The Supreme People's Court ruled whether the creditor could request the people's court to revoke the debtor's guarantee act in accordance with article 74 of the original Contract Law

【Main Points of the Judgment】1.Before the implementation of the Civil Code, the debtor's act of providing security was not listed in the scope of the exercise of the creditor's right of avoidance provided for in article 74 of the Contract Law, but the law could not fully enumerate all the forms in which the debtor harmed the creditor's claim. Interpretation (II) of the Contract Law adds three new situations: "the debtor waives its unmature claims", "waives the guarantee of the claims", and "maliciously extends the performance period of the matured claims". Therefore, from the above-mentioned supplementary provisions, it can be seen that the existing provisions are incompletely enumerated, but not completely enumerated, in the case of the exercise of avoidance rights against creditors. 2. Article 539 of the Civil Code stipulates that if the debtor transfers the property at a clearly unreasonable low price, accepts the property of others at an obviously unreasonable high price or provides security for the debts of others, affecting the realization of the creditor's claims, and the debtor's counterpart knows or should know the circumstances, the creditor may request the court to revoke the debtor's conduct. In addition to article 74 of the Contract Law, the Civil Code adds the situation in which the creditor exercises the right of avoidance by "providing security for the debts of others", indicating that the act of the debtor providing security for the debts of others is the meaning of the topic of the creditor's right of avoidance. Therefore, before the implementation of the Civil Code, the creditor may request the people's court to revoke the debtor's guarantee act in accordance with article 74 of the Contract Law.

Supreme People's Court of the People's Republic

Civil Settlements

(2020) SPC Minshen No. 2757

Retrial applicant (third person in the first instance): Zhou Yicheng, male, Han ethnicity, born on December 7, 1962, lives in Nanshan District, Shenzhen City, Guangdong Province, People's Republic of China.

Entrusted litigation agent: Wang Zhengquan, lawyer of Anhui Quanzhen Law Firm.

Respondent (plaintiff in the first instance, appellant in the second instance): Invested in 2234 Overseas Fund No. 7 (Investments2234OverseasFundVIIB.V.). Residence: 1 Amstel Square, 27th Floor, Rembrandt House, Amsterdam, Kingdom of the Netherlands.

Representative: York Chen, authorized representative of the company.

The appellee of the second instance (defendant of the first instance): Nanjing Changheng Industrial Co., Ltd. Residence: 19th Floor, Block B, Phoenix Plaza, No. 1 Hunan Road, Nanjing, Jiangsu Province, People's Republic of China.

Representative: Meng Lankai, the person in charge of the company's manager.

The third person in the first instance: Jiangsu Jintai Trading Industrial Co., Ltd. Domicile: No. 55 Huju Road, Nanjing, Jiangsu Province, People's Republic of China.

Legal representative: Li Jinfang.

The third person in the first instance: Chongqing Jiayi Industrial Co., Ltd. Domicile: No. 1, Building 46, Jianshe Village, Dadukou District, Chongqing, People's Republic of China.

Legal representative: Chen Guangdu.

The third person in the first instance: Henan Kejian Information Technology Co., Ltd. Residence: Sok Building, No. 218 Dongming Road, Zhengzhou City, Henan Province, People's Republic of China.

Legal representative: EY.

The third person in the first instance: China Tianyao Co., Ltd. Residence: Building 2, No. 268 Huanghai Avenue (West), Hai'an County, Jiangsu Province, People's Republic of China.

Legal representative: Yan Shengjun, chairman of the company.

Entrusted litigation agent: He Xiaohua, a staff member of the company.

Entrusted litigation agent: Li Ying, a staff member of the company.

The third person in the first instance: Hangzhou Kejian Information Technology Co., Ltd. Residence: Room 27D, No. 1 Huazhe Square, Gongshu District, Hangzhou, Zhejiang Province, People's Republic of China.

Legal representative: Lang Guannan.

