I. Case Recap

In 1996, Shenzhen Gangjing Food Co., Ltd. (hereinafter referred to as Gangjing Company) and Hubei Changle Health Food Co., Ltd. (hereinafter referred to as Changle Company) established a processing relationship with supplied materials. Changle Company provided agricultural raw materials, while Gangjing Company supplied packaging materials and was responsible for processing in Shenzhen, charging processing fees. Subsequently, an economic dispute arose between the two parties. On November 3, 1998, Changle Company sent a lawyer's letter to Gangjing Company, proposing the Jingzhou Intermediate People's Court as the court chosen by both parties to resolve the dispute, requiring a reply before November 15, 1998, otherwise it would be deemed as agreement. Gangjing Company failed to reply within the time limit. Then, on November 19, 1998, Changle Company sent another letter, stating that Gangjing Company's silence meant agreement to the jurisdiction of the Jingzhou Intermediate People's Court. At the end of 1998, Changle Company filed a lawsuit with the Jingzhou District People's Court, naming Hankun Food (Shenzhen) Co., Ltd. (an independent legal entity 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货款 of 1,394,522.30 yuan and overdue interest, and bear the litigation costs. On February 6, 1999, staff from the Jingzhou District Court went to Gangjing Company to serve the "Indictment" and summons. Due to incorrect names of the two defendants and the absence of a service receipt, neither Hankun Company nor Gangjing Company signed for them. On May 13, 1999, judges from the Jingzhou District Court went to Gangjing Company to enforce property preservation, forcibly seizing and towing away a car belonging to an employee of the company. On July 5, 1999, the Jingzhou District Court held the first-instance trial of the case. Due to the incorrect names of the two defendants, the two defendants only entrusted one lawyer to appear in court as a statement provider. On August 12, 1999, the first-instance court issued a first-instance judgment in the case. The "Judgment" arbitrarily changed the names of the defendants. Regarding the challenge to the jurisdiction of the case, the "Judgment" stated: "This court believes that after accepting this case, it directly served the response notice and related legal documents to the two defendant companies. At the time of receiving the litigation documents, the two defendants reached an agreement with the plaintiff on accepting mediation by this court and reconciling accounts with the plaintiff. The two defendants sent three letters and telegrams, stating that the dispute was fully handled by the legal representative ××× (original name omitted), who was now seriously ill and hospitalized. They requested that after the condition improved, the accounts be checked by both parties and that this court mediate. In fact, the two defendants had already responded to the lawsuit." The "Judgment" ruled on the substantive part of the case: "The two defendants shall, within 15 days from the effective date of this judgment, repay the plaintiff the principal and interest of the debt, and bear the plaintiff's travel expenses, attorney fees, case acceptance fees, and property preservation fees totaling 69,075 yuan." The two defendants, dissatisfied with the first-instance judgment, immediately appealed to the second-instance court, requesting the reversal of the original judgment and dismissal of the original plaintiff's lawsuit. After the second-instance trial, the court ruled: "Appeal dismissed, original judgment upheld." At the end of January 2000, lead attorney Wang Tengfeng accepted the commission of the two defendants during the period when the second-instance judgment took effect. On February 8, he submitted a "Retrial Application" to the Jingzhou Intermediate Court. On March 10, the court notified the payment of the retrial acceptance fee. However, on March 28, the Jingzhou District Court still sent personnel to Shenzhen to enforce the judgment. Lead attorney Wang Tengfeng rushed to the scene, persuaded the court enforcement personnel to suspend the enforcement, and immediately wrote 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 Higher People's Court, reporting the illegal trial and judgment of the two-level courts.

II. Case Outcome

On April 17, 2000, the Jingzhou Intermediate People's Court issued Civil Rulings (2000) Jing Zhong Li Zai Zi No. 30-1 and No. 30-2, deciding to retry this case and suspend the execution of the original judgment. On May 31, 2000, the Jingzhou Intermediate People's Court issued Civil Ruling (2000) Jing Zhong Jing Jian Zi No. 30-3, deciding that to ensure the enforcement of the retrial judgment in this case, Changle Company must immediately deliver the car of Gangjing Company's employee, which was detained at its premises, to this court for seizure. On July 18, 2000, the Jingzhou Intermediate People's Court issued Civil Ruling (2000) Jing Jing Zai Zi No. 30-4, which stated:

"The above parties, in a dispute over a processing contract, were initially subject to Civil Judgment (1999) Jing Jing Yi Chu Zi No. 049 issued by the Jingzhou District People's Court on August 12, 1999. After the original appellant appealed, this court issued Civil Judgment (1999) Jing Jing Zhong Zi No. 182 on December 10, 1999. After the judgment took effect, Hankun Company and Gangjing Company applied to this court for retrial. Upon review, the application met the legal conditions for retrial. After initiating the retrial, this court formed a new collegial panel to hear the case in accordance with the law, and the trial has now concluded.

This court holds that in this case, the first-instance plaintiff, Changle Company, named as defendants 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 aforementioned group and company do not exist. The defendants sued by Changle Company are not qualified parties. The Jingzhou District People's Court's change of the defendants to Hankun Company and Gangjing Company during the trial and in the judgment constituted a procedural violation. Furthermore, since the parties in this case have no agreement on jurisdiction, and the place of contract performance and the defendant's domicile are both in Shenzhen, the original court's jurisdiction was erroneous. Pursuant to Article 210(1) of the Supreme People's Court's Opinions on the Application of the Civil Procedure Law of the People's Republic of China, the ruling is as follows:

1. Revoke this court's Civil Judgment (1999) Jing Jing Zhong Zi No. 182 and the Jingzhou District People's Court's Civil Judgment (1999) Jing Jing Yi Chu Zi No. 049;

2. Dismiss Changle Company's lawsuit.

The litigation fees for the first instance, second instance, and retrial are each 19,260 yuan, totaling 57,780 yuan, all to be borne by Changle Company. This ruling is final."

