China - Circular Of The Supreme People’s Procuratorate On The 21st Batch Of Supreme People’s Procuratorate Guidance Cases.

Legal News & Analysis - Asia Pacific - China - Dispute Resolution

23 October 2020

 

On July 28, 2020, the Supreme People’s Procuratorate issued its 21st batch of guiding cases, including four in which the local people’s procuratorate enhanced judicial supervision over private commercial cases and effectively strengthened the rights and interests of private enterprises by applying Article 208 of the Civil Procedure Law against errors in law in decisions issued by a people’s court and either request a superior people’s procuratorate to file a protest to the same level of the people’s court, or provide procuratorial recommendations to the same level of the people’s court.  It is believed that procuratorates can provide guidance through the exemplary guiding cases in handling disputes involving commercial activities.  This article will briefly introduce two such cases.
 

1. Supervision case involving the erroneous inclusion of a livestock company in the List of Dishonest Persons Subject to Enforcement
 

In this case, the court seized property belonging to the subject of enforcement, but failed to provide service, and even included the person subject to the enforcement in the List of Dishonest Persons Subject to Enforcement when the seized property was sufficient to satisfy the debt pursuant to the legal document in effect.  This has caused the subject person difficulties in conducting business operations.  The local people’s procuratorate thus submitted a recommendation to the people’s court at the same level to serve the seizure ruling on the parties and reverse the decision to include the person subject to the enforcement in the List of Dishonest Persons Subject to Enforcement.  The people’s court at the same level accepted the procuratorial recommendation, thereby properly protecting the rights and interests of the person subject to enforcement.
 

2. Supervision case involving excessive seizure of assets from a Nanzhang County real estate development company
 

At the enforcement stage of the case, with the consent of the enforcing court, the person subject to the enforcement retained an appraisal institution to conduct an appraisal of the seized property, and the result showed that the value of the seized property clearly exceeded the amount of the debt stated in the effective court decision in violation of Article 21 of the Provisions of the Supreme People’s Court on the Seizure, Attachment and Freezing of Property in Civil Enforcement by People’s Courts, which stipulates that “the property of the person subject to enforcement may be seized, attached or frozen to the extent that the amount seized is sufficient to satisfy the debt determined in a legal document and the cost of enforcement, and there shall not be any seizure, attachment or freezing that clearly exceeds such amount.”  Therefore, the local people’s procuratorate made a procuratorial recommendation to the people’s court at the same level.  The court then confirmed that the amount seized was excessive and restored the excess portion seized.  As a result, the person subject to the enforcement was able to sell their commercial housing, recover the sales proceeds, improve its cash flow issues, pay owed wages to migrant rural workers, and actively negotiate the repayment of the remaining debt in the case.
 


 

For further information, please contact:  

 

Jolene Chen​, Lee Tsai & Partners

[email protected]