The third person in the first instance: Jiangsu Zhongkejian Communication Products Sales Co., Ltd. Residence: 4th Floor, No. 1 Dusi Lane, Xuanwu District, Nanjing, Jiangsu Province, People's Republic of China.

The third person in the first instance: Wuhan Qingsong Trading Co., Ltd. Address: Room 1205, 12th Floor, Xintiandi, Central, No. 204 Jiefang Avenue, Qiaokou District, Wuhan City, Hubei Province, People's Republic of China

Legal representative: Chen Chao.

The third person in the first instance: Shenzhen Shenzhen-Hong Kong Industry and Trade Import and Export Company. Domicile: 21st and 22nd floors, Mingshang Pavilion, Shenzhen-Hong Kong Haoyuan, No. 2078 Bao'an South Road, Luohu District, Shenzhen, Guangdong Province, People's Republic of China.

Legal representative: Wu Rongjun.

The third person in the first instance: Henan Quanwang Communication Technology Co., Ltd. Residence: Block D, 10th Floor, Building 1, Zhongfu Zidongyuan, No. 9 Zijingshan Road, Zhengzhou City, Henan Province, People's Republic of China.

Legal representative: Yang Qingzhi.

The retrial applicant Zhou Yicheng invested in 2234 Overseas No. 7 Fund Company (hereinafter referred to as the fund company) with the respondent, Nanjing Changheng Industrial Co., Ltd. (hereinafter referred to as Changheng Company), the third party of the second instance, Jiangsu Jintai Trading Industry Co., Ltd. (hereinafter referred to as Jintai Company), Chongqing Jiayi Industrial Co., Ltd. (hereinafter referred to as Jiayi Company), Henan Kejian Information Technology Co., Ltd. (hereinafter referred to as Henan Kejian Company), China Tianyao Co., Ltd. (hereinafter referred to as Tianyi Company), Hangzhou Kejian Information Technology Co., Ltd. (hereinafter referred to as Hangzhou Kejian Company), Jiangsu Zhongkejian Communication Products Sales Co., Ltd. (hereinafter referred to as Jiangsu Zhongkejian Company), Wuhan Qingsong Trading Co., Ltd. (hereinafter referred to as Qingsong Company), Shenzhen Shenzhen-Hong Kong Industry and Trade Import and Export Company (hereinafter referred to as Shenzhen-Hong Kong Company), Henan Quanwang Communication Technology Co., Ltd. (hereinafter referred to as "Quanwang Communication Company") Creditors' Right of Revocation Dispute, dissatisfied with the Jiangsu Provincial Higher People's Court (2018) Su Minzhong No. 51 Civil Judgment, Apply to this Court for a retrial. This court formed a collegial panel in accordance with law to conduct a review, and the review has now been concluded.

Zhou Yicheng applied for a retrial, stating: (1) According to Article 74 of the Contract Law of the People's Republic of China and Article 18 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (II), the creditor's exercise of the right of avoidance is limited to the circumstances specified in the above-mentioned law, and the guarantee guarantee provided by Changheng Company for Jiayi Company does not fall within the circumstances in which the creditor exercises the right of avoidance expressly provided for in the above provisions, and should not be revoked according to law. (2) The right of revocation of the fund company has been extinguished. The fund company already knew the cause of the revocation at the first creditors' meeting on March 4, 2013, and the time to exercise the right of avoidance was not the date of mailing the filing materials to the court of first instance on March 7, 2014, but the date of resubmitting the pleadings in May 2015. (3) Changheng Company provided a guarantee guarantee for Jiayi Company and did not cause damage to the creditors. On March 28, 2011, when Changheng Company provided a guarantee for Jiayi Company, the liabilities and assets were roughly equivalent and did not damage the claims of the fund company. (4) Zhou Yicheng, Changheng Company and Jiayi Company are all goodwill. Changheng Company is the controller of all Kejian enterprises, including the borrower in this case, and the loans of Kejian enterprises are basically arranged by Changheng Company, and they are basically used or arranged by Changheng Company, and it is its consistent practice to provide guarantees for Kejian enterprises after their debts are due or even after entering the court enforcement procedures, all of which are in good faith. In summary, Zhou Yicheng applied for a retrial in accordance with the provisions of items 2 and 6 of article 200 of the Civil Procedure Law of the People's Republic of China.

