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SEVERAL ISSUES OF THE SUPREME PEOPLE'S COURT THAT SHALL BE TAKEN INTO CONSIDERATION IN CURRENT ECONOMIC TRIALS

The Supreme People's Court

Several Issues of the Supreme People's Court that shall be Taken into Consideration in Current Economic Trials

Under the new situations, with a view to assuring that the economic trials are carried out surrounding the central target and the overall situation of the Party and the state, and sticking to the guiding thoughts of providing service for economic construction and providing judicial guard and service for the construction of socialist economic system, at present, the following issues shall be taken into consideration in the economic trial in the People's Court:

(1)

Issues concerning provision of legal guard and service for the transformation of state-owned enterprises

Along with the further deepening of the transformation of state-owned enterprises, cases of various kinds of disputes arising from the transformation of state-owned enterprise such as reorganization, unite, merge, lease, contract, transfer and adoption of stock system and stock cooperation system are increasing. But the laws and regulations concerning the transformation of enterprises are relatively lagged behind; the policy and methods vary from region to region. The transformation of enterprises in some places do not conform with provisions and violate the basic principles of the laws, which makes more difficulties in the trial of cases. In dealing with this kind of cases, following issues shall be specified:

1.

Sticking to the active and prudent principle. The courts at all levels shall understand completely that the transformation of state-owned enterprise is an important strategic decision of the Party and the country in constructing the socialist market economic system and stabilizing the socialist economic system, and shall be in an active attitude, exercise the function of trial to provide effective judicial guard and excellent judicial service to the transformation of state-owned enterprise, and shall start from the overall interest of the state to handle each cases involving the transformation of state-owned enterprise carefully and prudently.

2.

Sticking to the principle that the legal principle and the transformation policy of the state are connected with each other. Sticking to legal principle means to deal with cases in accordance with the Constitution, the General Principles of Civil Law, the Law of State-owned Industrial Enterprise, the Corporation Law and related administrative regulations. Where there are explicit provisions in law, the case shall be handled in accordance with law; where there is no explicit provision in law, the case shall be handled in accordance with policy; and where there is no explicit provision in both the law and policy, the case shall, sticking to starting from reality and weighing, be handled according to the criteria of "three favorables". Where the provisions provided for by local government governing the transform of enterprises are in conflict with the central guideline, policy and existing laws, the government shall be advised to sort out and amend related documents so that the relevant documents promulgated by local governments are legal, fair and reasonable. With respect to the transformation documents made by local governments that violate the central guideline, policy and existing laws, an account shall be made timely to relevant authorities and these documents cannot be the proof in dealing with cases.

3.

Issues concerning the bearing of liabilities after the transformation of enterprise shall be dealt with carefully. In hearing cases involving the transformation of enterprise, the transformation of enterprise shall be supported firmly and the activities to infringing on the national interest and the legal rights and interests of creditor by using the transformation shall be punished according to law. At present, the occurrence that the debt assumer is changed without the acknowledgement of the creditor is relatively predominant. This kind of illegal act has brought harms to the state and other creditors' interests, to which great importance shall be attached. With regard to the problem on assumption of the former debts after transformation of enterprise, it shall be solved according to different circumstances: where a new assumer is confirmed for the debts of the transformed enterprise before transformation and has the creditor's consent, the validity shall be determined; where the new confirmed assumer, even without the consent of the creditor, has adequate capability to discharge the debts, and the creditor' interests are little affected, the new debtor may be determined to assume the liabilities in the light of actual circumstances; With respect to the acts that infringe the national interest of the rights and interest of the creditor such as changing the debtor without authorization, turning banks into figureheads, evading and avoiding debts by the chance of restructuring of enterprise, the invalidity shall be determined in accordance with the provisions of the General Principles of the Civil Law and the Corporation Law; Where only the asset of the transformed enterprise rather than the debt of the transformed enterprise has been dealt with, in accordance with the relevant provisions set forth in the General Provisions of Civil Law, the debt before transformation shall in general be born by the enterprise after transformation within the extent equivalent to the assets thus received.

4.

