Civil and Commercial Perspective... Can children claim maintenance during marriage?

2023-02-22

Viewpoint | Analysis of the prerequisites for the continued implementation of liability insurance liability

Basic case In 2021, the insured (application executor) company a enforced a case due to a private loan dispute with the executed person Guo mou. during the execution process, the outsider Cao mou claimed ownership of the property and garage located in a residential area of wenshang county under the name of the executed person Guo mou and filed an objection to the execution, resulting in the suspension of the execution of the case. on June 2, 2021, the insured (application executor) company a applied to the court for continued execution, and purchase continuing liability insurance from the insurance company. In the case of Cao's objection to the execution of the application, the court made a civil judgment on September 10, 2021, and the house involved in the case was not allowed to be executed. The intermediate court made a final judgment to reject the appeal and uphold the original judgment. On September 2, 2021, the court made an enforcement ruling that the ownership of the property in question under Guo's name belonged to the buyer, Fan. The ownership of the property involved is irreversible. Cao sued the court and requested the insurance company and the executor to compensate for his losses. Court decision results Defendant A Company shall compensate Cao for the loss of XX yuan within 10 days after the judgment comes into effect. The defendant's insurance company shall be liable to Cao for the debts determined in the first item of this judgment, within the scope of XX yuan for the part that cannot be performed in the legal enforcement of the property of defendant a company. Referee Points 1. In this case, Cao raised an objection to the execution of the property involved. During the trial of the outsider's execution of the objection, after Company A insured with a qualified insurance company, the insurance company issued a policy guarantee to the court, and the court continued to execute the property involved in the case in accordance with the law, and the property involved in the case has now been executed. According to the final judgment of the outsider's execution of the objection, Company A applied to continue to execute the house mistake involved in the case. Company A requested the court to continue to execute the mistake and caused losses to Cao, and should be liable for compensation for Cao's losses. 2. Judging from the guarantee letter of the continued execution of the liability insurance policy issued by the insurance company and the compensation conditions specified in the policy, the insurance company shall judge the economic compensation liability of the insured in the people's court for the loss of the continued execution error in accordance with the law. If the insured fails to make compensation, the insurance company shall be liable for compensation within the compensation limit according to the agreement of the insurance contract. Legal basis The Supreme People's Court on the application<中华人民共和国民事诉讼法>Interpretation of Several Issues in the Implementation Procedure Article 16 During the trial of a lawsuit against an outsider's objection to execution, the people's court shall not punish the subject matter of execution. Where the executor of the application requests the people's court to continue the execution and provide a corresponding guarantee, the people's court may grant permission. If an outsider requests the lifting of the seizure, seizure or freezing, or if there is an error in the application for execution, causing losses to the other party, compensation shall be made. Lawyer's opinion The continued implementation of liability insurance does not reflect the premise of the principle of attribution of fault liability of the insured. Not only the terms of the insurance contract signed between the insurer and the insured do not reflect the principle of this rule, but after searching the court case, there is only one case involving the continued implementation of liability insurance at this stage, and the judgment made by the court is also based on the premise of execution error, regardless of whether the insured has subjective fault. Therefore, once the execution is wrong, the insured is very likely to bear the liability. In this case, is the insurer bound to bear the liability? According to the continued execution of the liability insurance clause and the continued execution of the liability insurance policy guarantee issued by the insurer to the court, the insurer must have the insurance liability at the same time: 1. The insured requests the court to continue the execution with errors, causing losses to the objector; 2. There should be an effective legal document to determine that the insured shall bear the economic compensation liability for the objector; 3. The insured fails to perform the compensation liability or fails to perform the compensation liability after the compensation liability after the execution procedure, at this time, the insurance talent is responsible for compensation within the compensation limit according to the insurance contract. Extended reading Litigation property preservation liability insurance means that the applicant signs an insurance product contract with the insurance company (insurer), and the insurance company uses the insurance product as collateral to guarantee the property preservation behavior of the litigant (insured). When the insured applies for error and should bear the economic compensation liability according to law, the insurer shall be responsible for compensation or advance payment according to the agreed compensation limit, Then realize the purpose of litigation preservation guarantee. Continued enforcement liability insurance is an insurance that specifically provides service protection for the executor in an enforcement case to continue to enforce the liability. The applicant for enforcement shall provide a policy guarantee issued by an insurance company approved by the court, and after examination by the court, the outsider shall continue to dispose of the property without suspending the execution procedure at the same time as the execution objection or the execution objection, so as to ensure that the legitimate rights and interests of the parties are fulfilled in a timely manner. The insurance is a new type of insurance, which was first born in Beijing Haidian Court on May 24, 2019. This is Beijing's first and the first insurance industry to prevent delays in the implementation of judicial liability insurance products. Litigation property preservation liability insurance and continued execution liability insurance are both an insurance contract signed between the policyholder and the insurance company, and then the two sides establish an insurance contract relationship. They are insurance companies to the court to provide policies or letters of guarantee as proof of security, from the form of the policy guarantee, with some of the characteristics of the guarantee guarantee, but in essence is not a guarantee guarantee relationship. First, the insurer does not appear as a guarantor, and the nature of the insurance policy guarantee payment expenses belongs to insurance claims; second, the insurance contract of this kind of insurance generally has a large number of exemption clauses, which conflict with the promise of unconditional liability in the insurance policy guarantee and do not meet the basic requirements of guarantee guarantee; third, if the insurance policy guarantee is regarded as the guarantee provided by the insurance company, however, if the guarantee does not comply with the current law, because according to the law, the provision of the guarantee requires the authorization or resolution of the shareholders' meeting or the board of directors, but in reality, there are no relevant documents authorized or resolved by the shareholders' meeting or the board of directors in the relevant cases. The insurance liability of litigation property preservation liability insurance is that during the insurance period, if the respondent suffers losses due to the wrong application of the insured's litigation property preservation, the compensation liability borne by the insured according to the judgment of the court shall satisfy at the same time: 1. The property preservation respondent has indeed suffered losses; 2. There is a causal relationship between the loss of the property preservation respondent and the error of the insured's litigation preservation application; 3. The loss of the property preservation respondent was confirmed by the court judgment in force to confirm the specific amount of the loss. In this case, the insurer is responsible for compensation in accordance with the insurance contract. The insurance liability for the continued execution of liability insurance is that during the insurance period, due to the insured's error in requesting the people's court to continue the execution, causing losses to the person subject to execution, interested parties or outsiders, the people's court shall be in accordance with the People's Republic of China laws (excluding Hong Kong, Macao and Taiwan Regional laws, the same below) determine that the insured shall bear the economic compensation liability, and the insurer shall be responsible for compensation in accordance with the insurance contract. Continued enforcement of liability insurance In the policy guarantee submitted to the court, it is further clarified that the insurance liability is that during the enforcement process, the objector files an objection to the enforcement of the subject matter, resulting in the suspension of the enforcement. The insured applies to the people's court for continued enforcement and requests The people's court continues to execute the subject matter. If there is an error in the insured's request to the people's court to continue execution, causing losses to the objector, if the people's court decides in accordance with the law that the insured shall bear the economic compensation liability and the insured fails to pay compensation, the insurer shall be responsible for compensation in accordance with the insurance contract. Litigation property preservation liability insurance liability is based on the principle of attribution of fault liability of the insured, that is, the insurer's liability needs to have at the same time the subjective fault of the insured, the illegality of the insured's behavior, the existence of the fact of damage, the insured's illegal behavior and the damage consequences of the causal relationship between the four constituent elements. In practice, the case of the court after searching shows that the compensation for the liability of property preservation in litigation is based on the causal relationship between the insured's preservation behavior and the loss and the subjective intention or gross negligence of the insured to the property preservation as the elements and premise of the insurer's liability for damages. In the course of litigation, the parties submit an application for property preservation in accordance with the provisions of the Civil procedure Law, which is a manifestation of exercising their litigation rights granted by the law. It is not appropriate to simply judge whether the application is wrong on the basis of the final trial result of the case. The key is to see whether the insured has fulfilled the reasonable duty of care and whether the litigation request filed by the insured is legal and reasonable. The continued implementation of liability insurance does not reflect the premise of the principle of attribution of fault liability of the insured. Not only the terms of the insurance contract signed between the insurer and the insured do not reflect the principle of this rule, but after searching the court case, there is only one case involving the continued implementation of liability insurance at this stage, and the judgment made by the court is also based on the premise of execution error, regardless of whether the insured has subjective fault. Therefore, once the execution is wrong, the insured is very likely to bear the liability. In this case, is the insurer bound to bear the liability? According to the continued execution of the liability insurance clause and the continued execution of the liability insurance policy guarantee issued by the insurer to the court, the insurer must have the insurance liability at the same time: 1. The insured requests the court to continue the execution with errors, causing losses to the objector; 2. There should be an effective legal document to determine that the insured shall bear the economic compensation liability for the objector; 3. The insured fails to perform the compensation liability or fails to perform the compensation liability after the compensation liability after the execution procedure, at this time, the insurance talent is responsible for compensation within the compensation limit according to the insurance contract. Because the continued implementation of liability insurance is a new type of liability insurance, the time is short, the judicial jurisprudence is also very few, therefore, the liability insurance liability preconditions should be based on the principle of fault liability attribution, there is a lot of controversy, to be further discussed with the increase in the number of cases.</中华人民共和国民事诉讼法>

2023-02-21

Point of view... A brief analysis of the practical treatment of social security claims when bankrupt enterprises do not open social security accounts for employees.

