Represented Hubei Changle Health Food Company in a payment dispute case.
I. Case Recap
In 1996, Shenzhen Gangjing Food Co., Ltd. (hereinafter referred to as "Gangjing Company") established a processing-with-supplied-materials relationship with Hubei Changle Health Food Co., Ltd. (hereinafter referred to as "Changle Company"). Under this arrangement, Changle Company supplied agricultural raw materials, while Gangjing Company provided packaging materials and was responsible for processing in Shenzhen, charging processing fees. Subsequently, an economic dispute arose between the two cooperating parties. On November 3, 1998, Changle Company sent a lawyer's letter to Gangjing Company, proposing that the Jingzhou Intermediate People's Court be the court chosen by both parties to resolve the dispute, requiring a reply before November 15, 1998, and stating that failure to reply would be deemed as consent. Gangjing Company did not reply within the time limit. Subsequently, on November 19, 1998, Changle Company sent another letter by mail, asserting that Gangjing Company's silence meant agreement to the jurisdiction of the Jingzhou Intermediate People's Court over the case. At the end of 1998, Changle Company filed a lawsuit with the Jingzhou District People's Court of Jingzhou City, naming Hankun Food (Shenzhen) Food Co., Ltd. (an independent legal person under the same parent company as Gangjing Company, hereinafter referred to as "Hankun Company") as the first defendant and Gangjing Company as the second defendant, requesting the court to order the defendants to immediately pay off the goods payment of 1,394,522.30 yuan and overdue interest, and to bear the litigation costs of the case. On February 6, 1999, court staff from Jingzhou District Court went to Gangjing Company to serve the Complaint and summons. Because the names of the two defendants were incorrect and no proof of service was attached, neither Hankun Company nor Gangjing Company signed to acknowledge receipt. On May 13, 1999, judges from Jingzhou District Court went to Gangjing Company to execute property preservation, forcibly seizing and removing a car belonging to an employee of the company. On July 5, 1999, the Jingzhou District Court held the first-instance hearing of the case. Because the names of the two defendants were incorrect, the two defendants only entrusted one lawyer to appear in court in the capacity of a person explaining the situation. On August 12, 1999, the first-instance court rendered a first-instance judgment on the case. The Judgment arbitrarily changed the names of the defendants. Regarding the challenge to jurisdiction over the case, the Judgment stated: "This court holds that after accepting this case, this court directly served the response notice and relevant legal documents upon the two defendant companies. At the time of receiving the litigation documents, the two defendants reached an agreement with the plaintiff on accepting this court's mediation and reconciling accounts with the plaintiff. The two defendants separately sent three letters and telegrams, stating that the dispute was solely in the charge of the legal representative ××× (original name omitted), who was currently hospitalized with a serious illness, and that after his condition improved, the two parties would check the accounts, and requesting this court to mediate. In fact, the two defendants had already responded to the lawsuit before this court." The Judgment ruled on the merits of the case: "In addition to repaying the principal and interest of the debt owed to the plaintiff within 15 days from the date this judgment takes legal effect, the two defendants shall bear the plaintiff's travel expenses, attorney's fees, case acceptance fees, and property preservation fees totaling 69,075 yuan." The two defendants, dissatisfied with the first-instance judgment, immediately filed an appeal with the second-instance court, requesting that the original judgment be reversed and that the original plaintiff's lawsuit be dismissed. After the second-instance hearing, the court ruled: "Appeal rejected, original judgment affirmed." At the end of January 2000, Zhiming lawyers, during the period when the second-instance judgment took effect, accepted the entrustment of the two defendants. On February 8, they submitted the Application for Retrial to the Jingzhou Intermediate People's Court. On March 10, the court notified them to pay the retrial acceptance fee. However, on March 28, the Jingzhou District Court still sent personnel to Shenzhen to enforce the judgment by compulsory means. Zhiming lawyers rushed to the scene and persuaded the court enforcement personnel to suspend the enforcement, and immediately submitted reports to the President of the Supreme People's Court, the Director of the Hubei Provincial People's Congress, and the President of the Hubei Provincial High People's Court, reporting the illegal trial and judgment situation of the two-level courts.
