Summary of the trial
If the objector fails to file a lawsuit for confirmation of creditor's rights within 15 days as stipulated in Article 8 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (III), it shall be deemed that it agrees with the conclusion of the creditors' conference to verify and the administrator's interpretation and adjustment, and exercises its rights in the bankruptcy proceedings accordingly after the people's court rules and confirms, and the adverse consequences arising therefrom to the exercise of the objector's voting rights and the distribution of the bankruptcy property shall be borne by itself. However, the expiration of the aforesaid 15-day period does not have the legal consequence of extinguishing the objector's right of action or substantive rights.
Supreme People's Court of the People's Republic
Civil rulings
(2023) Zui Gao Fa Min Zai No. 170
Applicant for retrial (plaintiff of first instance, appellant of second instance): Zhang Hongbin, female, born on October 12, 1970, Han nationality, living in Zhengzhou City, Henan Province.
Entrusted litigation agent: Yan Wenhao, lawyer of Henan Tianji Law Firm.
Entrusted litigation agent: Li Hui, lawyer of Henan Tianji Law Firm.
Respondent (defendant of first instance, appellee of second instance): Henan Yalesong Real Estate Co., Ltd. Residence: No. 200, 28th Floor, No. 19, Business Outer Ring Road, Zhengdong New District, Zhengzhou City, Henan Province.
Litigation representative: Henan Qianye Law Firm, bankruptcy administrator of Henan Yalesong Real Estate Co., Ltd.
Person in charge: Guan Xianxian, director of the institute.
Respondent (defendant of first instance, appellee of second instance): Kaifeng Jinyao Real Estate Co., Ltd. Residence: No. 102, 1st Floor, Unit 1, Building 12, Zhengkai Forest Peninsula, Jinming District, Kaifeng City, Henan Province.
Litigation representative: Henan Qianye Law Firm, bankruptcy administrator of Kaifeng Jinyao Real Estate Co., Ltd.
Person in charge: Guan Xianxian, director of the institute.
The retrial applicant, Zhang Hongbin, was dissatisfied with the civil ruling of the Henan Provincial High People's Court (2022) Yu Min Zhong No. 431 and applied to this court for a retrial due to a dispute over the confirmation of bankruptcy claims with the respondents Henan Yalesong Real Estate Co., Ltd. and Kaifeng Jinyao Real Estate Co., Ltd. On April 26, 2023, this court issued the (2023) Zui Gao Fa Min Shen No. 166 Civil Ruling to bring the case to trial. This court formed a collegial panel to hear the case in accordance with the law, and the trial has now been concluded.
Zhang Hongbin applied for a retrial, alleging that: (1) the application of law in the first and second instance rulings was erroneous, and Zhang Hongbin had the qualifications to file a lawsuit for confirmation of creditor's rights. Article 8 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (III) does not specify the legal nature of the 15-day period, and it is not appropriate to interpret it as the statute of limitations or exclusion period. This provision does not specify the relevant consequences of filing a lawsuit within the time limit, and the court of first instance found that Zhang Hongbin did not have the standing to sue if he exceeded the statutory period of 15 days, and then ruled to dismiss the lawsuit, which had no legal basis. (2) The Bankruptcy Law stipulates that an objection period is set up when the creditor's rights are declared, the purpose of which is to facilitate the confirmation of the creditor's rights, but it is not equivalent to losing the corresponding right of action if the claim is overdue. After the creditors' conference was convened on January 8, 2020, Zhang Hongbin raised a number of objections to the administrator, including the procedures for convening the creditors' conference, the voting procedures, the voting methods, and the obstruction of voting on the reorganization investment plan submitted by the new reorganization investors. The person in charge of the administrator has said that he will adjust the creditor's rights, but has not formally replied in writing. On May 19, 2020, Zhang Hongbin mailed another application to the person in charge of the case undertaker and the administrator requesting that the creditor's rights be verified in accordance with the law, but the parties still did not formally reply, nor did they issue a reply letter of non-adjustment, so Zhang Hongbin promptly filed a lawsuit with the people's court. Zhang Hongbin's lawsuit for more than 15 days does not mean that he will lose the corresponding right to sue within the time limit, nor will it cause the creditor to lose his substantive rights. Therefore, the trial court should conduct a substantive trial of the case. (3) The creditor's rights declared by Zhang Hongbin are the creditor's rights confirmed by the effective judgment of the Intermediate People's Court of Zhengzhou City, Henan Province, and the administrator determined that the creditor's rights were fund-raising claims without the confirmation of the court, and determined that the amount of the creditor's rights was 105.6 million yuan, causing huge losses to the creditor Zhang Hongbin. Zhang Hongbin requested that the first- and second-instance rulings be revoked in accordance with law, and that the Intermediate People's Court of Kaifeng City, Henan Province, be ordered to hear the case.
