Chinese Supreme Court Guidelines on Coronavirus Epidemic Cases

 

Supreme People’s Court on Several Issues Concerning the Proper Trial of Civil Cases Involving Coronavirus Pandemic Cases

Supreme people's court Issued on the proper trial of civil cases involving new coronary pneumonia according to law:

 

Notice on Guiding Opinions on Certain Issues

The Higher People's Courts of all provinces, autonomous regions and municipalities directly under the Central Government, the Military Court of the People's Liberation Army, and the Branch of the Production and Construction Corps of the Higher People's Court of Xinjiang Uygur Autonomous Region:

 

The Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Proper Trial of Civil Cases Involving New Coronary Pneumonia Epidemic Cases is printed and issued to you. Please implement them carefully.

 

 

Supreme people's court

 

On the proper trial of civil cases involving new coronary pneumonia according to law

 

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Guidance on several issues

In order to further implement the Party Central Committee ’s overall plan to promote the prevention and control of the new coronary pneumonia epidemic and economic and social development, it will do a good job of the “six stability”, implement the “six guarantees” task, and guide the people’s courts at all levels to properly review the new coronary pneumonia outbreak contract, Financial, bankruptcy and other civil cases, the following guidance is proposed.

 

I. Trial of contract cases

 

1. The epidemic situation or epidemic prevention and control measures cause the parties to fail to perform the sales contract within the agreed time limit or increase the cost of performance. Continued performance does not affect the realization of the purpose of the contract. If the parties request to terminate the contract, the people's court will not support it.

 

Supreme People's Court

If the epidemic situation or epidemic prevention and control measures cause the seller to fail to complete the order or deliver the goods within the agreed time limit, continue to perform the contract purpose of the buyer, the buyer requests to terminate the contract, and the prepayment or deposit paid has been returned, the people's court should be supported if the buyer requests the seller to bear the responsibility for breach of contract, the people's court will not support it.

 

2. The sales contract can continue to be performed, but the epidemic situation or epidemic prevention and control measures have led to a significant increase in labor, raw materials, logistics and other performance costs, or caused a significant price reduction in the product. Continued performance of the contract is obviously unfair to one party, and the affected party requests adjustment For the price, the people's court shall adjust the price according to the principle of fairness in light of the actual situation of the case. If the epidemic situation or epidemic prevention and control measures cause the seller to fail to deliver within the agreed period, or the buyer cannot pay within the agreed period, and the parties request to change the performance period, the people's court shall combine the actual situation of the case and change the performance according to the principle of fairness the term.

 

If the contract has been changed by adjusting the price, changing the performance period, etc., and the parties request the other party to bear the responsibility for breach of contract, the people's court will not support it.

 

3. After the seller and the buyer have entered into a contract for the sale of epidemic prevention materials, the high price of the epidemic prevention materials will be resold to others and the contract cannot be fulfilled. If the buyer requests that the profit from the seller be used as the amount of compensation for damages, the people's court shall support it. If the government calls for or temporarily requisitions the epidemic prevention materials, which prevents the seller from fulfilling the sales contract, and the buyer requests the seller to bear the responsibility for breach of contract, the people ’s court shall not support it.

 

4. If the epidemic situation or the epidemic prevention and control measures cause the seller to fail to deliver the house within the time limit agreed in the commercial house sales contract, or cause the buyer to fail to pay the purchase price within the agreed time period, and the parties request to terminate the contract, the other party shall bear the responsibility for breach of contract. The court did not support it. However, if the parties request to change the time limit for performance, the people's court shall make changes based on the principle of fairness in light of the actual situation of the case.

 

5. The leased house is used for business. The epidemic situation or epidemic prevention and control measures caused the lessee's capital turnover to be difficult or the operating income was significantly reduced. The lessor requested the termination of the lease contract on the ground that the lessee did not pay the rent within the agreed period, and the lessee shall bear the breach of contract. The people's court will not support the responsibility.

