The special craftsman lawyer said that the case | sue to terminate the equity transfer contract, when did the right of rescission arise? (2020) Jingmin Zhong No. 755
CITIC Asset Management Company and Galaxy Guorui Company equity transfer contract transaction arose, CITIC Assets, as the plaintiff, sued the court to request the termination of the equity transfer contract, the first instance intermediate court did not support the plaintiff's request, the plaintiff appealed to the high court, regarding the termination of the equity transfer contract, the collegial panel of the high court held:
(1) As to CITIC Asset Management Company's grounds for appeal that its exercise of the right to terminate the contract did not exceed the exclusion period, this Court held that in this case, Hengda Company (the target company) failed to obtain the Payment License as scheduled within the time limit stipulated in the Equity Acquisition Agreement. Subsequently, the parties agreed to extend the acquisition of the Payment Permit until July 31, 2017. As of July 31, 2017, Hengda Company still has not obtained the Payment License. Therefore, in order to obtain the Payment License as soon as possible, CITIC Asset Management Company promoted Yinhe Guorui Company, Liu Mou and Guoan Holdings to sign the relevant Equity Transfer Contract, with the intention of exerting the brand influence of CITIC Group and striving for Hengda Company to obtain the Payment License as soon as possible. The above facts prove that from July 31, 2017 until Yinhe Guorui Company, Liu and Guoan Holdings signed the relevant equity transfer contract, CITIC Asset Management Company, Yinhe Guorui Company, Li Xingzhen and Liu mou were communicating and negotiating and intended to solve the problem that the Payment License could not be obtained in a timely manner.
(2) As of June 3, 2019, the Beijing Arbitration Commission accepted the arbitration case between Yinhe Guorui Company and Guoan Holdings, and the arbitration request of Yinhe Guorui Company included the termination of the Equity Transfer Contract signed between Yinhe guorui company and Guoan Holdings. That is to say, as of June 3, 2019, the hope of CITIC Asset Management Company to exert the brand influence of CITIC Group and strive for Hengda Company to obtain the Payment License as soon as possible can no longer be realized. Therefore, CITIC Asset Management Company was involved in the repurchase of shares during the meeting with Bank and Guorui Company. Until April 2, 2020, CITIC Asset Management Company officially issued the Notice of Termination of Contract.
(3) Accordingly, June 3, 2019 should be the date on which CITIC Asset Management Company knew that the right to rescind the contract would arise. Therefore, the court confirms that the exclusion period for CITIC Asset Company to exercise the right of rescission shall be calculated from June 3, 2019. From June 3, 2019 to April 4, 2020, the Notice of Termination of Contract is served, and CITIC Asset Management Company shall be deemed to have exercised the right of termination within a reasonable period of time. Accordingly, the Court confirms that the Share Purchase Agreement was terminated on 4 April 2020.
This means that the time limit for the rescission of the contract requires the specific performance process of the contract, and when the purpose of the contract cannot be realized, the right to rescind the contract arises at the time point, and the right to rescind the contract of CITIC Assets in this case is sued from June 3, 2019, and from this point in time, it is impossible to obtain a payment license with CITIC influence, which is the case.
The above is for reference only.
