Page 18 - 2021 Policy Watch

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Policy Watch: A Milestone in Legal Development: China Promulgates a Civil Code

adds one more exception, namely the creditors shall ???娉?????瀹??淇??浜哄?搴??璐???哄?浜哄???
provide evidence that the debtor?? property is insuffi- 搴??璐??杞????????搴??琛ㄦ?淇??浜鸿韩浠藉苟??
cient to assume all its obligation or that the debtor is ???瑕??璇?32?????娉?????浜????????娌胯?
incapable of assuming its debts28. Based on the above 浜???????????惧??¤?瀹???烘?浜鸿浆璁╁?烘?锛?
features, the Supreme People?? Court issued the Inter- ??????哄?浜虹?锛??杞??瀵瑰?哄?浜轰?????????
pretation of the Supreme People?? Court on the Ap- ?ㄤ??????腑棰??澧??淇??浜洪????哄?浜虹?瑙?
plication of the Guarantee System in the Civil Code 瀹???ㄦ?璁ゅ???????????讹?瑙??淇??浜哄?褰?
of the People?? Republic of China that potentially will 琛ㄦ?淇??浜鸿韩浠藉苟???蹇?????浠ヤ??哄?浜哄?
further refine and regulate the specific application of ?革?浠ユ?淇???哄?浜虹??╃???
guarantee contracts. For example, unless otherwise
subject to one of the four circumstances set forth in ???锛????娉?????瑙??浜???惰处娆惧?烘?浜轰???
Article 687 (2) of the Civil Code, the court will not ?′汉???褰???卞??存?????虹????涓??瀵规?淇?
support the creditor?? application for preservation of a ??汉锛??杩界储?????腑淇??浜鸿?浣胯?姹???????
general guarantor?? assets. In a general guarantee, the ?????拷绱㈡?淇??涓??涓????汉??????锛????
creditor cannot only sue the guarantor, but it must add 璐??璁㈢?澶??淇???????舰涓????汉???椤轰?
the debtor as a joint defendant; otherwise, the court 绛???
will dismiss the creditor?? claim.29
???楂?汉姘???㈠?浜????<涓??浜烘??卞??芥?娉?
This judicial interpretation, if adapted, will further reg- ??>???????跺害??В?????涓?姝ョ????浣????
ulate the statute of limitations for a general guarantee. ???搴??璐?????瀛??淇??????惰处娆捐川?肩???
In 2000, the Interpretation of the Supreme People?? Court 褰?33??????搴??璐?????瀛??淇??????惰处娆?
on Several Issues Regarding Application of the Guarantee 璐ㄦ?锛??浜?汉?????『搴?????搴??璐??璁㈢?澶?
Law of the People?? Republic of China, Article 34 reads: ?????????淇??浜虹?浼??椤哄?涓??达?宸茬??昏?
??f a creditor of a general guarantee brings a lawsuit ?????????璁扮?锛?????璁帮??昏??ㄥ??????
or applies for arbitration against a debtor prior to the 浜??璁板????锛??????昏?锛?浆璁╅????????杈?
expiration of the term of guarantee, the statute of limi- 搴??璐???哄?浜虹?淇??浜轰???34??
tations of the guarantee contract will commence as of
the effective date of the judgement or arbitral award.?? f. ??????
However, this judicial interpretation has a contradic-
tion. According to the priority of allocation of a general 涓?????浼??寰??搴???便???娉??????诲?缂???
guarantee, before the creditor applies for enforcement ???缂?????浼??涓?????????淬???诲?缂??瀹?
against the debtor but the debtor fails to make full 浜??浼??涓??浜??娉?汉缁??锛???锋?娉?汉璧??锛?
payment, the general guarantor may refuse to assume 浣????互浠ヨ?宸辩????浠??姘??娲诲?35??????
liability for the guarantee. However, if, in accordance 璋??姘?????娉???崇郴锛?晶???浼??????崇郴锛?
with the judicial interpretation in 2000, the statute of 灞??澶?????娉???崇郴??????瀹??????浼??涓?
limitations of the guarantee contract starts after the ef- 娉?????ㄩ?瑙??浜??浼??涓??澶???崇郴瑙??锛??
fective date of the judgement or arbitral award, obvi- 瀵瑰?浜??浼???瑰?瑙????
ously, it is unfair to the creditor. As a result, the judicial
interpretation revised this provision to ??f the people?? ???娉?????瀹??浼?????姝㈠?锛??浼?汉涓????
court makes an order to terminate this execution pro- ?插?浼?储浜?36???浼?储浜т?涓哄???储浜э??????
cedure, or makes an order to terminate execution in 浼?汉?卞?绠＄???娇?ㄣ??????绔??瀵瑰?浼??涓???
accordance with the Civil Procedure Law, Article 257
(3) and (5), the statute of limitations shall commence 32 ???娉?????涓????????
tolling as of the day of service of order on the creditor. 33 ???楂?汉姘???㈠?浜????<涓??浜烘??卞??芥?娉??>??
?虫?淇??搴??瑙ｉ??????????
28 Civil Code, Article 687 34 ???娉?????涓????????
29 Interpretation of the Supreme People?? Court on the Application 35 ???娉?????涓??鹃?浜??
of the Guarantee System in the Civil Code of the People?? Republic of 36 ???娉?????涔?????涔??绗??娆?
China, Article 26

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