Ge, Deputy Director of Comprehensive Management Office of the Supreme People's Court Executive Board

Source/Legal Application, No.4, 20 15

First, the clarity of the implementation basis

To start the execution procedure, the legal conditions must be met. 1998 "Provisions of the Supreme People's Court on Several Issues Concerning the Enforcement of People's Courts (Trial)" (hereinafter referred to as "Enforcement Provisions") stipulates the acceptance conditions of enforcement cases, in which item 4 of paragraph 1 requires effective legal documents as the basis for enforcement, which stipulates: "The legal documents applied for enforcement have payment content, the object of enforcement and the execution. However, there are still some problems in judicial practice, such as the unclear subject of rights and obligations and the unclear content of payment in legal documents.

The latter problem is more prominent, mainly in two situations: first, the main text of legal documents is flawed because the producers of legal documents did not specify the payment content strictly in accordance with the provisions of relevant laws and regulations; Second, due to the unclear legal provisions of the relevant entities, the corresponding legal documents lack specific payment contents.

The second situation is more common in practice, and the most typical one is the legal document of contract extension. The text of such legal documents is generally expressed as "the contract is valid and continues to be performed". This is mainly because of the provisions of Article 107 of the Contract Law. According to the provisions of this article, if one party fails to perform the contractual obligations or fails to meet the contractual obligations, it shall be liable for breach of contract such as continuing to perform, taking remedial measures or compensating for losses.

Although this kind of legal document conforms to the relevant substantive law, it is controversial whether it can be used as the basis for implementation because of its unclear payment content. For example, in the common judgment of continuing to perform the cooperative development contract in practice, if the main text of the judgment is only generally expressed as "the contract is valid and continues to be performed", once it enters the execution procedure, the executor will judge the specific obligations and responsibilities between the parties, supplement the contract terms and deal with substantive disputes, which obviously does not conform to the principle of separation of trial and execution. If it is not allowed to apply for enforcement of such judgments, it will lead to the problem that the rights determined by effective legal documents cannot be realized through public power, and it is difficult to implement the liability system for breach of contract in contract law.

In view of the above problems, the Interpretation further stipulates the clarity of the implementation basis. This provision clarifies three issues: first, the effective legal document as the basis for implementation should clearly stipulate the subject of rights and obligations; Second, the implementation basis should not only have the payment content, but also be clear about the payment content; Third, in view of the outstanding problems in practice, the content of continued performance should be clearly stipulated in the legal documents of continued performance. There are several issues worth discussing about this provision.

First, can legal documents such as confirmation and formation be implemented?

Theoretically, it is generally believed that the confirmation and formation of the judgment has no payment content and cannot be used as the basis for execution. However, in China's enforcement practice, some courts also allow the enforcement of legal documents such as application for confirmation and formation from the perspective of solving practical problems. For example, according to the general theory of enforcement law, the judgment confirming that the property registered in the defendant's name belongs to the plaintiff is not enforceable and cannot be applied for enforcement. The plaintiff can directly apply for change of registration with the judgment. However, due to the imperfection of China's registration system and practical operation, some housing registration agencies do not accept the parties' application for change, but ask the people's court to issue a notice of assistance in execution. Therefore, under the current circumstances, it is reasonable to allow such cases to enter the execution procedure and let the obligee determined by the effective legal documents complete the registration of ownership change through the execution procedure.

Second, how to deal with the realization basis that does not meet the requirements of clarity?

According to article 18 of the implementation regulations, if the implementation basis does not meet the requirements of clarity, it shall be ruled inadmissible at the stage of filing the case for review. However, for cases that have entered the execution procedure, if it is found that the content of the execution basis is unclear, the existing laws and judicial interpretations are not clearly defined.

From a practical point of view, some courts do not simply reject the application for enforcement when the enforcement basis is unclear, but first determine the implementation content by convening the parties to negotiate or soliciting the opinions of the institutions that formulate the enforcement basis. If it is really impossible to execute, they will decide to reject the application for execution or terminate the execution procedure. This practice is conducive to reducing the litigation burden of the parties and solving the dispute more thoroughly, which is worth learning.

Third, the clarity of the legal documents on the continued performance of the contract.

This article puts forward the requirement of "defining the specific performance content" for the legal documents of contract extension. Accordingly, after the implementation of the judicial interpretation, whether it is such judgments, rulings, conciliation statements made by the people's courts or such arbitral awards made by arbitration institutions, it is no longer necessary to simply state "the contract is valid and continues to be performed" in the text, but also to indicate the specific contents that need to be performed. In this regard, the production department of relevant legal documents should pay enough attention.