Foreword Social insurance is at the core of the social security system, and the state also gives employers the legal obligation to pay social insurance for their employees in the form of legislation. In the case of enterprise bankruptcy, the enterprise will usually default on social insurance due to the pre-debt crisis, which leads to the inability to pay social insurance for employees in time, and usually the social security institutions will also protect the rights and interests of employees in the form of social security claims. However, some bankrupt enterprises have not opened social security accounts for their employees since the date of production and operation, and social security institutions are unable to declare claims because they have not opened accounts, and there is no express provision on how to deal with social security claims. The purpose of this paper is to analyze the practical treatment of social security claims when bankrupt enterprises do not open social security accounts for employees. 1. what is social security claims The expression of social security claims does not appear directly in the Enterprise Bankruptcy Law and the judicial interpretation of the Bankruptcy Law, but in the second paragraph of Article 113 of the Enterprise Bankruptcy Law, the expression "social insurance expenses owed by the bankrupt in addition to the provisions of the preceding paragraph" appears, which is the provision of social security claims. Social security claims are formed in social insurance costs, but social security claims and social insurance costs cannot be completely equated. According to Article 113 of the Enterprise Bankruptcy Law, social security claims are closely related to employee claims. Therefore, the scope of social security claims can be determined by employee claims. The calculation formula of social security claims can be expressed as follows: social security claims = social insurance fees payable by the unit (excluding the unit's withholding of the individual's contributions)-the social insurance fees paid by the unit shall be included in the basic old-age insurance and basic medical insurance fees of the employee's personal account. Thus, the social security claim can be understood as the social insurance fee paid by the unit into the co-ordination account. The significance of 2. enterprises to pay social insurance. The first paragraph of Article 58 of the "Social Insurance Law" stipulates that the employer shall apply to the social insurance agency for social insurance registration for its employees within 30 days from the date of employment. If the social insurance registration is not completed, the social insurance agency shall approve the social insurance premiums that it should pay. Article 72 of the "Labor Contract Law" stipulates that the social insurance fund shall determine the source of funds according to the type of insurance, and gradually implement social pooling. Employers and workers must participate in social insurance and pay social insurance premiums in accordance with the law. It can be seen that the employer's payment of social insurance for employees in accordance with the law is a legal obligation of the employer, which is mandatory. This obligation is not exempted for any reason, and it is not changed according to the wishes of the parties. The promise made by the employee to the employer not to pay social insurance is also invalid due to violation of mandatory legal provisions. Taking basic old-age insurance as an example, the first paragraph of Article 10 of the Social Insurance Law stipulates that employees shall participate in basic old-age insurance, and employers and employees shall jointly pay basic old-age insurance premiums. The first paragraph of Article 11 of the "Social Insurance Law" stipulates that the basic pension insurance shall be combined with social pooling and individual accounts. The first paragraph of Article 12 of the "Social Insurance Law" stipulates that the employer shall pay the basic pension insurance premiums in proportion to the total wages of its employees as prescribed by the state, and record them in the basic pension insurance pooling fund. The second paragraph stipulates that employees shall pay basic old-age insurance premiums in proportion to their wages as prescribed by the State, which shall be credited to their personal accounts. The social insurance fee paid by the employer has a double significance. On the one hand, part of the social insurance fees paid by employers are transferred to the individual accounts of employees, which is "private"; on the other hand, part of the social insurance fees paid by employers are transferred to the overall planning account, which is uniformly allocated and managed within a certain range. to achieve regional adjustment, protect social and public interests, with "mutual aid". It can be seen that social insurance has the function of social security. Employers pay social insurance, which is not only a way to realize the social security needs of employees, but also a way for the state to protect the basic human rights of all people through social risk sharing. The payment of social insurance by enterprises has dual significance. It has both corporate responsibilities and social responsibilities. It is conducive to resolving the contradiction between the rich and the poor in society, ensuring the basic living standards of the people, truly realizing people-oriented, and building a harmonious socialist society. The practical analysis of social security claims when the 3. bankruptcy enterprise does not open a social security account for its employees. The Enterprise Bankruptcy Law stipulates that employers should pay social insurance for their employees, which is a mandatory obligation. In a bankrupt enterprise, when the bankrupt enterprise fails to open a social security account for its employees during the normal production and operation period, it has violated the law. When the enterprise goes bankrupt, the bankrupt enterprise should pay the social security for the employees and safeguard the legitimate rights and interests of the employees. However, in practice, the bankrupt enterprise has been in a state of insolvency, has obviously lack of solvency, the lack of funds available to the enterprise, especially in the face of many creditors, how the enterprise fair settlement of claims, to protect the legitimate rights and interests of each creditor has become a top priority. However, social security claims are only one of the many types of claims, and there is no uniform standard for the payment of social security claims in practice. Below, I will comb the face of bankrupt enterprises did not open social security accounts for employees, the administrator (or liquidation group) of the practical path choice. Path 1: When a bankrupt enterprise does not open a social security account for its employees, it cannot pay social insurance for its employees. Case 1: Due to the bankruptcy of the enterprise did not open a social security account for employees, do not support the payment of social security. In Huang Wuchun and Yingshan County Zhongneng Real Estate Co., Ltd., the civil judgment of the second instance of the dispute over the confirmation of employees' bankruptcy claims ((2020) Sichuan 13 Minzong No. 2139, Nanchong Intermediate People's Court of Sichuan Province) stated: ...... Zhongneng Company has not opened a medical insurance account in the medical insurance department and is now unable to repay the employees' medical insurance expenses to the medical insurance institution...... Case 2: Due to the bankruptcy of the enterprise did not open a social security account for employees, do not support the payment of social security for employees, but support compensation for losses. In the civil judgment of first instance on the dispute over the confirmation of bankruptcy claims of employees of Yang Ping and Mianyang Antelai Chemical Co., Ltd. ((2018) Sichuan 0792 Minchu No. 1971, Sichuan Mianyang High-tech Industrial Development Zone People's Court), it is stated:... The defendant Antelai Company failed to handle the social basic pension insurance premiums for the plaintiff from January 2013 to September 2014, which is illegal and should be paid according to law. However, after writing to the relevant social security department, the court learned that because the defendant did not open a social security account for the employees, and it has been many years since then, the social security department has been unable to complete the social insurance procedures for the plaintiff. Accordingly, in accordance with Article 118 of the General Principles of the People's Republic of China Civil Law, "Civil subjects shall enjoy claims in accordance with the law. Creditor's right is the right of the obligee to request a specific obligor to act or not to do a certain act due to contract, tort, unjust enrichment and other provisions of the law, and Article 1 of the (III) on the interpretation of the Supreme People's Court on Several Issues concerning the application of law in the trial of labor dispute cases, if a dispute arises over a claim for compensation from the employer, the people's court shall accept it." The plaintiff Yang Ping asked the defendant Antelai Company to give corresponding compensation, the court to support..... Case 3: Although the bankrupt enterprise has not opened a social security account for its employees, it confirms the basic old-age insurance and basic medical insurance that should be transferred to the employee's personal account. In Zheng Qishu and Kaili Economic Development Zone Baoheng Real Estate Development Co., Ltd. employee bankruptcy creditor's rights confirmation dispute first instance civil judgment ((2019) Qian 26 Minchu No. 122, Guizhou Qiandongnan Miao and Dong Autonomous Prefecture Intermediate People's Court) stated:... On whether Baoheng Housing Development Company should deposit endowment insurance and medical insurance for Zheng Qishu. The Social Insurance Law stipulates that employees shall participate in social insurance, and employers and employees shall jointly pay basic old-age insurance premiums and basic medical insurance premiums in accordance with state regulations. Therefore, Baoheng Housing Development Company for the company's employees Zheng Qishu to pay basic old-age insurance premiums, basic medical insurance premiums is its legal obligation. Because Baoheng Housing Development Company did not go to the social insurance department to open a personal insurance account for Zheng Qishu and pay insurance premiums, Zheng Qishu requested to confirm that Baoheng Housing Development Company enjoys the basic pension insurance premiums and basic medical insurance premiums that should be transferred to the personal account, Should be supported...... Case 4: The bankrupt enterprise has not opened a social security account for its employees and cannot confirm the basic old-age insurance and basic medical insurance that should be transferred to the employee's personal account. The civil judgment of the second instance of the dispute over the confirmation of bankruptcy claims between Gao Ruifeng and Weihai Chengxin Medical Science and Technology Development Company ((2014) Weimin San Zhong Zi No. 160, Weihai Intermediate People's Court of Shandong Province) states: ...... On the personal issue of whether the basic old-age insurance and basic medical insurance expenses that should be transferred to the employee's personal account should be paid to the appellant Gao Ruifeng, Article 48, paragraph 2 of the Bankruptcy Law stipulates, the wages and medical, disability subsidies, and pension expenses owed by the debtor to the employees, and the basic pension insurance and basic medical insurance expenses that should be included in the employee's personal account, shall be listed and publicized by the administrator after investigation. This article determines that the basic old-age and basic medical insurance expenses owed by the bankrupt enterprise that should be transferred to the employee's personal account shall be the employee's claim, but the amount shall be transferred to the employee's personal account and not directly paid to the employee himself. Therefore, the appellant Gao Ruifeng's request to pay the money directly to his personal lack of legal basis, the original trial on this basis to reject his claim is not improper, should be maintained in accordance with the law. What the author needs to explain is that the above path 1 occurred before, and each place issued a one-time pension insurance premium policy (taking Shandong Province as an example, on December 31, 2019, Shandong Provincial Department of Human Resources and Social Security, The Shandong Provincial Department of Finance jointly issued the "Notice on Improving the Basic Pension Insurance Payment Policy for Employees" (Luren Social Regulation [2019] No. 13), stipulating that bankrupt enterprises owe pension insurance premiums, it shall be paid off in accordance with the provisions in the income from the realization of the assets of the bankrupt enterprise. If there are still arrears after the assets are realized and paid off, for the part of the arrears that cannot be paid off, after the employee's personal payment and the enterprise's payment should be transferred to the employee's personal account (including interest), the bankrupt enterprise liquidation team can hold the court's bankruptcy ruling, The enterprise's assets and liabilities statement and other materials, apply to the social insurance agency in the insured place to write off the basic pension insurance premiums in arrears...) When the bankrupt enterprise has not opened a social insurance account for employees, A one-time payment of basic old-age insurance can be made. Path 2: When a bankrupt enterprise does not open a social security account for its employees, it can pay back pension insurance for their employees, but cannot pay back medical insurance. 1. Since the implementation of the "Notice on Improving the Basic Pension Insurance Payment Policy for Employees" (Luren She Gui [2019] No. 13), when a bankrupt enterprise has not opened a social security account for its employees, it can make a one-time payment of pension insurance. The basic approach is: If the basic pension insurance is paid as an employee of the unit, the unit generally submits a written application and provides proof materials that can prove the labor relationship between the employee and the unit, such as labor contracts, employee rosters, wage payment vouchers, etc., employee identification documents, etc. Among them, if the one-time payment exceeds three years, legal documents issued by the people's court, the audit department, the administrative department implementing labor supervision or the labor and personnel dispute arbitration committee shall be provided. According to this provision, when the bankrupt enterprise does not open a social security account for its employees, it can pay back the old-age insurance. 2. At present, there is no relevant policy to support bankrupt enterprises to pay back medical insurance for employees when they have not opened medical insurance accounts for employees. After the author consulted a number of medical insurance institutions, medical insurance institutions feedback in the bankrupt enterprises did not open medical insurance accounts for employees, can not pay medical insurance for employees. Concluding remarks It is the legal obligation of the employer to pay social insurance for its employees in accordance with the law, and it shall not be exempted because the employer is in any situation. Under the current one-time supplementary pension insurance system, employers should open social security accounts for employees in a timely manner, pay social insurance, protect the legitimate rights and interests of employees in a timely manner, and avoid the problem of later payment of arrears and late fees.