Attaching importance to well organizing asset evaluation. The problems of the unconformity with standard in the asset evaluation in the transformation of enterprise are predominant and there are many disputes and hidden trouble. Some enterprises did not employ competent institute to conduct asset evaluation in the transformation; some did evaluation, though, it is of great arbitrariness of undervaluation or overvaluation. Asset evaluation is the objective requirement in determining the actual value of tangible and intangible assets of enterprise and also an effective method to prevent the loss of state-owned assets. The people's court shall advise the relevant governmental departments in charge of the transformation to attach importance to this work and supervise and urge relevant evaluation institutions to conduct legally the evaluation according to the legal, factual, scientific, fair and reasonable evaluation principle. In accordance with the administrative measures and the rules of implementation of the evaluation of state-owned assets, the evaluation of the assets of state-owned enterprises shall be conducted by the institution legally eligible.

5.

Issues of carefully dealing with the preservation of the fund of state-owned enterprise. The technology reform fund, difficulty solving fund and grain purchasing fund granted by the People's Bank of China in accordance with the directions of the leaders in the State Council are closed-end fund controlled by the state and have great importance in the implementation of structure adjustment and the going on wheels of reform of state-owned enterprise. The local courts shall not adopt preservation measures such as fund freezing to this part of closed-end fund, let alone the executive measures such as enforced appropriation.

(2)

Issues concerning the standardizing in accordance with law the trial of bankruptcy case

After the seminar on the trial of bankruptcy case of the courts around the country in March this year, all courts earnestly implement the spirit of the seminar and take effective measures to standardize in accordance with law the trial of enterprise's bankruptcy case, which has gained obvious achievements. But recently, still there are some problems in the trial of enterprise's bankruptcy case in some courts; the main problem thereof is that in some pilot cities, the bankruptcy of enterprise does not abide by relevant provisions of the State Council to convert the asset into money and close the enterprise; there are cases of transferring all asset in disguised form; and that the bankruptcy of state-owned enterprise in non-pilot cities adopt the special policies of the State Council. With respect to this, certain issues are hereby reaffirmed:

1.

Strictly follow the scope of the application of relevant documents of the State Council. The courts at all levels, in hearing the enterprise's bankruptcy case, shall not expand the applicable scope of the documents, Guo Fa (1994) No.59 and Guo Fa (1997) No. 10. The bankruptcy of the state-owned enterprise in pilot cities, if the above-mentioned documents are applicable, shall be listed in the State Enterprise Merger & Bankruptcy and Reemployment Plan.

2.

Strictly forbidding the bankruptcy of the enterprise in non-pilot cities to take the ride to apply special policies. The bankruptcy of the state-owned enterprise outside the pilot area and the bankruptcy of non-state-owned enterprise in pilot cities and non-pilot cities shall be implemented in accordance with the provisions concerning the bankruptcy and debt repayment procedures of legal persons in the Bankruptcy Law of Enterprise of the People's Republic of China (Trial) and the Civil Procedure Law of the People's Republic of China. The application by free riding of the special policies as prescribed in the documents of the State Council is strictly forbidden.

3.

To hold pass in each stage of the enterprise's bankruptcy case. The stages as in file registration, asset liquidate, asset evaluation shall be carefully carried out in accordance with the requirements of the Supreme People's Court; the guidance and supervision of the liquidation team shall be especially strengthened. The transference of the whole enterprise under disguised form shall be strictly prevented; it shall take endeavors to realize the asset of the bankrupted enterprise and to close the bankrupted enterprise. The court shall make full reliance of the leadership of the Party's committee to strengthen the contact and harmonization with related governmental authorities and shall actively coordinate related governmental authorities to arrange the employees of the bankrupted enterprise to maintain the social stability.

(3)

Issues concerning the dealing in accordance with law of the case involving the rectification of finance orders

During the process of rectifying the finance order, cleaning up the "three arbitraries in finance" and closing the financial institutions whose assets can't offset the debts, the people's court shall pay attention to following matters:

1.

It is necessary to build up the awareness of overall situation. The rectification of finance order and dissolve financial risks are the important measures adopted by the central authorities to assure the continuing and stable development of the national economy of our country. The people's court shall build up the awareness of overall situation, exercising the function of trial to assure firmly the the work go on wheels. The arrangement and requirements in the circular of the Supreme People's Court on the trial of finance cases in February this year shall be further implemented and realized, starting from the overall situation of preventing and dissolving financial risks to mediate and deal with cases of financial disputes in strict accordance with financial laws and regulations, provisions of relevant documents of the State Council and the spirit of relevant documents of the Supreme People's Court. It is not allowed that each one goes his own way for regional or partial profit so as to hinder or influence the progress of this work.

