Article

Procedural History: The court granted the plaintiff a preliminary injunction of L/G against the defendant.

Facts: The plaintiff applied for a preliminary injunction to stop the third party, Bank of China Liaoning Branch, from paying the defendant (beneficiary) the sum of Eur. 1,798,798 (RMB 13,441,697.9) under No. GC0486114000651 L/G because of the fraud in the L/G. And the plaintiff gave security for the preliminary injunction.

Legal Analysis:

Legal Issue(s): Whether the court could grant a preliminary injunction, concerned with the fraud under the L/G, when the plaintiff gave security for this preliminary injunction?

Legal Rule(s): Art. 100, Civil Procedure Law of the People’s Republic of China: If it becomes impossible or difficult to enforce a judgment because of the acts taken by one of the parties or for other reasons, the people’s court may, upon the request of the other party, make an order to preserve the property. In the absence of such requests, the people’s court may, when necessary, also order to adopt property preservation measures.

When a people’s court has decided to adopt property preservation, it may instruct the applicant to provide a surety; if the applicant fails to do so, his application may be rejected.

After receiving a party’s application, if the case is urgent, the people’s court must make an order regarding property preservation within 48 hours; if a people’s court makes an order for property preservation, it shall enforce the preservation immediately.

Art. 102, Civil Procedure Law of the People’s Republic of China: Preservation shall be limited to the scope of the claim or to the property related to the case.

Art. 103, Civil Procedure Law of the People’s Republic of China: The measures of property preservation may include seizure, detain, freeze, or other methods as prescribed by law. When a people’s court freezes a property, it shall notify the person whose property is frozen.

Those properties that have already been seized, detained, or frozen shall not be seized or frozen again.

Disposition – for each legal issue

  1. The court seized the security that the plaintiff offered;
  2. The court granted the plaintiff a preliminary injunction of L/G against the defendant.

Holding & Reasoning for each issue: Art. 100, Civil Procedure Law of the People’s Republic of China: If it becomes impossible or difficult to enforce a judgment because of the acts taken by one of the parties or for other reasons, the people’s court may, upon the request of the other party, make an order to preserve the property. In the absence of such requests, the people’s court may, when necessary, also order to adopt property preservation measures.

When a people’s court has decided to adopt property preservation, it may instruct the applicant to provide a surety; if the applicant fails to do so, his application may be rejected.

After receiving a party’s application, if the case is urgent, the people’s court must make an order regarding property preservation within 48 hours; if a people’s court makes an order for property preservation, it shall enforce the preservation immediately.

Art. 102, Civil Procedure Law of the People’s Republic of China: Preservation shall be limited to the scope of the claim or to the property related to the case.

Art. 103, Civil Procedure Law of the People’s Republic of China: The measures of property preservation may include seizure, detain, freeze, or other methods as prescribed by law. When a people’s court freezes a property, it shall notify the person whose property is frozen.

Those properties that have already been seized, detained, or frozen shall not be seized or frozen again.

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The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of the ICC or Coastline Solutions.