2023-02-21

Viewpoint | Choice of SOE Procurement

Procurement is an important link in the business activities of state-owned enterprises, and it is also a key link in risk-prone. The special status and role of state-owned enterprises in China's national economy make them have the characteristics of commercial and public welfare at the same time, and the procurement of state-owned enterprises also has the dual attributes of enterprise procurement and public procurement. Fairness and efficiency are important aspects that should be considered in the procurement of state-owned enterprises. The second paragraph of Article 18 of the interim measures for the Administration of State-owned Capital and Finance of Enterprises (Caiqi [2001] No. 325) stipulates: "the procurement of bulk raw and auxiliary materials or commodity materials, the purchase and construction of fixed assets, and the construction of projects shall generally be carried out in accordance with the principles of openness, fairness and fairness, and shall be carried out by way of bidding," which points out the basic principles that should be followed in the procurement of state-owned enterprises. With the development of the times and the increasing internal demand of enterprises to improve quality and efficiency, the procurement of state-owned enterprises should not only ensure fairness and justice, effectively prevent risks, but also reduce procurement costs and improve procurement efficiency. Among them, according to the specific situation of procurement and the characteristics of different procurement methods, flexible selection of appropriate procurement methods is one of the procurement strategies, but also in the procurement of state-owned enterprises to achieve fairness and efficiency in the coordination of an important way. Relevant documents 1. the procurement of state-owned enterprises A prominent problem in the field of state-owned enterprise procurement is the lack of applicable laws and regulations. The "Tendering and Bidding Law" and the "Government Procurement Law" do not fully cover the procurement activities of state-owned enterprises. The administrative regulations of the department on the procurement of state-owned enterprises are relatively general and the operability is not strong. In this case, the China Federation of Logistics and Purchasing, together with several research institutions and state-owned enterprises, has successively formulated the "State-owned Enterprise Procurement Operation Specification" (T/CFLP 0016-2019) and the "State-owned Enterprise Procurement Management Specification" (T/CFLP 0027-2020). The former stipulates the procurement process and general requirements of state-owned enterprises, as well as the general conditions and procedural rules of various procurement methods, the latter stipulates the management structure, procurement implementation, performance evaluation, supervision and management of state-owned enterprises. The two complement each other and are used together to form the system guidelines for the procurement management and operation of state-owned enterprises, and fill the state-owned enterprise procurement regulations. Blank. Contents and Methods of Procurement of State-owned Enterprises in 2. According to the Code of Practice for Procurement of State-owned Enterprises (T/CFLP 0016-2019) and the Code of Management for Procurement of State-owned Enterprises (T/CFLP 0027-2020), the procurement of state-owned enterprises includes project procurement and operational procurement. Project procurement refers to the procurement activities implemented to achieve the established objectives of enterprise project management, which is an important part of project management, such as engineering projects, technical transformation projects, equipment and facilities projects, one-time operation and maintenance projects of enterprises and other procurement activities. Its characteristics are one-time and systematic. Operational procurement refers to the repetitive procurement activities implemented to meet the objectives of enterprise operation and management and maintain daily business activities, which is an important part of enterprise operation and management. Operational procurement can be further divided into operational procurement directly related to production and operational procurement indirectly related to production. The former such as enterprise raw materials, accessories procurement, parts, components, assembly procurement, daily production maintenance and other procurement activities. The latter such as consulting services, labor services, information services, warehousing services and other procurement activities. The procurement methods of state-owned enterprises mainly include bidding procurement, bidding procurement, consulting procurement, cooperation negotiation, competition negotiation, competition negotiation, single-source direct procurement and multi-source direct procurement. For different procurement content, the applicable procurement methods are also different. Article 7.3.1 of the "State-owned Enterprise Procurement Management Code" stipulates the principle of selecting procurement methods, that is, enterprises should choose the corresponding procurement methods according to the characteristics of the project. The Choice of Purchasing Methods of 3. State-owned Enterprises (I) bidding procurement 1. Compulsory bidding system Since bidding procurement can enable many bidders to participate in fair competition, encourage tenderers to obtain the best goods, projects or services at the lowest or lower price, ensure the reasonable and effective use of state-owned funds and other public funds, and improve economic and social benefits, certain types of procurement projects within the scope of the law, or procurement projects that reach a certain scale, must be purchased through bidding. The relevant legal provisions of the compulsory bidding system mainly include the "Tendering and Bidding Law", "Regulations on the Implementation of the Tendering and Bidding Law", "Provisions on Projects that Must Be Tested", "Provisions on the Scope of Infrastructure and Public Utilities Projects That Must Be Tested", etc. The above provisions delineate the scope of application of compulsory bidding procurement from the dimensions of procurement object, project type, source of funds, procurement scale, etc. (1) Purchase object dimension The procurement object of compulsory bidding is the construction project. According to Article 2 of the Regulations on the Implementation of the Bidding and Bidding Law, construction projects refer to projects and goods and services related to project construction. The project refers to the construction project, including the new construction, reconstruction, expansion of buildings and structures and related decoration, demolition, repair, etc.; the goods related to the construction of the project refer to the equipment and materials that constitute an integral part of the project and are necessary for the realization of the basic functions of the project; the services related to the construction of the project refer to the survey, design, supervision and other services required for the completion of the project. According to the second paragraph of Article 2 of the "Regulations on the Quality Management of Construction Projects", construction projects refer to civil engineering, construction projects, pipeline and equipment installation projects and decoration projects. (2) Item Type Dimension The provisions on the scope of compulsory bidding from the project type dimension are mainly reflected in the Provisions on the Scope of Infrastructure and Public Utilities Projects that must be tendered. According to the regulations, energy infrastructure projects, transportation infrastructure projects, communication infrastructure projects, water conservancy infrastructure projects, urban rail transit and other urban construction projects are related to social public interests and public safety, and must be tendered in accordance with the law. (3) Funding source dimension From the perspective of the source of funds, all or part of the use of state-owned funds investment or state financing projects and the use of international organizations or foreign government loans, aid funds projects must be tendered in accordance with the law. The provisions of Article 2 of the "Regulations on Engineering Projects that Must Invest in Bidding" are further refined. Projects that use state-owned funds or state financing in whole or in part refer to projects that use budget funds of more than 2 million yuan and the funds account for more than 10% of the investment. Projects in which state-owned enterprises and institutions have funds that hold a controlling or dominant position. Projects using loans and aid funds from international organizations or foreign governments refer to projects using loans and aid funds from international organizations such as the World Bank and the Asian Development Bank, as well as projects using loans and aid funds from foreign governments and their institutions. (4) Procurement scale dimension The provisions on the scope of compulsory bidding from the dimension of procurement scale are mainly reflected in the Provisions on Projects that Must Be Tested. The estimated price of construction single contract is above 4 million yuan, the estimated price of procurement single contract for important equipment, materials and other goods is above 2 million yuan, the estimated price of procurement single contract for survey, design, supervision and other services is above 1 million yuan, and the procurement of survey, design, construction, supervision and important equipment and materials related to engineering construction can be combined in the same project, if the total estimated contract price meets the standards specified in the preceding paragraph, bidding must be conducted. 2, may not bid the statutory circumstances In the presence of statutory circumstances, even if the project falls within the scope of the compulsory bidding system, it may not be tendered in accordance with the law. According to the Law on Tendering and Bidding, the Regulations on the Implementation of the Law on Tendering and Bidding, and the Measures for Tendering and Bidding for Construction Projects, it mainly includes the following situations: (1) Special projects involving national security, state secrets, emergency rescue and disaster relief; (2) It belongs to special circumstances such as the use of poverty alleviation funds to implement work-for-work relief and the need to use famous agricultural workers; (3) The need to adopt irreplaceable patents or know-how; (4) The purchaser can construct, produce or provide on its own according to law; (5) The franchise project investors who have been selected through bidding can build, produce or provide on their own in accordance with the law; (6) It is necessary to purchase works, goods or services from the original winning bidder, otherwise it will affect the construction or functional supporting requirements; 3. Special provisions for invitation to tender Where there are statutory circumstances, projects that should be subject to public bidding in accordance with the law may be invited to tender. According to the "Regulations on the Implementation of the Bidding Law" and the "Measures for Bidding and Bidding for Construction Projects", the following situations are mainly included: (1) Technical complexity, special requirements or limited by the natural environment, only a small number of potential bidders to choose from; (2) The cost of using the open tender method accounts for an excessive proportion of the project contract amount; (3) Construction projects involving national security, state secrets or emergency rescue and disaster relief are suitable for bidding but not for public bidding. 4. Voluntary bidding Due to the positive role of bidding in promoting fair competition, regulating transaction behavior, and enhancing economic benefits, the purchaser can voluntarily choose bidding as a procurement method for projects that are not required by law. It is applicable to procurement projects with clear procurement requirements, competitive conditions for the subject matter of the procurement, permitted procurement time, open procurement costs, and reasonable bidding transaction costs. (II) bidding inquiry ratio procurement 1. Bidding procurement Competitive procurement refers to the procurement needs are clear, the purchaser in accordance with the established rules and methods of one or more price comparisons to finalize the procurement of the contract counterpart. Competitive procurement is applicable to procurement with clear procurement needs, uniform specifications and models, sufficient supply, stable price or clear price formation mechanism. Among them, the procurement that allows one quotation shall be the procurement of goods that are not individually customized or provided to the purchaser, and the value of the existing fixed market is not high and the frequency is not high; the procurement that allows multiple quotations also includes the procurement of goods or services with competitive conditions customized for the enterprise. The purchaser shall, to the extent feasible, purchase relatively low-value procurement items from as many suppliers as possible through competitive bidding. State-owned enterprises need to pay attention to the differences between the bidding (inquiry) procedures stipulated in the Government Procurement Law: First, the purchaser can form a review team according to the complexity and technical requirements of the project, and whether it is necessary to hire experts from the enterprise advisory expert committee to participate in the review team is decided by the purchaser; Second, state-owned enterprises can require suppliers to quote once and cannot change the quotation, or can allow multiple quotations according to regulations; third, the receipt of only one or two quotations without exceeding the procurement budget cannot be considered invalid. 2. Inquiry and procurement Inquiry procurement refers to a procurement method in which the procurement requirements are clear and the purchaser allows the bidder to quote multiple times in accordance with the established procedures and finally determine the contract counterpart after evaluation. If one of the following conditions is met, the inquiry-based procurement method can be adopted:(1) projects, goods and services that have clear procurement requirements but do not meet the bidding conditions, including small and medium-sized projects that are not subject to bidding within the enterprise, a few projects with strong confidentiality that are not suitable for public bidding or invitation to bid, and projects that are located in remote areas and few construction units come to bid. (2) small and medium-sized simple projects after the failure of the tender. The characteristics of inquiry ratio procurement are that it has certain flexibility on the basis of maintaining competitiveness, and the procedures are simpler and more efficient. In the process of inquiry ratio procurement, the purchaser inquires, compares, communicates and negotiates with suppliers on various procurement factors and content details, and can also modify non-substantive terms and require suppliers to re-quote to maximize their own interests. 3 The difference between the two For example, both methods require clear procurement requirements and apply to standardized, simple and low-value procurement projects. The difference is that competitive procurement is more suitable for low-value goods with a higher degree of standardization and less frequent procurement, and that the requirements for standardization of the subject matter are lower than those for competitive procurement, and are generally applicable to works, goods and services. In addition, the focus of competitive procurement is on "price", that is, price competition on the premise of meeting demand; the focus of inquiry procurement is to select the best solution through dialogue and comparison, and to compete on this basis. Negotiate procurement (III) consultation 1. Negotiations on cooperation Cooperative negotiation refers to the procurement method in which the procurement needs are clear but the bidding conditions are not available, and the contract for goods or services can only be signed with the supplier through negotiation and the strategic partnership can be established. The cooperative negotiation procurement method can be adopted if one of the following conditions is met:(1) Procurement that requires long-term stable supply and cannot be met by bidding or other procurement methods. (2) Need to communicate face-to-face with specific suppliers to negotiate long-term cooperation in procurement. Cooperative negotiation is the main way of enterprise strategy negotiation. Generally applicable to the procurement of strategic materials, bottleneck materials or supply chain needs. Especially when it comes to strategic materials, bottleneck materials or negotiations with the only supplier, the purchaser's position is at a disadvantage, at this time should pay attention to prevent procurement risks, such as limiting the contract share of the largest supplier, establishing a long-term mechanism for material reserves, and actively formulating emergency plans to find alternative partners. Especially for state-owned enterprises, there are many external unstable and uncertain factors such as global epidemics, economic and trade policy adjustments in major countries, and even political conflicts in some countries, which have a great impact on the import customs clearance and logistics of key raw materials and important parts of enterprises. Under the background of the era, supply chain thinking should be used to strengthen procurement management and improve work, prevent procurement risks, and ensure the safety and stability of the supply chain. 2. Competition negotiations Competitive negotiation means that the purchaser negotiates with qualified suppliers on the procurement of projects, goods or services with clear procurement functional requirements and certain competitive conditions, the suppliers submit response documents and final quotations in accordance with the requirements of the negotiation documents, and the purchaser determines the procurement method of the transaction person from the candidates proposed by the negotiation team. Competition negotiation can be adopted if one of the following conditions is met:(1) there is an urgent need for the subject matter of procurement, and it is difficult to meet the production and operation needs of the enterprise by bidding or other procurement procedures, and the urgent need is not caused by the delay or predictability of the purchaser;(2) it is difficult to meet the needs of the purchaser by bidding or other procurement procedures for catastrophic events or favorable business opportunities;(3) the purchaser determines, other procurement methods are not suitable for protecting the basic national security or the core interests of the enterprise. Competition negotiation, a procurement method, is mainly used to solve problems such as time-critical and urgent needs. Unlike cooperative negotiations, competitive negotiations require certain competitive conditions and strict procedures. 3. Competition consultation Competitive negotiation refers to the complex projects with vague procurement requirements or requiring suppliers' opinions and certain competitive conditions. The purchaser and qualified suppliers discuss and negotiate on the procurement of projects, goods and services, and finally improve and determine the procurement documents and contract terms. The purchaser conducts financial negotiations with suppliers in turn according to the negotiation report and negotiation order submitted by the consultation group after evaluation, the first supplier to reach an agreement is the supplier's procurement method. Meet one of the following conditions

2023-02-20

Real Estate Perspective | How to understand the accompanying information requirements for the delivery of commercial housing?

