. Therefore, this case can still provide reference for the duration of litigation in administrative agreement cases. (VI) time limit for prosecution of administrative compensation According to Article 14 of the State Compensation Law of the People's Republic of China, if the organ under compensatory obligations fails to make a decision on whether to compensate within the prescribed time limit, the claimant may bring a lawsuit to the people's court within three months from the date of expiration of the time limit. If the claimant for compensation has any objection to the method, item or amount of compensation, or if the organ under compensatory obligations makes a decision not to compensate, the claimant may, within three months from the date on which the organ under compensatory obligations makes the decision to compensate or not to compensate, bring a suit in a people's court. The Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Compensation Cases, which came into effect on May 1, 2022, make clearer provisions on the time limit for administrative compensation litigation. According to this provision, citizens, legal persons or other organizations shall, within two years from the date when they know or should know that an administrative act infringes upon their legitimate rights and interests, apply to the organ under compensatory obligations for administrative compensation. If the organ under compensatory obligations fails to make a decision on compensation within two months from the date of receipt of the application for compensation, a citizen, legal person or other organization may bring an administrative compensation lawsuit in accordance with the relevant provisions of the Administrative procedure Law. Where a citizen, legal person or other organization files an administrative lawsuit and requests administrative compensation at the same time, the provisions of the Administrative Procedure Law on the time limit for prosecution shall apply. If a citizen, legal person or other organization only disagrees with the administrative compensation part of the administrative reconsideration decision and files an administrative compensation lawsuit within 15 days from the date of service of the reconsideration decision, the people's court shall accept it according to law. When an administrative organ makes an administrative reconsideration decision with compensation content, if it fails to inform citizens, legal persons or other organizations of the time limit for filing a lawsuit, the time limit for filing a lawsuit shall be calculated from the date when the citizens, legal persons or other organizations know or should know the time limit for filing a lawsuit, but it shall not exceed one year from the date when the citizens, legal persons or other organizations know or should know the content of the administrative reconsideration decision. 3. epilogue </中华人民共和国行政诉讼法>

2022-09-05

Viewpoint... Practical analysis of the scope of the exercise of shareholders' right to know.