Upon review, the Court held that the main issues examined in this case were: (i) whether the debtor's act of providing security for others was the object of the creditor's exercise of the avoidance right; (ii) whether the security act in this case met the conditions for the exercise of the avoidance right, that is, whether it caused harm to the creditor and the security holder was aware of the situation; and (iii) whether the exercise of the avoidance right exceeded the statutory period.

1. Whether the debtor's act of providing guarantee security to others is the object of the creditor's exercise of the right of avoidance

Zhou Yicheng believes that the scope of the creditor's right of avoidance is limited to the acts stipulated in Article 74 of the Contract Law of the People's Republic of China and Article 18 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (II), except for the provision of security by the debtor and should not be revoked. However, the law cannot fully enumerate all forms in which the debtor harms the creditor's claim. After the incomplete enumeration led to problems in practice, on the basis of summarizing the successful experience of trial practice, the Supreme People's Court formed countermeasures to fill legal loopholes, and formulated the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (II), adding three new situations: "the debtor abandons its unmature claims", "abandons the guarantee of creditor's rights", and "maliciously extends the performance period of matured claims". It can be seen from the supplementary provisions of the judicial interpretation that the existing provisions do not fully enumerate the circumstances in which the creditor exercises the right of avoidance, but not the complete enumeration.

Article 539 of the Civil Code of the People's Republic of China stipulates: "Where a debtor transfers property at an obviously unreasonable low price, accepts the property of another person at an obviously unreasonable high price, or provides security for the debts of others, affecting the realization of the creditor's claims, and the debtor's counterpart knows or should have known of the circumstances, the creditor may request the people's court to revoke the debtor's conduct." Although the Civil Code of the People's Republic of China has not yet come into force, it adds to Article 74 of the Contract Law of the People's Republic of China the circumstances in which the creditor exercises the right of avoidance by "providing security for the debts of others", indicating that the debtor's act of providing security for the debts of others is the meaning of the creditor's right of avoidance. The purpose of the legislation on the creditor's right of avoidance is to ensure the realization of the creditor's claim by, inter alia, allowing the creditor to interfere with the debtor's free disposition of its property, so as to maintain the debtor's responsible property in an appropriate state. For this legislative purpose, it should be considered that the debtor's conduct resulted in an undue reduction in its liability property and hindered the realization of the creditor' realization, which could be the object of the exercise of the avoidance right. The debtor provides security for the debts of others, increases its own debt burden, has the legal effect of reducing the liability property, and may affect the realization of the creditor's claim. Therefore, the creditor may, in accordance with the provisions of Article 74 of the Contract Law of the People's Republic of China, request the people's court to revoke the debtor's guarantee. The original judgment applied Article 74 of the Contract Law of the People's Republic of China to the trial of this case, and there was no impropriety.

2. Whether the 6 guarantee guarantees provided by Changheng Company for Jiayi Company Caused Damage to creditors

1. After the creditor's rights of the fund company were established, when Changheng Company provided guarantees for Jiayi Company, the liability property of Changheng Company was no longer sufficient to pay off several concurrent claims.

Zhou Yicheng argued that when Changheng Company provided a guarantee for Jiayi Company on March 28, 2011, Changheng Company also had assets such as stock dividends and foreign investment, plus the total assets of Tibet City Investment Stock exceeded 1.2 billion yuan. However, Zhou Yicheng failed to provide a detailed breakdown of the evidence to prove that Changheng Company held other assets on 28 March 2011. At that time, the assets of Changheng Company were only the shares of Tibet City Investment and kejian Marketing Company directly held, worth about 1 billion yuan, which was also consistent with Zhou Yicheng's calculations.