The delivery of commercial housing has a very important legal significance in the contract of sale of commercial housing, and it is also one of the main obligations of real estate developers to fulfill the contract of sale of commercial housing. For the delivery requirements of commercial housing, many laws and regulations or local normative documents in China have corresponding provisions or guiding requirements. However, up to now, there are still many disputes about the delivery of commercial housing, which lead to endless disputes about the delivery of commercial housing. Among them, there are not only the reasons of substantive delivery conditions, such as unqualified quality of commercial housing, infrastructure not meeting the needs of basic living functions, but also the reasons of formal delivery conditions, such as the real estate developer did not make a written delivery notice, did not provide housing mapping reports and other delivery accompanying information. From the perspective of real estate developers, how to understand and meet the accompanying information requirements of commercial housing delivery, this paper will discuss and analyze related issues. Common types of accompanying materials According to the legal provisions of our country and the common agreements in commercial housing sales contracts, real estate developers usually need to show or provide the following accompanying materials when delivering houses: 1. Completion acceptance filing documents; 2. "Residential quality Guarantee" and "Residential use Manual" (commonly referred to as "two books");3. Housing surveying and mapping report; 4. Written delivery notice. The above-mentioned accompanying materials have certain independent value, which is not only based on legal provisions and contractual agreements, but also as important evidence for real estate developers to meet the substantive delivery conditions. Completion acceptance filing documents with data Article 61 of the "Construction Law" stipulates: "A construction project can only be delivered for use after it has been completed and accepted; if it has not been accepted or failed, it shall not be delivered for use." Article 16 of the Regulations on the Quality Management of Construction Projects stipulates: "Construction projects can only be delivered for use after they have been completed and accepted." Article 27 of the "Urban Real Estate Management Law" stipulates: "Real estate development projects can only be delivered for use after they have been completed and passed the acceptance." Article 17 of the regulations on the Management of Urban Real Estate Development and Operation stipulates: "after the completion of a real estate development project, it can be delivered for use only after it has passed the acceptance in accordance with the regulations on the quality Management of Construction projects." According to the above provisions, it can be seen that the completion acceptance is the basic delivery condition clearly stipulated by law. The quality of commercial housing and the construction of supporting facilities are related to the safety of people's lives and property and living and working in peace and contentment, so the government needs to manage them effectively. The completion acceptance filing document is the result of the construction administrative department's decision to approve the filing after reviewing the application materials and project status of real estate developers, which has high credibility, therefore, the filing documents for the completion and acceptance of commercial housing issued by it are an important basis for proving that the commercial housing has passed the acceptance. In judicial practice, many courts will obtain the completion acceptance filing documents as the legal minimum delivery conditions for the delivery of construction projects. Residential Quality Guarantee with Data and "residential use instructions" Article 30 of the "Regulations on the Management of Urban Real Estate Development and Operation": "Real estate development enterprises shall provide the purchaser with a residential quality guarantee and a residential instruction manual when the commercial housing is delivered for use." Article 3 of the provisions on the system of residential quality guarantee and residential use instructions for commercial residential buildings: "when real estate development enterprises deliver new commercial residential buildings for sale to users, they must provide residential quality guarantee and residential use instructions." Article 10 of the provisions on the implementation of the residential quality guarantee and residential instruction manual system for commercial housing: "the residential quality guarantee and the residential instruction manual shall be provided to the user at the same time when the residence is delivered to the user." "Shandong Province New Commercial Housing Sales Contract (presale) Model Text" Article 9 Commercial Housing Delivery Conditions: "If the commercial housing is residential, the seller must also provide the" Residential Use Manual "and" Residential Quality Guarantee ". Based on the above provisions, it can be seen that the "Residential Quality Assurance" and "Residential User Manual" provided by real estate developers are mandatory provisions of administrative regulations and rules, and there are usually similar clear agreements in commercial housing sales contracts, and real estate developers should strictly abide by them. In judicial practice, some local courts believe that if real estate developers cannot provide both the "Residential Quality Guarantee" and the "Residential User Manual" at the time of delivery, they should bear the responsibility for overdue delivery. For example, the "Anhui Higher People's Court" Article 1, paragraph 6 of the Guiding Opinions on the Application of Legal Issues in the Trial of Disputes over Housing Sales Contracts states: "The house purchase and sale contract stipulates that the seller must provide documents such as the" Residential Quality Guarantee "and" Residential Use Manual "when delivering the house. If the seller fails to provide the above documents when actually delivering the house, the buyer has the right to refuse to accept the house". Housing Surveying and Mapping Report with Data Article 34, paragraph 1, of the "Measures for the Administration of Commercial Housing Sales" stipulates: "Real estate development enterprises shall entrust units with real estate surveying and mapping qualifications to carry out surveying and mapping according to the project before the commercial housing is delivered for use. The surveying and mapping results are reported to the real estate administrative department for review and used for housing ownership registration." Article 9 of the Model Text of Sales Contract (presale) for Newly-built Commercial Housing in Shandong Province: "Conditions for the delivery of commercial housing: the commercial housing shall meet the following conditions when it is delivered:... 2. The commercial housing has obtained the housing surveying and mapping report". Based on the above provisions and agreements, it can be seen that there is no mandatory law to stipulate that the housing surveying and mapping report is one of the delivery conditions, but the provision of housing surveying and mapping report is usually one of the delivery conditions clearly agreed in the commercial housing sales contract. Based on the principle of agreement priority, if the real estate developer fails to provide the housing surveying and mapping report as agreed upon when the commercial housing is delivered, some local courts will tend to think that the agreed delivery conditions are not met, the buyer has the right to require the real estate developer to bear the liability for breach of contract on the grounds that it does not meet the delivery conditions stipulated in the contract. Notice of written delivery of accompanying information Article 8, paragraph 2, of the "Judicial Interpretation of Commercial Housing Sales Contracts" stipulates: "If the buyer receives the seller's written delivery notice and refuses to accept it without proper reasons, the risk of damage or loss of the house shall be determined from the written delivery notice. The buyer shall bear the date of use, unless otherwise provided by law or otherwise agreed by the parties." The (II) paragraph of Article 9 of the "Model Text of the Sales Contract (presale) for Newly Built Commercial Housing in Shandong Province": "After the commercial housing meets the delivery conditions agreed in Articles 9 and 10, the seller shall, before the expiration of the delivery date (not less than 10 days), deliver the notice of the time of inspection of the house, the time and place of handling the delivery formalities and the documents and materials that should be carried to the buyer (postal express, registered mail, SMS, e-mail, etc.)." In judicial practice, many local courts believe that the real estate developer, as the owner of the commercial housing, is the first responsible subject of whether the housing has been completed, whether the completion acceptance is qualified and the delivery conditions are met. The buyer can only confirm the specific handover time of the commercial housing after receiving the written notice from the real estate developer. Therefore, the "written delivery notice" is the obligation of the real estate developer, it will lead to the buyers not knowing the specific time of house collection and unable to collect the house in time. This inaction damages the interests of the buyers and should bear the corresponding liability for breach of contract according to law. The author thinks that the above point of view is questionable, commercial housing sales contract usually has a clear agreement on the delivery time of the house, and the delivery location, based on the characteristics of real estate can be judged to be the location of the commercial housing, so whether the buyer receives a written notice of delivery will not substantially damage the rights and interests of buyers. However, as one of the important evidences for real estate developers to fulfill their delivery obligations on time, and written notice also marks the milestone significance of starting to fulfill their delivery obligations, the author still suggests that real estate developers attach great importance to the performance management of written delivery notice. Proposals for delivery of accompanying materials by real estate developers After the commercial housing has met the substantive delivery conditions stipulated in the law and the contract, the accompanying materials mentioned in this article should not be taken lightly. It is suggested that real estate developers should do a good job in relevant delivery management in the following aspects: 1. Apply to the construction administrative department in time for completion acceptance filing and obtain relevant filing documents before delivery; 2. Send written delivery notice to the buyer according to the address agreed in the commercial housing contract in time, and properly retain relevant delivery documents; 3. When handing over the house to the buyer, the real estate developer shall show the completion acceptance filing documents to the buyer, provide the "Residential Quality Assurance", "Residential Use Manual" and the housing surveying and mapping report, and show and hand over the above documents one by one Confirm and record.

2023-02-14

Viewpoint... Cross-border financing observation-the new rules on foreign debt take effect tomorrow, where are the changes? (I).