2.

Issues concerning the case of some closed financial institutions. In recent years, the State Council closed some non-bank financial institutions and a few commercial banks and designated some financial institutions to take the trusteeship of their credits and debts. The Supreme People's Court issued respective circulars on how to deal with the case of these closed institutions. Because these closed institutions have many branches involved in an extended financial business and many public deposits and overseas deposits, under the present situation, that the state adopted administrative measures to close and rectify is beneficial in overall situation to maintain the social stability, the image of the state and protect the rights and interests of the creditors. The dealing with such kind of problem afterwards shall still implement the requirements as put forward by Xiao Yang, the president of the Supreme People's Court, in the symposia of the presidents of higher courts on 2 July this year, i.e. "with respect to the economic dispute cases of the commercial banks and other financial institutions closed by the State Council, those that have not instituted an act shall no be accepted; those that have been accepted shall discontinue the action; those that the verdict has come into effect shall suspend the execution. The trial and execution will be resumed after the circular from the Supreme People's Court".

3.

Issues concerning the case of cooperation funds of farmers. In accordance with the provisions of the document Zhong Fa (1997) No. 19, the rectification of the cooperation funds of farmers shall be led, organized and harmonized by local governments in accordance with policies. The people's court shall be prudent in dealing with cases of the dispute arising from cooperation funds of farmers. The dispute arising from the cooperation fund of farmers as the debtor and the dispute between the funds and farmers shall be dealt with by the rectification authorities in accordance with the policies of the State Council, except the necessary assistance to the cooperation funds of farmer to liquidate and collect debt as required by the authorities in charge of the rectification.

4.

Issues concerning the case of arbitrary funds raising. At present, all regions and departments are all conducting the rectification of the "three arbitraries in finance", i.e. arbitrary funds raising, arbitrary approval of financial institutions and arbitrary operation of financial business, under the unified arrangement of the Central Committee of the Party and the State Council. In accordance with the provisions of the document Guo Ban Fa (1998) No. 126 of the Office of the State Council, the principle in rectifying the "three arbitrary in finance" is "The one that is in charge shall rectify, the one that approves shall take responsible, the one that uses money shall pay the debt, the one that provides guaranty shall bear respective liability". So, the dispute arising from the arbitrary funds raising from random object without being legally approved, especially the disputes arising from the illegal funds raising shall be dealt with by related authorities.

5.

Issues concerning the freezing of the account of securities institutions and the fund appropriation wherefrom. The freeze and appropriation of deposit of the stockholders kept in the account of securities institutions will affect the transaction of the stockholders, which easily causes disputes and leads to instability of the stock market and the society. Thus all courts shall be prudent in appropriating fund from the frozen account of securities. The nature of the account and the fund shall be checked before measures are adopted. Under the circumstances that the proprietary account of the securities institutions is not separated from the agency account, only the fund that has been found out to be the fund of the securities institutions may be frozen and appropriated. The Supreme People's Court has issued two circulars on this matter, all courts shall pay full attention to this issue.

(4)

Issues concerning the case involving rural areas

To assure the implementation of the basic policies of the Party concerning rural areas is the basic guiding ideology for the people's court in dealing with cases involving rural areas. At present, the maintenance of the stability of the overall situation of the rural areas and the long-term stability of the policies of the Party concerning rural areas shall be emphasized. The unification of the protection of the rights and interests of the collective economy in rural areas and the protection of the rights and interests of farmers shall be stuck to and the unification of the legal effects of trial and the social effect thereof shall be stuck to.

1.

To do a good job in the trial of the case of the disputes arising from the land contract in rural areas. The stabilizing of the land contract policies and extending the land contract term directly concern the enthusiasm of farmers and the development and stability of rural areas. It shall be specified that the household contract operation is a layer within the collective economic organization, and is the base of this kind of dual operation system when compared with another layer, the collective unified operation. The Decision of the Central Communist Party on Certain Material Problems in the Work in Agriculture and Rural Areas as passed in Third Plenary Session of the Fifteenth Central Committee of the Communist Party pointed out that: "The key point in stabilizing and perfecting the dual operation system is to stabilize and perfect the land contract relationship. The policy to prolong 30 years of the land contract term shall be firmly stuck to and the laws and regulations that can assure the long-term stability of the land contract relationship in rural areas shall be promulgated without delay to grant a long-term and protected land use right to farmers". In the trial of the case of land contract, this Central policy shall be carefully implemented and the land contract right and production self-determination rights and rights to gain proceeds from operation shall be protected by practical measures. The illegal activities such as arbitrarily increase the land contract fees, tearing up the contract, more than one contract in one land, taking back the land for high price contract, shortening the contract term shall be corrected strictly in accordance with laws.