The current company law for the limited liability company's shareholders' right to know is mainly stipulated in Article 33, the limited liability company's shareholders' right to know is mainly stipulated in Article 97, this paper will combine the current law, the provisions of judicial interpretation and the shareholders' right to know judicial case analysis, in order to explore the scope of the exercise of shareholders' right to know. 2. Main Legal Provisions the People's Republic of China Companies Act (I) (as amended in 2018) Article 33 Shareholders shall have the right to consult and copy the articles of association, the minutes of the shareholders' meeting, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports. Shareholders may request access to the accounting books of the company. If a shareholder requests to consult the company's accounting books, he shall submit a written request to the company stating the purpose. If the company has reasonable grounds to believe that the shareholders' access to the accounting books has an improper purpose and may damage the legitimate interests of the company, it may refuse to provide access, and shall reply to the shareholders in writing within 15 days from the date of the written request of the shareholders and explain the reasons. If the company refuses to provide inspection, the shareholder may request the people's court to require the company to provide inspection. the People's Republic of China Companies Act (II) (as amended in 2018) Article 97 Shareholders shall have the right to consult the articles of association, the register of shareholders, the stubs of corporate bonds, the minutes of the general meeting of shareholders, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports, and to make suggestions or inquiries about the operation of the company. the People's Republic of China Accounting Act of (III) (amended in 2017) The registration of account books in the first paragraph of Article 15 must be based on audited accounting documents and comply with the provisions of relevant laws, administrative regulations and the unified accounting system of the State. Accounting books include general ledgers, ledgers, journals, and other auxiliary books. Article 20 Paragraph 2 A financial accounting report shall consist of the accounting statements, the notes to the accounting statements and the statement of financial situation. Financial and accounting reports provided to different users of accounting information should be prepared on a consistent basis. Where the relevant laws and administrative regulations stipulate that the accounting statements, notes to the accounting statements and statements of financial situation shall be audited by a certified public accountant, the audit report issued by the certified public accountant and the accounting firm in which he works shall be provided together with the financial accounting report. Regulations of (IV) on Financial Accounting Reports of Enterprises (Order No. 287 [2000] of the State Council) Article 7 Annual and semi-annual financial accounting reports shall include: (I) accounting statements; Notes to (II) accounting statements; (III) Statement of Financial Situation. The accounting statement shall include the balance sheet, profit statement, cash flow statement and related schedules. (V) of the Opinions of the Higher People's Court of Shandong Province on Several Issues Concerning the Trial of Company Dispute Cases (for Trial Implementation) (Lu Gaofa [2007] No. 3) Article 63 Paragraph 2 The accounting books to which shareholders have the right of inspection include accounting vouchers and original vouchers. (VI) "Answers to Several Questions of the Second Civil Division of the Higher People's Court of Shandong Province on the Trial of Company Dispute Cases" 10. When shareholders consult the accounting books, can they consult the accounting vouchers together? A: Shareholders have the right to know about the company's operating conditions, and when shareholders consult the accounting books, they can consult the accounting vouchers together. Reason: Shareholders' right to know is an important way for shareholders to understand the company's operating conditions and supervise management, and is an important basis for shareholders to exercise other shareholders' rights. According to the provisions of Article 33 of the the People's Republic of China Company Law, the right to know enjoyed by shareholders varies according to the content of the inspection. Shareholders have the right not only to inspect, but also to request copies of, and exercise such rights without the obligation to state the purpose of the articles of association, minutes of shareholders' meetings, resolutions of meetings of the board of directors, resolutions of meetings of the board of directors, resolutions of meetings of the board of supervisors and financial and accounting reports. However, in the case of accounting books, shareholders can only consult, not copy, and the exercise of this right must state in writing the purpose of the inspection, if the company has reasonable grounds to prove that the shareholders have improper purposes, may damage the legitimate rights and interests of the company, may also refuse to provide access. When a shareholder consults the accounting books, he may consult the accounting vouchers together. According to the the People's Republic of China Accounting Law, the registration of accounting books must be based on audited accounting vouchers. Therefore, accounting vouchers can be regarded as attachments to accounting books. Although Article 33, paragraph 2, of the the People's Republic of China Company Law provides that shareholders may consult the company's accounting books, it is not clear whether the original accounting documents can be consulted together. However, based on the original accounting documents is the most true reflection of the company's business situation, if the scope of the right of access of minority shareholders is limited to the accounting books, it will be difficult to ensure that the real operation of the company through the accounting books, in the accounting books of a large number of false records, resulting in the shareholders' right to know failed. (VII) of the Guiding Opinions of the Higher People's Court of Beijing Municipality on Several Issues concerning the Trial of Company Dispute Cases Article 19 The accounting books of the company which the shareholders of a limited liability company have the right to consult include bookkeeping vouchers and original vouchers. Sorting out 3. referee rules (I) the scope of legal exercise of shareholders' right to know Article 33 of the Company Law stipulates the general principles of the manner and scope of exercise of the shareholders' right to know of a limited liability company, and may consult and copy the articles of association, the minutes of the shareholders' meeting, the minutes of the meeting of the board of directors, the minutes of the meeting of the board of supervisors and the financial and accounting reports, and only consult the accounting books. Article 97 of the Company Law stipulates the general principles of the manner and scope of the exercise of the right to know of shareholders of a limited company, and is limited to access to the articles of association, the register of shareholders, the stubs of corporate bonds, the minutes of the general meeting of shareholders, the resolutions of the meeting of the board of directors, the resolutions of the meeting of the supervisory board, and the financial and accounting reports. It should be noted that, according to Article 20 of the Accounting Law and Article 7 of the Regulations on Financial and Accounting Reporting of Enterprises, financial and accounting reports include accounting statements (balance sheet, profit statement, cash flow statement and related schedules), notes to accounting statements and financial statements. According to Article 15 of the Accounting Act, accounting books include general ledgers, detailed ledgers, journals and other auxiliary books. [Case 1] Dispute over Shareholders' Right to Know between Beijing Peking University Attached Middle School Education Investment Co., Ltd. and Beijing Peking University Yilin Company (Case No.:(2012) Yizhong Min Zhong Zi No. 5887, Trial Court: Beijing No.1 Intermediate People's Court) The court held that, in accordance with the relevant provisions of the Company Law, shareholders have the right to consult and copy the articles of association, the minutes of the shareholders' meeting, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports. The Beijing Education Investment Company has no basis in law to exclude the exercise of shareholders' right to know on the grounds that Peking University High School and Yilin Company have already understood the company's financial situation. With regard to the request to consult the accounting books, Beijiao Investment Company failed to provide effective evidence in this case to prove that Peking University Affiliated High School and Yilin Company had improper purposes, and the first instance judgment supported the litigation claims of Peking University Affiliated High School and Yilin Company. [Case 2] Dispute over Shareholders' Right to Know between Beijing Twelve Years Education Technology Co., Ltd. and Shenzhen Wolfers Jewelry Industry Co., Ltd. (Case No.:(2021) Guangdong 0303 Minchu No. 24786, Trial Court: Shenzhen Luohu District People's Court) The court held that this case is a dispute over shareholders' right to know, and the defendant is a joint stock limited company. According to Article 97 of the the People's Republic of China Company Law, the plaintiff, as a shareholder of the defendant company, has the right to consult the articles of association, the register of shareholders, the minutes of the general meeting of shareholders, the resolutions of the board of directors, the resolutions of the board of supervisors and the financial accounting reports. The plaintiff claimed that there was no legal basis for consulting the company's accounting books and accounting vouchers, and the court did not support it. Whether the shareholders of a (II) limited liability company have the right to know about the accounting vouchers (original vouchers, bookkeeping vouchers). Accounting vouchers originally recorded the company's operating data, customer information, financial data, shareholder rights and company rights trade-off issues more prominent. Because the company law and related judicial interpretations do not clearly include accounting documents as the scope of the exercise of shareholders' right to know, there are different understandings of local courts in judicial practice as to whether shareholders can exercise their right to know about accounting documents, and there are three main judicial views: Viewpoint 1: Shareholders have no right to consult accounting documents outside the scope of statutory exercise. [Case 1] Dispute over Shareholders' Right to Know between Fuba Investment Co., Ltd. and Hairong Boxin International Financial Leasing Co., Ltd. (Case No.:(2019) Supreme Law Minshen No. 6815, Trial Court: Supreme People's Court) The court held that it was the right of shareholders to consult and copy the articles of association, the minutes of the shareholders' meeting, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the supervisory board and the financial and accounting reports, and that the shareholders' access to the company's accounting books should be based on the premise that there was no improper purpose and that it would not harm the legitimate interests of the company. Fuba Company is a shareholder of Hairong Boxin Company. Shareholders have the right to know about the operation of the company and have the right to consult the relevant information of the company. Article 13, paragraph 1, of the the People's Republic of China Accounting Law stipulates: "Accounting vouchers, accounting books, financial accounting reports and other accounting information must comply with the provisions of the unified national accounting system." Article 14, paragraph 1, states: "Accounting vouchers include original vouchers and bookkeeping vouchers." According to the aforementioned law, the accounting books do not include original vouchers and bookkeeping vouchers. The protection of shareholders' right to know and the interests of the company needs to be balanced, so we should not arbitrarily expand the scope of the interpretation of shareholders' right to know beyond the provisions of the law. The the People's Republic of China Company Law only limits the scope of shareholders' access to accounting information to financial accounting reports and accounting books, does not involve original documents, and the second-instance judgment does not support Fuba's request for access to the original documents of Hairong Boxin Company, which is not improper. Article 9 of the "the People's Republic of China Accounting Law" does not give shareholders the right to consult the company's original documents. The guidance of the Beijing Higher People's Court does not have the effect of judicial interpretation. Fuba's request for a retrial of this case based on the above provisions cannot be established. Retrial ruling: Reject Fuba Company's application for retrial. [Case 2] Dispute between Guangdong Dongli Energy Technology Co., Ltd. and shareholders of Wang Lizhong, Li Zhongbao, Li Na and Li Man over their right to know (Case No. (2014) Sui Fa Min Er Zhong Zi No. 1327, Trial Court: Guangzhou Intermediate People's Court of Guangdong Province) The court held that, according to Article 13, paragraph 1, of the the People's Republic of China Accounting Law, "accounting vouchers, accounting books, financial accounting reports and other accounting information must comply with the provisions of the unified national accounting system." Paragraph 1 of Article 14 "Accounting vouchers include original vouchers and accounting vouchers." According to other regulations, accounting books and accounting vouchers are parallel legal concepts, and the company law has clearly defined the scope of shareholders' access, so it is not appropriate to make an expanded explanation. Therefore, Dongli Company believes that Wang Lizhong has no right to access Dongli Company's accounting vouchers and property lists (including accounting vouchers, relevant original vouchers and relevant materials recorded as attachments to original vouchers for future reference), which are legally based and supported by our hospital. Viewpoint 2: Accounting vouchers are an important basis for the preparation of accounting books, the scope of "accounting books" should be expanded to understand, you can consult accounting vouchers. [Case 1] Li Shujun, Wu Xiang, Sun Jie, Wang Guoxing and Jiangsu Jiade Real Estate Development Co., Ltd. Shareholder's Right to Know Dispute (in Supreme People's Court Bulletin, No. 8, 2011, Case No.:(2009) Suzhong Min Er Zhong Zi No. 319, Trial Court: Suqian Intermediate People's Court, Jiangsu Province) The court held that the shareholders' right to know is the right of shareholders to have a true understanding and mastery of important information or information such as the operation and management of the company, and is the basic right of shareholders to exercise the rights of asset income, participation in major decisions and selection of managers in accordance with the law. From the legislative value orientation, the key is to protect the legitimate rights and interests of small and medium-sized shareholders. Article 34, paragraph 2, of the Company Law provides that "shareholders may request access to the company's accounting books." The right of access to books is an important part of the shareholders' right to know. One of the most important things that shareholders know about the company's operations is to understand the company's financial situation by consulting the company's books. Article 9 of the the People's Republic of China Accounting Law stipulates: "Each unit must conduct accounting according to the actual economic business transactions, fill in accounting vouchers, register accounting books and prepare financial and accounting reports." Article 14 stipulates: "Accounting vouchers include original vouchers and bookkeeping vouchers. In handling the economic business matters listed in Article 10 of this Law, the original vouchers must be filled in or obtained and sent to the accounting institution in a timely manner. ...... The bookkeeping vouchers shall be prepared on the basis of the original vouchers and relevant information that have been examined." The first paragraph of Article 15 stipulates: "The registration of accounting books must be based on audited accounting documents and comply with the relevant laws, administrative regulations and the unified national accounting system." Therefore, the specific business activities of the company can only be known by consulting the original documents, without consulting the original documents, small and medium-sized shareholders may not be able to accurately understand the real business situation of the company. According to accounting standards, relevant information such as relevant contracts is also the basis for the preparation of bookkeeping vouchers and should be recorded as an annex to the original vouchers. Accordingly, the scope of the exercise of the appellant's right of access shall include accounting books (including general ledgers, ledgers, journals and other auxiliary books) and accounting vouchers (including bookkeeping vouchers, relevant original vouchers and relevant information recorded as attachments to the original vouchers). [Case 2] Dispute over Shareholders' Right to Know between Harbin Shenge Sports Chain Co., Ltd. and Bailaimu Co., Ltd. and Gold Medal Sports Co., Ltd. (Case No.:(2020) Heimin Zhong No. 463, Trial Court: Heilongjiang Higher People's Court) The court held that, in accordance with the provisions of Article 33 of the the People's Republic of China Company Law, Belaimu Company and Gold Medal Company, as shareholders of Schenge Company, may consult Schenge's articles of association, resolutions of shareholders' meetings and general meetings and minutes of meetings, resolutions of the board of directors, resolutions of the board of supervisors, financial and accounting reports and accounting books. According to the provisions of Articles 14 and 15 of the the People's Republic of China Accounting Law, the registration of accounting books must be based on audited accounting vouchers and comply with the relevant laws, administrative regulations and the provisions of the unified national accounting system. Accounting vouchers include original vouchers and bookkeeping vouchers, which shall be prepared on the basis of audited original vouchers and related information, and accounting books include general ledgers, ledgers, journals and other auxiliary books. Accounting vouchers are the basis for the registration of accounting books, is an indispensable part of verifying the authenticity of accounting books, the right of shareholders to consult accounting books, should also include the right to consult accounting vouchers, giving shareholders the right to consult accounting vouchers in line with the legislative purpose of protecting shareholders' right to know. Therefore, the first instance ruled that Bellemu and Gold Company had access to the accounting certificate.