Henan Yalesong Real Estate Co., Ltd. and Kaifeng Jinyao Real Estate Co., Ltd. did not reply.
Zhang Hongbin filed a lawsuit with the court of first instance, requesting that: 1. a ruling in accordance with the law confirm that Zhang Hongbin has a principal claim of 4.4 million yuan and an interest claim of 42.4313 million yuan against Henan Yalesong Real Estate Co., Ltd. and Kaifeng Jinyao Real Estate Co., Ltd.; 2. The litigation costs of the first instance shall be borne by Henan Yalesong Real Estate Co., Ltd. and Kaifeng Jinyao Real Estate Co., Ltd.
The court of first instance found that the two parties had objections to the "time point at which the verification of the creditors' meeting was completed", and Zhang Hongbin held that because the time of the creditors' meeting was inconsistent with the 15-day advance notice to creditors as stipulated in the Enterprise Bankruptcy Law of the People's Republic of China, with the consent of the court, the time limit for voting and verification of the relevant matters at the creditors' meeting was extended by 10 days, and the administrator believed that it was the day on which the creditors' meeting was convened. Regarding Zhang Hongbin's objection to the confirmation of the creditor's rights involved in the case, Zhang Hongbin said that on January 19, 2020, he reported to the relevant leaders that there were problems in the fifth creditors' meeting and the confirmation of the creditor's rights, and reported the situation to the administrator and the court. Zhang Hongbin submitted an application for verification and confirmation of Zhang Hongbin's creditor's rights in accordance with the law on May 17, 2020, and sent it to the administrator and the court by registered mail in China on May 19, 2020. On November 3, 2020, a lawsuit for confirmation of creditor's rights was filed with the court, and it was later ruled that Zhang Hongbin withdrew the lawsuit because Zhang Hongbin failed to pay the litigation fees. On November 8, 2021, Zhang Hongbin again filed a lawsuit for confirmation of creditor's rights with the Intermediate People's Court of Kaifeng City, Henan Province. The court of first instance held that Article 8 of the Provisions of the Supreme People's Court on <中华人民共和国企业破产法>Several Issues Concerning the Application (III) provides that if the debtor or creditor has any objection to the creditor's rights recorded in the creditor's rights table, they shall explain the reasons and legal basis. If the objector is still dissatisfied after the administrator's explanation or adjustment, or if the administrator does not interpret or adjust, the objector shall file a lawsuit with the people's court for confirmation of creditor's rights within 15 days after the conclusion of the verification of the creditors' conference. If the parties enter into an arbitration clause or arbitration agreement before the acceptance of the bankruptcy application, they shall apply to the selected arbitration institution for confirmation of the creditor-debtor relationship. This case is a dispute over the confirmation of bankruptcy creditor's rights, and Zhang Hongbin was dissatisfied with the decision made by the administrators of Henan Jinou Real Estate Development Co., Ltd., Henan Jinyao Real Estate Co., Ltd., Henan Dongjian Real Estate Co., Ltd., and Henan Yalesong Real Estate Co., Ltd. on January 8, 2020. Henan Yalesong Real Estate Co., Ltd. raised an objection to the creditor's rights confirmation form, and filed a lawsuit with the people's court for confirmation of creditor's rights on November 3, 2020, and the creditors' meeting to review the creditor's rights involved in the case was held on January 8, 2020, although the two parties had objections to the end time of the creditors' meeting's verification, even if according to Zhang Hongbin, the creditor's verification of the creditor's rights was postponed for ten days from the convening of the creditors' meeting (January 18, 2020) 。 Therefore, it no longer has the qualifications to file a lawsuit for confirmation of creditor's rights. Accordingly, the court of first instance ruled to dismiss Zhang Hongbin's lawsuit.