 

For temporary venue lease contracts reserved for specific purposes such as exhibitions, conferences, temple fairs, etc., the epidemic situation or epidemic prevention and control measures have led to the cancellation of the activity. If the lessee requests to cancel the lease contract and return the advance payment or deposit, the people ’s court shall support it.

 

6. Lease of houses of state-owned enterprises and houses of administrative institutions such as government departments, universities, research institutes, etc. for operation. Small and micro enterprises in service industry, individual industrial and commercial households and other tenants who have operating difficulties due to the epidemic situation or epidemic prevention and control measures, request if the lessor exempts the rent within a certain period in accordance with relevant national policies, the people’s court shall support it.

 

Lease of non-state-owned houses for operation, epidemic or epidemic prevention and control measures lead to less or no significant reduction in operating income, continue to pay rent in accordance with the original lease contract is obviously unfair, lessee requests to reduce rent, extend the lease term or extension. If the rent is paid, the people's court may guide the parties to carry out mediation with reference to the policy on rent reduction and exemption. If the mediation fails, the contract shall be changed according to the principle of fairness based on the actual situation of the case.

 

COVID Rules and Regulations

7. If the contractor fails to complete the construction within the agreed time limit due to the epidemic situation or the epidemic prevention and control measures, the people’s court will not support the contractor ’s request for the contractor’s breach of contract.

If the contractor requests an extension of the time limit, the people’s court shall consider the epidemic situation or the epidemic situation The degree of impact of prevention and control measures on contract performance shall be supported as appropriate.

 

The epidemic situation or epidemic prevention and control measures have led to a significant increase in the cost of labor, building materials, etc., or caused the contractor to suffer losses such as labor costs and equipment rental fees. Continued performance of the contract is obviously unfair to the contractor. If the contractor requests an adjustment of the price, the people’s court shall combine The actual situation of the case is adjusted according to the principle of fairness.

 

8. The offline training contract entered into by the parties cannot be trained offline due to the epidemic situation or the epidemic prevention and control measures, and can achieve the purpose of the contract through online training or changing the training period. Support, if the parties request to continue to perform the contract through online training, change the training period, adjust the training cost, etc., the people's court should combine the actual situation of the case and change the contract according to the principle of fairness.

 

Affected by the epidemic situation or epidemic prevention and control measures, offline training cannot be conducted, the contract purpose cannot be achieved through online training, or the actual situation of the case indicates that online training is not suitable. If the training party requests to terminate the contract, the people's court shall support it. For a training contract with time-limiting requirements, if the training period is changed and the purpose of the contract cannot be achieved, if the recipient accepts the request to terminate the contract, the people’s court shall support it. 

After the training contract is cancelled, the training fees already paid in advance shall be refunded in whole or in part according to the training hours and other circumstances.

 

9. Persons with limited capacity for civil conduct, who do not agree with their guardians, participate in online payment games or "reward" on online live broadcast platforms and spend money that is incompatible with their age and intelligence. If the guardian requests the network service provider to return the money, the people The court should support it.

 

II. The trial of financial cases

10. The People's Court is hearing the disputes involving financial loans involving industries that are more affected by the epidemic situation or the epidemic prevention and control measures, as well as promising enterprises that are temporarily affected by the epidemic situation or the epidemic prevention and control measures, especially small and medium-sized enterprises. Full consideration should be given to the series of financial support policies such as the “Notice on Further Strengthening Financial Support to Prevent and Control New Coronavirus Infection Pneumonia” issued by the five departments including the People’s Bank of China. Loans due to financial institutions that violate financial support policies expire early and are unilaterally released. Litigation claims such as contracts are not supported by the people’s courts. 

The interest charged by financial institutions and the disguised interest charged in the name of consulting fees, guarantee fees and other fees must be strictly based on the provisions of special credit preferential interest rate policies such as national re-loan and discount. No support for the excess involved in hospitalization or isolation of new coronary pneumonia or isolation personnel, epidemic prevention and control need to isolate observers, staff participating in epidemic prevention and control, and persons affected by epidemic or epidemic prevention and control measures who temporarily lose their source of income. 