2022-08-26

Point of View | Determination Criteria for "Seizure" in Article 28 of the Provisions on Implementation Objection and Reconsideration

Article 28 of the Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Enforcement Objection and Reconsideration Cases by the People's Court in the execution of pecuniary claims, the buyer raises an objection to the real estate registered in the name of the person subject to execution, and the following circumstances are met and its rights can be The people's court shall support the exclusion of enforcement: The (I) has signed a legal and effective written sales contract prior to the seizure by the people's court; The (II) has lawfully taken possession of the immovable property before the seizure by the people's court; The (III) has paid the whole price, or has paid part of the price in accordance with the contract and delivered the remaining price for execution in accordance with the requirements of the people's court; The (IV) is not due to the buyer's own reasons for not going through the transfer registration. How does the 1. determine the "seizure time" in "a legally valid written sales contract has been signed before the court seizure"? In (2021) the case of the second instance of the Supreme Law Minzong No. 550, Cheng Yilun and Shenyang Rural Commercial Bank Co., Ltd. Dadong Sub-branch The appellant (plaintiff in the original trial) Cheng Yilun believed that the court of first instance sealed up the house involved in the case for the first time on October 23, 2014, and then sealed up the house involved in the case again on November 15, 2016 due to the expiration of the seal-up period. Therefore, the effect of the first seal-up was eliminated, and the effect of the seal-up of the house involved in the case began on November 15, 2016. The "Commercial Housing Sales Contract" involved in the case was signed on October 31, 2014. After the first seizure expired and before the seizure again, it should be determined that a legal and effective written sales contract relationship had been formed before the seizure. The Supreme People's Court held that the time for the first seizure of the house involved in the case by the People's Court was October 23, 2014. Cheng Yilun advocated that the time for the seizure of the house involved in the case should be November 15, 2016 without facts and legal basis, while Cheng Yilun and Hongyuan Company signed the "Commercial Housing Sales Contract" on October 31, 2014, later than the time for the first seizure of the house involved in the case, therefore, Cheng Yilun's claim does not conform to the provisions of a legally valid written sales contract signed before the people's court seized it. Therefore, Cheng Yilun's claim does not conform to the circumstances stipulated in Article 29 of the Provisions on Objection and Reconsideration of Enforcement, and the court of first instance does not support Cheng Yilun's claim that he enjoys civil rights and interests excluded from enforcement, which is not improper. Therefore, according to the Supreme Court's decision, the "seizure time" in "a legally valid written sales contract has been signed before the court seizure" should be understood as the time of the first seizure of the house involved. Does the seizure in Article 28 of the 2. Provisions on Objection and Reconsideration of Execution only refer to the seizure in execution? Does it include the preservation seizure in litigation? Does it include the waiting seizure? In the retrial case of (2020) Xinmin Zhong No. 149 (2021) Supreme Famin Shen No. 1519 Hu Muxiang and Guoyao Xinjiang Korla Pharmaceutical Co., Ltd. and other applicants for execution objection, Hu Muxiang (defendant of first instance, appellee of second instance and outsider of execution) believes that: (1) property preservation in the lawsuit is a temporary measure, the disputed creditor's rights have not yet been determined and do not naturally enter the execution procedure. The action of the execution objection is for the seizure measures that occurred in the execution procedure, does not involve litigation preservation, and determines the time of the seizure of the house involved in the case shall be subject to the time when the execution ruling is issued. (II) new evidence, the People's Court of Yuyao City, Zhejiang Province (2015) Yong Yu Simin Chuzi No. 12-1 Civil Ruling Letter and the Notice of Assistance in Execution can prove that the house involved in the case was waiting for seizure when it was preserved on March 3, 2015. At this time, the preservation did not take effect, and the second instance determined that the seizure preservation time was wrong on March 3, 2015. The Supreme Court held that Article 28 of the Provisions on Objection to Execution and Reconsideration does not distinguish whether the seizure is a seizure in execution. Whether it is a preservation seizure in litigation or a seizure in execution, it has the effect of publicity, and its effect is not only extended to the seized person, but also to a third party. Moreover, Article 4 of the Provisions of the Supreme People's Court on Seizure, Seizure and Freezing of Property in Civil Execution of the People's Court stipulates that "if property preservation measures are taken before litigation, in litigation and in arbitration, they will be automatically converted into seizure, seizure and freezing measures in execution after entering the execution procedure", the seizure in litigation preservation will be automatically converted into seizure in execution after entering the execution procedure. Hu Muxiang believes that the seizure in Article 28 of the Provisions on Objection to Implementation and Reconsideration is limited to the seizure in the execution procedure, and his application for retrial cannot be established because the law is unfounded, and this court will not support it. During the retrial review, Hu Muxiang applied for retrial with the Civil Ruling No. 12-1 of the People's Court of Yuyao City, Zhejiang Province (2015) Yong Yu Simin Chuzi and the Notice of Assistance in Execution as new evidence, and believed that the seizure of the house involved in the case was waiting for seizure. However, the above documents did not clearly record that the seized house included the house involved in the case. Even if the seizure of the house involved in the case is a waiting seizure, the waiting seizure is an enforcement measure implemented by the people's court based on the effective enforcement ruling. It does not have legal effect before the seizure effect is automatically produced in accordance with the law, but has the legal effect of pre-seizure. Hu Muxiang submitted new evidence in his retrial application to prove that he received the notice of occupancy of the house involved in the case in January 2017 and occupied the house involved in the case. Even if the evidence can prove his claim, because Hu Muxiang's possession of the house involved in the case occurred after the seizure of the house involved in the case, the original judgment found that Hu Muxiang did not comply with the "legal possession of the real estate before the seizure by the people's court" as stipulated in the second paragraph of Article 28 of the "Regulations on Objection and Reconsideration", and it was not improper to determine the facts and apply the law. Hu Muxiang's application for retrial with new evidence sufficient to overturn the original judgment cannot be established, and the court will not support it. Therefore, according to the decision of the Supreme Court, the seizure in Article 28 of the Provisions on Objection and Reconsideration of Enforcement is not limited to the seizure in the enforcement procedure, but also includes the preservation seizure and post-turn seizure in litigation.

2022-08-24

Viewpoint... The criteria for determining the material nature of information in the information disclosure system.