2.

Doing a good job in the trial of the dispute arising from the contract for sale and purchase of agriculture products and byproducts. It is an important policy of the Party's adherence to market orientation in the reform of rural areas to reform the sale and purchase system of agriculture products, encourage the farmers to come into the circulation zone and to foster the market of agriculture products and the market of productive elements so that the rural economy throws away the limitation of natural economy and the fetter of planned economy. Under the new circumstances that the marketization extend are increasing in all stages of the sale and purchase of agriculture production, the strict performance of all kinds of sale and purchase contracts for agriculture products and byproducts is very important to the promotion of the reform in rural areas and the stable development of agriculture. In the trial of the cases of this kind of dispute, it shall start from the maintenance of the legal effect of the contract, to punish in accordance with law the activities that violate contracts, rescind contracts and other activities that infringe on the legal rights and interests of farmers. At present, in the trial of cases of the circulation of foodstuffs, the three policies that the open purchase of extra foodstuff by protecting price, the foodstuff collection and reservation enterprises shall sell with a profitable price, and foodstuff purchase fund operate in a closed cycle shall be firmly implemented, and such violating activities as the low price sale of foodstuffs by foodstuff dealers shall be punished in accordance with laws to assure the smooth going of the reform of the circulation system of foodstuffs.

3.

The cases of farmers harmed by production and sale of counterfeited and inferior seeds, fertilize and pesticide shall be tried timely. The activities to produce and sell counterfeited and inferior seeds, fertilize and pesticide cause great harms to agriculture production and impair greatly the interest of farmers. This kind of cases shall be tried timely and proper measures shall be taken to reduce loss and actually protect the rights and interest of farmers. It shall be guarded against to hear a case just for the sake of this case. The punishment of the producer and seller involved shall be attached importance to and the criminal clues thus found shall be referred to other competent authorities.

(5)

Issues concerning the trial of cases involving foreign elements and cases involving Hong Kong and Macao interests

In recent years, the economic disputes cases involving foreign elements and cases involving Hong Kong and Macao interests increase largely; the people's courts shall pay especial attention to the following issues at the time of trials:

1.

Paying adequate attention to the influence of Asian financial crisis to the trial of the cases involving foreign elements. Attention shall be paid at any moment to the new instances resulting from Asian financial crisis in the cases of disputes arising from Chinese-foreign joint venture investment, the equity transfer of Chinese-foreign joint venture enterprise, contracts for international sales of goods and other international economic and trade, to the study of new problems thereof and put forward corresponding countermeasures. At the same time, attentions shall be paid to the influence of the return of Hong Kong and Macao SAR to the motherland and the steps and measures taken in the process of joining the World Trade Organization to the import and export trade, foreign trade system and the reform of foreign trade operation mechanism and to the new problems that have come out or are about to come out in the economic trial.

2.

The issues concerning jurisdiction shall be dealt with prudence. In the trial of cases involving foreign element, the state sovereignty principles shall be stuck to. The case that shall be accepted by the court of our country in accordance with law shall be accepted firmly in accordance with law. In accepting cases, special attention shall be paid to the provisions of the Civil Procedure Law, strictly examining the connecting factors of the facts of the case so that the jurisdiction can be precisely determined. Where both parties are not the enterprises of our country and there is no actual relation between the disputes and our country and the investigation, evidence obtaining and execution are of real difficulties, the parties may be informed to institute litigation in the courts of other countries.

3.

