Supreme Court Case: Determination of the nature of third party undertaking docum

Release Date: 2020-04-09 Posted by admin

In the trust business, the trust company often requires the financing party to take several measures to increase credit, and the third party will provide the debtor to make up for the debts formed by repurchasing various specific assets or the right of income. Regarding the determination of the nature of such commitment documents, there are disputes in practice. In this case, the Supreme People’s Court defined the contractual relationship formed by this type of credit enhancement as an independent contractual relationship, and defined the nature of the contract as a mixed contract based on the specific rights and obligations of both parties. Different from the general guarantee guarantee.

Referee points

1. If the trust asset investment and financing activities are carried out based on the business trust relationship, the new form of property formed due to the change of the trust property still belongs to the trust property, but it cannot be used as the basis for defining the nature of the contract with the trust property as the subject. Therefore, all contracts involving trust property cannot be regarded as trust contracts.

2. The payment promise made by a third party to make up the difference is independent of the creditor's right to be supplemented. It is different from the usual subordinate and supplementary guarantee guarantee. Although it has the role of credit enhancement guarantee, it is not a guarantee in the sense of guarantee law. Guarantee behavior.

Basic case

1. On December 6, 2012, Jiangsu Trust Company and Guangzhou Securities Company signed the "Single Fund Trust Contract" (referred to as the "Trust Contract"). Guangzhou Securities Company will deliver 1.2 billion yuan of trust funds to Jiangsu Trust Company. Jiangsu Trust Company will Trust funds are used to transfer specific asset income rights and obtain trust income for Guangzhou Securities Company through methods such as collecting repurchase prices.

2, 2012 Nian 12 Yue 6 , Jiangsu Luyuan trust companies and property companies signed a "transfer contract" and "buy-back contract", Jiangsu Trust paid 12 Yiyuan on the price, buyers get Luyuan specific income right from Jiangsu Trust Two years from the date of payment of the specific asset transfer price to Lvyuan Real Estate (hereinafter referred to as the repurchase start date) in accordance with the "Transfer Contract", Lvyuan Realty will repurchase the income right of the specific asset. The repurchase price includes the principal of the transfer price And premium models in two parts

3 , 2 012 Nian 12 Yue 6 , Jiangsu trust company signed with the Agricultural Bank of China Kunming Branch "Transfer Agreement", Kunming Branch of Agricultural Bank of China should pay the transfer price for the assets of certain gains the right to repurchase as of the expiration date of this section above Green Park estate companies cope The unpaid principal of the transfer price and the unpaid premiums, liquidated damages, Jiangsu Trust Company's expenses for realizing the right to return on specific assets, etc.

Controversy

Regarding whether the transfer agreement involved in the case is an independent legal relationship, the courts of first and second instance held the same view , that is: the "Assignment Contract", the "Repurchase Contract" and the "Assignment Agreement" and other contracts involved in the case are attached to the "Trust Contract" and are Guangzhou Securities companies and Jiangsu Trust Company are part of the trust transaction framework, but there is no master-subordinate relationship with the "Trust Contract", and it is an independent legal relationship.

Regarding the nature and validity of the "Assignment Agreement" involved in the case, the court of first instance and the court of second instance held that it was different. The court of first instance considered that the legal relationship between the transfer of creditor's rights was constituted, namely: the "Assignment Agreement" signed by Jiangsu Trust Company and the Kunming Branch of Agricultural Bank of China on the right to the proceeds of specific assets involved in the case "It belongs to a creditor’s rights assignment contract. The content does not violate the mandatory provisions of laws and administrative regulations, and should be deemed legal and effective. Therefore, although the "Assignment Agreement" involved in the case is related to the legal relationship of the trust, the rights and obligations stipulated in the "Assignment Agreement" itself are the agreement reached on the contractual creditor's rights of specific asset income rights, based on the transfer of income rights and payment of the price by both parties. The "Assignment Agreement" has the nature of the transfer of rights, so the cause of this case should be determined as a dispute over the assignment of claims. The "Assignment Agreement" involved in the case did not include the content of the performance guarantee provided by the Agricultural Bank of China Kunming Branch to Jiangsu Trust Company, which was not a guarantee contract in the legal sense. Therefore, the Agricultural Bank of China Kunming Branch claimed that the "Assignment Agreement" was actually a guarantee contract and there was no law. in accordance with.

