Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of Enforcement Procedures under the Civil Procedure Law of the People's Republic of China

Fa Shi [2008] No. 13

November 3, 2008

Adopted at the 1452nd meeting of the Judicial Committee of the Supreme People's Court on September 8, 2008, the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of Enforcement Procedures under the Civil Procedure Law of the People's Republic of China is hereby promulgated and will become effective on January 1, 2009.

Supreme People's Court

November 3, 2008

For the purposes of effectively implementing valid legal documents in a lawful and timely manner and maintaining the lawful rights and interests of parties concerned, certain issues regarding the application of law in enforcement procedures are hereby interpreted as follows in accordance with the Civil Procedure Law of the People's Republic of China as amended in October 2007 (hereinafter referred to as the Civil Procedure Law) and in light of the actual enforcement work of the people's courts.

Article 1 Any enforcement applicant that files an application with the people's court at the place where the property against which enforcement action is sought is located shall provide evidential materials to prove that there is property in respect of which enforcement action can be taken in the area under the jurisdiction of the people's court concerned.

Article 2 In the event that two or more people's courts have jurisdiction over an enforcement case, where one court, prior to filing the case, finds that the case has already been put on record by another court with jurisdiction, it shall not put the case on record.
Where a court, after putting a case on record, finds that the case has already been put on record by another court with jurisdiction, it shall dismiss the case. Where the court has taken enforcement measures, it shall deliver the property under its control to the court that first put the case on record.

Article 3 After a people's court has accepted an application for enforcement, any party that has an objection to the court's jurisdiction shall lodge the objection within ten days of receipt of the enforcement notice.
The people's court shall review any objection lodged by a party. Where an objection is sustained, the court shall dismiss the enforcement case and notify the party concerned to apply for enforcement with the competent court. Where an objection is overruled, the court shall rule that the objection be dismissed. Any applicant that refuses to accept any such ruling may file an application for reconsideration with the people's court at the next higher level.
The enforcement process shall continue during the review or reconsideration of any objection to jurisdiction.

Article 4 With regard to a case where a people's court takes property preservation measures, if an enforcement applicant files an enforcement application with a people's court with jurisdiction other than the court taking property preservation measures, the court taking property preservation measures shall deliver the preserved property to the enforcement court for treatment.

Article 5 During an enforcement process, any party or interested party who considers that the enforcement activities of the enforcement court are in violation of the law may lodge an objection in accordance with Article 202 of the Civil Procedure Law.
Any enforcement court that reviews an objection to enforcement shall make a ruling within fifteen days of receipt of the written objection.

Article 6 Any party or interested party who applies for reconsideration in accordance with Article 202 of the Civil Procedure Law shall file the application in writing.

Article 7 Written materials for a reconsideration application made by a party or an interested party may either be transferred through the enforcement court or submitted directly to the court at the next higher level than the enforcement court.
The enforcement court shall, within five days of receipt of the application for reconsideration, submit the case file materials required for the reconsideration to the people's court at the next higher level. The people's court at the next higher level shall, after receiving the application for reconsideration, notify the enforcement court to submit the case file materials required for the reconsideration within five days.

Article 8 The people's court at the next higher level shall form a judicial panel to review the reconsideration application of any party or interested party.

Article 9 Where a party or interested party applies for reconsideration in accordance with Article 202 of the Civil Procedure Law, the people's court at the next higher level shall complete the review within thirty days of receipt of the application for reconsideration, and make a ruling. Where the review needs to be extended under special circumstances, the president of the court may approve an extension of no longer than thirty days.

Article 10 The enforcement process shall continue during the review or reconsideration of any objection.
Where an enforcee or interested party provides an adequate and effective guarantee in seeking to halt the relevant disposal measures, the people's court may allow such an application; where an enforcement applicant provides an adequate and effective guarantee in seeking to continue the enforcement process, the enforcement process shall be continued.

Article 11 In accordance with Article 203 of the Civil Procedure Law, in any of the following circumstances, the people's people's court at the next higher level may, according to the request made by an enforcement applicant, order the enforcement court to take enforcement action within a specified period of time or change the enforcement court:
1. Where, although the enforcee had enforceable property when a creditor applied for enforcement, the enforcement court has failed to complete the enforcement process in respect of that property within six months of receipt of the enforcement application;
2. Where, although enforceable property was found during the enforcement process, the enforcement court has failed to complete the enforcement process in respect of that property within six months of finding it;
3. Where the enforcement court has failed to take measures to enforce obligations specified in the relevant legal documents within six months of receipt of the enforcement application; or
4. In any other circumstances where an enforcement process that meets all applicable conditions has not been completed within six months.