It is worth noting that in the process of drafting this article, some people think that the legal documents that continue to perform the contract should be distinguished from other legal documents, and different provisions should be made on whether they can be used as the basis for execution. Continuing to perform the contract is a legal way to bear the liability for breach of contract stipulated in the contract law, and the law clearly stipulates that it is not appropriate to judge to continue to perform the contract. Therefore, it should be understood that the court weighed the costs and benefits when making such a judgment, but other judgments whose liabilities for breach of contract are not enough to make up for the damage of the parties should be enforceable in principle, which has been confirmed by the the Supreme People's Court Judicial Committee in a specific case.

The formation mechanism of other legal documents such as conciliation statement is obviously quite different from the judgment. Mediation is the confirmation of the mediation agreement reached by both parties, and the court usually does not involve weighing whether the cost of contract performance and other liabilities for breach of contract are enough to make up for the losses of the parties. The main form of liability for breach of contract should be compensation for damages, and continuing to perform the liability for breach of contract guaranteed by the state with compulsory force should have strict standards and complementarity. It is not in line with the legislative purpose to give this effect to the conciliation statement confirming the continued performance of the contract. Although this opinion has not been adopted by judicial interpretation, the related issues raised by it deserve further discussion.

Second, about the implementation of specific things.

"the Supreme People's Court on the application of

The above provisions establish a discount compensation system when a specific object cannot be executed in the execution procedure. The advantage of this system is that when it is objectively impossible to execute the delivery of specific goods, it is directly converted into compensation execution in the execution procedure, which is conducive to improving efficiency and realizing creditor's rights as soon as possible.

However, this practice also faces many problems: the discount compensation involves the judgment of substantive law and is directly determined in the execution procedure, which goes beyond the scope of authority of the executive organ and violates the principle of "separation of trial and execution". Not only that, the amount of compensation is directly determined in the execution, and the parties lack sufficient procedural guarantee, which does not conform to the principle of due process and is easy to cause new disputes. In the execution of delivering specific things, it is not only the requirement of separation of trial and execution, but also the embodiment of the connection between trial and execution to introduce damages into litigation after the specific things are damaged or lost.

Based on the above considerations, Article 494 of the Interpretation amends Article 284 of the "92 Opinions" to read: "If the subject matter to be executed is a specific subject matter, the original subject matter shall be executed. If the original thing has been damaged or lost, it can be compensated at a discount with the consent of both parties. If the two parties fail to reach an agreement on the discount compensation, the people's court shall terminate the execution procedure. The application executor can sue separately. " This provision not only adheres to the basic idea of solving substantive problems through litigation, but also allows the parties to compensate at a discount if they reach an agreement through consultation, which can better balance the principle of "separation of trial and execution" and the principle of quickly handling disputes, avoid litigation fatigue of the parties and save judicial resources.

Third, about the execution of due creditor's rights.

Regarding the execution of the creditor's rights due, Article 300 of the "92 Opinions" stipulates: "If the person subjected to execution cannot pay off the debts, but enjoys the creditor's rights due to a third person, the people's court may, upon the application of the application executor, notify the third person to perform the debts to the application executor. If a third party has no objection to the debt but fails to perform it within the time limit specified in the notice, the people's court may enforce it. Article 6 1-69 of the enforcement regulations further refines the enforcement system of due creditor's rights.

Two outstanding problems in the execution system of due creditor's rights

It is generally reflected in judicial practice that there are two outstanding problems in the execution system of due creditor's rights: the first problem is that the third party uses the right of dissent to evade debts. According to Article 63 of the Implementation Regulations, if a third party raises an objection within the period specified in the performance notice, the people's court shall not enforce it against the third party, and the objection raised shall not be examined. Once the third party raises an objection, the notice effect of performing the due creditor's rights and preserving the creditor's rights will be eliminated. In practice, the third person often evades execution.

The second problem is that the third party still raises the objection that the creditor's rights determined by the effective legal documents do not exist. If the creditor's rights between the third party and the person subjected to execution have been confirmed by effective legal documents, the person subjected to execution obviously should not deny them again. However, because Article 63 of the Implementation Regulations stipulates that the enforcement court shall not examine the objection of the third party, the objection of the third party causes difficulties in enforcement.

