Page 20 - 2017 Policy Watch
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icy Watch: The Circuit Courts of the Supreme People’s Court
the issue of the funds that should be returned by Chow Tai Case Brief:
Fook Company and Pacific Gain Company in accordance
with the contract, which decision did not exceed the trial Shenyang Municipal Company initiated a lawsuit
court’s concept of this case. There did not exist any alleged against Hangzhou Xinshi Company and Zhejiang Xinshi
issue of violation of the basic litigation principles of“no trial Company, requesting the termination of the relevant
without complaint.” agreements entered into by the Parties and payment of
liquidated damages in 2012. The Intermediate People’s
(4) As to the issue of whether the statute of Limitations Court of Shenyang (hereinafter referred to as “Shenyang
of the action had passed in this case, the Law on Choice Intermediate Court”) held that the two agreements entered
of Law for Foreign-related Civil Relationships, Article 7 into by the Parties were invalid. For example, Shenyang
reads: “The proper laws applicable to the relevant foreign- Municipal Company argued that the losses incurred to it
related civil relations shall apply to the time limitations of due to the project quality problem may be deducted when
an action.” Therefore, the limitation of action of this case settling construction funds. The Court rejected Shenyang
shall be determined in accordance with the laws applicable Municipal Company’s claims. The People’s High Court of
to the contract dispute, namely Hong Kong Law. Article 4 Liaoning Province of the second instance sustained the
(1) (a) of the Ordinance on Limitation of Action of Hong original judgment.
Kong reads, the Limitation of action for a litigation arising
out of a contract or infringing acts shall be six years, On August 13th 2013, Hangzhou Xinshi Company
commencing from the date when the cause of action arose. initiated a lawsuit with the People’s Court of Changxing
The Parties had no objection as to this point, but disputed County, Zhejiang Province (hereinafter referred to as
the starting point for calculating this limitation of action. “Changxing Court”) against Shenyang Municipal Company,
Huang Yiming and Su Yuedi initiated this lawsuit based requesting the Court to order Shenyang Municipal
on the contract entered into between Huang Guanfang Company to pay construction funds. Changxing Court
and Chow Tai Fook Company, Pacific Gain Company and determined that this case was being tried at Shenyang
requested confirmation of the termination of the contract; Intermediate Court while ascertaining the facts. Thereafter,
and Chow Tai Fook Company, Pacific Gain Company and The Changxing Court ordered Shenyang Municipal
Baoyi Company return the paid transfer price and interest Company to pay the construction funds. Shenyang
therefrom and less compensation for losses. Although the Municipal Company appealed and the court of the second
Agreement specified that Huang Guanfang’s payment instance sustained the original judgment.
ended on May 31st 2002, Chow Tai Fook Company and
Pacific Gain Company notified Huang Guanfang of On November 28th 2013, Shenyang Municipal
termination of the contract on May 30th 2006. Therefore, it Company initiated this lawsuit with The Shenyang
is determined that the cause of action in this case occurred Intermediate Court, alleging that the Zhejiang Xinshi
on 30th May 2016, rather than May 31st 2002. Therefore, Company and Hangzhou Xinshi Company project had
the limitation of action of this case had not passed. quality problems and requesting the Court to order the
Defendants to compensate it for its losses. Zhejiang Xinshi
A Typical Case of the Second Circuit Court Company raised objection to the jurisdiction, holding that
this case had been accepted for trial by Changxing Court
(1) Municipal Construction Engineering Co., Ltd. of and should be transferred to Changxing Court.
Shenyang Economic Technological Development Zone
(“Shenyang Municipal Company”) v. Hangzhou Xinshi Pipeline Judgment Result:
Group Co., Ltd. (“Hangzhou Xinshi Company”) & Zhejiang
Xinshi Pipeline Corporation (“Zhejiang Xinshi Company”). The Shenyang Intermediate Court held that the case
being tried by The Changxing Court was different from this
20
the issue of the funds that should be returned by Chow Tai Case Brief:
Fook Company and Pacific Gain Company in accordance
with the contract, which decision did not exceed the trial Shenyang Municipal Company initiated a lawsuit
court’s concept of this case. There did not exist any alleged against Hangzhou Xinshi Company and Zhejiang Xinshi
issue of violation of the basic litigation principles of“no trial Company, requesting the termination of the relevant
without complaint.” agreements entered into by the Parties and payment of
liquidated damages in 2012. The Intermediate People’s
(4) As to the issue of whether the statute of Limitations Court of Shenyang (hereinafter referred to as “Shenyang
of the action had passed in this case, the Law on Choice Intermediate Court”) held that the two agreements entered
of Law for Foreign-related Civil Relationships, Article 7 into by the Parties were invalid. For example, Shenyang
reads: “The proper laws applicable to the relevant foreign- Municipal Company argued that the losses incurred to it
related civil relations shall apply to the time limitations of due to the project quality problem may be deducted when
an action.” Therefore, the limitation of action of this case settling construction funds. The Court rejected Shenyang
shall be determined in accordance with the laws applicable Municipal Company’s claims. The People’s High Court of
to the contract dispute, namely Hong Kong Law. Article 4 Liaoning Province of the second instance sustained the
(1) (a) of the Ordinance on Limitation of Action of Hong original judgment.
Kong reads, the Limitation of action for a litigation arising
out of a contract or infringing acts shall be six years, On August 13th 2013, Hangzhou Xinshi Company
commencing from the date when the cause of action arose. initiated a lawsuit with the People’s Court of Changxing
The Parties had no objection as to this point, but disputed County, Zhejiang Province (hereinafter referred to as
the starting point for calculating this limitation of action. “Changxing Court”) against Shenyang Municipal Company,
Huang Yiming and Su Yuedi initiated this lawsuit based requesting the Court to order Shenyang Municipal
on the contract entered into between Huang Guanfang Company to pay construction funds. Changxing Court
and Chow Tai Fook Company, Pacific Gain Company and determined that this case was being tried at Shenyang
requested confirmation of the termination of the contract; Intermediate Court while ascertaining the facts. Thereafter,
and Chow Tai Fook Company, Pacific Gain Company and The Changxing Court ordered Shenyang Municipal
Baoyi Company return the paid transfer price and interest Company to pay the construction funds. Shenyang
therefrom and less compensation for losses. Although the Municipal Company appealed and the court of the second
Agreement specified that Huang Guanfang’s payment instance sustained the original judgment.
ended on May 31st 2002, Chow Tai Fook Company and
Pacific Gain Company notified Huang Guanfang of On November 28th 2013, Shenyang Municipal
termination of the contract on May 30th 2006. Therefore, it Company initiated this lawsuit with The Shenyang
is determined that the cause of action in this case occurred Intermediate Court, alleging that the Zhejiang Xinshi
on 30th May 2016, rather than May 31st 2002. Therefore, Company and Hangzhou Xinshi Company project had
the limitation of action of this case had not passed. quality problems and requesting the Court to order the
Defendants to compensate it for its losses. Zhejiang Xinshi
A Typical Case of the Second Circuit Court Company raised objection to the jurisdiction, holding that
this case had been accepted for trial by Changxing Court
(1) Municipal Construction Engineering Co., Ltd. of and should be transferred to Changxing Court.
Shenyang Economic Technological Development Zone
(“Shenyang Municipal Company”) v. Hangzhou Xinshi Pipeline Judgment Result:
Group Co., Ltd. (“Hangzhou Xinshi Company”) & Zhejiang
Xinshi Pipeline Corporation (“Zhejiang Xinshi Company”). The Shenyang Intermediate Court held that the case
being tried by The Changxing Court was different from this
20
