Plea for care in civil trial rulings

PUBLISHED : Wednesday, 22 February, 2012, 12:00am
UPDATED : Wednesday, 22 February, 2012, 12:00am


The mainland's top court issued a notice this week, urging all courts to take special care when hearing cases touching on controversial topics such as private loans and the lease of farmland.

In a notice entitled 'Strengthening Civil Trials to Protect People's Livelihood', the Supreme People's Court listed eight categories of disputes that deserve particular attention. They were disputes over real estate, private loans, labour issues, farmers' rights and consumer rights, traffic accident compensation, medical negligence compensation, and marital and family disputes.

It is not unusual for the Supreme People's Court to issue such working guidelines, but inclusion of private loans caught the media's attention.

Zhejiang billionaire businesswoman Wu Ying was sentenced to death in 2009 for illegally collecting funds with the intention to defraud, but her defence argued that she was only borrowing money from friends and colleagues. The 30-year-old's death sentence was upheld in January, and a final decision now lies with the Supreme People's Court.

The case has stirred unprecedented public discussion on issues, including the precarious state private firms find themselves in when trying to raise funds. It is difficult for firms to borrow from banks due to policy limits, but private lending is prone to being seen as illegal fund-raising.

Professor Wang Weiguo, from Chinese University of Political Science and Law, said the court notice on Sunday was unlikely to have been motivated by Wu's case because it was a criminal case.

But the focus on private loans reflected the sensitivities and difficulties involved in lending between individuals or companies. 'Private loan disputes are important because if they are not properly ruled on, it could lead to the collapse of companies, and a loss of jobs,' Wang said.

The notice said courts should safeguard 'legal and orderly' private loan relationships, and protect the parties' rights. The notice also said courts should be careful of loan-sharking elements and the creation of fake debt relationships to avoid paying a real debt.

Wang said it was a call for the recognition of private loan agreements and the resolution of such disputes under civil litigation. In practice, courts sometimes tried a person who defaulted on a debt on fraud charges, wrongfully aggravating the issue.

'On the whole, private loans are an area that deserves more room and freedom to develop, and this notice is in line with that policy,' Wang said.

On farmers' rights, the notice called for rulings to consider the maintenance of rural stability, in particular when cases concern the lease and transfer of rights to farmland.

Many mass protests on the mainland concerned the illegal use of farmland, the most notable case in Wukan, Guangdong. Residents began protesting in September after officials sold the village's land to a property developer without paying proper compensation. The protests turned into clashes with police in December that led to intervention by the provincial officials, who promised free elections. A village committee will be elected next month.