On January 5, 2023, the National Development and Reform Commission issued Order No. 56, officially promulgating the "Administrative Measures for the Examination and Registration of Medium and Long-term Foreign Debt of Enterprises" (hereinafter referred to as the "Measures"). The "Measures" will come into effect on February 10, 2023. Since its implementation in 2015, the "Notice of the National Development and Reform Commission on Promoting the Reform of the Registration System for the Registration of Foreign Debt Issued by Enterprises" (hereinafter referred to as "Document No. 2044") will be invalidated and abolished at the same time, marking a new era in the supervision of corporate foreign debt issuance. The Measures have six chapters and 37 articles. Compared with Document No. 2044, it reflects the policy guidance of improving the management system, improving the quality and level of management, and effectively preventing foreign debt risks, improving the management of overseas bond issuance, and strengthening monitoring and risk early warning. While strongly supporting enterprises to use global resource elements to expand domestic and foreign business, it has also played a positive role in optimizing the maturity structure of full-caliber foreign debt and effectively preventing foreign debt risks. This paper compares some of the highlights of the Measures with Document 2044 and attempts to make a brief analysis. 1. "notice" becomes "method" The nature of document No. 2044 is a "notice" and a normative document, while the National Development and Reform Commission clearly defined the "measures" as departmental regulations in answering reporters' questions on the "measures for the examination and Registration of medium-and long-term Foreign debts of Enterprises," and its effectiveness has been improved. 2. "record registration" adjusted to "audit registration" Document No. 2044 adopts the "record registration system management" for the issuance of foreign debt of enterprises, while the "measures" implement the "examination and registration management" for the foreign debt of enterprises that meet the conditions ". The difference between the term and the legal nature is different: "record registration" is not an administrative license, but only an act of administrative organ registration for reference; while the "examination and registration" in the "measures" is an administrative license (the annex to the notice of the General Office of the State Council on the comprehensive implementation of the list of administrative license items issued by the State Council No. 2 [2022] clearly lists "examination and approval of medium-and long-term foreign debt borrowing by enterprises" as an administrative license items). Nevertheless, both the "filing" of document No. 2044 and the "examination and registration" of the "measures" have set conditions for substantive examination. The audit criteria for "examination and registration" in the measures have become stricter, coupled with the impact of the rising cost of overseas financing caused by the continuous interest rate hike of the Federal Reserve, on August 26, 2022, after the National Development and Reform Commission issued the measures for the examination and Registration of medium-and long-term Foreign debts of Enterprises (draft for soliciting opinions), the number of overseas debt issuance and the scale of financing decreased significantly in the second half of 2022. 3. audit principles put more emphasis on "risk prevention" Document No. 2044 proposes to implement scale control of foreign debt issued by enterprises in accordance with the principle of "controlling total amount, optimizing structure, and serving entities", strengthen supervision during and after the event, and effectively prevent risks; the "Measures" increase the principle of corporate foreign debt review and registration management to "Control total amount, optimize structure, serve entities, and prevent risks", and delete the expression "expand the scale of corporate foreign debt" in Document 2044. In 2022, a total of 43 entities and $57.6 billion of bonds defaulted, up 95 per cent and 61 per cent respectively from the same period last year; 97 per cent of these were material defaults, 2.5 per cent were technical defaults and 98 per cent were concentrated in the real estate sector. With the country's vigorous rectification of the property market, real estate enterprises limited financing channels, superimposed on the epidemic caused by the property market downturn, the industry is facing severe debt pressure. Rongchuang, Greenland, Shimao, Baolong, Yuzhou, Rongxin, Zhengrong, Xuhui, Zhongliang, Fuli, Longguang, Aoyuan, Hejing Taifu, Jingrui, Hongyang, Sino-Ocean Capital, Jiayuan, Jinke and many other leading real estate enterprises in the US dollar debt default, have taken debt extensions, exchange offers and other ways to save themselves. It is foreseeable that the principle of "risk prevention" will become an important guiding principle for the examination and registration of foreign debt in the future. At present, the main issuers of foreign bonds are concentrated in financial institutions, urban investment and real estate enterprises, unlike real estate enterprises, so far, the credit situation of urban investment dollar bonds is still good, and showing a trend of regional differentiation. In 2022, Zhejiang, Jiangsu and Shandong, the three eastern coastal developed provinces, are the three major urban investment overseas bond issuing provinces, accounting for about 16%, 15% and 14% respectively, accounting for more than 45% in total. The net financing amount has reached more than 100 billion yuan, and the overseas bond issuance market shows a certain concentration trend; while the regions with the largest net repayment scale are Gansu, Guizhou and Yunnan. Substantial change in 4. review conditions: bonds can also be issued in the event of a default. According to Article 3 of Document No. 2044, the issuance of foreign debt by an enterprise shall meet the following basic conditions: a good credit record and no default on the bonds or other debts issued. It has good corporate governance and foreign debt risk prevention and control mechanism. Good credit standing and strong solvency. The "Measures" added the requirement of "having a reasonable demand for foreign debt funds", which reflects the guiding principle that corporate foreign debt should focus on the main business and service entities; deleted the requirement that "issued bonds or other debts are not in default". "With strong solvency" was changed to "with solvency", giving enterprises more room to borrow foreign debt to save themselves, it reflects the important positioning of the National Development and Reform Commission that "corporate borrowing of foreign debt, especially medium and long-term foreign debt, is an important part of my country's effective use of foreign capital and expansion of two-way opening up. However, it is foreseeable that for companies that have defaulted, the National Development and Reform Commission will conduct a more stringent review of the company's creditworthiness and use of funds. In addition, the "Measures" also added that "the enterprise and its controlling shareholders, and actual controllers have not committed criminal crimes of corruption, bribery, embezzlement of property, misappropriation of property, or disrupting the order of the socialist market economy in the past three years, or are suspected of crimes or major violations of laws According to the requirements of" violations ", the follow-up due diligence of foreign debt issuance intermediaries should increase the relevant scope, relevant sections shall be added to relevant transaction documents and legal documents. 5. scientific delineation of the scope of management, reduce regulatory blind spots 1, clear "indirect borrowing of foreign debt abroad" audit registration. The Measures clarify that these Measures apply to domestic enterprises' indirect borrowing of foreign debt abroad, and also clarify the definition of indirect debt issuance: domestic enterprises' indirect borrowing of foreign debt abroad refers to enterprises whose main business activities are in the country, in the name of enterprises registered overseas, based on the equity, assets, income or other similar rights and interests of domestic enterprises, issuing bonds or borrowing commercial loans abroad. It can be seen that the Measures adopt a more general expression for the supervision of the structure of "indirect bond issuance", which not only brings the indirect bond issuance of red chips and VIE structure into the supervision, but also expands the scope of indirect borrowing of foreign debt that needs to be reviewed and registered to a certain extent, and the transaction structure that meets the characteristics of "indirect bond issuance" is included in the supervision. As for the understanding of "the main business activities are in China" and "based on the equity, assets, income or other similar rights and interests of domestic enterprises", it is necessary to further explain through the government service platform of the national development and Reform Commission to issue the "work guide" and frequently asked questions matching the "management measures". We will also pay close attention to it. 2. Clarify the audit and registration of the issuance structure of overseas SPV and other subsidiaries as issuers. In practice, it is very common for domestic parent companies to set up SPV and other subsidiaries abroad as the issuance structure of overseas bond issuers, and there is no doubt about the filing and examination of this structure. However, the Measures further clarify this: Article 2 of the Measures defines the foreign debts that need to be examined and registered as debt instruments of more than one year borrowed by "domestic enterprises and their controlled overseas enterprises or branches, and the definition of" control ":" the control referred to in these measures refers to the direct or indirect ownership of more than half of the voting rights of the enterprise, or although it does not have more than half of the voting rights, but can control the operation, finance, personnel, technology and other important matters of the enterprise." 6. Application Procedure Optimization 1. Application subject optimization: no longer distinguish between group headquarters and local enterprises According to Article 11 of the Measures, the "headquarters of domestic holding enterprises" shall apply to the examination and registration authority. The distinction between group headquarters and local enterprises is no longer made in accordance with article 2044. To a certain extent, the new regulations are conducive to the unified management of enterprise groups and promote the further optimization of the foreign debt management of the NDRC. 2. The audit time limit was extended from 7 working days to 3 months The "Measures" extend the time limit for issuing a registration certificate from 7 working days after acceptance to 3 months from the date of acceptance (the time taken to complete the review and registration materials is not counted in the time limit for review and registration). It should be noted that at present, there are two time points for foreign debt registration of safe. First, as required on page 8 of the operational guidelines for the administration of foreign debt registration, foreign debt registration procedures shall be handled at the local foreign exchange bureau within 15 working days after the signing of the foreign debt contract; second, as stipulated in Article 10 of the notice of the people's Bank of China on matters related to macro Prudential Management of full caliber cross-border financing, the enterprise shall, after the signing of the cross-border financing contract but no later than 3 working days before the withdrawal, file the signing of the cross-border financing with the capital project information system of the State Administration of Foreign Exchange. Under the condition that the "Measures" clearly require the "Audit Registration Certificate" for foreign exchange registration, the three-month audit period may have problems with the handling of SAFE procedures. The timing of the issuance is worthy of the attention of relevant entities, and the timetable should be planned in advance. 7. strengthens the management of the use of foreign debt funds, and makes the use of foreign debt funds more flexible. The new regulations put forward a positive orientation and negative list of the use of foreign debt, and focus on guiding enterprises to use foreign debt funds from both positive and negative aspects. As an answer to the old regulation, item 47 points out that the use of foreign debt funds should meet the following conditions:(1) do not violate China's laws and regulations;(2) do not threaten or harm China's national interests and economic security;(3) do not violate China's macroeconomic control objectives;(4) do not violate China's relevant development plans and industrial policies;(5) shall not be used to make up for losses and non-productive expenditures;(6) Except for banking financial enterprises, they may not lend to others ". In this regard, the "Notice" has made many adjustments:(1) For the requirement that financial enterprises other than banks are not allowed to lend to others, if "the relevant information has been stated in the application materials for foreign debt review and registration and approval", they can lend. However, the extent to which enterprises need to explain whether such lending constitutes a major change in the use of raised funds and triggers the change application obligation stipulated in Item (II) of Article 18 of the measures still needs to be explored in practice;(2) delete the requirement of "not to be used to make up for losses and non-productive expenditures" and add the requirement of "not to be used for speculation, speculation and other acts". On the whole, the new regulations not only allow to make up for losses, the scope of "speculation and speculation" is also smaller than that of "non-productive expenditure", and the use of enterprise funds is more flexible;(3) the provision of "no new hidden debts of local governments" is added, once again, it is clearly stated that the state has repeatedly emphasized in many documents, such as Guofa [2014] No. 43, Guobanfa [2015] No. 40, FGFFEI [2018] No. 706, FGFEI [2019] No. 666, FGFEI [2018] No. 27, and FBC [2021] No. 15, who borrows and pays back the debts of state-owned enterprises, the local finance is not guaranteed, and the local government is only limited. Guiding Principles of Responsibility. Compared with document No. 2044, on the basis of repeatedly emphasizing the encouragement of foreign debt funds to flow to national key strategies and key projects, the new regulations emphasize that "enterprises can make independent decisions to apply foreign debt funds at home and abroad according to their own credit situation and actual needs." it defines the basic attitude of regulators on the free use of foreign debt funds within the legal scope, which can be mutually confirmed with the content of the new regulations mentioned in this article to expand the scope of capital lending. The 8. clearly states that foreign exchange registration requires a Certificate of Audit and Registration. Document No. 2044 only requires enterprises to go through relevant procedures such as inflow and outflow of foreign debt according to regulations on the basis of the filing registration certificate, but does not clearly specify the registration of foreign debt. Article 17 of the Measures specifies that foreign exchange registration must be handled by means of the Examination and Registration Certificate: enterprises shall go through relevant procedures such as foreign exchange registration, account opening, fund receipt and exchange, and fund use according to regulations on the basis of the Examination and Registration Certificate. For enterprises that fall within the scope of management of these Measures but have not obtained the "Examination and Registration Certificate", the relevant departments will not handle the relevant procedures, and financial institutions will not handle the relevant business. 9. takes information disclosure as the core and compacts the main responsibility of all parties. Document No. 2044 stipulates that "within 10 working days after the end of each issue, the issuance information shall be submitted to the National Development and Reform Commission", and the "Measures" greatly enriched the requirements for information disclosure: First of all, the time and content of the post-event submission are clarified. The enterprise shall, within 10 working days after borrowing each foreign debt, submit the information of borrowing foreign debt to the examination and registration authority through the network system, including the main business indicators of the enterprise and the situation of foreign debt borrowing, etc.; within 10 working days after the expiration of the validity period of the examination and registration certificate, the corresponding foreign debt borrowing situation shall be submitted. The term "after borrowing foreign debt" refers to the exercise of the right of the enterprise to withdraw foreign debt funds (the completion of the delivery of foreign bonds or each withdrawal of commercial loans); Secondly, a reporting system for major events has been added, and for major situations that may affect the normal performance of debts, such as domestic and foreign debt repayment risks or major asset restructuring, enterprises should promptly report relevant information and take risk isolation measures to prevent spillover and cross-default risks of domestic bond default risks; Third, a new periodic reporting system has been added. Enterprises should report to the examination and registration authority through the network system the use of foreign debt funds, the payment of principal and interest, the planned arrangement, and the main business indicators within five working days before the end of January and July each year; Fourth, the obligation of overseas investigation and reporting has been increased. If enterprises or relevant intermediary agencies need to cooperate with overseas regulatory agencies for inspection or investigation due to borrowing foreign debts, and involve national security or public interests, they should report to the relevant domestic authorities in advance. 10. Enhance Change Regulation According to the "Measures", after the completion of the foreign debt review and registration, if the currency of the foreign debt to be borrowed or the type of debt instrument changes, the use of the raised funds changes significantly, or other circumstances that require major adjustments to the relevant content of the "Review and Registration Certificate" occur, the enterprise shall apply to the review and registration authority for changes before the relevant circumstances occur; and Document 2044 only stipulates, "When there is a large difference between the actual situation of the issuance of foreign debt by an enterprise and the registration of the record, it shall be explained when the information is submitted". 11. Other changes in the Measures In addition to the above changes, the Measures have also made many changes to the external debt audit and registration process, such as the addition of a mechanism for the completion of audit materials, the parallel submission of network systems and paper materials, the refinement of the content of debt instruments, the enhancement of the responsibilities of enterprises and intermediaries, etc., which we will discuss in subsequent articles. Conclusion: winter and spring, looking ahead to the bond market in 2023 In 2022, a total of about $104.8 billion million of Chinese dollar-denominated debt will be issued, down 57% from 2021; Bloomberg Chinese Dollar-denominated Debt Investment Grade Index, Bloomberg Chinese Dollar-denominated Debt High Yield Index

2023-02-10

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

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

2022-07-05

Real estate perspective: can the construction team claim the project cost or labor cost from the employer?