Introduction: In this paper, under the background of civil cases of securities misrepresentation, this paper studies the criteria for determining the material nature of information in the information disclosure system. The author thinks that its information importance is the cornerstone of the information disclosure system and the scope of compensation in civil cases of securities misrepresentation. The author thinks that the criterion of information materiality should be measured by the price fluctuation in the securities market. The essence of the securities market is an information intersection, all kinds of information is full of it, the timely, symmetrical, complete and true information is the basis for investors to invest, but also the key to maintain the smooth operation of the securities market. Investors in the securities market, as passive recipients of information, have led to a weak position relative to listed companies. Therefore, it is particularly important to put the information under supervision and provide for the relevant disclosure system. In December 2002, the Supreme People's Court promulgated the "Several Provisions of the Supreme People's Court on the Trial of Civil Compensation Cases Caused by False Statements in the Securities Market" (hereinafter referred to as "Several Provisions"), which marked the formal adoption of civil compensation in China to force listed companies to have good faith experience and strictly abide by the information disclosure system. A "false statement" in the Black's Law Dictionary means "the act of a person expressing to another person, verbally or otherwise, that the situation is inconsistent with the true facts; an untrue expression of the facts; an incorrect or false statement that, if accepted by another person, would lead to an understanding of a particular situation that deviates from the true facts." The "false statement behavior" in the securities market is a normative legal concept set for the relevant listed companies to fulfill the information disclosure obligations stipulated in laws and regulations and other documents. That is, Article 17 of the "Several Provisions" defines the false statement of securities as "the false statement of the securities market", which refers to the information disclosure obligor's violation of the securities laws and regulations, In the process of securities issuance or trading, make false records and misleading statements against the truth of major events, or material omissions or improper disclosure of information at the time of disclosure." Among them, the law emphasizes that major matters should be comprehensively determined as significant in combination with articles 59, 60, 61, 62, 72 and other relevant provisions of the Securities Law. In addition, this article defines the above four behaviors. First, false records simply refer to making something out of nothing; second, misleading statements refer to the release of wrong information to interfere with normal information and affect investors' judgment; third, major omissions refer to the lack of disclosure without disclosure; fourth, improper disclosure is actually a bottom-up clause, which mainly includes two types, one is not disclosed in a legal manner, the other is the wrong time period disclosure. Thus, the Certain Provisions provide for four cases of misrepresentation in the securities market, which we can summarize as fabrication, omission, misleading disclosure and inappropriate disclosure. However, these four acts have a common premise, or for those with disclosure obligations, the need to disclose information involving material matters in accordance with legal procedures in a timely and compliant manner, so it can be understood that information containing material events of the obligor is significant, and such information is the cornerstone of the information disclosure system. As mentioned above, the essence of the securities market is an information meeting place, and all kinds of information are full of it. If the listed company discloses all the information of the company, this practice is obviously unrealistic, which violates the original intention of the legislation on the information disclosure system. It can not achieve the role of standardizing corporate behavior and will cause a huge burden to the company, thus affecting the normal operation of the company. From the investor's point of view, the aggregation of information will also make it difficult for investors to identify effective information, thus missing the best time to invest, resulting in the loss of vitality of the securities market, so it is particularly important to disclose what information needs to be disclosed. So what information needs to be disclosed, the core is to combine the problems in practice and the legislative intent of the information disclosure system to specify a standard to distinguish all information. According to Article 17 of the "Several Provisions", "For major events, it shall be determined in conjunction with Articles 59, 60, 61, 62, 72 and related provisions of the Securities Law." As well as the Supreme People's Court on a number of specific issues in the current commercial trial work, the emphasis on the entity trial to correctly understand the constituent elements of civil liability for securities infringement. It is necessary to study the significance of securities cases, including behavior, fault, result and causality, with the constituent elements of traditional civil tort cases. Wherein, it is clearly stated that "it refers to the possible impact of the illegal act on the investor's decision, and its main measurement index can be judged by the impact of the illegal act on the price and volume of securities trading. The significance and transaction causality are institutional arrangements to limit or reduce the liability of the actor. When the tort is not material or the tort is not causally related to the investor's transaction decision, the actor shall not be liable for compensation." The author notes that in Article 17 of the Certain Provisions, it is mentioned that it should be determined in combination with the relevant provisions of the Securities Law. Can such a statement be understood as that the relevant provisions of the Securities Law are only used as a reference, and the concept of material information is actually more extensive. In addition, the Supreme People's Court on a number of specific issues in the current commercial trial work is also too broad a statement that the importance of the decision to be judged by the ability to influence investors. The author believes that the key to the information disclosure system of the securities market lies in the identification of the importance of information. The reason why the relevant laws and regulations are relatively broad, in addition to the abstract characteristics of the material information itself, the more important influence investors make decisions on the basis of reference The items are too extensive, and the angles and methods that investors consider are also very different, so it is difficult to standardize the importance. The criteria for determining the importance of information are so abstract, so how do foreign countries do it, or in other words, can we learn from the standards of other countries to find commonalities and provide us with ideas? When it comes to the identification of major issues in the U.S. securities market, it is bound to mention its TSC case and Basic case, the specific facts of the two cases I will not introduce in detail here, but based on these two cases there are two criteria for identification. That is, the TSC standard, also known as "investor decision-making", means that the importance depends on the rational investor being influenced by the information. The Basic standard, on the other hand, raises the threshold for identification on the basis of the TSC, where rational investors are judged by a significant image of information against existing information. Similar to the United States, Japan is also Japan. Article 5, paragraph 1, of the Financial Commodities Exchange Law of Japan stipulates that "material nature may have an important impact on investors' judgment." There is a significant difference with the above two national identification standards, which is represented by the United Kingdom and focuses on respecting the opinions of professional consultants. Combined with other national identification criteria, although there are many differences, but there is a more unified view of the impact on investment decisions. At present, there are also differences in the material standards of information in China's academic circles, which are summarized well in the book "Research on the Rules of Civil Cases of Securities Misrepresentation" and are mainly divided into three types: the first type affects the decision-making standards of investors, and false information obviously affects the reference information that rational investors originally rely on. The typical representative is "Guidelines for the Content and Format of Information Disclosure by Companies Issuing Securities to the Public No. 1-Prospectus (Revised in 2015)". The second type is the price standard, that is, whether the information has a great impact on the price of securities, which mainly comes from the occurrence of major events that may have a greater impact on the stock trading price of listed companies as emphasized in Article 67 of the Securities Law. When investors have not yet learned about it, listed companies should immediately attach reporting and publicity obligations about the major event; the third is the standard of adverse effects on issuers, that is, whether the matters involved in the information have a material adverse effect on the issuer's operation, financial and other related matters, to determine whether it is material. A typical example is that if the relevant risk factors may have a serious impact on the issuer's production and operation status, financial position and profitability only, a "material matter alert" should be made in the relevant risk alert rules of the prospectus and prospectus ". In addition to the above three views, some scholars have proposed the "rational investor standard", "expert standard" and so on. Combining the views of foreign and Chinese academic circles, we can draw the following conclusions: 1. the current standards for identifying the significance of the information disclosure system in the securities market have not been unified; 2., although the views are not unified, the mainstream views are relatively concentrated. The author thinks that the standard of determination of material importance should be considered from many aspects, but this paper studies the civil compensation of securities misrepresentation as the background. Just as the "Supreme People's Court on Several Specific Issues in Current Commercial Trial Work" emphasizes that the essence of securities misrepresentation is an infringement case. It is an undue bubble generated by the listed company's misrepresentation of material information that causes the stock to be generated for a period of time. The bubble burst due to the disclosure of the facts, resulting in the decline of the stock price and the loss of investors. Therefore, in the investor's claim litigation, there is the burden of proof for the listed company's misrepresentation of material information, even if the CSRC's "political penalty decision" as evidence, but in the entire securities market investors are always in a weak position. Another issue that cannot be ignored in securities misrepresentation cases is time, as the time span from the date of presentation to the date of disclosure to the date of reference is often very long in practice, and the confirmation of such time through material matters can lead to a wide variation in the scope of compensation. As a listed company, it should operate in good faith and truthfully disclose information to provide investors with investment reference. It is obviously unreasonable for investors to pay for the company's own wrong behavior or let investors share the losses. Therefore, the author believes that there should be a certain tendency for investors to confirm the criteria for determining the significance and should not raise the threshold, so as to balance the status of both sides and eliminate the market impact as soon as possible. But the tendency is not one-sided support investors, so it is not conducive to market stability. The author thinks that the criteria for the determination of significance should be considered in combination with other factors, one of which is the definition of misrepresentation, or model. From the definition of the misrepresentation infringement case combined with the real case in practice, the author understands that the scope of compensation is mainly the closed area formed by the real trend of the stock price and the inflated stock price trend, and this closed area is actually the bubble mentioned above. Based on this understanding, it is not difficult to model the case of securities misrepresentation infringement. The author thinks that the ideal model closing point is the false statement date and the reference date. Therefore, it can be found from the model that the criteria for determining the importance of information can be directly reflected in the model, and the model is relatively stable, and the model is drawn according to the trend of the stock price, so the author thinks that the criteria for determining the importance of information should be measured by the change of stock price.