Housing mortgage, credit card and other personal Disputes, the people's court should be combined with the actual circumstances of the case, change the repayment period according to the principle of fairness.

 

11. Epidemic prevention materials production and operation enterprises set up floating mortgages with their production equipment, raw materials, semi-finished products, products and other movable property, and the mortgagee shall apply for the realization of the security rights in accordance with Article 196 of the Civil Procedure Law of the People's Republic of China After the people's court accepts the application, if the respondent or interested party can prove that the realization of the mortgage right will endanger the production and operation of the enterprise's epidemic prevention materials, they may wait for the epidemic situation or the factors affecting the epidemic prevention and control measures to be resolved.

 

12. For stock pledge and financing and securities lending disputes caused by stock market price fluctuations during epidemic prevention and control, different situations should be dealt with: for the on-site stock pledge and financing and securities lending disputes where creditors are securities companies, the People’s Court can refer to the China Securities Regulatory Commission. The relevant policies issued by the meeting will guide securities companies to negotiate and resolve disputes with different customer groups in accordance with the policy.

 If the negotiation fails, the client’s lawsuit requesting the securities company to bear the liability for compensation for the part of the loss expansion caused by the illegal liquidation of the regulations will be supported according to law. For OTC stock pledge disputes where creditors are other financial institutions, the people’s court should fully consider the impact of the realization of stock pledges on the normal operation of listed companies, strengthen policy guidance and coordination of interests of all parties, and strive to reduce the impact on the securities market.

 

13. When the people's court hears a case of infringement of civil compensation for a false statement of a listed company, when determining the amount of investor losses, it shall be in accordance with Article 19, Articles of the Supreme People's Court on the Trial of Civil Compensation Cases Caused by False Statements in the Securities Market The provisions of the four items distinguish between the epidemic situation or the factors affecting the epidemic prevention and control measures and the misrepresentation of stock price losses, and determine the scope of loss compensation fairly and reasonably according to law.

 

14. For the disputes caused by the implementation of the "performance-to-gambling agreement" by companies or their shareholders, actual controllers and investors that have been severely affected by the epidemic situation or the epidemic prevention and control measures such as wholesale and retail, accommodation and catering, logistics and transportation, cultural tourism, etc. 

The actual situation of the impact of the epidemic situation or epidemic prevention and control measures on the performance of the target company should be fully considered, and the parties should be guided to negotiate changes or cancellation of the contract.

If the parties fail to negotiate and continue to perform according to the agreed performance standards or the amount of performance compensation, which is obviously unfair to one party, the people’s court shall, in light of the actual situation of the case, change or cancel the contract according to the principle of fairness; if the contract is cancelled, the contract shall be reasonably allocated according to law Lift the loss caused.

 

If the "performance-to-gambling agreement" does not clearly stipulate that the company's small and medium shareholders and the controlling shareholder or the actual controller shall bear joint and several liabilities for performance compensation, the investor shall be required to jointly and jointly sue the small and medium shareholders and the company, the controlling shareholder or the actual controller for joint liability. The request was not supported by the people's court.

 

15. When hearing medical insurance contract disputes related to the epidemic situation or epidemic prevention and control measures, the People's Court does not support the defense that the disease is not within the scope of the major disease or insurance accidents stipulated in the commercial medical insurance contract. 

If the insured who is infected with New Coronary Pneumonia fails to receive treatment at the medical service institution as stipulated in the insurance contract due to the epidemic situation or the epidemic prevention and control measures, the insured or the beneficiary shall request the insurer to pay compensation according to the contract of the insurance contract. Should be supported. 

The contracted expenses incurred by the insured to receive treatment at a medical service institution not stipulated in the insurance contract due to other diseases are indeed caused by objective reasons such as epidemic situation or epidemic prevention and control measures. If the insured or the beneficiary requests compensation, the people’s court shall support . If the insured or the beneficiary requests compensation according to the medical insurance contract donated by the insurance company during the epidemic prevention and control period, the people’s court shall support it.

