Chinese foreign equity joint venture contract dispute case agent

Huang Zhenyuan businessmen to invest in Beijing, funding is not in place, announce to fail, the case agent word text.
Beijing Qili Logistics Co., Ltd. (hereinafter referred to as Kellett company), Zhao Yupeng because of a Sino foreign joint venture contract dispute case
Respected judge, judge:
   Because of Huang Zhenyuan v. Beijing Qili Logistics Co., Ltd. (hereinafter referred to as Kellett company), Zhao Yupeng because of a Sino foreign joint venture contract dispute case (6721st 2007 second issued Spain in the early Republican word case number), commissioned the Guangdong Guofeng law firm accepted the plaintiff, appointed Chang Yingzhou, Cheng Shizhuo served as the retrial litigation agent. The trial survey, published the following agency comments, please reference, the collegial panel adopted (with reference the relevant legal provisions).
First, the plaintiff's claim should get the support of the court, the following facts and reasons:
   (a) "contract" investment management enterprise is the true meaning of that
The original defendants cite evidence. On 6 January 2004 the plaintiff defendant (trial the defendant has admitted for the new company set up a separate account remittance of $730000), equivalent to RMB 6000000 by both parties. The defendant has no objection, can be used as a basis of fact. That is to say the plaintiff fulfill the obligations stipulated in the contract.
  (two) because of the fundamental breach of contract, the plaintiff shall terminate the contract
The defendant received the plaintiff 6000000 yuan, did not go to the national foreign trade and Economic Cooperation Department for approval, more do not talk to go up to the Department of industry and Commerce registration. The defendant received the money after the unauthorized use of the essence of what actually work did not do, do not perform the obligation of capital contribution and change the nature of the enterprise's own duty, namely the defendant not to new venture capital and a change of business license (the evidence for five joint venture enterprise application approval obligation, the agent also admitted that the defendant has the obligation) belonging to a fundamental breach of contract. In July 21, 2005, the plaintiff issued a notice of cancelling the contract (the defendant acknowledges receipt), the behavior of the "contract law" in accordance with statutory conditions ninety-fourth the rescission of the contract.
  (three) the legal consequences of the termination of the contract
China's "contract law" provisions, after the lifting of the contract, termination is not performed, perform; has fulfilled, according to the nature of the contract and performance, the parties may seek restitution or take other remedial measures, and shall have the right to claim compensation for losses. According to, first, China's "contract law" that the lifting of the contract should have an effect to the future, for not to perform shall terminate. Secondly, China's "contract law" that the lifting of the contract can have retroactive effect.
To sum up, the plaintiff and the defendant to perform the contract, but did not perform the contract, the actual fundamental breach of contract and law, the plaintiff may terminate the contract of course not. The plaintiff demands the termination of the contract, the return of property, and ask for damages is a legal and factual basis.
Two, the defendant argued that reason cannot be established
   (a) the defendant had no evidence to support the view of the performance of the contract. The defendant repeatedly referred to the Beijing City Administration of industry and Commerce registration. This is not in accord with the objective reality, because the law provides that the Chinese foreign joint venture contract shall first apply for approval, and then by virtue of approval before registration. Joint ventures law article third the detailed rules for the implementation of article ninth, article third, article seventh, article fourteenth and other provisions, the provisions of law belongs to the pre procedure, a sequence in time, the law is mandatory.
According to the "contract" investment and management of enterprise itself. This contract is signed, Party A Party B to draft. Party in the contract cleverly wrote "6.1.2 assist the JV Company in a change of business license and the shareholders in the China situation". But this contract in the responsibilities of Party B has no provisions of this obligation. In accordance with the provisions of the contract law, the provisions of the dispute should be made in accordance with the terms of the contract the understanding of relevant departments. Based on the above, the accurate meaning of the terms "by the party to the joint venture company change the business license and shareholders in the Chinese situation". The defendant to perform a so-called application, how to change the business license and the shareholders. The court found the defendant not, go through the formalities for approval. So back to the Bureau of industry and commerce registration impossible.