Article 12 When it orders an enforcement court to complete the enforcement process within a specified period in accordance with Article 203 of the Civil Procedure Law, the people's court at the next higher level shall issue an enforcement supervision and urgency order to the court and notify the enforcement applicant of the relevant information in writing.
When making a decision that the enforcement process is to be completed by itself or any other court under its jurisdiction, the people's court at the next higher level shall make a ruling, serve the ruling on the parties, and inform the relevant court.

Article 13 Where an enforcement court fails to complete the enforcement process within the period specified in the order of the people's court at the next higher level and has no justifiable reason, the people's court at the next higher level shall rule that the enforcement process is to be completed by itself or by any other court under its jurisdiction.

Article 14 None of the periods for public announcements, authentication and appraisal, settlement of jurisdictional disputes, mediation of enforcement disputes, adjournment of enforcement procedures or suspension of enforcement procedures shall be included in the time limit of six months specified in Article 203 of the Civil Procedure Law.

Article 15 Any party not involved in a case who claims the ownership of the subject matter of enforcement or who has other substantive rights which suffice to prevent the transfer or delivery of the subject matter of enforcement may, in accordance with Article 204 of the Civil Procedure Law, lodge an objection with the enforcement court.

Article 16 No people's court shall dispose of the subject matter of enforcement during the review of any objection made by a party not involved in the case.
Where a party not involved in a case provides an adequate and effective guarantee in seeking to cancel the sequestration, seizure or freezing of the property in respect of which an objection is lodged, the people's court may approve its application; where an applicant provides an adequate and effective guarantee in seeking to continue the enforcement process, the enforcement process shall be continued.
Where enforcement action cannot be taken against subject property due to the wrongful cancellation of any sequestration, seizure or freezing procedure, the court may taken enforcement action using the collateral posted for a guarantee. Where any loss is suffered by a party not involved in a case due to the wrongful continuation of an enforcement process based on an application made by an applicant that has provided a guarantee, the applicant shall pay compensation.

Article 17 Where a party not involved in a case institutes a lawsuit in accordance with Article 204 of the Civil Procedure Law to claim that it has substantive rights in the property subject to an enforcement process and applies for the enforcement process relating to the subject property to be discontinued, the suit shall be filed against the enforcement applicant; where the enforcee disputes the claim made by the party claiming such substantive rights, the suit shall be filed against the applicant and enforcee as joint defendants.

Article 18 Any suit instituted by a party not involved in a case in accordance with Article 204 of the Civil Procedure Law shall fall within the jurisdiction of the enforcement court.

Article 19 Any suit instituted by a party not involved in a case in accordance with Article 204 of the Civil Procedure Law shall be heard by the enforcement court in accordance with litigation procedures. Where the basis of the claim is not upheld by the court, the court shall make a ruling dismissing the claim; where the basis of the claim is upheld by the court, the court shall make corresponding decisions in accordance with the plaintiff's claim.

Article 20 Where a party not involved in a case institutes a lawsuit in accordance with Article 204 of the Civil Procedure Law, no enforcement process shall be discontinued while the case is being dealt with.
Where a party not involved in a case has a justifiable basis for his claim or provides an adequate and effective guarantee in seeking to have an enforcement process discontinued, the court may make a ruling that the subject property against which enforcement action is being taken not be disposed of; where an applicant provides an adequate and effective guarantee in seeking to have an enforcement process continued, the enforcement process shall be continued.
Where there is any error in a plaintiff's application to have an enforcement process discontinued or to have any sequestration, seizure or freezing procedure cancelled, or where there is any error in an applicant's request to have an enforcement process continued, and the relevant error causes the other party to suffer a loss, the plaintiff or the enforcement applicant shall pay compensation.

Article 21 Where an enforcement applicant institutes a lawsuit in accordance with Article 204 of the Civil Procedure Law to request that enforcement action be taken in respect of the subject property, the suit shall be filed against the party not involved in the case; where the enforcee disputes the claim of the enforcement applicant, the suit shall be filed against the party not involved in the case and the enforcee as joint defendants.

Article 22 Any suit instituted by an enforcement applicant in accordance with Article 204 of the Civil Procedure Law shall fall within the jurisdiction of the enforcement court.

Article 23 Where an enforcement applicant fails to institute a lawsuit within fifteen days of receipt of a ruling made by a court in accordance with Article 204 of the Civil Procedure Law that the enforcement process in respect of the property subject to an objection be suspended, the people's court shall make a ruling overturning enforcement measures which have been taken.

Article 24 Any suit instituted by an enforcement applicant in accordance with Article 204 of the Civil Procedure Law shall be heard by the enforcement court in accordance with litigation procedures. Where the basis of the claim is not upheld by the court, the court shall make a ruling dismissing the claim; where the basis of the claim is upheld by the court, the court shall make corresponding decisions in accordance with the plaintiff's claim.

