The special craftsman lawyer said that the case | the termination of the equity transfer contract, and the deposit should be returned to the buyer?
In equity transactions such as equity transfer (share transfer), the transferor may ask the transferee to pay a deposit to ensure the progress of the contract. If there is a dispute between the two parties after the transferee pays the deposit, is the deposit refunded or not refunded? Do I want to double the return? The author hopes to illustrate one or two through cases:
1. When the share transfer contract is terminated by consensus, the deposit shall be refunded. (2021) Jing 02 Min Zhong No. 10407.
Zunsha International Company transferred part of the equity of Tiffany Company to Song, the two parties signed the Equity Transfer Agreement, Song paid a deposit of 500,000 yuan, and the remaining 1.5 million yuan of equity transfer payment was paid separately, but Song has not paid the balance as agreed, and on October 30, 2019, he sent a "Notice of Termination of Contract" to the transferor Zunsha International Company on the grounds that he was in breach of contract.
Subsequently, Song, as the plaintiff, sued the transferor Zunsha International Company, requesting confirmation that the contract would not be repaid with a deposit of 500,000 yuan, which was supported by the first and second instances, and the reason for the judgment was: "Under the premise that the two parties have consulted and the Equity Transfer Agreement has been terminated by consensus, Zunsha International Company's claim that Song Mou constitutes a breach of contract and should not refund the deposit paid cannot be established, and this court does not support it." In other words, the subsequent negotiation is lifted, resulting in the deposit penalty no longer applicable.
2. The company is handed over to the transferee's control, and the equity is not transferred to the transferee, and the transferee supports the return of the deposit when exercising the unilateral right of rescission. (2021) SPC Minshen No. 6074.
The shareholders of Wanxin Company transferred the company's equity to Hainan Zhongshi Company, and a few years after Hainan Zhongshi Company took over, the land under the name of the target company was classified within the scope of ecological protection and could not be developed. Hainan Zhongshi Company sued to terminate the contract and return the 5 million investment funds and 10 million deposits that had been paid. The Collegial Panel of the Supreme Court upheld it on the grounds that:
"The land involved in the case can no longer be commercially developed, and China Television has paid a deposit of 10 million yuan and an investment of 5 million yuan to the shareholders of the target company, but the shareholders of the target company have not changed 90% of the equity to the name of China Television Company as agreed." Accordingly, the original judgment supported China Television Company to unilaterally terminate the contract and return the deposit of 10 million yuan and the investment amount of 5 million yuan when China Television Company was no longer able to achieve the purpose of the equity transfer contract, which was not improper."
This actually means that the unilateral right of rescission is established, the land of the target company cannot be developed and the equity has not been transferred to the transferee, which essentially means that the contractual purpose of the transferee to purchase equity cannot be realized, and at this time, the contract is supported to terminate the contract and the deposit is returned.
3. In an equity transfer transaction, if both parties are at fault, the share transfer contract shall be terminated and the deposit shall be returned. (2021) Jingmin Shen No. 560.
Xie and others transferred the equity of the target company to youhuwan company, youhuwan company paid a deposit of 1.5 million yuan, and then because of the dispute over the renewal of the lease of the target company's business site, youhuwan company sued to terminate the share transfer contract and return the deposit, the original trial gave support, Xie et al. applied to the high court for retrial, the collegial panel of the high court approved the original judgment, that is, supported the return of the deposit, the reason for the judgment was:
"After entering the substantive acquisition, Youhuwan Company still terminated the contract on the grounds that Xie did not provide sufficient information and documents, and should bear certain civil liability for the termination of the contract." The two parties did not stipulate in the contract the renewal of the lease of the operating space of Jinghua Hospital during the acquisition period, and according to the usual practice, the renewal of the lease of the venue should continue to be renewed by the original lessee and pay the corresponding rent, and Xie terminated the contract on the grounds that youwuwan Company did not renew the lease of the venue, and should also bear the corresponding civil liability. In the second instance, both parties agreed to terminate the contract, and after the termination of the contract, Xie should return the deposit of 1.5 million yuan. ”
That is to say, when it is not clear who has the heavier responsibility, one shot and two scattered, each returning to each home. In particular, if the transferor cannot prove its own loss, compensation for damages and deposit penalties do not apply.
4. The equity transferor defaults and the purpose of the transferee's agreement is frustrated, and the double return of the deposit is supported. (2020) SPC Minshen No. 2198
Xue is the legal representative of a company, holding part of the equity of a company, which transfers the equity of the target company to Hechuang Oriental Asset Management Company, and ensures that the equity of another shareholder of the company is also transferred to Hechuang Oriental Asset Management Company, and after the two parties sign an equity transfer agreement, Hechuang Asset Company pays Xue a deposit of 30 million. Later, because another shareholder of the target company exercised the right of first refusal, resulting in the failure of the purpose of Hechuang Asset Company to purchase 100% of the equity of the target company, it sued Xue to terminate the share transfer contract and return the double deposit of 60 million yuan. After the original trial was supported, Xue applied to the Supreme Court for a retrial, and the Supreme Court also supported the claim that Hechuang Asset Company doubled the deposit, and the reasons for the judgment were:
Paragraph 3 of Article 4 of the Equity Transfer Agreement clearly stipulates that after the agreement takes effect, if either party terminates the agreement without authorization or seriously breaches the agreement and makes it impossible to continue to perform the agreement, it shall be deemed to be a unilateral breach. If Mr. Xue constitutes a unilateral breach of contract as agreed in this paragraph, he will double the deposit paid by Hechuang Company. In this case, because another shareholder exercised the right of first refusal, Xue promised that the acquisition of all the equity of Hechuang Asset Company could not be fulfilled, and Xue's fundamental breach of contract led to the inability to perform the agreement, and according to the agreement between the two parties, the original judgment found that the deposit paid by Hechuang Company should be doubled, and the applicable law was not improper.
This means that the share transfer agreement clearly stipulates a double refund of the deposit, and when the transferor fundamentally defaults, when the share transfer contract is terminated, it supports the transferee's request for double return of the deposit.
The above examples are for reference only.