 

16. In the trial of civil disputes arising from the financial leasing business of medical equipment between a financial leasing company and a medical service organization, the medical service organization claims that the financial leasing contract is invalid on the ground that the financial leasing company has not obtained the medical device sales administrative license The People’s Court did not support the defense.

 

III. The trial of bankruptcy cases

 

17. Enterprises affected by the epidemic situation or the epidemic prevention and control measures cannot pay off their due debts. If a creditor applies for bankruptcy, the people’s court shall actively guide the debtor to negotiate with the creditor and eliminate it by instalment payment, extension of the debt performance period, change of contract price, etc. Reasons for bankruptcy application, or guide the debtor to resolve the debt crisis through out-of-court mediation, out-of-court reorganization, pre-reorganization, etc., so as to achieve the early rescue of the enterprise.

 

Coronary Pneumonia

18. When examining whether an enterprise meets the conditions for acceptance of bankruptcy, the people ’s court should pay attention to whether the enterprise is in a dilemma and is treated differently due to the epidemic situation or the epidemic prevention and control measures. 

For enterprises that were in good business conditions before the outbreak, caused by the epidemic or the impact of the epidemic prevention and control measures, and unable to pay off due debts due to the difficulty of capital turnover, the company's ability to solve the problem should be comprehensively determined based on factors such as the company's sustainable operating capacity and the development prospects of the industry. 

In order to prevent the ruling of an enterprise that originally had the ability to survive into bankruptcy simply based on the capital flow and assets and liabilities of the enterprise in a specific period. Enterprises that have fallen into a predicament before the outbreak of the epidemic, whose production and operation have further deteriorated due to the epidemic or the epidemic prevention and control measures, and who already have the cause of bankruptcy, should accept the bankruptcy application in time according to law to achieve the survival of the fittest in the market and the reallocation of resources.

 

19. To further promote the link between execution and bankruptcy proceedings. If it is found in the execution procedure that the person subject to execution has the cause of bankruptcy due to the epidemic situation but has salvage value, the creditor or person subject to execution shall be guided to the bankruptcy review by means of interpretation, etc., and the execution suspension and preservation prescribed by the Enterprise Bankruptcy Law shall be used reasonably.

The system of cancellation, interest stop and payment stop effectively preserves the operating value of the enterprise and wins space for the regeneration of the enterprise. At the same time, actively guide enterprises to apply bankruptcy reorganization and reconciliation procedures, comprehensively solve the corporate debt crisis, fair and orderly repay all creditors, and realize the protection and rescue of the difficult enterprises.

 

The judicial auction procedure that has been initiated before the court made the transfer decision may continue after the transfer decision is made. If the auction is completed, the subject of the auction will no longer be included in the debtor’s property in the bankruptcy proceedings, but the auction proceeds shall be distributed in accordance with the bankruptcy proceedings according to law. 

If an asset evaluation report or an audit report has been made during the execution procedure, and the evaluation conclusion is within the validity period or the audit conclusion meets the needs of the bankruptcy case, it may continue to be used in the bankruptcy procedure.

 

20. In the bankruptcy reorganization procedure, if the investor cannot be recruited due to the epidemic or the impact of the epidemic prevention and control measures, due diligence and negotiation cannot be submitted on time, the people’s court may follow the application, based on the actual impact of the epidemic situation or epidemic prevention and control measures on the reorganization work, is reasonably determined that it should not be included in the period specified in Article 79 of the Enterprise Bankruptcy Law, but generally not exceeding six months.

 

If the reorganization plan or settlement agreement has entered the implementation stage, but the debtor is difficult to implement due to the impact of the epidemic situation or the epidemic prevention and control measures, the people’s court shall actively guide the parties to fully negotiate to make changes. 

Anyone who negotiates to change the reorganization plan or the settlement agreement shall vote in accordance with the provisions of Articles 19 and 20 of the "Minutes of the National Bankruptcy Trial Work Conference" and submit it to the court for approval. However, if only the execution period is changed, the people’s court may make a ruling directly on the basis of the debtor’s or creditor’s application.

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