Issues concerning the exit prohibition shall be prudently handled. In the trial of cases involving foreign elements or Hong Kong or Macao interests, the measures to prohibit the concerned party to leave the boundary may only be applied to such circumstances that the party has involved in un-concluded economic litigation that can't be tried or executed if the party concerned leaves the boundary. Where the overseas legal person is involved in the un-concluded economic litigation within the territory, the legal representative and the manager in charge of business may be prohibited to leave the boundary. Where the foreign-funded enterprise whose assets can't offset its debt, it shall be dealt with in accordance with the Corporation Law and the Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures; the representatives and investors of the foreign party shall not be prohibited to leave the boundary. Only where the foreign shareholder has deliberated fraudulence in the investment may the legal representative of the foreign shareholder be prohibited to leave the boundary. Where it is really necessary to prohibit the foreign party to leave the boundary, it shall be carried out in accordance with the provisions of Law of the People's Republic of China on Control of the Entry and Exit of Aliens. Special attention shall be paid to the rules that the implementation shall be with good reason, with advantage and with restraint and that prohibition the concerned foreign party to leave the boundary does not mean to limit the personal freedom of the party. Any limit of the personal freedom of the party shall be refrained strictly in accordance with law.

4.

Issues concerning the stop of payment of the fund under credit letter. Credit letter is a main payment method of international settlement. Disputes arising from credit letter are increasing along with the continued expansion of opening-up and increasing of foreign trade. In recent years, the freeze taken by the courts of our country on the fund under credit letter has attracted great attentions of the international legal world and the finance world and some improper freeze of the courts of our country has caused losses of international credit and property to the banks of our country. So we drafted the Provisions on Certain Issues of the Determination to Stop the Payment of Fund under Credit Letter (draft) for discuss. In dealing with these issues, one is to stick to the independent principle of credit letter and not to stop the payment of the fund under the credit letter due to the disputed arising from the contract for international sale of goods and other basic contracts; two is that the payment can only be stopped, as required by the applicant and with the guaranty of the applicants, where there is adequate evidence that the seller (the beneficiary) is conducting fraudulency under credit letter or providing fake bills. Three is that even it is under the second circumstances as mentioned above, but the credit letter has been accepted and transferred, or the credit letter has been negotiated, the payment shall not be stopped by determination. Because in such case, the fraudulence can't be stopped and by contrary, the rights and interests of the bona fide third party will be impaired and the issuing bank will be sued outside our country and may lose the suit. Some courts violate the above principles to abuse the payment stop measures, which not only can't recover loss, but also deteriorate the loss. Thus all courts shall hold the pass strictly and require the applicant to bear, in accordance with the law, the losses due to the freeze after mistake application.

5.

Issues concerning the support and supervision of international commercial arbitration. Arbitration and action are closely related as two methods of solving international economic and trade disputes. The court shall support the arbitration institutions in foreign business to exercise jurisdiction in accordance with law, and after receiving the request transferred by the arbitration institutions or the application made by concerned parties, shall not only take property preservation measures in accordance with laws or conduct implementation in accordance with law, but also pay attention to the exercise of the supervision powers as granted by laws to deny the execution of or revoke the awards of the arbitration institutions. The dealing with the arbitration with foreign elements or foreign arbitration by the courts of our country not only concerns the rights and interests of the parties but also has great influence to the international commercial arbitration and relates to the international fames of the courts of our country so that all courts shall pay much attention to it. In the process of specific trial of these issues, one is that the validity of the arbitration agreement shall be examined; where there is arbitration agreement between parties, the court shall respect the validity of the agreement and shall not accept the action instituted by the parties; two is the recognition of the validity of the arbitration agreement involving foreign elements shall apply correct laws and in general shall apply the laws of the country where the arbitration is agreed to occur; and refer to international usage for recognition. Only under the circumstances that Chinese laws are specified to be applied may the validity be recognized in accordance with article 17 and 18 of the Arbitration Law, Three is that the issues concerning the revoke of the awards of the arbitration involving foreign elements shall be examined strictly in accordance with article 71 of the Arbitration Law and Paragraph 1, article 260 of the Civil Procedure Law. The examination scope can't be extended arbitrarily. The confirmation of some issues in the arbitration procedures may look up in the materials and files of the arbitration trial. Four is that the convention on the recognition and enforcement of foreign arbitral awards shall be strictly abided by in the dealing with the recognition and enforcement of foreign arbitral awards as applied by the concerned parties. The deny of the validity of the arbitration awards with foreign elements, revoke of the arbitration awards with foreign elements, denial to recognize and enforce of foreign arbitral awards shall be approved by the Supreme People's Court in advance in accordance with relevant provisions. The fees and examination time limits of the recognition and enforcement of foreign arbitral awards shall subject to the Provisions on the Fees and Examination Time Limits of the Recognition and Enforcement of Foreign Arbitral Awards issued recently by the People's Supreme Court.

