Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 29
China
4
•
On April 15, the Supreme People’s Court issued the opinions on promoting lawful
and efficient adjudication of bankruptcy cases, which provides various measures to
improve the efficiency and reduce the cost of bankruptcy proceedings.
•
On May 15, the Supreme People’s Court issued the second guiding opinions in
adjudicating civil cases involving the COVID-19 epidemic. The Supreme People’s Court
asks the courts at different levels to facilitate consultation between the debtor and
creditor if a creditor petitions for bankruptcy of an enterprise that fails to meet its debt
repayment obligation due to the COVID-19 epidemic. The courts are asked to avoid
initiating bankruptcy proceedings for enterprises that fail to meet debt repayment
obligation solely because of the impact of COVID-19 epidemic by evaluating the cash
flow and asset liability ratio of these enterprises during this special period of time only.
Contractual
Issues
•
Performance of contractual obligations could be delayed due to the COVID-19
Epidemic. Here is an analysis about if a developer can claim exemption from liability
for the breach of contract arising from a delay in delivering houses on schedule.
What measures
have been taken
to reinforce
contracts?
•
In practice, many developers see epidemics, major public health events, universal
epidemic diseases, governmental policies and decrees relating to construction as force
majeure events, or at least situations where developers are specifically entitled to postpone
the time of delivery as agreed upon in their sales contracts. Thus, based on the principle of
autonomy of will, sellers and purchasers can enjoy and undertake the rights and obligations
to postpone the time of delivery as agreed upon in their contracts if it is valid.
•
If there is no valid agreement, developers can apply for a force majeure or use the
principle of change of circumstances. However, the legal consequences and outcome
of such a declaration will be determined on a case-by-case basis.
•
Special Series regarding the Legal Impact of the COVID-19 Epidemic on the Real
Estate Industry. Topic One: the impact of the COVID-19 epidemic on the sale of
commodity housing.
•
On May 15, the Supreme People’s Court issued the second guiding opinions in
adjudicating civil cases involving the COVID-19 epidemic. The Supreme People’s
Court states that the courts should not grant the petition of either party to terminate
a sales contract if the COVID-19 epidemic is making performance more costly or
performance will be later than the time specified in the contract as long as the
purpose of the contract is not frustrated. On the other hand, the courts may allow
adjustment of price or time of performance based on the actual circumstances of
each case and the principle of equity.
Government measures in key jurisdictions
29