Provisions of the Supreme People's Court on Several Issues Concerning the Guaranteeing of Enforcement

February 23, 2018

For the purpose of further standardizing the guaranteeing of enforcement and protecting the legal rights and interests of the parties concerned and interested parties, these Provisions are formulated in accordance with the Civil Procedure Law of the People's Republic of China and other applicable laws and regulations and in consideration of practical enforcement.

Article 1 For the purpose of these Provisions, a guarantee of enforcement means the guarantee, provided by the guarantor before the people's court in accordance with Article 231 of the Civil Procedure Law, that the party subject to enforcement will fulfill its obligations, in whole or in part, specified in the effective legal instrument.

Article 2 A guarantee of enforcement may be the guarantee provided by the party subject to enforcement with its property, or the guarantee provided by another party with its property or the warranty given by another party. 

Article 3 Where a guarantee is provided by the party subject to enforcement or another party, it shall issue a letter of guarantee to the people's court, and send a copy of such letter to the enforcement applicant.

Article 4 The letter of guarantee shall clearly specify the basic information of the guarantor, duration of suspended enforcement, guarantee period, category and amount of the guaranteed creditor's rights, guarantee coverage, means of guarantee, the promise of the guarantor that it voluntarily accepts the direct compulsory enforcement if the party subject to enforcement still refuses to perform its duties after the duration of suspended enforcement has expired, etc.
Where the guarantee is provided with property, the letter of guarantee shall also specify the name, quantity, quality, status, location and ownership of the pledged property or who holds the right to use such property, etc.

Article 5 Where a company provides the guarantee of enforcement for the party subject to enforcement, it shall submit its articles of association and the resolution adopted by the board of directors or board of shareholders or at the general meeting of shareholders, which shall be in line with Article 16 of the Company Law.

Article 6 Where the party subject to enforcement or another party provides the guarantee of enforcement, the enforcement applicant shall issue written consent to the people's court if it agrees with the provision of a guarantee; alternatively, the enforcement officers can include the applicant's consent in the written record and have the applicant sign or stamp the record.

Article 7 Where the party subject to enforcement or another party provides the guarantee with its property, it may handle the registration and other formalities to publicize real rights for security, in accordance with the Real Rights Law and the Security Law; if such formalities have been completed, the enforcement applicant may claim its priority for repayment according to the law.
Where the enforcement applicant claims before the people's court to have the pledged property sealed up, detained or frozen, the people's court shall agree to its claim, unless otherwise specified in the letter of guarantee.

Article 8 Where the people's court decides to defer enforcement, it is possible to have all enforcement measures suspended and postponed, unless otherwise specified in the letter of guarantee.

Article 9 Where the content set out in the letter of guarantee does not conform to the truth, and a substantial impact arises on the enforcement applicant's legal rights and interests, the people's court may resume the enforcement of the original effective legal instrument, if the enforcement applicant requests it to do so.

Article 10 The duration of suspended enforcement shall be in line with the period agreed in the letter of guarantee, and be up to one year.

Article 11 Where the party subject to enforcement still refuses to fulfill its obligations after the period of suspended enforcement has expired, or the guarantor transfers, conceals, sells at low prices, or destroys the pledged property during the period of suspended enforcement, the people's court may resume the enforcement of the original effective legal instrument, if the enforcement applicant requests it to do so, and directly rule to enforce against the pledged property or the warrantor's property, and shall not deem or recognize the guarantor as another party subject to enforcement.
Enforcing against the pledged property or the warrantor's property shall be limited to the property with which the guarantor shall perform its obligations. Where the party subject to enforcement has any cash or bank deposits, against which it is convenient to take enforcement actions, the enforcement actions shall be taken against such cash or bank deposits first.

Article 12 The guarantee period shall be calculated from the expiration of the period of suspended enforcement.
Where the letter of guarantee does not specify the guarantee period or the guarantee period given in the letter of guarantee is unclear, the guarantee period shall be one year.

Article 13 Where the enforcement applicant applies for enforcement against the pledged property or the warrantor's property, after the expiration of the guarantee period, the people's court shall not uphold such application. Where another party provides a guarantee with its property, the people's court may have the pledged property freed from being sealed up, detained or frozen, upon such party's application.

Article 14 Where the guarantor, after bearing the guarantee liability, may lodge a lawsuit against the party subject to enforcement for reimbursement, the people's court shall accept the lawsuit.

Article 15 Where the party subject to enforcement claims to have all or part of enforcement actions changed or lifted, and undertakes to fulfill its obligations under the effective legal instrument, these Provisions shall apply mutatis mutandis.

Article 16 These Provisions shall come into force as of March 1, 2018.
A guarantee of enforcement established before the effectiveness of these Provisions shall not be governed by these Provisions.
Where there is any discrepancy between these Provisions and the judicial interpretations issued by the Supreme People's Court before the implementation of these Provisions, these Provisions shall prevail.