2022.10.08
JunHe represented the provincial branch of a large state-owned bank (the “Client) in a dispute initiated by the bankruptcy administrator of a domestic enterprise that was seeking to cancel certain repayments (the “Case”). The Municipal Intermediate People's Court (the "Court of First Instance") and the Provincial High People's Court (the "Court of Second Instance") adopted all of JunHe's representations and ruled to reject all the requests made by the counterparty.
In this Case, the bankrupt enterprise repaid the Client in several instalments totaling more than RMB 560 million from June 2019 to September 2019. On 29 November 2019, the Court of First Instance ruled to accept the bankrupt enterprise's application for bankruptcy liquidation and appointed a bankruptcy administrator. The bankrupt administrator subsequently filed this Case, requesting the cancellation of certain repayments made by the bankrupt enterprise to the Client of over RMB 560 million and for the return of the principal and interest on the amount repaid.
JunHe’s team sorted through many contracts and disbursement and repayment transactions between the two parties within a short period of time and conducted legal research and analysis on the application of Article 32 of the Enterprise Bankruptcy Law of the People's Republic of China ("Enterprise Bankruptcy Law"). They decided on a litigation strategy of "specifically classifying repayments according to their characteristics and clearly stating the circumstances of each payment and their unsatisfaction of all or part of the requirements of Article 32 of the Enterprise Bankruptcy Law or exceptions thereto". JunHe prepared a detailed defense and case search report and organized an expert hearing. JunHe adhered to this litigation strategy throughout the Case and their opinions were fully adopted by the Court of First Instance and the Court of Second Instance, laying a solid foundation for the eventual successful outcome of the Case.
The difficulty and special characteristics of this Case:
The repayments all occurred within six months before the Court of First Instance ruled that the bankrupt enterprise’s petition for bankruptcy liquidation was accepted, which prima facie satisfied the time requirements stipulated in Article 32 of the Enterprise Bankruptcy Law.
The Case involved specialized knowledge of operational practices and norms in banking and foreign exchange management, requiring the lawyers to understand the relevant industry practices and norms in a short period of time in order to fully apply them to the Case.
The connotation and extension of the provisions of Article 32 of the Enterprise Bankruptcy Law are unclear, and judicial practice has not formed clear guidance, requiring the lawyers to sort through many different laws, regulations and judicial cases and summarize the rules in a short period of time to form a class case search report, for the Court making the most favorable decision for the Client.
The Case fully demonstrates the ability of JunHe’s lawyers to accurately grasp the key points of the Case and collect and understand a vast amount of documentation in a very short period. The rigorous and thorough preparation and the outstanding trial performance of JunHe’s legal team maximized the protection of the Client's rights and interests and were highly recognized and praised by the Client.
The lead partners were ZOU, Weining, YANG, Li and ZHOU, Jun, with YANG, Li and other lawyers appearing in the Case. WANG, Lihua also assisted at different stages during the Case.