Debate on the retention or abolition of the execution system of due creditor's rights

In view of the problems existing in practice, the original provisions have added two contents on the basis of the original provisions: First, the connection between the execution of creditor's rights and the litigation of creditors' representatives has been added, and it is stipulated that "if a third party raises an objection to its debt, and the application executor considers that the objection of the third party cannot be established, he may bring a lawsuit in accordance with the provisions of Article 73 of the Contract Law within 15 days. If no lawsuit is filed within the time limit, the ruling of freezing creditor's rights is invalid. " Second, the provision that "if the debt owed by a third party to the person subjected to execution has been determined by an effective legal document, the third party may not raise any objection to the non-existence of the debt" has been added.

However, in the process of judicial interpretation and argumentation, there is a great controversy about the retention or abolition of the system of enforcing due creditor's rights.

One view is that there are legal obstacles in the "92 Opinions" on the enforcement system of the third party's creditor's rights and it should be deleted. The main reasons are as follows:

First, the contract is relative, and there are legitimate reasons to break through the relativity of the contract;

Second, this provision was made before the contract law came into effect. 1999 The Contract Law, which came into effect, stipulates the subrogation litigation system, which is used to solve the creditor's subrogation to the secondary debtor and protect its creditor's rights. The exercise of contractual subrogation has clear legal conditions, which can only be exercised if the conditions are met;

Third, the creditor's right of subrogation must be exercised through litigation, not in execution;

Fourth, directly executing the due creditor's rights in the execution procedure cannot protect the legitimate rights and interests of other creditors of the secondary debtor.

The second opinion is to improve the enforcement system of the third party's creditor's rights on the basis of reservation, specifically, to improve the connection with the subrogation system and prohibit the third party from denying the existence of the creditor's rights by effective legal documents. The main reasons are:

First, the system does not break through the relativity of contracts on the premise that the third party does not raise objections;

Secondly, the establishment and perfection of this system is just to cooperate with the subrogation system in contract law and jointly realize the purpose of preserving creditor's rights;

Third, most countries and regions in the civil law system have stipulated this system.

During the discussion, the above two opinions influenced each other, and the final Article 50 1 of the Interpretation is actually a compromise between the two opinions, that is, on the basis of the second opinion, the content of the first opinion on protecting interested parties was absorbed.

How to protect related rights holders?

There are also different opinions on how to protect the relevant rights holders. One view is that the interested party should be given the same right of dissent as the third party, and it is stipulated that if the interested party raises an objection, the people's court shall not enforce the creditor's right. The reason is that if the creditor's rights against the third party are realized through subrogation litigation, other creditors of the third party can also safeguard their rights and interests by joining litigation.

Another point of view is that the relevant obligee should remedy his rights by objecting from outsiders. The reasons are as follows: First, the law provides relief for the rights and interests of relevant obligees. In the system of enforcing creditor's rights against the third party, the third party has a special position and should be protected. However, other related obligees in this system are no different from those in other enforcement procedures and cannot enjoy special protection. On the contrary, they should be equally protected through Article 225 of the Civil Procedure Law and Article 227 of the Civil Procedure Law, the system of participation in distribution and the bankruptcy system. Second, if it is stipulated that the relevant obligee enjoys the same right of dissent as the third party, it is actually an overhead system. The Interpretation finally adopted the second opinion.

To understand and apply the provisions of Article 50 1 of the Interpretation, we should correctly grasp the spirit of the creditor's rights enforcement system, not only to promote the implementation of legal documents to determine the realization of creditor's rights, but also to protect the legitimate rights and interests of secondary debtors and related stakeholders. Specifically, we should pay attention to the following issues:

First, the creditor's rights that can be used as the object of execution are limited to the due creditor's rights, which is different from the fact that some countries and regions can use the unexpired creditor's rights as the object of execution.

Second, freezing creditor's rights requires a ruling. In the original judicial interpretation, this article clearly stipulates that the freezing of creditor's rights requires a written ruling. On the one hand, it is consistent with the legal documents for sealing up and detaining movable property and immovable property, and on the other hand, it makes the execution procedure of freezing creditor's rights more standardized.

Third, the people's court may notify the third party to perform it to the person subjected to execution. If a third party objects to the creditor-debtor relationship between the third party and the person subjected to execution, the enforcement court may not continue to enforce the creditor's rights, and the applicant for enforcement may seek relief through subrogation proceedings.