II. Case Outcome
On April 17, 2000, the Jingzhou Intermediate Court issued Civil Rulings (2000) Jing Zhong Li Zai Zi No. 30-1 and No. 30-2, ruling to conduct a retrial of this case and to suspend the execution of the original judgment. On May 31, 2000, the Jingzhou Intermediate Court issued Civil Ruling (2000) Jing Zhong Jing Jian Zi No. 30-3, ruling that to ensure the enforcement of the retrial judgment in this case, Changle Company shall immediately deliver the employee cars of Gangjing Company detained at its premises to the court for impoundment. On July 18, 2000, the Jingzhou Intermediate Court issued Civil Ruling (2000) Jing Jing Zai Zi No. 30-4, which stated:
The parties listed above, in the case concerning a dispute over a processing and workmanship contract, were originally issued a civil judgment by the Jingzhou District People's Court on August 12, 1999, under (1999) Jing Jing Yi Chu Zi No. 049. After the appellant in the original trial appealed, this court issued a civil judgment on December 10, 1999, under (1999) Jing Jing Zhong Zi No. 182. After the judgment became effective, Hankun Company and Gangjing Company applied to this court for a retrial. Upon review, the application met the statutory conditions for retrial. After this court initiated the retrial, a collegial panel was separately constituted in accordance with the law to hear this case, which has now been concluded.
This court holds that in the first instance, the defendants sued by the plaintiff Changle Company were, first, Shenzhen Hankun Food Group, and second, Hankun Food Group Shenzhen Gangjing Food Co., Ltd. According to the registration records of the industrial and commercial authorities, the aforesaid group and company do not exist. The defendants sued by Changle Company are not qualified parties. The Jingzhou District People's Court changed the defendants to Hankun Company and Gangjing Company during the trial and in the judgment, which constitutes a procedural violation. Furthermore, there is no agreement between the parties on the selection of jurisdiction, and the place of contract performance and the locations of the defendants are both in Shenzhen, so the original trial court's jurisdiction was erroneous. In accordance with the provisions of Item (1) of Article 210 of the Opinions of the Supreme People's Court on Several Issues concerning the Application of the Civil Procedure Law of the People's Republic of China, it is ruled as follows:
1. Vacate the Civil Judgment No. 182 (1999) Jing Jing Zhong Zi of this Court and the Civil Judgment No. 049 (1999) Jing Jing Yi Chu Zi of Jingzhou District People's Court;
2. Dismiss Changle Company's lawsuit.
The first instance, second instance, and retrial each collected litigation fees of 19,260 yuan, totaling 57,780 yuan, all borne by Changle Company. This ruling is final.
III. Case Analysis
Attorney Zhiming's acceptance of this case could well be described as being entrusted with a mission in a time of crisis, beset by formidable difficulties. In the end, the tide turned, and a complete and decisive reversal was successfully achieved. The two primary reasons are, first, that the Application for Retrial seized upon the crux of the matter, and second, that decisive hammer blows were struck at critical moments.
(1) The "Petition for Retrial" pinpointed the crux of the issue.
The Petition for Retrial points out sharply at the outset that "protecting local interests" is the fundamental cause of judicial illegality: "The court of second instance, despite the fact that the appellant's grounds for appeal were factually clear and the evidence was conclusive, still forcibly rendered a final judgment upholding the original ruling. In this regard, the applicant believes that this judgment of the second instance is not only manifestly unfair and unjust, but also clearly unlawful. Its unbridled favoritism toward Changle Company and its practice of protecting local interests have seriously damaged the image of judicial fairness in our country." It then forcefully demonstrates the facts of judicial illegality by focusing on two key issues: the determination of the subject and the question of jurisdiction.
Regarding the issue of subject determination, the "Application for Retrial" states: "The second-instance court adhered to the first-instance court's error in its determination of the subject issue, and its conduct has clearly violated the provisions of Article 108 of the Civil Procedure Law of the People's Republic of China." The application points out that the name listed in the statement of claim clearly does not match the applicant's legal name, and pursuant to Article 108 of the Civil Procedure Law, the lawsuit should have been dismissed; however, the first-instance court, on the grounds that "the defendant named in the plaintiff's complaint is merely a formal inaccuracy in writing the defendant's name, and does not constitute an error in the actual object of the lawsuit," forcibly changed and determined the applicant's name directly in the judgment, resulting in the applicant, without having gone through the stages of responding to the lawsuit, filing a defense, and trial, becoming the object of a direct judgment as a defendant. The essence of this is the deprivation of the applicant's litigation rights. The application also refutes the first-instance judgment upheld by the second-instance court, which found: "The plaintiff's misunderstanding of the defendant's name at the time of filing the lawsuit was caused by the defendant's use of the name 'Hankun Group' in newspaper advertisements and on letterhead." The application points out that the names written in newspaper advertisements and on letterhead do not possess legal effect; moreover, the contract signed between the applicant and Changle Company, as well as the correspondence exchanged, all bear the official seal and signature of the applicant's legal name. As to such an absurd finding, the second-instance court actually endorsed it, and its deliberate favoritism and protection of local interests is self-evident.