Presentation of 1. issues In the judgment documents, the concept of "construction team" is often mentioned, and it is often combined with "actual constructors", "contractors" and "migrant workers. "Actual builder" refers to the contractor of invalid construction project construction contract, I .e. the contractor of illegal professional project subcontracting and labor operation subcontracting contract, sub-contractor and qualified constructors (affiliated constructors); The non-professional term "contractor" refers to the individual contractor who does not have the qualification of the main body of employment, who obtains the project through subcontracting and illegal subcontracting, and illegally solicits migrant workers for labor operations, pay labor remuneration to migrant workers, so as to form the smallest organizational unit in project management-"construction team" with migrant workers ". As mentioned above, the "construction team" and the contractor are at least separated by the "contractor", "actual builder" and "construction general contractor. Then, whether the "construction team" has the right to claim the project price or labor cost to the employer? If so, what is the basis for its claim? This paper intends to analyze the view of judicial judgment. 2. view of judicial adjudication There are generally three views on whether the construction team should be supported to claim the project price or labor cost from the contractor in judicial practice: first, the construction team does not belong to the actual builder in the legal sense, and has no right to require the contractor to bear the responsibility within the scope of the construction project price arrears according to the provisions of Article 43 of the Interpretation of the Supreme People's Court on the Application of Legal Issues in the Trial of Construction Contract Disputes (I) 2020 No; second, the construction team has no right to require the employer to advance the arrears of migrant workers' wages within the scope of the arrears of project funds in accordance with the provisions of Article 29 of the regulations on ensuring the payment of migrant workers' wages; third, the construction team has the right to require the employer to advance the arrears of migrant workers' wages within the scope of the arrears of project funds. The specific views of the referee are as follows: (I) construction team does not belong to the actual construction person in the legal sense, does not enjoy the right to break through the relativity of the contract, and requires the contractor to bear the responsibility within the scope of the price of the construction project. For example, (2019) Supreme Famin Shen No. 5594 Judgment holds that:&hellip; Peng Yunrui is the actual builder of Huai'an Mingfa Commercial Plaza project;&hellip; Le Dianping is the head of the mud team in the C block project of Huai'an Mingfa Commercial Plaza contracted by Peng Yunrui&hellip; The relationship between Le Dianping and Peng Yunrui is the labor legal relationship, and Le Dianping (team) is the personnel employed by Peng Yunrui to engage in mud labor service, not the actual construction person in the legal sense mentioned above, ...... Le Dianping requested Huai'an Mingfa Company, the contractor of the project involved in the case, to assume the liability for payment within the scope of the project payment owed on the grounds of Article 26 of the judicial interpretation, which lacked the corresponding factual basis and legal basis. For example, (2022) Lu 14 Min Zhong No. 263 Judgment holds that: ...... The actual construction party shall not include the labor operation contractor. In this case, the "Construction Contract" signed by the employer Jinming Wucheng Branch and Guoji Dezhou Branch is legal and valid. As the contractor, Guoji Dezhou Branch signed the "Labor Contract" with Senmao Company. As the labor contractor, Senmao Company hired Liu Jihai to engage in carpentry labor. Therefore, Liu Jihai was not the actual constructor of the project, ...... The case should be a labor contract dispute, not a construction contract dispute. Liu Jihai has no right to break through the relativity of the contract and claim the project payment from the contractor and the general contractor involved. (II) construction team has no right to require the employer to advance the arrears of migrant workers' wages within the scope of the unpaid project price in accordance with the regulations on ensuring the payment of migrant workers' wages. For example, (2021) Qing 01 Minzong No. 2341 Judgment holds that: The Internal Team Contract Agreement signed between Beijing Huaji Shengde Company and Zhang Jiazhi is a labor contract... Zhang Jiazhi's labor payment should be paid by the opposite party of the contract, Beijing Huaji Shengde Company. Beijing Huaji Shengde Company now requests Jiangsu Construction Engineering Group Co., Ltd. and Xining Hongxing Meikailong Company to pay Zhang Jiazhi's labor service fee on the grounds that Jiangsu Construction Engineering Group Co., Ltd. owes its project payment. The appeal reason is groundless, and the hospital does not support it. (III) in principle, the construction team has the right to require the contractor to advance the arrears of migrant workers' wages within the scope of the arrears of the project funds in accordance with the provisions of the Regulations on Guaranteeing the Payment of Migrant Workers' Wages. However, in terms of the allocation of the burden of proof, judicial decisions are different. 1. The construction team shall bear the burden of proof on the causal relationship between the fact that "the contractor did not allocate the project funds in time in accordance with the contract" and the result of "wage arrears of migrant workers. For example, (2021) Lu 02 Minzong No. 15249 Judgment holds that Xin Wei did not submit valid evidence to prove that Sunac Company in this case complies with the provisions of Article 29, paragraph 2, of the Regulations on Guaranteeing the Payment of Migrant Workers' Wages, which states that Sunac Company, as a construction unit, should advance the wages of migrant workers, the joint and several liability for the payment of labor costs and interest is not accepted by the Court on insufficient basis. Xin Wei is a labor team member, not a construction or labor company, regardless of whether there is illegal subcontracting or subcontracting of the project involved, Sunac does not meet the statutory circumstances that should bear joint and several payment liability. For example, (2021) E 05 Min Zhong No. 3489 Judgment holds that: Article 29, paragraph 2, of the State Council's Regulations on Guaranteeing the Payment of Migrant Workers' Wages, which came into effect on May 1, 2020, stipulates: "If the construction unit fails to timely allocate the project funds in accordance with the contract, the construction unit shall advance the arrears of migrant workers' wages within the limit of the outstanding project funds." Therefore, the application of Article 26 of the interpretation of the Supreme People's Court on the application of legal issues in the trial of construction contract disputes breaks through the relativity of the contract, which is that the construction unit fails to timely allocate the project funds in accordance with the contract, resulting in the arrears of migrant workers' wages. In this case, the construction unit Yichang Housing Investment Company has paid 90% of the total project price to the general contractor, China Construction Third Bureau, that is, about 0.3 billion. The general contractor, China Construction Third Bureau, has paid 12.84 million yuan to the illegal subcontractor Zhongzhi Xincheng Company. The reason why China Construction Third Bureau has not paid the remaining project price to Zhongzhi Xincheng Company is due to court co-operation and quality assurance problems. Therefore, there is no case in this case that Zhongzhi Xincheng Company did not pay Xu Yangtao for the project due to the construction unit Yichang Housing Investment Company. Based on the principle that the people's court should adhere to the principle of equal protection for all parties in the construction industry, while protecting the interests of Baotou workers and migrant workers, it should not harm the legitimate rights and interests of qualified construction enterprises and contractors, ...... The court of first instance did not find that Yichang Housing Investment Company was responsible for the debts owed by Zhongzhi Xincheng Company within the scope of the construction project price. 2, in the case of the contractor and the construction general contractor has not yet settled, the construction team advocates that the contractor to the outstanding project funds as the limit of advance payment of the arrears of migrant workers wages conditions will not be achieved. (The following part of the case is the actual construction of the contractor to require the contractor to bear the responsibility within the scope of the project payment, can refer to the applicable). For example, (2021) the Supreme People's Court ruled No. 339 that Li Haijun and Cui Youliang advocated that Zhongfa Source Company should bear the responsibility within the scope of the outstanding project funds. ... The case involving Times Square was not completed, and the settlement between China Development Source Company and Huangwatai Company was not made, so we could only confirm the fact that Huangwatai Company and Huangwatai Qinghai Branch Company owed Li Haijun and Cui Youliang project funds. Whether Zhongfa Source Company owes Huangwatai Company and Huangwatai Qinghai Branch the project funds, the amount of the project funds owed and other facts cannot be found out due to unsettled accounts, and the rights and obligations between the actual constructor and the employer are not clear. Therefore, Li Haijun and Cui Youliang claimed to Zhongfa Source Company that the conditions for them to assume responsibility within the scope of the project funds owed were not fulfilled. For example, (2021) Liao 03 Min Zhong No. 4477 Judgment holds that Haicheng Huayuan Company (the employer) has not made effective settlement with the qualified subject, so it is not clear whether the employer has determined the amount of outstanding project funds in this case, and the audit and settlement of project funds between Haicheng Huayuan Company and Liu Fangping or other qualified subjects has not been carried out at present, and the settlement may involve legal relations between other subjects, therefore, in this case, it is not possible to determine whether the contracting party still owes the project funds. Therefore, the court of first instance rejected Qu Mingguo's claim that the contracting party should bear the responsibility for payment within the scope of the project funds not paid. It is not improper for Qu Mingguo to file a separate lawsuit after the settlement of the project involved in the case. For example, (2021) Lu 0113 Minchu No. 3673 judgment held that: Ma Zhanfeng claimed that the project involved was contracted by Panghui Company to Chengda Company, so according to the relevant provisions of the Regulations on Guaranteeing Wage Payment for Migrant Workers, Panghui Company should pay labor fees to it. In response, the court believes that since neither Panghui Company nor Chengda Company took part in the lawsuit, it is impossible to find out whether Panghui Company failed to pay the project funds to Chengda Company as promised, and Ma Zhanfeng clearly indicated that it was employed by Chengda Company and Chengda Company settled with it. Therefore, the court does not support Ma Zhanfeng's request to order Panghui Company to pay its labor costs. 3, in the case of the contractor and the construction general contractor has not yet settled, the contractor shall bear the burden of proof on the "settled project funds", otherwise, the construction team has the right to require the contractor to advance the outstanding project funds to advance the wages of migrant workers in arrears. For example, (2021) Yue 20 Min Zhong No. 9286 Judgment holds that the second paragraph of Article 29 of the Regulations on Guaranteeing the Payment of Wages for Migrant Workers stipulates that if the wages of migrant workers are in arrears due to the failure of the construction unit to allocate the project funds in time in accordance with the contract, the construction unit shall advance the wages of migrant workers in arrears to the extent of the outstanding project funds; ...... In this case, Southern Grid Energy Company confirms that it has not settled with the general contractor, nor has it provided evidence to prove that the project payment has been settled. According to the second paragraph of Article 29 of the above-mentioned regulations, China Southern Power Grid Energy Company shall be responsible for the advance payment of Chen Zhipeng's labor remuneration within the scope of the outstanding project payment of Zoomlinda Company; For example, (2021) Liao 10 Min Zhong No. 2036 Judgment holds that the construction unit shall allocate the project funds in a timely manner in accordance with the agreement and pay the workers' expenses in full and on time. If the construction unit fails to allocate the project funds in time as agreed in the contract, resulting in the wages of migrant workers in arrears, the construction unit shall advance the wages of migrant workers in arrears to the extent of the outstanding project funds. There is no dispute between the appellant and the appellee Longxin Company that the project payment has not been settled. At the same time, the dispute is in another lawsuit. The court of first instance found that the project payment owed by Shangda Company exceeded the wages claimed by 41 people such as Zheng Chengwei, so it ordered Shangda Company to bear joint and several liability for the workers' wages. If this fact is found to conflict with another case, both parties can resolve the dispute in this case separately. The scope of joint and several liability of Shangda Company shall be limited to the outstanding project funds. 3. legal analysis According to the provisions of laws, administrative regulations and judicial interpretations, combined with the rules of judgment of similar cases in judicial practice, the following legal analysis is carried out on whether the construction team has the right to claim rights against the contractor, or, as far as the contractor is concerned, how to avoid its responsibility to the construction team that it has never contacted: 1, the construction team to the contractor to claim rights, contrary to the principle of fairness, should not become judicial guidance. The construction team is not the subject of the contract under the construction project contract dispute, not the actual construction person, not the scope that should be considered in civil and commercial cases, and its interest protection should belong to the functional category of the administrative construction department, and in practice, the wage deposit system, bank guarantee system and labor supervision system of migrant workers have all become the channels to safeguard their legitimate rights and interests. From the contractor's point of view, if the provisions of the regulations on the protection of migrant workers' wages allow the construction team to file a lawsuit against it, the contractor is often inexplicably sued, followed by property preservation. This is extremely unfair to the contractor. The employer needs to spend a lot of litigation energy, prove in numerous cases that he no longer has project arrears, or realize account unsealing through property replacement to maintain normal operation, which actually makes him in a kind of insecurity: on the one hand, he does not know when he will be sued and sealed up again; On the other hand, I don't know why the contractor didn't pay the project payment in full to the downstream subcontracting teams and teams. In addition, in practice, there are also contractors or subcontractors due to poor management, unable to pay the actual construction of the project, team wages, will negotiate fictitious claims, false litigation, etc., thereby harming the rights and interests of the contractor. 2, the construction team has no right to require the contractor to pay the project. According to the provisions of Article 43 of the Interpretation of the Supreme People's Court on the Application of Legal Issues in the Trial of Disputes over Construction Contracts of Construction Projects, (I) the Interpretation of the Supreme People's Court [2020] No. 25, the main body that requires the employer to bear the responsibility within the scope of the unpaid construction project price is only the "actual constructor". However, Article 7 of the "Answers to Several Questions of the First Civil Court of Shandong Higher People's Court on the Trial of Construction Project on the Trial of Construction Contract, the construction team does not belong to the actual construction person in the legal sense. Therefore, the construction team has no right to file a dispute over the construction contract and require the contractor to pay the project money to it. 3. The construction team requires the contractor to advance the wages of migrant workers who are owed in advance, and should bear a greater burden of proof, and should be strictly controlled in judicial practice. First of all, the construction team shall bear the burden of proof for the direct causal relationship between "the employer fails to allocate the project funds in time according to the contract" and "the wage arrears of migrant workers"; and the determination of whether there is a "causal relationship" can be comprehensively considered from factors such as the employer's payment amount, payment proportion, labor cost proportion, and non-payment reasons, it is not simply and roughly determined that the contractor should bear the responsibility of "advance payment" as long as there is the fact of "arrears of project payment" and the fact of "arrears of migrant workers' wages; Secondly, in the case that the employer and the general construction contractor have not yet settled the account, since the employer cannot find out the facts such as whether the employer owes the project payment and the amount owed, in order to avoid infringing on the rights and interests of other subjects and not to avoid litigation, it should be determined that the conditions for the construction team to require the employer to assume the responsibility for advance payment within the scope of the project payment are not fulfilled; Third, in the case that the employer and the general construction contractor have not yet settled the settlement, as long as the employer reasonably explains that the settlement has not yet been made for the purpose of delay, and can prove that it does not owe the progress payment at present, such as providing monthly progress statements, payment vouchers, etc., it should be determined that it does not owe the project payment and does not need to bear the responsibility of "advance payment. 4. epilogue The Regulations on Guaranteeing the Payment of Migrant Workers' Wages stipulate that the employer shall advance the arrears of migrant workers' wages within the limit of the outstanding project payment. This clause has caused the employer to be innocent and involved in the lawsuit, and the judicial practice is different, and it has also been criticized by the theoretical circle. The only basis for its existence lies in the position of "special protection of the interests of migrant workers"; with the increasing improvement and improvement of the protection system for the interests of migrant workers, construction teams have not used this clause as a "shield" for a long time. As far as the contractor is concerned, although the "involved in the lawsuit" is indeed "innocent", once the lawsuit is involved, if you want to get out, the effort is still routine, such as timely and sufficient labor costs.