2022-08-16

Viewpoint. An analysis of the insurance value in the insurance contract -- take a sea loss insurance claim as an example.

Brief description of case Company A has a batch of aluminum ingots that need to be sold to Company B by sea. Company A has signed the Supply Contract with Company B and the Shipping Contract with Company C. Company A, as the insured, is insured by Company C and Insurance Company D. After the ship ran aground and sank in the sea during transportation, all aluminum ingots were damaged and soaked in the sea. Before the accident, Company B had already paid Company A the full price and transportation expenses of the aluminum ingots and entrusted Company A to handle the transportation. Company A has also issued a special VAT invoice to Company B. focus of controversy Company A, as the insured, negotiates compensation with Insurance Company D. When both parties reach an agreement on compensation in advance, there are disputes over the amount of compensation, mainly in the following two aspects: How to calculate the insurance value of the goods when the insurance value is not clearly agreed in the (I) insurance contract; (II) if compensation for the VAT portion should be included in the total insured amount. Legal provisions and views of lawyers (I) on the determination of the insured value of the goods. China's Insurance Law and Maritime Law have provisions on the value of cargo insurance and the amount of insurance. Article 55 of the Insurance Law stipulates: "If the insured and the insurer agree on the insurance value of the subject matter of the insurance and state it in the contract, the agreed insurance value shall be the standard of compensation calculation in the event of loss of the subject matter of the insurance. If the insured and the insurer have not agreed on the insured value of the subject matter of the insurance, the actual value of the subject matter of the insurance at the time of the insurance accident shall be the standard for the calculation of compensation in the event of loss of the subject matter of the insurance. The insured amount shall not exceed the insured value. If the insured value is exceeded, the excess shall be invalid and the insurer shall refund the corresponding insurance premium. ......" Article 219 of the Maritime Law stipulates: "The insured value of the subject matter of insurance shall be agreed between the insurer and the insured. If the insurer and the insured have not agreed on the insurance value, the insurance value shall be calculated in accordance with the following provisions: ...... The insurance value of the (II) goods is the sum of the invoice price of the goods at the place of shipment at the beginning of the insurance liability or the actual value of the non-trade goods at the place of shipment and the freight and insurance premiums;...... ". Article 220 stipulates: "The insured amount shall be agreed between the insurer and the insured. The insured amount shall not exceed the insured value; if it exceeds the insured value, the excess shall be null and void." As can be seen from the above-mentioned legal provisions, the value of insurance is agreed from the agreement. In the case where the insurance contract only stipulates the amount of insurance and does not agree on the value of the insurance. First of all, it should be based on Article 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Maritime Insurance Disputes: "The trial of maritime insurance contract disputes shall be governed by the provisions of the Maritime Law; if the Maritime Law does not provide for it, the relevant provisions of the Insurance Law shall apply; if the Maritime Law and the Insurance Law do not provide for it, the provisions of the Civil Code and other relevant laws shall apply". Priority shall be given to the relevant provisions of the Maritime Law on the insured value of the goods, I .e. the invoice price of the goods at the place of shipment at the beginning of the insurance liability. Specifically in this case, there is no agreement on the separation of price and tax in the Insurance Contract, and the policyholder C Shipping Company is insured at the invoice price including tax and should be paid in full. In addition, from the point of view of the transaction process, the Supply Contract stipulates that the seller will handle the carriage on behalf of the buyer, so that when the seller completes the consignment procedure (I. e. the goods are delivered to the carrier), the ownership of the subject matter has been transferred and the value of the subject matter has been fixed. Subsequent parties A, C and D agree on the subject matter of insurance based on the Insurance Contract, the insured value of which shall also be the total price of the goods including tax. (II) whether the VAT component should be included in the total insured amount 1. Analysis from the perspective of tax law The sales between Company A and Company B have been completed and a special VAT invoice has been issued for the other party. If Insurance Company D does not bear the VAT amount, Company A needs to issue a red-letter special VAT invoice again. However, Article 1 of the Announcement of the State Administration of Taxation on Issues Related to the Issuance of Red-letter VAT Invoices stipulates that the issuance of red-letter special VAT invoices is aimed at the case of incorrect invoicing or return, and A company in the sales behavior has been completed and the goods sink in the sea, the actual operation, the tax authorities have not allowed the seller to issue a red letter VAT special invoice. Company B has become the owner of the goods from the time of payment and delivery to the carrier, but it is not the insured. Article 237 of the Maritime Law stipulates: "After the loss caused by an insurance accident, the insurer shall pay insurance compensation to the insured in a timely manner", at which time Company A has the right to claim compensation from the insurer in accordance with the insurance contract and the above-mentioned legal provisions, and can also be regarded as claiming the value of the loss on behalf of Company B. Since the purchase price paid by Company B in the sales contract is the full amount including tax, Insurance Company D should also pay the total amount of insurance including tax at this time. If Insurance Company D claims that Company B can avoid losses by deducting tax after receiving a special VAT invoice, our lawyers believe that it is not feasible from a tax point of view. Because from the analysis of the principle of taxation, value-added tax is a transfer tax levied on the new value or added value of goods in many links of commodity production, circulation and labor services. In the case of the goods have been damaged, the goods in question can no longer be circulated downstream, the VAT chain has been broken, at this time the VAT will be substantially converted into the final cost of the goods borne by Company B, so it is reasonable for Insurance Company D to pay the full VAT. At the same time, according to the provisions of paragraph (II) of Article 10 of the interim regulations on value-added tax in the People's Republic of China, the input tax shall not be deducted from the output tax for the purchase of goods with abnormal losses. According to Article 24 of the Detailed Rules for the Implementation of the Provisional Regulations on Value-Added Tax, abnormal losses refer to losses caused by theft, loss, mildew and deterioration due to poor management. The above provisions are listed. Although the sinking of the goods in question into the sea does not belong to the listed situation and can be deducted from VAT on the surface, the main premise for the application of the above provisions is that the goods are purchased in substance, and the purchased goods not only have legal ownership, but also need to exist and be managed. Otherwise, there is no basis and premise for "mismanagement" in the above provisions. Since the goods involved have been lost, the special VAT invoice received by Company B is not allowed to be deducted according to the tax law, so it is reasonable for Insurance Company D to pay the full amount of VAT. 2, from the perspective of civil and commercial law analysis. Company A has three legal relationships in this transaction, one is the "supply contract" relationship with Company B, the other is the "shipping contract" relationship with Company C shipping company (Company A handles shipping on behalf of Company B), and the third is the "insurance contract" relationship with Insurance Company D. (1) Supply contract relationship Article 224 of the Civil Code states: "The creation and transfer of a right in rem in movable property shall take effect upon delivery, unless otherwise provided by law." The Contract of Supply stipulates that the seller handles the carriage on behalf of the buyer, so that when the seller completes the consignment formalities (I. e. to the carrier), the ownership of the subject matter has been transferred. The seller's sales link has been completed at this time, so the VAT amount should be paid as part of the insurance value. (2) Maritime contractual relationship After the completion of the transaction between Company A and Company B, Company A has the obligation to handle the transportation on the basis of the Supply Contract, which is already another legal relationship. The value of the goods transported by Company A is the total purchase price including tax (at this time, the price and tax are combined), and Company B also purchases the goods including tax. From this point of view, D insurance company should also pay in full. (3) Insurance contract relationship Company A entered into an insurance contract with Insurance Company D based on the need to ship the goods, and paid the full premium for the total insured amount based on the total price of the goods including tax. The aim is to be able to get the insurance company's full payout in the event of an insurance event. Therefore, in the event that the insured amount does not exceed the insured value, the D insurance company is obliged to perform the full payment obligation in accordance with the insured amount agreed with the bidder and the insured. Conclusion In general insurance claims, if the insured and the insurer have not agreed on the insured value of the subject matter of the insurance, the actual value of the subject matter of the insurance at the time of the insurance accident shall be the standard of compensation calculation. In the case of maritime insurance, the relevant provisions of Articles 219 and 220 of the Maritime Law shall be applied in preference to the calculation of the insured value of the goods in the light of the actual circumstances of the loss of the goods. Regarding the question of whether VAT should be compensated, our lawyers believe that under the premise that the transaction link has been completed and the insurance contract does not stipulate the separation of price and tax to exempt part of the compensation for VAT on the loss of goods, the goods cannot be transferred downstream due to the loss of goods, and the purchaser becomes the final consumer at this time and cannot deduct this part of the tax, and the insurance company shall pay full compensation to fill in the loss.