Zhou Yicheng argued that the Court of Second Instance held that Changheng Company's "liabilities exceeded RMB1.7 billion" on 28 March 2011 were due to the erroneous adoption of the principal and interest of the debt calculated by the fund company. However, in the second instance, Changheng Company lacked the necessary information for the audit, did not submit evidence to prove the amount of its liabilities as of March 28, 2011, and did not submit evidence to prove it in this application for retrial. According to Article 90 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, "a party shall provide evidence to prove the facts on which its own litigation claims are based or on which it is based in its rebuttal of the other party's litigation claims, unless otherwise provided by law." If, before the judgment is rendered, the parties fail to provide evidence or the evidence is insufficient to prove their factual claims, the party with the burden of proof shall bear the adverse consequences". The Fund Company provided the (2012) Ningshang Broken Character No. 14-6 Civil Ruling to prove the total liabilities of Changheng Company as at 13 September 2012, and deduced the amount of Changheng Company's liabilities as at 28 March 2011 based on the average annual interest rate, but Changheng Company did not provide evidence. In this case, the court of second instance adopted the amount of liabilities calculated by the fund company, which was based on law.

2. The claims of the fund company and Zhou Yicheng are both ordinary bankruptcy claims, and the proportional distribution in the bankruptcy liquidation of Changheng Company affects the realization of the claims of the fund company.

On September 13, 2012, the Intermediate People's Court of Nanjing Municipality, Jiangsu Province, rendered the (2012) Ningshang Broken Character No. 14-1 Civil Ruling, accepting Zhou Yicheng's application for bankruptcy liquidation of Changheng Company, and on November 23, 2015, the ruling confirmed the establishment of an undisputed claim of RMB1547205766.62. Since the total value of the assets cleared by the manager was about 598981800 yuan, Changheng Company was unable to repay its debts as they were due, and the assets were insufficient to pay off all its debts, and on August 19, 2016, the Intermediate People's Court of Nanjing Municipality, Jiangsu Province, declared Changheng Company bankrupt.

According to Article 113 of the Enterprise Bankruptcy Law of the People's Republic of China, "after the bankruptcy estate has paid off the bankruptcy expenses and common interest debts on a priority basis, it shall be repaid in the following order: (1) the wages and medical treatment, disability allowances and pension expenses owed by the bankrupt to the employees, the basic old-age insurance and basic medical insurance expenses that shall be transferred to the personal accounts of the employees, as well as the compensation that shall be paid to the employees according to laws and administrative regulations; (2) the social insurance expenses owed by the bankrupt in addition to those provided for in the preceding paragraph and the taxes owed by the bankrupt." ;(3) Ordinary bankruptcy claims. Where the estate is insufficient to satisfy the claims for satisfaction in the same order, it shall be distributed proportionately. The salaries of the directors, supervisors and senior management of a bankrupt enterprise shall be calculated on the basis of the average salary of the employees of the enterprise. "In this case, the fund company's claims were transferred from Cinda Company on June 20, 2007, and Zhou Yicheng's claims were transferred from Jiayi Company on March 30, 2011, both of which are gratuitous secured claims and are both ordinary bankruptcy claims. When the bankruptcy estate of Changheng Company is insufficient to satisfy the liquidation requirements in the same order, the liquidation assets that the fund company and Zhou Yicheng can obtain will be distributed proportionally. Therefore, the six guarantee guarantees provided by Changheng Company obviously affected the realization of the fund company's claims.

In summary, on March 28, 2011, Changheng Company had liabilities of about 1.7 billion yuan and total assets of about 1 billion yuan, and still provided external guarantees without having sufficient assets to pay off debts, causing damage to the fund company. Zhou Yicheng's claim that there is no legal basis for judging whether it has caused harm to creditors based on the principal repayment rate, and it is not supported.