2022-07-04

Construction project construction contract dispute first judgment case.

Case description Company A is a private enterprise with real estate development and management qualifications. Company B has the special qualification for general contracting of construction projects. In 2017, Company A identified Company B as the construction unit of a residential project it invested in and developed by inviting tenders. Company B contracted the construction project invested and developed by Company A. The two parties signed two contracts for the project, namely the "black and white" contract. The actual performance of the contract clearly stipulates that "if the contractor is unable to continue to perform or clearly indicates that it does not perform or has substantially stopped performing the contract, the party issuing contract may notify the contractor to terminate the contract immediately and deal with it in accordance with the relevant laws. If the contractor fails to take measures to rush the work for more than 30 days, the party issuing contract has the right to terminate the contract." Later, during the performance of the contract, Company B requested the construction period to be postponed and the material and labor costs to be increased, and Company A was required to pay the losses on the grounds that the project would stop production, outage, material and labor costs would rise. In this regard, the two sides did not reach an agreement. Since then, part of the project is in a suspended or semi-suspended state. Company A has repeatedly urged, but Company B still refuses to resume work. In 2018, Company A mailed a notice of termination of the contract to Company B in accordance with the contract, notifying Company B of the termination of the project general contract signed by both parties (actual performance of the contract). After Company B receives the notice of cancellation. In the same year, Company A filed a lawsuit to confirm that the contract in question had been terminated and demanded that Company B pay liquidated damages and compensate for the losses. litigation ideas The key point of the lawsuit is to confirm which of the two contracts is the actual performance of the contract and the breach of contract by Company B. In this case, the contract number and contract amount filled in by company B in the application form for payment of project funds to company a are completely consistent with the construction contract provided by company a in the lawsuit. therefore, the contract provided by company a is the actual performance of the contract by both parties, the true intention of both parties, does not violate the mandatory provisions of laws and administrative regulations, and is a valid contract. both parties shall fully perform their respective obligations according to the contract. Company A mailed a notice of termination to Company B in accordance with the actual performance of the contract. Company B did not raise any objection after receiving the notice of termination. During the trial, Company B recognized the fact that the contract had been terminated and Company B admitted that it had stopped the construction of the project on a certain day. Therefore, Company A requested to confirm that the contract involved in the case provided by it had been terminated and complied with the legal provisions. In view of the fact that Company A requests to confirm that the contract has been terminated in this case, the facts are clear, and other claims of Company A are more complicated. According to the relevant legal provisions of "advance judgment" in the the People's Republic of China Civil Procedure Law, in order to prevent the loss of work stoppage from continuing to expand, Company A applies to the court to make an advance judgment to confirm that the contract has been terminated. Litigation results Based on the above facts and relevant legal provisions, the court made a first judgment, the judgment confirmed that the contract has been terminated, and other claims of Company A will be judged after the relevant facts are found out. description of meaning This case is to use the first judgment litigation ideas to solve the construction contract dispute cases. The plaintiff's request for confirmation of the termination of the contract is clear. In order to prevent the loss of work stoppage from continuing to expand, the plaintiff, in accordance with relevant laws and regulations, applied to the court for a first judgment that the contract has been terminated. For the plaintiff's other claims, due to the complexity, the judgment will be made after the relevant facts are found out. The first judgment is to face difficult cases and multiple litigation requests of the parties. When some facts are clear, it can ensure timely access to judgments, prevent litigation delays, and improve litigation efficiency.