2022-08-12

Viewpoint... Legal analysis of the breach of contract clause of the employment agreement for college graduates.

The employment agreement is an employment intention contract for graduates to work in the employer after graduation, and its nature is an appointment contract; the liquidated damages clause stipulated in the employment agreement is legal and valid; if the agreed liquidated damages are excessively higher than the losses caused, the graduate may request the arbitration institution Or the people's court to reduce it. 1 The legal nature of the employment agreement The employment agreement (also known as the "tripartite agreement") is a written agreement signed by fresh graduates of ordinary higher education institutions, recruiters and graduate institutions. As for the nature of the employment agreement, there are different views in the theoretical circles and different understandings in judicial practice. 1, civil contract said: from the employment agreement signed time, content and the legal status of the parties reflected in the employment agreement, the employment agreement is a general civil contract. (Relevant case: Cheng Li v. BYD Co., Ltd. and others for the return of liquidated damages) 2. The appointment contract said: The employment agreement is a preliminary agreement between the graduates, the school and the employing unit on the graduates' future employment intention. It is the employment of the graduates with time limit and conditions attached to the employing unit (relevant cases: Yu Sulan and Fujian Electric Power Co., Ltd. applied for labor dispute retrial) 3. The labor contract says: The employment agreement is a special form of the labor contract. The nature of the employment agreement and the labor contract is consistent, and its subject meaning and legal basis are also consistent. The "Labor Contract Law" should be applied. (Relevant case: Li Moumou v. Tianjin College Personnel Dispute) 4. Non-contract theory: The employment agreement is a product of the transition period of the employment market with Chinese characteristics. In nature, it is neither an agreement in public law, nor a contract in private law, nor a labor contract. Strictly speaking, this kind of tripartite agreement It adds the content of public power intervention on the basis of "private" autonomy. This paper holds that from the point of view of the signing process of the employment agreement, the function of the employment agreement lies in the proof role of the school reporting employment plan, the employer's declaration of entry indicators, etc., with a certain administrative function color, does not have the equality of the subject and the freedom of will, and runs counter to the basic spirit of civil contract. From the content of the agreement, most of the employment agreements in colleges and universities are relatively simple and general, and it is true that the legal provisions of the Labor Contract Law are necessary, so it is more appropriate to adopt the "appointment contract theory" in its legal nature. 2 The validity of the penalty clause in the employment agreement. 1. The liquidated damages clause is legal and valid. The reason why the employment agreement can agree on liquidated damages is that both employers and graduates spend a lot of costs in recruitment or job hunting. This reduces the utility of a tripartite employment agreement if one party defaults recklessly without penalty. The liability for breach of contract stipulated in the employment agreement is not limited by Article 25 of the the People's Republic of China Labor Contract Law. As long as there is no invalid situation in the Civil Code, that is, the parties' full capacity for civil conduct means true and the content does not violate the mandatory provisions of laws and administrative regulations, and does not violate public order and good customs, the liability clause for breach of contract should be valid. Article 495, paragraph 2, of the Civil Code stipulates that "if one of the parties fails to perform the obligation to conclude the contract under the appointment contract, the other party may request it to bear the liability for breach of the appointment contract". The employment agreement has legal effect on both the graduate and the employer. Regardless of any party's breach of contract, it shall be liable for breach of contract. 2. The liquidated damages clause follows the following principles: One is the principle of fairness. The Civil Code provides for the principle of fairness in civil contracts. However, in practice, many employers take advantage of their advantageous position in recruitment to only agree that graduates violate or terminate the liability for breach of contract of the tripartite employment agreement, and do not agree on the liability for breach of contract of the employer, which is obviously unfair. The second is the principle that liquidated damages are equivalent to losses. Article 584 of the Civil Code stipulates: "If one of the parties fails to perform its contractual obligations or the performance of its contractual obligations does not comply with the agreement, causing losses to the other party, the amount of compensation for the loss shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract, However, it shall not exceed the losses that may be caused by the breach of contract that were foreseen or should be foreseen when the party entered into the contract." Article 585 of the law further stipulates: "if the agreed liquidated damages are lower than the losses caused, the parties may request the people's court or arbitration institution to increase them; if the agreed liquidated damages are excessively higher than the losses caused, the parties may request the people's court or arbitration institution to reduce them appropriately." According to the above provisions, the standard of liquidated damages should be determined according to the loss caused by one party's breach of contract to the other party. If it is abnormally high or abnormally low, adjustments can be made after disputes arise. How to determine that the liquidated damages are excessively higher than the loss? "If the liquidated damages agreed by the parties exceed the 30% of the loss caused, it can generally be determined as 'excessively higher than the loss caused '". 3 Reduction of liquidated damages provisions in employment agreements The employer will take into account the deterrent effect of the clause when setting the liability clause for breach of contract, so it will set a higher standard of liquidated damages, but it is still possible for the adjudicator to adjust the liquidated damages according to the principle of fairness, taking into account the consequences of the graduate's breach of contract, the employer's loss, the economic level, the post salary and other factors. Reference Case:(2021) Beijing 0102 Minchu No. 35066 The original and the defendant signed the Employment Agreement for Graduates of Domestic Colleges and Universities of an Airport Co., Ltd., stipulating that the defendant will work in the plaintiff's company after graduation. If the defendant fails to sign a tripartite agreement with the plaintiff before March 31, 2020 due to reasons attributable to the defendant, it will be deemed as a breach of contract, and the defendant shall pay liquidated damages of 50000 yuan to the plaintiff. The party proposing to terminate the agreement shall pay liquidated damages of 50000 yuan to the other party. The court held that in this case, according to the facts found out, although the plaintiff failed to produce sufficient evidence to prove that its actual loss had reached or exceeded 50000 yuan, the existing evidence could still show that the plaintiff did bear certain human and material costs for recruiting the defendant, and the plaintiff would inevitably incur actual losses if the defendant did not agree to join the company for its own reasons. Since the plaintiff failed to prove the specific amount of the actual loss and the defendant applied for a reduction in liquidated damages, the court determined the amount of liquidated damages to be borne by the defendant to be 20000 yuan in combination with factors such as the contract agreement, actual performance and fault degree of both parties, especially the situation shortly after the defendant's graduation. Due to the outbreak, most of the last 2 years of school recruitment online, the cost of online recruitment by employers is significantly lower than the cost of on-site recruitment. If the liquidated damages charged by the employer for online recruitment are the same as or even more than the liquidated damages charged for on-site recruitment, job-seeking students can consider whether the liquidated damages are excessively higher than the losses caused. 4 Employment Agreement Signing Risk Tips and Suggestions Both signing and settlement contracts should be carefully considered. When graduates and employers sign employment agreements, they should pay attention to the following points: 1. Determine the regularity of the recruitment unit, verify the authenticity and social reputation of the company in many ways, and avoid being deceived. 2, the specific content should be agreed clearly. If the employment agreement is to stipulate liquidated damages, please write clearly the amount, not the vague "economic loss" or "to be determined". If the unit clearly indicates that there is no liquidated damages, please also indicate or cross out the blank of liquidated damages, and the same applies to other blanks. 3. Please clarify the relevant contents with the employer before signing the contract, and sign after careful consideration. Keep the corresponding evidence to avoid disputes arising from the discrepancy between the written content and the negotiation. 4. Please be careful before signing the contract. Please keep your promise after signing the contract.