3. Whether the counterpart Jiayi Company and the transferee Zhou Yicheng knew that the guarantee behavior of Changheng Company would cause damage to the fund company

Article 74 of the Contract Law of the People's Republic of China and Article 18 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (II) divide the relevant acts of the debtor into two categories: "abandonment of matured claims", "gratuitous transfer of property", "abandonment of unmature claims", "abandonment of creditor's rights security", and "malicious extension of the performance period of matured claims", as long as it causes harm to the creditor, the creditor can exercise the right of avoidance; "transfer of property at an obviously unreasonable low price" must also have " The assignee knows the "element" of the circumstances.

By analogy with the provisions of the existing law, and with reference to the provisions of Article 539 of the Civil Code of the People's Republic of China, it should be held that when a creditor revokes an act of providing security for another person's debts, the act requires, in addition to causing harm to the creditor, the debtor's counterparty must know or should know about the situation.

Zhou Yicheng argued that the guarantee provided by Changheng Company to Jiayi Company was for the restructuring of Zhongke Construction Company, and Changheng Company, Jiayi Company and Zhou Yicheng were all in good faith. In fact, Article 74 of the Contract Law of the People's Republic of China does not regard the existence of subjective bad faith as a requirement for the establishment of the right of avoidance, and the element of establishing the right of avoidance is to cause harm to the creditor, and at the same time requires "the transferee to know" in some circumstances. Therefore, as far as Changheng Company's act of providing security is concerned, the elements of the creditor's right of avoidance do not include the subjective malice of Jiayi Company and Zhou Yicheng, but only require Jiayi Company and Zhou Yicheng to know or should know that Changheng Company's guarantee behavior will damage the creditor's rights.

As far as the counterpart Jiayi Company and the transferee Zhou Yicheng are concerned, there are many unreasonable aspects in the transfer of their creditor's rights, and considering the auction, guarantee and transfer process, it can be concluded that Jiayi Company and Zhou Yicheng should know that Changheng Company's act of providing guarantee guarantees will cause damage to creditors.

1. Jiayi Company and Zhou Yicheng know that the claims they purchase are all bad debts, and Changheng Company is very likely to bear the responsibility for providing guarantee guarantees. Jiayi Company purchased a large number of non-performing debts at one time on March 14, 2011, and on March 28, 2011, Changheng Company issued a guarantee letter to provide guarantees, and on March 30, 2011, Zhou Yicheng received the transfer of claims from Jiayi Company. Subsequently, Jiayi Company and Zhou Yicheng issued the Notice of Assignment and Collection of Creditor's Rights to Changheng Company on April 30, 2011 to claim claims. In addition, on April 11, 2011, Qingsong Company sent a notice of transfer of the claim to Changheng Company, informing it of the transfer of the claim to Zhou Yicheng, and Changheng Company issued a letter of guarantee on April 18, 2011 to provide guarantee for the debt. It can be seen from this that Jiayi Company and Zhou Yicheng both knew when Changheng Company provided the guarantee guarantee that Changheng Company had a very high probability of being liable, and could directly request Changheng Company to bear the guarantee liability at any time.

2. There is an unreasonableness in the process of Jiayi Company obtaining a guarantee guarantee from Changheng Company. Jiayi Company obtained the claim through auction on March 14, 2011, but Changheng Company issued a guarantee letter for Jiayi Company's hundreds of millions of yuan of claims without receiving any written notice. In the application for retrial, Zhou Yicheng submitted new evidence, evidence 1 "Confirmation of Auction Transaction" and evidence 3 "Letter on the Auction Assignment of Kejian System Creditor's Rights" to prove that Jiayi Company obtained the truth of the claim. The Court held that Evidence 1 could only prove that Jiayi Company obtained the claim in this case through auction and could not prove the reasonableness of Changheng Company's guarantee for Jiayi Company, and Evidence 3 stated that Guangdong Yuecai Investment Holdings Co., Ltd. (hereinafter referred to as Guangdong Yuecai Company) issued a notice letter to China Kejian Co., Ltd. and its related party Debt Restructuring Financial Creditors Committee on May 23, 2011, and the time when Changheng Company provided the guarantee was March 28, 2011, earlier than the time of the notice letter.

