China's Supreme People's Court and others released typical cases focusing on resolving disputes over corporate debt arrears

China News Service, Beijing, October 8 (Reporter Zhang Su) The Supreme People's Court of China and the All-China Federation of Industry and Commerce jointly released 10 typical cases of diversified settlement of disputes in the private economic field on the 8th, focusing on resolving disputes over arrears of corporate accounts.

In July last year, China's Supreme People's Court and the All-China Federation of Industry and Commerce jointly released the first batch of typical cases on diversified settlement of disputes in the private economic field, guiding private enterprises to give priority to resolving enterprise-related disputes through chamber of commerce mediation. The release of the second batch of typical cases aims to give full play to the important role of mediation in resolving corporate account arrears and guide private enterprises to mediate through voluntary and legal principles.

The Supreme People's Court stated that relying on the "court + chamber of commerce" diversified dispute resolution mechanism, the People's Court has given full play to its guidance and mediation functions, providing professional guidance to chambers of commerce mediation organizations in terms of legal application standards, clarifying legal relationships, clarifying the direction of judicial decisions, and strengthening judicial protection.

The facts of the "Mediation Case of Sales Contract Dispute Between a Concrete Company and a Design Engineering Company" released this time show that after a concrete company supplied goods as contracted, the two parties settled and confirmed that the total payment was 5.8559 million yuan (RMB, the same below). A design engineering company only paid a down payment of 448,500 yuan, and the remaining 5.4074 million yuan has been in arrears for a long time.

The trial court believed that this case was a typical "triangular debt" problem in the construction industry, forming a closed debt loop in which the upstream was in arrears with project payments, the midstream was in arrears with building materials payments, and the downstream had difficulty in collecting payments. If it is dealt with only by a simple judgment, it will not only easily intensify conflicts and amplify the business crisis caused by preservation measures, but also intensify the risk of the industry's capital chain breaking.

The trial court relied on the "court + chamber of commerce" multi-dispute resolution mechanism, and it only took 15 days for both parties to reach a consensus on mediation and determine the "unfreeze first + installment payment" mediation idea. A design engineering company paid an initial payment of 1 million yuan within 3 days after the account was unfrozen, and the remaining balance was paid in two installments. A concrete company voluntarily waived liquidated damages and attorney fees of RMB 526,400.

It is worth mentioning that the case clarified the consideration relationship between "reduction of liquidated damages" and "resumption of operations" through an agreement, which not only gave distressed companies breathing space to restore their hematopoietic functions, but also forced companies to perform their contracts in good faith with strict liability for breach of contract, providing a replicable path to cracking the industry's "triangular debt".