2022-08-12

Viewpoint... A brief analysis of the nature and validity of the letter of intent, the appointment contract and the contract in the equity transfer.

With the rapid development of science and technology and the continuous rise of emerging industries, the scale of transactions continues to expand, making the forms of transactions with various functions increasingly diversified. In practice, there is often such a phenomenon that the conditions for the parties to enter into a formal contract are not yet mature, but The parties do not want to miss opportunities or take risks. The simple contracting method of "offer-commitment" can no longer meet the needs of market entities, intentional agreements such as letters of intent and appointment contracts came into being as a way of contracting in the new era. Equity transfer is a complex and cyclical process. Risks exist in the entire process of the transaction. Therefore, the negotiation and contracting cycle is relatively long. In order to lock in an exclusive negotiating position and strive for more favorable contract conditions, both parties often sign framework agreements., Subscription letter, letter of intent, memorandum of understanding, negotiation minutes and other intentional agreements to achieve the purpose of finally signing a formal equity transfer agreement. The main application scenarios of intentional agreements in equity transfers include internal decision-making procedures still to be performed by both parties to the transaction, uncertainty of the target company, restrictions on the subject matter of the transaction or the transaction procedures, and the need to approve or register the transaction. Article 495 of the Civil Code provides general provisions on the definition and effect of an appointment contract, but does not provide additional provisions and interpretation of intentional agreements. Usually, there are clauses in the intention agreement that cause it to lose its binding force, such as "this agreement is not legally binding". Such clauses often mean that both parties do not want to be bound by the agreement, but in some cases, the intention agreement also has certain legal effect. In practice, it is called an intentional agreement, which may also be recognized as a formal contract, and this article will briefly analyze the characterization and validity of the letter of intent, the appointment contract and the contract in the equity transfer. Relevant laws and regulations Civil Code Article 495, paragraph 1, provides that a subscription, order, reservation, etc., in which the parties agree to conclude a contract within a certain period of time in the future, constitutes an appointment contract. The second paragraph of Article 495 stipulates that if one of the parties fails to perform the obligation to conclude the contract under the appointment contract, the other party may request it to bear the liability for breach of the appointment contract. Article 500 stipulates that if a party has any of the following circumstances in the course of concluding a contract, causing the other party's loss, it shall be liable for compensation: (I) negotiate in bad faith under the guise of concluding a contract; (II) intentionally conceals important facts relating to the conclusion of the contract or provides false information; (III) other violations of the principle of good faith. focus analysis Can (I) contract called letter of intent for equity transfer be recognized as an appointment contract or this contract according to its contents? In the process of equity transfer, there are usually three stages for the parties to conclude a contract, namely, the negotiation stage before the offer commitment, the formal contract stage scheduled to be concluded at a certain time in the future in the offer commitment and the final signing of the contract stage after the offer commitment. Intentional agreement is the pre-contract state that appears with the complexity of the transaction process, but according to the substance of the contract, the letter of intent may also be identified as a different contract nature, this affects the application of the law and the determination of the relationship between the rights and obligations of the parties to the contract. Since both the letter of intent and the appointment contract, which do not constitute an appointment, express the willingness of the parties to enter into a formal contract in the future, it is not easy to distinguish between the two in practice, and in general, the letter of intent, the appointment contract and the contract can be identified from the following two aspects: First, the purpose of the contract. The purpose of the contract is the soul of the whole contract, and the determination of the purpose of the contract is of vital value and significance to the signing and performance of the contract, which is the natural requirement of freedom of contract. The letter of intent expresses the willingness to trade and hopes to continue the negotiation in good faith. Generally, there will be clauses such as "this letter of intent shall be regarded as concluded for the purpose of negotiation only". The purpose of the reservation contract is to ensure that the contract subject enters into this contract. For the formal contract to be concluded at a certain time in the future, the main content of the contract is to conclude this contract within a certain period of time in the future. Generally, the purpose of time, however, this purpose will be expressed through the terms of the contract, such as "pending the signing of a formal equity transfer agreement between the parties"; the purpose of this contract is to establish a specific legal relationship, I .e., for the transferee to enjoy the assets of the subject company or some special property right carried by the equity, and for the transferor to obtain the corresponding consideration. Second, the certainty and completeness of the content of the contract. Generally speaking, the transaction content of the letter of intent is not certain, it is only a record of the negotiation process between the two parties, which is part of the contracting process and provides reference for further negotiation. In order for the letter of intent to constitute an appointment, its binding force must be expressed or implied in the terms of the contract, one of the differences between the reservation contract and the letter of intent is that the substantive terms of the reservation contract must meet the explicit or implicit binding force, while the procedural terms must meet sufficient certainty; the transaction object, content, duration and other contents of this contract are determined and complete. Generally, under the condition that the reservation content is relatively complete, there is a theoretical view of "this contract", for example, there is a specific arrangement for the delivery of the subject matter, if the main terms of the equity transfer are in place and the subject of the contract no longer signs a separate written contract, but performs it directly, it may be deemed to constitute this contract. However, the fundamental difference between the appointment and the contract still lies in the agreement on the rights and obligations of the parties in the contract. If the contract clearly states that the purpose of the contract is to conclude the contract in the future, the appointment cannot be characterized as the contract because the content has been determined or partially performed. Instead, the contract content, negotiation behavior and performance facts should be comprehensively considered to determine whether the contract is established. In short, the core criterion for distinguishing between a letter of intent, an appointment contract and a contract contract is the intention of the parties, and the certainty and completeness of the content of the contract is only a necessary, not sufficient, condition for the appointment. What legal liability should the (II) bear for violating the letter of intent, appointment contract and contract signed in the equity transfer? In the letter of intent for equity transfer, the contract subject undertakes the obligation of good faith negotiation, which is generally not bound by law, and can only be relieved from the perspective of contractual negligence liability. Generally speaking, the principle of attribution of contractual negligence liability is the principle of fault liability, and the violation is the prior contractual obligation. The form of liability can only be compensation for losses, and the scope of compensation is the loss of trust interests, the purpose is to refund the various fees paid by the non-breaching party for the performance of the contract of reliance. In the reservation contract, the contract subject shall sign a formal equity transfer agreement within a certain time, and its binding force shall be terminated after the conclusion of this contract. When one party violates the contract and fails to perform the obligation to conclude this contract, there are generally four views in the academic circle on the legal liability that it should bear: must negotiate, should conclude, distinguish and regard as this contract. The "must negotiate" holds that as long as negotiations are held for the conclusion of this contract at some point in the future, the contractual obligations will be fulfilled. The "should be concluded" holds that the appointment debtor has the obligation to conclude this contract, and the creditor can claim to perform it. The "distinction" holds that the specific situation is analyzed in detail; "deemed to be the contract" holds that the contract that already has the main points of this contract should be directly regarded as this contract. As to whether the appointment contract can be enforced, there are still great disputes in academic and practical circles. In judicial practice, most courts will not directly judge the parties to force the conclusion of a formal equity transfer agreement, mainly because the purpose of the appointment contract is to sign a formal contract in the future, and compulsory contracting may violate the principle of autonomy of will and the spirit of