对于管辖问题，申请书指出：“二审法院在管辖问题上的认定无视事实、刻 意偏袒、混淆是非，致使申请人的诉讼权利遭受严重侵害。” 申请书对二审判决认为“原审法院受理此案后，到深圳向两上诉人送达起诉状副本和办理有关法律手续后，两上诉人在法定的答辩期内未提出管辖权异议，视为放 弃”的认定进行反驳：“首先，申请人认为一审法院并未依法律规定向申请人送达上述法律文书，申请人也未在送达回证上予以签收;其次，——本案不属 荆州市中级人民法院和荆州区法院管辖，因此该两法院应当不予受理或移交有管辖权的法院受理，——更何况申请人并非起诉状所称之被告，又如何去提管 辖权的异议呢?”
The reasons for the illegality of the two key issues in the aforementioned argument were ultimately acknowledged by the Jingzhou Intermediate People's Court, becoming a strong supporting point that leveraged a major reversal of the case. The application also enumerated a series of facts, proving that the first-instance court rendered a judgment on the substantive part of the case without the applicant's participation in the proceedings, which seriously deviated from the facts and infringed upon the applicant's lawful rights and interests; the second-instance court seriously violated statutory procedures and issued a ruling affirming the original judgment, seriously infringing upon the applicant's lawful rights and interests.
(2) Striking Hard at a Critical Moment
On March 28, after Attorney Zhiming dissuaded the Jingzhou District Court from carrying out compulsory enforcement, he was keenly aware that a mere written application could not break through the deeply entrenched local protectionism within the local judicial system. To prevent the Jingzhou Intermediate People's Court from delaying its retrial decision indefinitely, and to avoid a situation where the enforcement personnel of the Jingzhou District Court would return to carry out compulsory enforcement—resulting in the parties ultimately winning the lawsuit but suffering property losses—Attorney Zhiming felt that there was no time to lose. He decided to take a series of forceful measures and leverage high-level authority to shatter the obstinate local protectionism. On the very day he persuaded the enforcement personnel to withdraw, Attorney Zhiming sent a "Report on the Erroneous Judicial Conduct of the Jingzhou Intermediate People's Court of Hubei Province" to Chief Justice Xiao Yang of the Supreme People's Court. The report enumerated the erroneous facts of judicial misconduct committed by the Jingzhou Intermediate People's Court.
First, this case should be under the jurisdiction of the Shenzhen court where the defendant is located (which is also the place of contract performance). However, due to human factors, the Jingzhou court in Hubei forcibly assumed jurisdiction and rendered an erroneous judgment.
Second, the parties to the dispute in this case are the two companies, Shenzhen Gangjing and Hubei Changle. Hankun Food (Shenzhen) Co., Ltd. has no connection to this dispute and has now been wrongly dragged into this case and had legal liability wrongfully imposed upon it (Gangjing and Hankun are two independent enterprises under the overseas Hankun Group).
Third, the Jingzhou District People's Court of Jingzhou City erroneously seized the property of a party unrelated to the dispute in this case, forcibly towing away the private Lexus 400 sedan belonging to Ms. Zhang Ling, an employee of Hankun Company.
Fourth, throughout the first and second instance proceedings in this case, no substantive review of the case was ever conducted, yet erroneous substantive judgments were forcibly rendered.
Fifth, the case is to be compulsorily enforced at 2:00 PM today. Meanwhile, the Jingzhou Intermediate People's Court has formally accepted our appeal.
This case seriously violates legal procedures. Please pay timely attention and coordinate to halt the erroneous judicial actions of the Intermediate People's Court of Jingzhou City, Hubei Province.
On March 30, Zhiming lawyer successively sent the "Report on the Erroneous Judicial Actions of the Two-Level Courts in Jingzhou City" to Director Guan of the Hubei Provincial People's Congress and President Wu of the Hubei Provincial High People's Court, detailing and analyzing the facts, reasons, and consequences of the illegal judicial actions of the two-level courts, and strongly hoping that the relevant leaders would attach importance to this case and make correct decisions in accordance with the law. The critical hammer blow alarmed the highest echelons of China's judicial community, and the directives from leaders at all levels shocked those who rendered the judgment at the Jingzhou Intermediate People's Court. At last, this case obtained the correct final ruling.
(Compiled and commented by Guo Tianxi)
Zhiming Office
April 24, 2000