(6)

Certain Important Issues Concerning the Application of Guaranty Law

The Guaranty Law is an important law in the social and economic life in our country and has great importance to the promotion of fund finance and commodity circulation, to the assurance of the realization of creditor's rights and to the development of socialist market economy. Courts at all levels met a lot of law application problems in the trial practice within these 3 years since the implementation of the Guaranty Law. The Supreme People's Court based on the collection of the problems met in the trial practice and summary of the trail experience in all places, are carrying on the draft of the judicial interpretation of the Guaranty Law without delay. Because this law involves a lot of aspects, concerns every aspects of the social and economic life and relates to the basic theories of creditor's right law and law relating to rights over things, there are many issues require for further research though the judicial interpretation has requested the opinions of many. I just talk about certain issues here for discussion:

1.

Issues concerning the failure to make clear agreement on the guaranty terms. The guaranty term is an important issue of the Guaranty law. At present, the transactions in the market mainly adopt credit guaranty and the parties do not have standardized agreement on the guaranty term. There are serious disputes between the parties while in trial of related cases; even the adjudicatory personnel do not share the same opinion. The main problem arises from the circumstance that the parties fails to have a clear agreement on the guaranty term, for example, the agreement that "the guaranty liability lasts till the repayment of principal and interest" does not have an agreed specific expiring date of the guaranty term, then should it be deemed to be half an year as in reference to the "no agreement" as prescribed in the Guaranty Law or to be two years as in reference to the provisions of limitation of action. We hold that: anyway this circumstance does not equal to that the parties do not have an agreement, it is only no specified date in the agreement and it is improper to be dealt with as in accordance with the provisions of no agreement. So, it will be more proper to be two years as in reference to the provisions of limitation of action. But what shall be specified is that this period of time is guaranty term and has a different nature with the limitation of action and so it does not have the suspension and interruption as does in limitation of action.

2.

The issues concerning the validity in time of the application of the Guaranty Law. The Guaranty Law was passed and promulgated on June 30, 1995 and came into implementation on October 1 of the same year. Before the implementation of the Guaranty Law, the trial of the cases of guaranty disputes was carried out mainly in accordance with the General Principle of the Civil Law and the relevant interpretation of the Supreme People's Court. After the implementation of the Guaranty Law, there came the problem of the connection between new law and old laws. The Circular on Earnest Study and Implementation of the Law of Negotiable Instrument and the Guaranty Law ([1995] No. 19) issued by the Supreme People's Court has made clear provisions that the Guaranty Law does not have retroactivity ability, and the trial of the guaranty cases shall apply the laws of the time when the guaranty is occurred; where the laws of that time do not have relevant provisions, the Guaranty law may be referred to. And what is the time when the guaranty is occurred is not specified in the Circular. We think that the time when the guaranty is occurred means the time when the guaranty liability is set, i.e. the time when the guaranty contract is established rather than the time when guaranty liability has really occurred.

3.

Issues concerning the validity of the guaranty contract concluded involuntarily. This issue comes many from the trial of bankruptcy cases and the loan contract of banks involving the bankruptcy of enterprises. The reason is that the local government requires the bank to give loans to the enterprise with bad profit and directs other enterprise with better profit to provide guaranty. Where the debtor enterprise is not able to pay the loan or applies for bankruptcy, the bank requires the guarantor enterprise to bear guaranty liability while the guarantor enterprise requires the court to confirm the invalidity of the guaranty, arguing that the provision of guaranty is governmental order and violates its own will. Some courts thus confirm that this guaranty is invalid based on these reason, some courts even issue notice to the creditor bank, requiring the bank not to sue the guarantor; all these are not in conformity with the provisions of the Guaranty Law. Because that the guaranty contract is a contract between the creditor and the guarantor, and that the guarantor provides guaranty because the debtor deceits the guarantor or because a third party directs the guarantor to do so only means that there is flaw in the reason of the guarantor to provide guaranty and nothing to do with the creditor; the flaw does not necessarily affect the validity of the guaranty contract, except that the creditor has fraudulent or intimidating activities. The Supreme People's Court has issued circular on this issues, so please pay full attention to this issue.

The deputy president of the Supreme People's Court: Li Guoguang

November 23, 1998

  The Supreme People's Court 1998-11-23  


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