Zhang Hongbin was dissatisfied with the first-instance ruling and appealed, requesting that the first-instance ruling be revoked and that the court of first instance be instructed to hear the case. The court of second instance held that this case was a lawsuit filed by Zhang Hongbin against the administrator's objection to the proposed confirmation of Zhang Hongbin's declared creditor's rights. On the issue of whether Zhang Hongbin's lawsuit for confirmation of creditor's rights in this case should be accepted. First of all, Article 8 of the Provisions of the Supreme People's Court on <中华人民共和国企业破产法>Several Issues Concerning the Application (III) has clear provisions on this issue. The creditor's rights involved in the case declared by Zhang Hongbin were voted on at the fifth creditors' meeting held on January 8, 2020, and item 4 of the voting instructions and the tail of the creditor's rights confirmation form clearly informed the creditors of the remedies and time limits for objections to the creditor's rights confirmation form, that is, the administrator should be contacted to explain the reasons and legal basis. If the objector is still dissatisfied after the administrator's explanation or adjustment, or if the administrator does not interpret or adjust, the objector shall file a lawsuit with the people's court for confirmation of creditor's rights within 15 days after the conclusion of the verification of the creditors' meeting. Zhang Hongbin filed a lawsuit for confirmation of his claims on November 3, 2020 and November 8, 2021, respectively. Even if calculated according to the time when Zhang Hongbin first filed the lawsuit, it far exceeded the statutory 15-day time limit. Secondly, in the handling of bankruptcy cases, the law provides for a number of procedures to protect the interests of creditors, as far as the declaration of creditor's rights is concerned, whether it is declared within the declaration period or supplemented declaration, creditors will go through the procedures of declaration of creditor's rights, provision of evidence, supplementary provision of evidence, review of creditor's rights, receipt of results of creditor's rights review, verification of creditors' meetings, review of creditor's rights, etc. The review of the administrator is very clear, there are no difficulties and obstacles in filing a lawsuit within the prescribed time limit, and the checklist on whether the creditor's rights are confirmed has been clearly informed of the right to sue and the corresponding consequences, if the creditor does not file a lawsuit in time during this period, the relevant creditor's rights recorded in the creditor's rights table will be in a state of uncertainty for a long time, and then affect the repayment of other creditors, hindering the progress of the bankruptcy case, and the creditor's failure to file a confirmation lawsuit with the people's court within the prescribed time limit is regarded as a waiver of its rights, and the creditor should bear the adverse consequences arising from its negligence in exercising its rights。 Accordingly, after the adjudication committee's study, the court of second instance ruled to reject the appeal and uphold the original ruling.
The purpose of the retrial is to urge creditors to file a lawsuit for confirmation of creditor's rights as stipulated in Article 45 of the Enterprise Bankruptcy Law of the People's Republic of China and Article 8 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (III) to file a lawsuit for confirmation of creditor's rights in the people's court. The debtor exercises its rights in a timely manner and clarifies the creditor's rights and debts as soon as possible, thereby promoting the efficiency of bankruptcy proceedings and avoiding damage to the interests of all creditors in a fair and timely manner. If the objector fails to file a lawsuit for confirmation of creditor's rights within 15 days as stipulated in Article 8 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (III), it shall be deemed that it agrees with the conclusion of the creditors' conference to verify and the administrator's interpretation and adjustment, and exercises its rights in the bankruptcy proceedings accordingly after the people's court rules and confirms, and the adverse consequences arising therefrom to the exercise of the objector's voting rights and the distribution of the bankruptcy property shall be borne by itself. However, the expiration of the aforesaid 15-day period does not have the legal consequence of extinguishing the objector's right of action or substantive rights. The court of first and second instance erred in applying the law by dismissing the lawsuit on the grounds that Zhang Hongbin had exceeded the 15-day time limit for filing a lawsuit.
In summary, in accordance with the provisions of Article 214, Paragraph 1, Article 177, Paragraph 1, Paragraph 2, and Article 178 of the Civil Procedure Law of the People's Republic of China, it is ruled as follows:
1. Revoke the (2022) Yu Min Zhong No. 431 Civil Ruling of the Henan Provincial High People's Court and the (2021) Yu 02 Min Chu No. 310 Civil Ruling of the Intermediate People's Court of Kaifeng City, Henan Province;
2. Order the Intermediate People's Court of Kaifeng City, Henan Province to hear this case.
Presiding Judge Yin Xiaochun
Judge Zhao Fengfeng
Judge Wang Deng
June 18, 2023
Judge's Assistant: Zhao Zhi
Clerk: Zhang Xiaoxu