The special craftsman lawyer said that the case | the equity transfer for several years, can the lawsuit terminate the equity transfer contract be supported? (2021) SPC Minshen No. 6074
Lin X and others hold the equity of Wanxin Company, Wanxin Company has a construction land under its name, Lin X and others signed an equity transfer agreement with Hainan Zhongshi Company to transfer 100% of the equity of Wanxin Company to Hainan Zhongshi Company, Lin et al. handed over the company's license seal to Wanxin Company, but did not go through the transfer registration for a long time.
A few years later, due to government planning, the construction land was classified within the scope of ecological redline protection, that is, the construction land could no longer be used for development, and the equity transferee Hainan Zhongshi Company, as the plaintiff, could not achieve the purpose of the contract, and sued the transferor Lin to terminate the contract and return the equity transfer payment that had been paid. The first and second instances upheld the plaintiff's request, and the transferor, Lin X, was dissatisfied and applied to the Supreme Court for a retrial, and the collegial panel held that:
First, the Equity Transfer Agreement is called the transfer of equity, which is actually the transfer of land use rights. The Equity Transfer Agreement stipulates that "China Television Company shall transfer 100% of the equity of Wanxin Company, including the land use right under the equity". The content of the agreement also mainly involves the development and construction of the land involved in the case, so the purpose of the contract of China Television Company is to obtain the right to use the land involved in the case and carry out development and construction in the form of equity transfer, and whether the land involved in the case can be used and developed affects the performance of the Equity Transfer Agreement. Secondly, the Wanning Municipal Bureau of Land and Resources has informed Wanxin Company that the land involved in the case belongs to the scope of ecological redline protection and can no longer be developed and constructed. In addition, China Television Company has paid a deposit of 10 million yuan and an investment of 5 million yuan to Wanxin Company, but Wanxin Company has not changed the equity of Wanxin Company to the name of China Television Company as agreed. Based on this, the original judgment found that Hainan Zhongshi Company was no longer able to achieve the purpose of the Equity Transfer Contract, and it was not improper to support the unilateral termination of the share transfer contract.
Second, on the question of whether Wanxin Company and other companies should return the deposit of 10 million yuan and the investment amount of 5 million yuan. As mentioned above, the case involved the termination of the Equity Transfer Contract. According to Article 562 of the Civil Code, "After the contract is terminated, if the performance has not been performed, the performance shall be terminated; if the performance has been performed, according to the performance and the nature of the contract, the parties may request restitution, take other remedial measures, and have the right to claim compensation for losses", the original judgment of Wanxin Company and others returned the deposit of 10 million yuan and the investment amount of 5 million yuan already paid by China Television Company, and there was no improperness. The applicant's request for retrial is rejected.
In practice, equity transfer transactions ultimately point to the assets of the target company, especially the transfer of land use by equity transfer, and land is the primary purpose of the transferee to sign the share transfer contract. However, in the author's opinion, the equity has not been transferred, which is an important factor that the transferor's claim of the retrial applicant cannot be supported, that is, the equity transfer has not been completed, the transferee has not obtained the equity, the termination of the equity transfer contract has a factual basis, according to this fact, it can also find a legal basis (the purpose of the contract cannot be achieved), and the balance of victory and defeat at this time naturally tends to the transferee, that is, Hainan Zhongshi Company, right?
The above is for reference only.