2022-06-27

Viewpoint | Analysis of the validity of private entrusted financial contracts

Overview of 1. Private Entrusted Financial Management Entrusted financial management is an economic activity in which the principal entrusts his funds, financial assets, etc. to the trustee, who invests the assets in futures, securities and other trading markets or manages them through other financial forms, and the proceeds are distributed by both parties as agreed or the trustee collects agency fees. According to the main characteristics of the trustee, entrusted financial management can be divided into financial institutions entrusted financial management and non-financial institutions entrusted financial management. Financial institutions engaged in entrusted financial management business mainly include commercial banks, securities companies, trust companies, insurance companies and fund management companies. Non-financial institutions as trustees mainly include asset management companies, investment consulting companies and natural persons with certain professional knowledge. In recent years, due to the lack of specific supervision of the corresponding financial institutions, various forms and the lack of standardized guidance on rights and obligations, disputes have occurred frequently. In judicial practice, there are still differences in the validity of the private entrusted financial management contract, and this paper mainly combines the typical cases in judicial practice to analyze the effectiveness of the private entrusted financial management contract. The influence of the qualification of the 2. trustee on the effectiveness of the private entrusted financial contract. If the trustee is a legal person of a non-financial institution, the (I) shall review the content of its entrusted financial management and its business qualifications, subject qualifications, business scope, etc. If the content of the trustee's entrusted financial management exceeds its business scope, if the excess is prohibited, Restricted operation and franchise operation, the entrusted financial management contract is generally deemed invalid. Except for the trustee who accepts the entrustment of an unspecified object to engage in fiduciary wealth management business, in general, a contract entered into by a non-financial institution who accepts the entrustment of a specific object to engage in private entrusted wealth management is not considered invalid. However, if the trustee exceeds the scope of business and the excess is prohibited, restricted or franchised, or if the trustee is a practitioner in the financial industry, the financial contract will be deemed invalid. Typical case: Shanghai No.1 Intermediate People's Court (2020) Hu 01 Min Zhong No. 1847 Judgment held that "First of all, this court believes that Chen Jiping is listed as the authorized representative of relevant subordinate funds, regardless of the three-party naming on the front page of the dispute subscription agreement or the agreement in the general provisions of Article 1 of the dispute subscription agreement, and has made an agreement on the rights and obligations different from Puying Company as an investment consultant. In the process of the implementation of the dispute subscription agreement, Chen Jiping also carried out the relevant collection and transfer of funds in his own name in accordance with the agreement, and signed relevant documents on behalf of Ma Wenwei. Although Chen Jiping argued that these acts were the performance of his duties, this claim was clearly inconsistent with the contractual agreement and actual performance. After examination, the court has so far failed to provide sufficient evidence to prove that before and after the signing of the dispute subscription agreement, Ma Wenwei to accept its entrusted financial management and has a settlement relationship with the other party of the contract subject is Puying Company, and Chen Qiping and Ma Wenwei there is no direct payment, settlement relationship is known and recognized. Therefore, it is difficult for the Court to accept Chen Kiping's independent subject of his non-litigation subscription agreement. The court of first instance said that Chen Qiping was only a channel for Puying Company to invest in the trust company and collect funds, so the reasons and basis for Chen Qiping's determination that he did not have to bear civil liability were insufficient, and it was difficult for the Court to agree. Secondly, the parties in this case have not raised any objection to the invalidity of the subscription agreement, and there is no evidence that Ma Wenwei was obviously at fault in signing the subscription agreement in this case. In contrast, Chen Jiping and Puying, as specialized securities investment practitioners, are obviously more professionally aware of the investment projects and legal consequences involved in the case, and the prohibitions on the securities industry should be clearer. Knowing that the dispute subscription agreement violated the spirit of the relevant documents of the financial regulatory authorities and violated the order of securities market supervision, he still signed the dispute subscription agreement with Ma Wenwei, which eventually led to the invalidity of the agreement. Chen Jiping and Puying Company have unshirkable responsibilities. As the fault party, they should jointly bear Ma Wenwei's capital loss in accordance with the law". (II) if the trustee is a natural person, he or she generally does not need to be approved for accepting financial management entrustment, but if the trustee is a financial industry practitioner, the trustee should be examined for any violation of the prohibition of employment. For example, securities companies, trust companies and other practitioners privately accept financial management entrustment in their own name. In such cases, violation of the mandatory provisions of legal effect will render the entrusted financial management contract invalid. Typical case: Beijing Haidian District People's Court (2021) Beijing 0108 Minchu No. 29015 Judgment held that "judging from the WeChat chat records of both parties and the facts stated by all parties, Li Shengli accepted Yan Chunsheng and Liu Huiting's entrustment to manage their respective stock accounts and carry out relevant trading operations according to their own will and experience, although there is no written contract between the parties, but between Yan Chunsheng and Li Shengli and between Liu Huiting and Li Shengli is the legal relationship between the entrusted financial contract. According to the facts stated by the parties, Li Shengli was a securities practitioner when he accepted the entrustment of the two persons to operate the stock account for financial management. According to the provisions of paragraph 1 of Article 40 and paragraph 2 of Article 136 of the the People's Republic of China Securities Law, employees of securities trading places, securities companies and securities registration and settlement institutions, staff of securities regulatory institutions and other personnel prohibited by laws and administrative regulations from participating in stock trading shall not hold, buy or sell stocks or other securities with equity nature directly or in the name of others during their term of office or within the statutory time limit, nor may they accept shares or other securities of an equity nature as gifts from others. The employees of a securities company shall not privately accept the client's entrustment to buy or sell securities. The above provisions are mandatory provisions of validity. Therefore, in this case, Li Shengli, as a securities practitioner, engaged in securities wealth management business, and his entrusted wealth management contract with Yan Chunsheng and Liu Huiting is invalid". 3. the validity of the bottom clause in the private entrusted financial management contract. There is no clear agreement in the current law on the validity of the guarantee clause of the private entrusted wealth management contract. At present, in judicial practice, most courts have found that the minimum guarantee clause violates the principle of fairness in civil law and the principle of responsibility in entrustment contracts, violates economic laws, and should be deemed invalid; a few courts have found that the minimum guarantee clause does not infringe on national interests, does not disturb the order of the financial market, damages the public interest, and does not violate public order and good customs, so it should be deemed valid. Cases identified as invalid: Shanghai No. 2 Intermediate People's Court (2022) Hu02 Minzong No. 729 Judgment determined that "the entrusted financial management contract is the true intention of Fang Peili and Zheng Chao, and it does not violate the mandatory provisions of laws and administrative regulations. It is legal and effective. Both parties should comply with the principle of good faith, but the guarantee clause agreed by both parties should be invalid. Article 5 of the Receipt states that" the third party's income commitment shall ensure that the income shall not be less than 28% from May 26, 2015 to December 31, 2015 ", that is, the trustee Zheng Chao and the principal Fang Peili agreed to guarantee the minimum return of principal and interest, which is a guaranteed clause. Although the guarantee clause is the result of the autonomy of both parties, it unreasonably transfers the risk burden category that belongs to the client to the trustee, resulting in unequal civil rights and obligations of both parties, violating the basic principle of the client's own risk in the entrustment contract, and also violating the principle of fairness and the basic laws of the financial market, which is not conducive to promoting the healthy development of the securities market and maintaining the stability of the securities market, therefore, the agreement of the guarantee clause should be found to be invalid". Cases found to be valid: Guangdong Guangzhou Intermediate People's Court (2021) Yue 01 Min Zhong No. 25284 found that "regarding the validity of the guarantee clause involved in this case, the court's analysis is as follows: first, Article 144 of the the People's Republic of China Securities Law stipulates:" Securities companies shall not make promises in any way to the profits of customers' securities trading or to compensate for the losses of securities trading." In this case, although Deng Zhongyi, as the trustee, made a promise to ensure that the principal of the entrusted assets for stock investment will not be lost, Deng Zhongyi does not belong to the securities companies and their employees that are not allowed to engage in financial management on behalf of clients and promise returns as stipulated in articles 144 and 145 of the the People's Republic of China Securities Law, while the restrictive provisions of the law on the behavior of special subjects cannot be directly applied to non-special subjects by analogy, therefore, there is no violation of the aforementioned provisions or other mandatory provisions of laws and regulations resulting in the invalidity of the contract. Secondly, the performance of the contract involved in this case is that Deng Zhongyi was entrusted to use his own funds in He Qianlan's account to invest in securities for him, which does not involve the national interest, nor does it endanger the stability of the financial market and the public interest of society, such as the use of capital allocation for highly leveraged transactions. Deng Zhongyi involved in accepting entrustment to carry out stock investment financial management disputes, in Guangzhou two-level court only case, Deng Zhongyi self-admitted that is only accept He Qianlan's entrustment to carry out entrusted financial management, the principal does not come from the society is not a specific object, Deng Zhongyi is not mainly entrusted financial management profit income as a source of income. Therefore, the minimum guarantee clause involved in the case did not infringe on national interests, did not reach the level of disrupting the order of the financial market and harming the public interest, and there was no violation of public order and good customs. Finally, the civil status of both parties in this case is equal, and neither of them is the subject of monopoly in the market. Both parties have sufficient choice when determining the subject of the transaction. Both parties have full freedom of expression and freedom of contract on whether to conclude the entrusted financial management contract and the specific terms of the contract. The terms reached should be considered as the result of independent consultation and prudent decision-making, it is the embodiment of the principle of voluntary and the principle of autonomy of the civil subject. Judging from the WeChat chat records of both parties, Deng Zhongyi had bought shares from He Qianlan recommend many times and made analysis before the two parties established a private entrusted financial management contract. It can be seen that Deng Zhongyi has certain professional investment and financial management experience and knowledge, and has the ability to predict investment risks. Deng Zhongyi in the conclusion of the contract in order to strive for 30% of the profit sharing, voluntarily bear the risk, in the premise of not bearing the obligation to contribute to the bottom as a condition, voluntarily accept He Qianlan entrusted to use his funds for stock investment. Even because the securities market is a high-risk investment place, Deng Zhongyi's stock trading began to suffer losses in October 2019. Since then, Deng Zhongyi has continued to pay a "guaranteed profit" of 3000 yuan every month from November 2019 to March 2020 without raising any objection to the validity of the guaranteed clause. Therefore, the guaranteed clause is not invalid because it violates the principle of fairness. Based on the above analysis, the guaranteed clause formed by Deng Zhongyi and He Qianlan through agreement does not violate the prohibitive provisions of laws and regulations. The two parties distribute the benefits and losses between the parties. The rights and obligations of the parties are essentially balanced. The guaranteed clause is valid. The court of first instance found that the guarantee clause involved in the case was invalid, and the court corrected it." After the 4. determines that the guarantee clause is invalid, the validity of the private entrustment contract and the principle of loss determination. In judicial practice, after determining that the guarantee clause is invalid, most courts have determined that the guarantee clause belongs to the purpose clause and core clause of the entrusted financial management contract and cannot become a relatively independent invalid part of the contract. Therefore, the ineffectiveness of the guarantee clause leads to the invalidity of the entrusted financial management contract as a whole, and both parties to the contract share the losses arising from the performance of the entrusted financial management contract according to their fault. Typical case: Beijing Financial Court (2022) Beijing 74 Minzong No. 126 Judgment held that "this court believes that the agreement in the Account Entrusted Investment Agreement that" if Party A's account suffers a loss of principal after the end of the entrustment, Party B shall compensate Party A "by ensuring that the investment principal will not be lost and Li Jisheng will be exempted from the investment risk, which is a guaranteed clause, in view of the fact that the" guaranteed clause "belongs to the purpose and core clause of the entrusted financial management contract in this case, the court of first instance ruled that this cannot be a relatively independent invalid part of the contract, resulting in the" Account Entrusted Investment Agreement "signed by Li Jisheng and Jin Zhichao to entrust the financial management contract as a whole invalid, and there is no obvious impropriety. After the entrusted financial management contract is confirmed to be invalid, the trustee shall return the principal amount of the entrusted assets to the principal, and the income from the entrusted financial management shall first offset the amount of principal that should be returned". 5. Conclusion With the increasing number of disputes over private entrusted financial contracts, how to identify the effectiveness of private entrusted financial management in practice is undoubtedly crucial. The author thinks that if the trustee does not take "entrusted financial management" as the main business, and does not violate the legal effect of prohibition, the private entrusted financial management contract including the guarantee clause has legal space. Here, we look forward to further attention and response to this issue at the judicial level. 6. legal basis Civil Code Article 6 When engaging in civil activities, a civil subject shall follow the principle of fairness and reasonably determine the rights and obligations of all parties. Article 999 A contract of entrustment is a contract in which the principal and the trustee agree that the trustee shall handle the affairs of the principal. Article 929 If a paid entrustment contract causes the principal's loss due to the trustee's fault, the principal may request compensation for the loss. For a gratuitous entrustment contract, if the trustee's intentional or gross negligence causes the principal's loss, the principal may request compensation for the loss. If the trustee exceeds his authority and causes losses to the principal, he shall compensate for the losses. Securities Act of the People's Republic of China Article 40 Employees of securities trading venues, securities companies and securities registration and settlement institutions, employees of securities regulatory bodies and other persons prohibited by laws and administrative regulations from participating in stock trading shall not hold, buy or sell stocks or other securities of an equity nature directly or under a pseudonym or in the name of another person during their term of office or within the statutory time limit, nor may they accept shares or other securities of an equity nature as gifts from others. Article 135 A securities company shall not make a commitment to the proceeds of the trading of securities by its clients or to compensate for the losses incurred in the trading of securities. Article 136 If a practitioner of a securities company executes the instructions of the securities company to which he belongs or violates the trading rules by taking advantage of his position in the course of securities trading activities, the securities company to which he belongs shall bear full responsibility. The employees of a securities company shall not privately accept the client's entrustment to buy or sell securities. the People's Republic of China Securities Investment Fund Law Article 20 The fund manager of a publicly offered fund and its directors, supervisors, senior managers and other practitioners shall not commit the following acts: (4) It is prohibited to promise gains or bear losses to fund share holders in violation of regulations. Interim Provisions on the Operation and Management of Private Asset Management Business of Securities and Futures Institutions Article 3 Securities and futures business institutions and relevant sales institutions shall not sell asset management plans in violation of regulations, and shall not improperly publicize, mislead and defraud investors, and promise investors that the principal will not be lost or the minimum return will be promised in any way, including but not limited to the following situations: (1) There are expressions in asset management contracts and sales materials that contain the connotation of capital preservation and return, such as zero risk, guaranteed return, worry-free principal, etc; the name of the (II) asset management plan contains the word "capital preservation"; the (III) and investors privately sign repurchase agreements or commitment letters and other documents, directly or indirectly promise to protect capital and income.

2022-06-20