Fourth, if an interested party disagrees with the due creditor's rights, if it claims that it is the real obligee of the due creditor's rights, it can be relieved in accordance with the provisions of Article 227 of the Civil Procedure Law. It should be noted that the interested party in this article is an outsider as stipulated in Article 227 of the Civil Procedure Law.

Fifth, the third party cannot deny the creditor's rights due as determined by the effective legal documents. It is only stipulated here that the parties cannot deny the creditor's rights determined by the effective legal documents, but if the third party has performed the debt after the legal documents are made, it has the right to raise the objection that the debt has been performed.

For the enforcement system of creditor's rights due, because the subject of enforcement is relative creditor's rights, it involves the protection of the rights of secondary debtors, and its theoretical composition and procedural operation are very complicated. German, Japanese, Korean and Taiwan Province provinces have used a lot of provisions to regulate this. China's current judicial interpretation of the provisions of the creditor's rights enforcement system is not perfect, which makes it difficult for the system to play its due role. It is necessary to further strengthen theoretical research and practical research, strive to issue a special judicial interpretation as soon as possible, and make more systematic and detailed provisions on this system.

Four, about the connection between the execution procedure and the bankruptcy system

The positioning difference between execution procedure and bankruptcy procedure and the judicial status quo

Execution procedure and bankruptcy procedure are both procedures to enforce creditor's rights, but their functions are different: execution procedure aims at individual repayment of specific creditor's rights and is individual execution of debtor's personal property; Bankruptcy procedure aims at paying off all creditor's rights as a whole and is a simple execution of all debtor's property.

In the execution procedure, if the debtor goes bankrupt, if the creditor who applied first is still given priority, the creditor who applied later will not be paid off, which violates the principles of fairness and equality of creditor's rights. In this case, it is more reasonable to transfer the execution procedure to bankruptcy procedure to ensure the fair distribution of the debtor's property among creditors at the same level.

However, judging from the current judicial practice in China, it is difficult for a considerable number of insolvent enforcement cases to be transferred to bankruptcy proceedings normally, and many creditor's rights and debts that should have been cleared through bankruptcy proceedings are delayed in the execution procedures, so the backlog of enforcement cases remains high. Since the implementation of the Enterprise Bankruptcy Law, the number of bankruptcy cases accepted by the national courts has been sluggish for years. In 20 13, the national courts accepted less than 2,000 bankruptcy cases, which reflected the dilemma that the bankruptcy law was not running smoothly in reality and its function was difficult to play.

There are many reasons for the above problems. From the legal system, there are two main reasons: first, the start-up procedure of bankruptcy procedure is limited to the application of the parties, and the road from execution to bankruptcy is not smooth; Second, according to Article 96 of the Implementation Regulations, the participation distribution system can be applied to enterprise legal persons under special circumstances. In addition, this provision is often extended in practice, and creditors who apply for enforcement in the later stage have the opportunity to get compensation in proportion in the enforcement procedure, while ordinary creditors who have not obtained the basis for enforcement are excluded from the enforcement procedure, so they are often reluctant to start relatively complicated bankruptcy procedures.

Explanation on the application of the system of implementing bankruptcy transfer and restricting the participation of enterprise legal persons in distribution

In view of the above problems, in the process of revising the judicial interpretation, the theoretical and practical circles generally call for the establishment of an effective connection system between the execution procedure and the bankruptcy procedure. These opinions and suggestions are fully absorbed in the Interpretation, and this issue is stipulated in four articles (Article 5 13-5 16). Among them, it mainly includes implementing the system of turning bankruptcy into bankruptcy and restricting the application of enterprise legal persons to participate in the distribution system.

Implement the system of turning bankruptcy.

According to Article 5 13 of the Interpretation, if an enterprise as a legal person subject to execution meets the requirements stipulated in Article 2, Paragraph 1 of the Enterprise Bankruptcy Law, with the consent of one of the applicants for execution or the person subject to execution, the execution court shall decide to suspend execution and transfer the relevant materials of the execution case to the court where the person subject to execution is located.

The fundamental purpose of this provision is to add a new way to start bankruptcy proceedings besides the application of the parties. The original intention of judicial interpretation is to establish a "forced bankruptcy" system, which stipulates that the enforcement court can directly transfer the executed person who meets the bankruptcy conditions to the bankruptcy court for bankruptcy proceedings. However, because the bankruptcy law only stipulates two ways to start bankruptcy proceedings: creditor's application and debtor's application, the scheme lacks clear legal basis and is finally not adopted.