3. There is an unreasonableness in zhou Yicheng's transfer of creditor's rights from Jiayi Company. According to jiayi company and Zhou Yicheng, jiayi company paid a deposit of RMB 10 million to Guangdong Yuecai Company on March 14, 2011 when it obtained the debt through auction, Changheng Company provided a guarantee guarantee on March 28, 2011, and Zhou Yicheng obtained the debt from Jiayi Company on March 30, 2011, and remitted 50.5 million yuan directly to Guangdong Yuecai Company, and Jiayi Company did not profit from the transaction. In this transaction process, neither Jiayi Company nor Zhou Yicheng submitted any of the following three pieces of evidence in the first and second instances: 1. Evidence that Jiayi Company paid the transfer of creditor's rights to Guangdong Yuecai Company; 2. Evidence that Zhou Yicheng paid the transfer of creditor's rights to Jiayi Company; 3. Evidence that Zhou Yicheng paid the remaining transfer amount to Guangdong Yuecai Company.

During the retrial, Zhou Yicheng submitted a new evidence 2 "Receipt for Receipts", proving that Guangdong Yuecai Company received 60.5 million yuan in auction transactions from Jiayi Company on April 2, 2011, and new evidence 4 Jiayi Company received receipts, proving that Jiayi Company received a debt transfer payment of 16685306.77 yuan from Zhou Yicheng on April 18, 2014. The Court held that the above two new pieces of evidence should not be recognized for the following reasons: First, there was a discrepancy between the Receipt for Collection and Zhou Yicheng's statement in the second instance. The remitter specified in the "Receipt for Collection" is "Chongqing Jiayi Industrial Co., Ltd.", but in the second instance, Zhou Yicheng claimed that Jiayi Company only paid a deposit of 10 million yuan to Guangdong Yuecai Company, and the remaining 50.5 million yuan was directly remitted by Zhou Yicheng to Guangdong Yuecai Company, and the remitter stated in the receipt was inconsistent with its statement; secondly, Jiayi Company's receipt lacked probative power. Zhou Yicheng did not mention that he had paid the transfer consideration to Jiayi Company in the second instance, and the Debt Transfer Agreement signed by the two parties did not stipulate that Zhou Yicheng should pay consideration to Jiayi Company. After the court of second instance challenged Jiayi Company's failure to profit from this transaction arrangement and its incompatibility with commercial common sense, Zhou Yicheng submitted a receipt in the retrial, stating that Zhou Yicheng paid 16685306.77 yuan to Jiayi Company. The evidence is a photocopy, the original original is not submitted, other auxiliary evidence such as bank statements is not submitted, only jiayi company stamps, for transactions of more than 100 million yuan, the form is too simple, and does not conform to the general company's financial norms; at the same time, the provider of the evidence, Jiayi company, has an interest in Zhou Yicheng. Pursuant to Articles 85, 87 and 88 of the Several Provisions of the Supreme People's Court on Evidence in Civil Proceedings, this court does not recognize the above two pieces of evidence.

Based on a comprehensive examination of the transaction process between the debtor Changheng Company and the counterparts Jiayi Company and Zhou Yicheng, including the process of concluding the contract and the performance of the contract, it can be concluded that Jiayi Company and Zhou Yicheng should have known that Changheng Company's act of providing guarantee guarantees would cause harm to the creditors.