   (two) for the defense of the accused
   This is a case of the plaintiff's request the return of property and claim compensation for losses, the defendant as of today no counterclaim. The so-called that costs are not against the plaintiff's petition. Such evidence does not have the relevance, authenticity, legitimacy. The people's court shall not adopt this evidence, as the defendant had no evidence to show to the court.
(three) on the settlement issue
The defendant argued that the joint venture did not set up to liquidation without any legal basis. Is the contract dispute and non market legal existence. On the contrary, "Regulations" liquidation of enterprises with foreign investment, only the establishment of enterprises to liquidation, and from the beginning of enterprise liquidation, for the duration of the business prior to the expiry date of approval by the examination and approval authorities, enterprises or enterprise is dissolved, or the people's court or an arbitration institution for arbitration on the termination of the contract of the enterprise. The relevant judicial interpretations and regulations of the people's court did not organize a liquidation. Moreover, the joint venture is not established, the more impossible to liquidation.
(four) after the termination of the contract will terminate. The contract has been lifted, the defendant has no right to require the plaintiff to continue the delivery of the remaining 4000000. So the accused claimed that the plaintiff did not deliver the remaining 4000000 is the default reason cannot be established. The court found, shareholder meeting resolution: "four million failed to arrive, the board will have the right according to the actual amount of investment accounting for equity" as a revision to the original contract
   (five) on the application of the defendant argued that the law
The defendant argued that the provisions of "company law" and "on the basis of the Supreme People's Court on Several Issues concerning the trial of company cases regulations", "the company is not established, the investor or sponsor funded ratio within the agreed burden" our general legal reasoning is the premise of law. Minor premise: the facts. A draft law is now the Supreme Court issued, have not come into effect, the defendant will cite. The premise is uncertain, not a conclusion.
A series of act three, accused of serious violations of the principle of honesty and credit of civil law in China
The defendant is engaged in the logistics industry expertise and professionals, should know foreign investment logistics company condition, should become aware of the joint venture law implementation rules, should know that the joint venture funded several provisions, should know foreign investment industry directory, should know the foreign-funded international freight agency enterprise management, knowing Huang Zhenyuan as individuals do not with foreign investment logistics company, knowing that Huang Zhenyuan funded 20% does not meet the requirements, to ensure that the year 15% return to Huang Zhenyuan (a contract) signed the contract "trap" investment management enterprise with Huang Zhenyuan, and make various eyesight will be 6000000 for various expenses, to the illegal possession of 6000000 yuan. Later in the Huang Zhenyuan urged and pressed, the other party has not delivered to the accounting statements. Not only that, the defendant was also to a "proof" of Beijing City Industrial and commercial bureau to attempt to stall, to try to practise deception. One glance: Sino foreign joint venture contract without the approval of the State Ministry of foreign trade and economic cooperation, where the industrial and commercial registration......
Also, the establishment of Sino foreign joint venture enterprises, not only to comply with the law of the people's Republic of China on Chinese foreign equity joint venture law and its implementing regulations, the relevant provisions of the company law of China should abide by. China's company law, set up a new company, shareholders should be temporary account the new company set up. But the reality is, the defendant asked the defendant company funds into their account, do not meet the provisions of the company law, other fraudulent intent. And Qili company in their own assets shall be evaluated by the transfer of assets and other procedures, in violation of "Sino foreign joint venture investment regulations" article second, article fourth, article seventh of the above aspects, and the defendant did not do anything.