According to the provisions of this article, if the person subjected to execution meets the bankruptcy conditions, the enforcement court must obtain the consent of one of the applicants or the person subjected to execution if it wants to transfer bankruptcy. If the parties do not agree, the enforcement court cannot directly transfer it. In addition, according to Article 5 14 of the Interpretation, the transfer of case materials by the enforcement court does not necessarily start the bankruptcy proceedings, and whether the bankruptcy case is finally accepted or not shall be examined and decided by the court in the place where the person subjected to execution resides. In order to prevent excessive delay in the examination and acceptance procedures, the Interpretation clearly stipulates that the relevant court shall make a ruling on whether to accept the bankruptcy case within 30 days from the date of receiving the materials and notify the enforcement court. Article 5 15 of the Interpretation stipulates whether a bankruptcy case is accepted and the impact of bankruptcy declaration on the execution procedure according to different situations: if the people's court decides to accept bankruptcy or declare bankruptcy, the execution court shall lift the preservation measures and terminate the execution respectively; If the bankruptcy case is not accepted, the execution court shall resume execution.

Restrictions on participation in distribution apply to enterprise legal persons.

As mentioned above, according to Article 96 of the Implementation Regulations, an enterprise as a legal person that has been "cancelled, cancelled or closed without liquidation" can become the applicable subject to participate in the distribution system. From a practical point of view, the scope of application of this article is quite wide, mainly because: first, the "termination" in this article is not a standardized legal concept, and it is easy to apply to insolvent enterprise legal persons; Second, the motivation for the parties to apply for bankruptcy is insufficient, and local governments are unwilling to let enterprises go bankrupt based on various practical considerations, so there are practical difficulties in starting bankruptcy procedures; Third, from the perspective of fair protection of creditors, and in order to reduce the pressure of appeals and petitions, it is often difficult for the enforcement court to insist on the order of taking enforcement measures to realize creditor's rights. The exceptional application of the participation distribution system to enterprise legal persons and its expansion in practice is undoubtedly an important reason why the bankruptcy procedure can not fully play its role.

In order to solve this problem, Article 5 16 of the Interpretation stipulates that if the parties do not agree to transfer the bankruptcy case or the people's court in the place where the person subjected to execution lives refuses to accept the bankruptcy case, the enforcement court will pay off the ordinary creditor's rights with the property obtained from the execution of the price change, and after deducting the execution expenses and giving priority to paying off the creditor's rights, it will pay off the ordinary creditor's rights in the order of seizure, seizure and freezing in the execution of property preservation.

Accordingly, for the enterprise legal person who cannot enter the bankruptcy procedure, the "priority principle" should be implemented in the execution, and the creditor's rights should be realized in the order of compulsory measures. This provision can "force" creditors who apply for enforcement measures to apply for the commencement of bankruptcy proceedings, effectively solving the problem of difficult commencement of bankruptcy proceedings.

The linking system of execution procedure and bankruptcy procedure is an important new system in the Interpretation, aiming at alleviating the practical problems of execution backlog and poor operability of bankruptcy law. However, the reasons for the poor operation of bankruptcy procedures are complicated. Although adding this new system will solve some problems, it is by no means a panacea. Moreover, the system itself may face many difficulties in actual operation, especially when the case is difficult to enter bankruptcy proceedings and the enforcement court must apply the principle of priority in the application of ordinary creditor's rights in Article 5 16, which will face great pressure.

In this regard, it is necessary to strengthen the contact and cooperation between the enforcement court and the bankruptcy court. On the one hand, the enforcement court should fully realize the function of bankruptcy procedure, guide the parties to go into bankruptcy after reaching an agreement, and apply the provisions of Article 5 16 of the Interpretation to cases that cannot enter bankruptcy procedure according to law, so as to realize the reverse function of the system. On the other hand, the bankruptcy court should also exclude the influence from all parties, and accept the cases transferred by the enforcement court that meet the bankruptcy conditions after examination. For cases where relevant departments are involved in bankruptcy due to social stability and other reasons, we should actively communicate and coordinate, and strive for the support and cooperation of relevant departments. In the future, it is necessary to further refine and improve the legal system of execution and bankruptcy, further straighten out the relationship between execution procedure and bankruptcy procedure, so that execution procedure and bankruptcy procedure can better perform their respective duties and make full use of each other, so as to realize creditor's rights fairly and efficiently.