freedom of contract. According to the second paragraph of Article 495 of the Civil Code, the contract-keeping party may request the breaching party to bear the liability for breach of the appointment contract, and if the conditions for termination are met, it may also claim the termination of the appointment contract and compensate for the loss. In the transfer of shares, the loss arising from the breach of the appointment contract is usually expressed as the expenses paid by the party to enter into the appointment contract, the preparation of the contract, and the deposit, security deposit or similar payment and interest paid. However, in fact, many parties did not agree on liquidated damages in the appointment contract, and it is difficult for the right holder to prove the actual loss of their own party, and it is difficult to prove that the failure to complete the equity transfer between the two parties is caused by the other party's violation of the principle of good faith. In violation of an effective equity transfer contract, the transferee shall have the right to demand delivery of the equity and compensation for the loss, and the transferor shall have the right to claim the price and compensation for the loss. In practice, due to the diversity of the forms of the appointment contract, it is also easy to be confused with this contract. For example, the name is "equity transfer agreement". Based on the principle that the substance is greater than the form, it may also be identified as a letter of intent, an appointment contract or this contract. If the appointment contract has the main terms of this contract, it may be converted into this contract, at this time, the breaching party may require the breaching party to continue to perform the contract and bear the liability for breach of contract in accordance with the contract. Related Cases (I) Supreme People's Court (2015) Min Er Zhong Zi No. 143 Civil Judgment Basic case: In October 2012, Zaihe Company and Landing Company signed the "Letter of Intent for Equity Transfer", agreeing to transfer 51% of its equity in Zaihe Mining Company to Landing Company, and within 45 days from the date of signing the letter of intent Complete the signing of the formal agreement on equity transfer; on the same day, the two companies signed the "Memorandum of Understanding I", agreeing that the "Letter of Intent" is only as the cooperation intention between the two parties, for its final performance, both parties will sign a formal equity transfer agreement as the basis. After that, Landing Company paid 0.1 billion yuan to the company. In April 2013, Landing Company and Zahe Company signed the "Equity Transfer Agreement", which agreed: Zahe Company transferred 51% of the equity of Zahe Mining Company; two days later, the two parties signed the "Memorandum of Understanding II", which agreed that the previous two days Signed the "Equity Transfer Agreement" has no legal effect on both parties; since then, the two parties have not signed a formal equity transfer agreement, landing Company sued the court for the return of 0.1 billion yuan in advance payment and interest. Zaihe Company claimed that both parties still have a contractual relationship of equity transfer and demanded to continue to perform the contract. The court of first instance (Anhui Higher People's Court) held that: the "Letter of Intent for Equity Transfer" is a document of intent signed by both parties and does not have the legal binding force of a formal contract for both parties. The "Equity Transfer Agreement" is the implementation of the "Letter of Intent for Equity Transfer". A formal agreement reached by consensus on the content of the relevant equity transfer. Once the "Equity Transfer Agreement" is signed, it replaces the "Equity Transfer Letter of Intent" and becomes the basis for the relationship between the rights and obligations of the two parties in the equity transfer, and the "Equity Transfer Letter of Intent" is therefore invalid. Later, the two parties signed the "Memorandum of Understanding" to terminate the validity of the "Equity Transfer Agreement", so there is no valid equity transfer contract relationship between the two parties. On this basis, the company believes that there is still a valid equity transfer contract relationship between the two parties can not be established, and accordingly, Landing Company won the case. The court of second instance (the Supreme People's Court) held that the Letter of Intent for Equity Transfer stipulates that within 45 days from the date of signing the Letter of Intent, both parties shall complete the signing of the formal agreement for equity transfer according to the terms of the Letter of Intent. Based on this, it can be judged that the Letter of Intent is an appointment, and it is a contract for the parties to conclude this contract in the future, the judgment of the first instance that the Letter of Intent for Equity Transfer is only a document of intent signed by both parties, and the determination that the parties do not have the legal binding force of the formal contract is corrected; at the same time, the judgment of the first instance that Zahe Company should compensate Landing The determination of the loss of interest is maintained. (II) Supreme People's Court (2018) Supreme Court Civil Judgment No. 813 Basic case: Nord signed a "Project Acquisition Agreement" with Tianlang Company in February 2014, transferring HD49-1 and HD49-2 residential projects to Tianlang Company. In February 2016, the lawsuit sought the termination of the acquisition agreement. In June 2016, Nord Company and Evergrande Company signed the Equity Transfer Contract. The contract stipulates that within 3 months after the signing, Nord Company will be responsible for terminating the acquisition agreement, and will invest the HD49-1 and HD49-2 plots at the price to establish project company A and project company B respectively, and transfer 100 percent of the equity of the two companies to Evergrande Company. The contract clearly stipulates the relevant circumstances of the project company and the project plot, the specific operating procedures, the total amount and payment of the lump sum fee, the rights and obligations of both parties, and the liability for breach of contract. In December 2016, Nord Company sent a "Notice of Termination of Contract" to Evergrande Company. In May 2017, Evergrande Company sent a "Notice of Request to Perform the Contract as soon as possible" to Nord Company. Evergrande Company sued Nord Company for continuing to perform the "Equity Transfer Contract", compensating 50 million yuan for liquidated damages and 241.86 million yuan for losses. The court of first instance (Zhejiang Higher People's Court) held that: according to the agreement in the Equity Transfer Contract, Nord Company agreed to invest the HD49-1 and HD49-2 plots to establish project companies A and B after the cancellation of the acquisition agreement. This is a prerequisite for Evergrande Company to accept the equity of the corresponding project company. At the same time, the contract also stipulates that within 3 months after the signing of this agreement, Nord Company is responsible for the cancellation of the acquisition agreement, "Prerequisites" and "3 months" shall be the preconditions of the relevant equity transfer and the time limit for the termination of the relevant acquisition agreement, rather than the agreement of the parties on the effective conditions of the equity transfer contract involved in the case, so the contract shall be confirmed and valid according to law. The case concerning Nord's claim that the contract has been terminated because Evergrande requested a clear reply that did not agree to the termination and could not determine the cause of the termination, so the claim was not valid. According to this judgment, Nord Company shall pay Evergrande Company liquidated damages of 50 million yuan and compensate Evergrande Company for losses of 100 million yuan. The Court of Second Instance (Supreme People's Court) held that Nord had argued in the second instance that the Equity Transfer Contract between Nord and Evergrande was an appointment contract with the main terms of this agreement. According to the basic principles of civil law and the consistent understanding in judicial practice, the standard of distinction between appointment and contract should be determined according to the meaning of the parties in the contract. First of all, from the content of the contract between the parties, the equity transfer contract involved in the case takes the equity of the project company as the subject of transfer. At the time of signing the contract, both project companies A and B have not been established, and both parties have no very certain certainty. Secondly, judging from the agreement on the transaction operation procedure in the contract, even if Nord has completed the prerequisites agreed in the agreement, there is uncertainty as to whether the transaction can be completed, rather, it depends on whether Evergrande confirms in writing its continued performance after the completion of due diligence. Third, although the "Equity Transfer Contract" involved in the case stipulates Evergrande's right to unilaterally decide whether to continue to perform, this unilateral decision can only be attributed to the agreement on the right to claim creditor's rights, and cannot set the right to form in the right to choose contract, and the contract price and other contents have not been determined. Even if Evergrande agrees to continue the transaction after due diligence is completed, there is still room for both parties to continue negotiation on the price. Accordingly, the nature of the contract should be recognized as an appointment contract, after the signing of the contract, both parties have the obligation to actively facilitate the completion of the transaction and the conclusion of this contract. In this case, Evergrande did not pay any money to Nord, nor did it make any input or other contributions to the project involved, other than the fees paid for the conclusion of the appointment contract, and could not provide any evidence in this case to prove it.

2022-08-12