Four, about the focus of controversy in this case
  (a) "investment management" of the contract validity
    "Sino Foreign Joint Ventures Law of the people's Republic of China third joint venture agreement, contract, articles of association signed by the parties to the venture shall be submitted to the state, the Department in charge of foreign economic relations and trade (hereinafter referred to as the examination and approval authorities) for examination and approval. The examination and approval authorities shall decide whether to approve or disapprove within three months. The joint venture after approval, to the national industry and commerce registration administration departments, business license, open. In this case the "investment management enterprise contract" is not approved by the national foreign trade and economic department, in accordance with the "contract law of the people's Republic of China" forty-fourth paragraph second and interpretation of the Supreme Court, "in the court of first instance before the end of the debate, is still to go through formalities for approval, the people's court shall determine the contract is not in force": "the law, administrative rules and regulations shall go through the approval and registration procedures, such provisions". "Contract" investment management enterprise are not effective contract. Not the entry into force of the contract is the contract established according to law, the premise condition for termination of the contract.
　 (two) "investment contract" default facts
Who is in breach of contract, we must carefully analyze the "investment management enterprise contract".
1, the two sides of the main rights and obligations. For plaintiffs, the main duty is to invest 10000000 yuan in cash. (be A) 40000000 funded Qili company, of which there is 28000000 of assets, intangible assets 12000000. (be B) by A and B C -- set up together. That is the new Sino foreign joint venture. The defendant received after the 6000000 paragraph did not perform its capital contribution, the establishment of the new company's obligations. -- assets assessment that original Qili company into the new joint venture company and the change of business licenses and so on.
2, the defendant has no legitimate property investment. In fact this contract without the approval of the Ministry of Commerce, everything is empty. The defendant did not perform any obligations as agreed in the contract, even argued that its work and fulfill the contract No. According to the "Regulations" provisions of Sino foreign equity joint venture investment made by the various parties, the parties to the joint venture investment in accordance with the provisions of the contract to the joint venture must be subscribed, the person all his cash, all of their own and not set up any security interest in kind, industrial property rights, proprietary technology, etc.. The so-called Xinjiang branch defendant cited equity is inconsistent with the provisions of.
3, the defendant has no evidence to support the execution of the contract claim. According to the Supreme Court "rules of evidence", the contract is performed by the dispute, have to fulfil the obligations of the parties shall bear the burden of proof. The plaintiff to fulfill the obligation of capital contribution made their own evidence, the other no objection. But the defendant has no evidence to support the execution of the contract claim.
To sum up, the "contract" investment management enterprise, the plaintiff and the defendant did not fulfill the obligation of capital contribution obligation. Is the default but not the default.
Five, several other aspects
  (a) in the case of the
In the case of the civil case should be "Provisions (for Trial Implementation)" 127 Sino foreign joint venture contract disputes, the qualitative influence on the case. The scope of investment disputes is very wide, and the case is the establishment of a Chinese foreign joint venture enterprise, the enterprise is not set, the two sides dispute to the contract. "Contract" investment management enterprise is a typical Chinese foreign equity joint venture contract, this case is this contract dispute. Therefore, this case belongs to the Chinese foreign equity joint venture contract dispute typical.
(two) for the interest request
"General rule of the civil law" article 115th the alteration or termination of a contract, the parties does not affect the right of claim for compensation. This shows that the termination of the contract and claim damages can co-exist. The plaintiff's claim compensation for loss is the loss of interest. On May 26, 2004 starting problem. Because the plaintiff Huang Zhenyuan is on 26 May 2004 the remittance of $730000, equivalent to RMB 6000000 by both parties. After the contract is revoked, the retroactive effect, of course should remittance date calculation of interest. The interest rate to the people's Bank of China loan interest rate is in line with China's relevant laws and judicial interpretation of the spirit, but also reflects the rights and obligations of both sides fair.
(three) effect on the resolution of the shareholders' meeting of May 26, 2004 ""
May 26, 2004 "the resolutions of the shareholders' meeting", called the resolution of the shareholders' meeting is the equity transfer agreement, the shareholders Zhao Yupeng Kellett company to transfer to Huang Zhenyuan et al Qili company. Both the old and new "company law" stipulates, the shareholders to a person other than a shareholder capital contribution, must be approved by a majority of all the shareholders consent. And "Kellett" stipulates that the tenth articles of association of the company, the shareholders to a person other than a shareholder capital contribution, must be approved by a majority of all the shareholders consent. The defendant Zhao Yupeng and no evidence to prove that agree, a majority of all the shareholders to transfer the shares have Qili Company Act provisions, therefore, transfer of Zhao Yupeng to Huang Zhenyuan's violation of law violation of mandatory articles of agreement is invalid. Legal consequence of invalid is restitution.