Article 25 Where two or more creditors apply for enforcement action in respect of the same enforcee or to share in the distribution of the property in respect of which enforcement action is being taken, the enforcement court shall produce a property distribution plan and serve the plan on each creditor and the enforcee. Where any creditor or the enforcee has an objection, it shall lodge the objection in writing with the enforcement court within fifteen days of the date on which it receives the plan.

Article 26 Where any creditor or enforcee lodges a written objection to a property distribution plan, the enforcement court shall notify the creditors and enforcees who did not lodge the objection.
Where any creditor or enforcee that did not lodged the objection fails to express disagreement within fifteen days of receiving the notice, the enforcement court shall distribute the property pursuant to the plan as revised in accordance with the objection. Where any creditor or enforcee that did not lodge the objection expresses disagreement with the plan, the court shall pass on its opinion to the objecting parties. The objecting parties may, within fifteen days of receiving the notice, institute a lawsuit with the enforcement court against the creditors and enforcees expressing disagreement. Where any objecting party fails to institute a suit within the specified period, the enforcement court shall distribute the property in accordance with the original plan.
Where a distribution is made in the course of litigation, the enforcement court shall hold an amount equivalent to the debt in dispute in escrow.

Article 27 Where it is impossible to exercise claim rights due to force majeure or any other obstacle during the last six months of the application period for enforcement, the application time limit shall be suspended and shall be resumed from the date on which the grounds for the suspension disappear.

Article 28 The time limit for any enforcement application shall be discontinued when an application is filed, both parties reach a resolution agreement or either party makes an enforcement demand or agrees that an obligation has been performed. The enforcement application time limit shall be calculated anew after being discontinued.

Article 29 Where a legally effective document specifies that an obligor has a non-feasance obligation, the enforcement application time limit shall start from the date on which the obligor violates its non-feasance obligation.

Article 30 Where enforcement officials take compulsory enforcement measures in accordance with Article 216 of the Civil Procedure Law, the enforcement notice may be issued either simultaneously or within three days of the date on which such measures are taken.

Article 31 When ordering an enforcee to report information on his property in accordance with Article 217 of the Civil Procedure Law, the people's court shall issue a property reporting order, which shall specify the scope of property to be reported on, the period to be covered by the report, and the legal liabilities for refusal to report or giving a false report, etc.

Article 32 Enforcees shall provide a written report on the following types of property in accordance with Article 217 of the Civil Procedure Law:
1. Income, bank deposits, cash and marketable securities;
2. Land use rights, houses and other real estate;
3. Transport vehicles, machinery and equipment, products, raw materials and other movables;
4. Creditors'rights, equities, investment interests, funds, intellectual property and other property rights; and
5. Other reportable property.
Enforcees shall report on any changes in their property that have occurred from one year before they receive an enforcement notice until the present time.
Where an enforcee has performed all his obligations during the reporting period, the people's court shall make a ruling terminating the reporting procedure.

Article 33 Where any change that affects the creditor's rights of the enforcement applicant has occurred to the property of an enforcee after it has been reported, the enforcee shall provide a supplementary report to the people's court within ten days of the occurrence of the relevant change.

Article 34 Where an enforcement applicant requests that he check the property information reported by the enforcee, the people's court shall permit him to check such information. The enforcement applicant shall maintain the confidentiality of all information on the enforcee's property he checks.

Article 35 An enforcement court may, pursuant to its own powers or at the request of the enforcement applicant, investigate and check the property information reported by an enforcee.

Article 36 In order to restrain an enforcee from leaving the territory in accordance with Article 231 of the Civil Procedure Law, the enforcement applicant shall file a written application with the enforcement court; when necessary, the enforcement court may make a decision pursuant to its own powers.

Article 37 Where an enforcee is an institution, its legal representative, main personnel in charge or personnel directly responsible for influencing the performance of its obligations may be restrained from leaving the territory.
Where an enforcee is a person without civil capacity or with limited civil capacity, his or her legal agent may be restrained from leaving the territory.

Article 38 Where an enforcee performs all the obligations specified in the relevant legal documents during the period for which he is restrained from leaving the territory, the enforcement court shall withdraw the measures restraining the enforcee from leaving the territory without delay; where the enforcee provides an adequate and effective guarantee or the enforcement applicant agrees, the measures restraining the enforce from leaving the territory may also be withdrawn.

Article 39 In accordance with Article 231 of the Civil Procedure Law, an enforcement court may, pursuant to its own powers or at the request of an enforcement applicant, publicize the fact that the enforcee has refused to perform his obligations as specified in the relevant legal documents via newspapers, a broadcast, television, the Internet or any other media outlet.
Charges incurred for any such media publication shall be borne by the enforcee; where the enforcement applicant applies for such publication, he shall pay the relevant charges in advance.

Article 40 Where any interpretation issued by the Supreme Court conflicts with this Interpretation, the latter shall prevail.