In summary, the six guarantee letters issued by Changheng Company on March 28, 2011 provided guarantee guarantees for the debts of others, causing damage to the creditor fund company, and Jiayi Company and Zhou Yicheng should have known about the situation and met the requirements for the creditor's right of avoidance. The court of second instance correctly revoked it.

4. The second-instance judgment held that the period for the fund company's right of revocation had not yet passed, the evidence was indeed sufficient, and the application of law was correct

Zhou Yicheng argued that the fund company's right of revocation had been extinguished. According to Article 55 of the Contract Law of the People's Republic of China, "the right of revocation shall be extinguished in any of the following circumstances: (1) the party with the right of revocation has not exercised the right of revocation within one year from the date on which it knew or should have known of the cause of revocation; (2) the party with the right of revocation has expressly expressed or waived the right of revocation by its own conduct after knowing the cause of revocation." Zhou Yicheng believes that the fund company already knew the cause of the revocation at the first creditors' meeting of Changheng Company on March 4, 2013, and that the date on which the fund company exercised its right of avoidance was not the date of mailing materials to the court of first instance on March 7, 2014, but the date of resubmitting the new complaint in May 2015.

The exclusion period is counted from the date on which the fund company knows or should have known the reason for the revocation, and the reason for the revocation is the fact that the guarantee provided by Changheng Company to Zhou Yicheng will be detrimental to the realization of the claim. On 4 March 2013, the fund company raised objections to Zhou Yicheng's status as a creditor and the chairman of the meeting at the first creditors' meeting, and questioned the legality of Zhou Yicheng's claims, at which time the fund company did not know the amount of Zhou Yicheng's claims, whether the guarantee was repaid gratuitously, whether there were other trading arrangements, and could not judge whether the guarantee was harmful to the realization of the claims; until March 7, 2013, after the fund company consulted all the claims of Zhou Yicheng, Only then can it be determined that the guarantee behavior of Changheng Company has harmed its own claim, that is, it knows the reason for the revocation. Zhou Yicheng claimed that the fund company had conducted a "due diligence" on Zhou Yicheng's claims since 2012, but failed to provide evidence to prove it and should not be accepted.

As far as the time for the fund company to exercise the right of avoidance is concerned, according to the first paragraph of article 74 of the Contract Law of the People's Republic of China, the right of avoidance is exercised by the creditor filing a lawsuit with the people's court; the specific time point of exercise is the time when the parties file the lawsuit, not the time of filing the case. According to Article 12 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Limitation System for the Trial of Civil Cases, "where one of the parties submits a complaint or an oral complaint to the people's court, the limitation period shall be interrupted from the date of submission of the complaint or oral complaint". Although the right of avoidance applies to the exclusion period rather than the limitation period, the legal requirements for the interruption of the limitation period and the exercise of the right of avoidance are the same - the exercise of civil rights. Therefore, if the right of revocation is exercised by litigation, the time node for the exercise of the right shall be the time when the complaint is submitted. On March 7, 2014, the fund company sent a complaint to the court of first instance, which was an exercise of the right of avoidance within a one-year exclusion period. Zhou Yicheng's claim that the time when the court filed the case and the time of filing a new complaint should be used as the time to exercise the right of revocation, which had no basis in law and was not supported. Therefore, the court of second instance found that the fund company did not exceed the exclusion period when filing the lawsuit, and the law was correct.

In summary, Zhou Yicheng's application for retrial did not comply with the circumstances provided for in Article 200 of the Civil Procedure Law of the People's Republic of China. In accordance with the provisions of the first paragraph of Article 204 of the Civil Procedure Law of the People's Republic of China and the second paragraph of Article 395 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, the ruling is as follows:

Zhou Yicheng's application for retrial was dismissed.

Judge Li Guishun

Judge Xi Xiangyang

Judge Wang Beibei

December 30, 2020

Legal Officer Assistant Zhang Mei

Secretary Fang Jianyi

Source: Civil Trials