(four) the defendant Zhao Yupeng personal liability issues
May 26, 2004 signed the "resolutions of the shareholders' meeting" wrote "6000000 yuan has arrived"
Clearly this has been into the hands of Zhao Yupeng. Of course, the resolution of the shareholders' meeting "invalid" does not affect the fact that Zhao Yupeng.
(five) the particularity of this case
This case is a retrial retrial, why?
The case is very complex? The answer is negative, the case as long as grasp three main legal fact: understand the law of Chinese foreign equity joint ventures and investment rules, some provisions and foreign logistics enterprises related laws and regulations. To find out whether the plaintiff law-abiding and perform the obligation of capital contribution, to find out whether the defendant law and fulfill the investment and the examination and approval of new company obligations.
The trial showed that: as the foreigners (Taiwan), the lack of relevant legal knowledge, but he signed for less than 1 months time to fulfill the obligation of capital contribution is the fact that the 6000000 yuan. Defendant? As the operation of the logistics industry in recent 10 years, the legal representative Zhao Yupeng to circumvent the law on the "return of 15% risk margin from the beginning. "Investment contract". Fundamentally what obligation is not fulfilled, the no contribution, no approval to. In contrast, the plaintiff was appropriated for the new company funds, for his extravagance. After a year and a half after the termination of the contract, the plaintiff had to take measures. Request the return of the investment. As a successful entrepreneur he disdains to also don't want to take other violent means to solve the problem. He felt a humble attitude, believe and rely on the civil justice system, to resolve the matter, recoup their losses.
In 2005 September to two intermediate people's court. The trial judge basic safeguard the legitimate rights and interests of the plaintiff. In 2006 December. The Supreme Court made a ruling remanded to make the grade, to restore the loss would almost come to nothing.
What the Supreme Court ruled that the what?
"The court after hearing that, the establishment of dispute in the trial, the parties in the investor has mixed...... In Qili company clearly put forward should go ahead of the rest of the defense establishment during the liquidation expenses, the court would not hear the case facts are not clear......"
1, the case according to the provisions of "the civil cases (for Trial Implementation)" notice "clearly belongs to the Chinese foreign equity joint venture contract dispute" where "the company set up dispute"?
2, "what contribution mixed": obviously, the plaintiff 6000000 yuan investment, set up a new independent account, the defendant has violated the obligation of capital contribution, a no, not fulfil the obligation, but the misappropriation of funds.
3, "without hearing the facts are not clear," the original a dossier on the defendant, it is so-called the liquidation expenses, and in this case no association. But the misappropriation of funds.
We do not know the trial judge High Court ignored the facts of the case is cited a law, a regulation, which rule, which a court judicial interpretation to support is not associated with the case, the establishment of the company liquidation expenses.
Of course it is possible that the high court judges understand the applicable law problems. But also and we China characteristic judicial system. One hundred years ago we learn western guns, today is learning (mainly western civilization create) the universal human, we have not started in the digestive process their own Newton law, geometry, relativity, but its own Chinese characteristics of the judicial system, it has no jury, behind no independent news supervision mechanism, not well established law, and supervise the implementation of strict mechanism, leading to considerable miscarriages of justice occurred.