The court of second instance held that: the "Assignment Agreement" is a mixed contract, and the payment obligations promised by both parties constitute different contractual relationships. One is the legal relationship between the transfer of specific asset income rights and the repurchase claims and corresponding mortgage rights. The second is the balance supplementary legal relationship with the role of credit enhancement guarantee. Based on the "Assignment Agreement", Jiangsu Trust Company and Agricultural Bank of China Kunming Branch agreed that they would each bear different types of principal payment obligations. They were combined and inseparable in a consideration relationship, forming a mutually dependent relationship of rights and obligations. Since the payment obligations borne by both parties do not belong to the same contract type, the "Assignment Agreement" is not a well-known contract stipulated by law. In view of the fact that the legal relationship of the parties' litigation is complex and not typical, the cause of this case should be determined as a contract dispute. The first-instance judgment determined that the "Assignment Agreement" involved in the case was a single assignment of creditor's rights, and the cause of the case was determined to be improper in the dispute over the creditor's rights assignment contract, which was corrected by this court.

Regarding whether the transfer agreement constitutes a guarantee contract that “named transfer is actually guarantee” , the Supreme Court made the following determination:

The "Assignment Agreement" stipulates that the Kunming Branch of Agricultural Bank of China undertakes the obligation to supplement the difference before the maturity date of the repurchase of specific asset income rights [1]. The above obligation is a payment commitment made by the Agricultural Bank of China Kunming Branch, which is independent of the creditor's rights to be replenished, and the Agricultural Bank of China Kunming Branch shall pay the corresponding amount within the due date. This is different from the usual subordinate and supplementary guarantees. It is not that the Kunming Branch of Agricultural Bank of China will perform debts or assume liabilities to Jiangsu Trust Company when Luyuan Real Estate Company fails to fulfill its repurchase obligations. Therefore, although it has the role of credit enhancement guarantee, it is not a guarantee guarantee activity in the sense of guarantee law. The Kunming Branch of Agricultural Bank of China argued in the grounds of appeal that the "Assignment Agreement" "named as a transfer is actually a guarantee". The reason is insufficient and this court does not support it.

Source of the case

(2017) Supreme Law Minzhong No. 478 Jiangsu International Trust Co., Ltd. and the Kunming Branch of Agricultural Bank of China Co., Ltd., the second-instance civil judgment on contract disputes

Notes:

[1] It is worth noting thatthe subject of thethird party credit enhancement obligationinthis caseis the bank. Article 18 of the "Interbank Business Notice" stipulates that "the interbank business carried out by a financial institution prior to the issuance of the notice shall The People’s Bank of China and relevant regulatory authorities report the management status, and the business will be settled when it expires.” Article 7 of the "Opinions on Further Deepening the Rectification of the Banking Market Chaos" stipulates that “the old and the new must be separated, and the existing business shall be distinguished by the nature of the problem circumstances, causes and consequences, etc., to give some digestion period and the transition period, differentiated disposal; for chaos after the renovation work carried out banking market ( 2017 Nian 5 Yue 1 new business in the future), and in strict accordance with laws and regulations Standardize, investigate and deal with in accordance with the law." Article 29 of the "Guiding Opinions on Asset Management Business" stipulates that "a transition period shall be set up in accordance with the principle of'breaking the old from the old' to ensure a smooth transition. The transition period starts from the date of the issuance of this opinion to theend of 2020 . Appropriate regulatory incentives will be given to institutions that complete rectification ahead of schedule. During the transition period, financial institutions should issue new products in compliance with the provisions of this opinion; the unexpired assets invested in continued stock products should maintain necessary liquidity and market stability. Institutions can issue old products for docking, but they should be strictly controlled within the overall scale of stock products, and the decline should be reduced in an orderly manner to prevent the cliff effect at the end of the transition period.” Accordingly, in the process of rectifying the chaos in the financial market, the regulatory authorities should The existing business and the new business adopt a differentiated disposal policy that separates the old from the new business. The existing business should be cleaned up during the transition period and settled after expiration.

Case "Transfer Agreement" department in 2012 Nian 12 Yue 6 signed, the business in question already existed before the introduction of the above-mentioned financial regulatory filing. Jiangsu Trust Company filed a lawsuit in this case, requesting Kunming Branch of Agricultural Bank of China to perform the "Assignment Agreement" and bear the responsibility for breach of contract, which is a clearing-up business. The current financial regulatory policy allows the continued performance of existing business contracts such as the "Assignment Agreement", which helps stabilize relevant market expectations and maintain the security of financial market transactions. It also indicates that the financial risks that may arise from this are within the controllable range. It does not constitute the invalidity of the contract as stipulated in Article 52 of the Contract Law, such as harming public interests.

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