The 2008 Olympic footsteps are close to us, today we are in the period of social transition, is to construct the harmonious society, and the main characteristics of a harmonious society is a democratic legal system, we are in line with international standards, respect for and protection of human rights (ownership is the basis of human rights), accept the results of human development of universal civilization. We believe that the two parties of the judges will as in the past, an honest official., overcome some institutional defects, ascertain the facts of the case, according to the timely and fair verdict, the plaintiff's claim to support, to ensure the correct implementation of law, the maintenance of expatriates in China investment interests, safeguard the legitimate rights and interests of our Taiwan compatriots on the mainland, to highlight the construction of harmonious world social, Chinese implementation of the strategy of rule of law determination.
The Supreme People's court put forward, justice and efficiency, justice delayed is not fair. Believe that the Beijing second intermediate people's Court on the case in accordance with the law, timely justice, protect the interests of Taiwanese investment. At the same time, Beijing Taiwan Business Association, Taiwan Affairs Office, Beijing Municipal People's Government of Taiwan of other investors, overseas media also pay high attention to the case for further progress.
Six, to sum up
The case was a typical example of this case belongs to the Chinese foreign equity joint venture contract dispute typical. The focus of dispute is the "contract" investment management enterprise is in force, performance, breach of contract has the legal consequences. Through today's hearing to find out, the plaintiff fulfill their obligations to the defendant, Kellett company remittance 6000000 yuan. The defendant received this paragraph does not perform its obligations under the contract, which did not fulfill the formalities for approval, registration no, did not perform the obligation of capital contribution. Also an attempt to personal share transfer confusion instead of company. The defendant did not perform the contract, cause the enormous economic losses, the plaintiff may terminate the contract in accordance with the law of. Upon termination of the contract, the defendant shall be returned to the plaintiff 6000000 investment proceeds and compensation for loss of interest.
The foresaid opinions please collegiate consider, adopt, thank you!
Guangdong Guofeng law firm
Chang YingzhouCheng Shizhuo

Attached: relevant articles link
[Annex A]
"Contract law of the people's Republic of China"
1, ninety-fourth 2, ninety-seventh
[Annex twoThe civil case] provisions of the Supreme People's court "(for Trial Implementation)" the Supreme People's Court issued "the regulations of civil cases (for Trial Implementation)" notice
[Annex three"] of the people's Republic of China Law on Sino foreign equity joint ventures"
1, third
"Regulations for the implementation of" the people's Republic of China Law on Sino foreign equity joint ventures
2, Ninth with modifications.
[Annex four] "Sino foreign equity joint venture investment Several Provisions" (released in December 30, 1987 January 1, 1988 approved by the State Council, Ministry of foreign economic relations and trade, the State Administration for Industry and Commerce)
Article second article third
[Annex five] 1,The old "company law of the PRC" article thirty-fifth paragraph second
2, the new "company law of the people's Republic" seventy-second
[Annex six] "foreign-funded international freight agency enterprise management approach" of the people's Republic of China Ministry of foreign trade and economic cooperation made 2002 No. thirty-sixth (Note: have been abolished, but the law has no retroactive effect) fifth
[Annex sevenOfficial Reply of the Supreme People's Court on] how the enterprises of trying cases of disputes over Chinese foreign equity joint venture contract (the 950th meeting of the judicial committee of the Supreme Court by law interpretation (1998) No. 1)
[Annex eight] "measures for liquidation of foreign investment enterprises"
Ministry of foreign trade and economic cooperation to the Ministry of foreign trade and economic cooperation [1996] No. second
[Annex nine] "the Supreme People's Court on civil procedure rules of evidence"
[Annex ten] the provisions on Several Issues concerning the trial of the company disputes (a) (Draft)
(the author: the Supreme People's court  Posted: since the Supreme People's court)
[Annex eleven]
"Replied the Supreme People's Procuratorate on embezzlement of company funds have not been registered the behavior of applicable law"
　[Annex twelve]
"Notice on the relevant issues concerning the pilot foreign-funded logistics enterprise"
[Annex thirteen] Beijing Higher People's Court on the "Beijing Municipal Higher People's Court on
Guiding opinions on Several Issues concerning the trial of the company disputes (Trial) "notice
(the February 24, 2004 Beijing high Law No. [2004]50)