III. Case Analysis

Attorney Wang Tengfeng took on this case at a critical moment, facing numerous difficulties, but ultimately turned the tide and achieved a complete reversal. The main reasons were, first, the "Petition for Retrial" pinpointed the crux of the issue, and second, a decisive strike at a key moment.

　(1) The "Petition for Retrial" pinpointed the crux of the issue.

The "Petition for Retrial" began by directly pointing out that "protecting local interests" was the root cause of judicial violations: "The court of second instance, despite the appellant's grounds for appeal being clear in facts and supported by solid evidence, still forcibly upheld the original judgment in its final ruling. In this regard, the appellant believes that this judgment of the second instance is not only manifestly unfair and unjust but also clearly illegal. Its blatant favoritism toward Changle Company and its practice of protecting local interests have severely damaged the image of judicial fairness in our country." It then focused on two key issues—subject identification and jurisdiction—to forcefully demonstrate the facts of judicial violations.

Regarding the issue of subject identification, the "Petition for Retrial" argued: "The court of second instance, in its determination of the subject, adhered to the errors of the court of first instance, and its actions have clearly violated Article 108 of the Civil Procedure Law of China." The petition pointed out that the name listed in the complaint was clearly inconsistent with the appellant's legal name, and according to Article 108 of the Civil Procedure Law, the lawsuit should have been dismissed. However, the court of first instance, on the grounds that "the defendant's name listed in the plaintiff's complaint was merely a formal inaccuracy in writing, not an actual error in the target of the lawsuit," forcibly changed and determined the appellant's name directly in the judgment, causing the appellant to become the subject of a direct judgment without going through the stages of response, defense, or trial, effectively depriving the appellant of its litigation rights. The petition also refuted the court of second instance's endorsement of the first-instance judgment's determination: "The plaintiff's misunderstanding of the defendant's name at the time of filing the lawsuit was due to the defendant's use of the name 'Hankun Group' in newspaper advertisements and letterheads." The petition pointed out that the names written in newspaper advertisements and letterheads had no legal effect, and moreover, the contracts and correspondence between the appellant and Changle Company all bore the appellant's legal name's official seal and signature. For such an absurd determination, the court of second instance actually endorsed it, making its deliberate favoritism and protection of local interests self-evident.

Regarding the issue of jurisdiction, the petition pointed out: "The court of second instance's determination on jurisdiction ignored the facts, deliberately showed favoritism, and confused right and wrong, severely infringing upon the appellant's litigation rights." The petition refuted the second-instance judgment's determination that "after the court of first instance accepted this case and went to Shenzhen to serve the copy of the complaint and handle relevant legal procedures on the two appellants, the two appellants did not raise an objection to jurisdiction within the statutory period for defense, which is deemed as a waiver": "First, the appellant believes that the court of first instance did not serve the above legal documents to the appellant in accordance with the law, and the appellant did not sign the service receipt; second, this case does not fall under the jurisdiction of the Jingzhou Intermediate People's Court or the Jingzhou District Court, so these two courts should have either declined to accept the case or transferred it to a court with jurisdiction. Moreover, since the appellant is not the defendant named in the complaint, how could it raise an objection to jurisdiction?"

The reasons for the violations in these two key issues were ultimately acknowledged by the Jingzhou Intermediate People's Court, becoming a strong supporting point for overturning the case. The petition also listed a series of facts, proving that the court of first instance made a substantive judgment on the case without the appellant's participation, which was seriously inconsistent with the facts and infringed upon the appellant's legitimate rights and interests. The court of second instance seriously violated legal procedures and issued a ruling upholding the original judgment, severely infringing upon the appellant's legitimate rights and interests.

(2) Striking Hard at a Critical Moment

On March 28, after Chief Attorney Wang Tengfeng dissuaded the Jingzhou District Court from enforcing the judgment, he was well aware that a mere written application could not break through the deeply entrenched local protectionism within the local judicial system. Fearing that the Jingzhou Intermediate Court’s retrial would be delayed indefinitely and that the Jingzhou District Court’s enforcement officers would return to execute the judgment, causing the client to suffer property losses even after winning the case, Chief Attorney Wang Tengfeng decided that no time should be wasted. He resolved to launch a series of heavy blows, leveraging higher-level authority to shatter the stubborn local protectionism. On the very day he persuaded the enforcement officers to leave, Chief Attorney Wang Tengfeng submitted a "Report on the Erroneous Judicial Conduct of the Jingzhou Intermediate People's Court of Hubei Province" to President Xiao Yang of the Supreme People's Court. The report listed the erroneous facts of judicial misconduct by the Jingzhou Intermediate Court:

"First, this case should have been under the jurisdiction of the Shenzhen court, where the defendant is located (and also where the contract was performed). However, due to human factors, the Jingzhou court in Hubei forcibly assumed jurisdiction and rendered an erroneous judgment.

Second, the parties to this dispute are Shenzhen Gangjing and Hubei Changle, two companies. Hankun Food (Shenzhen) Co., Ltd. has no connection to this dispute but has been wrongfully dragged into the case and unjustly held liable (Gangjing and Hankun are two independent subsidiaries of the overseas Hankun Group).

Third, the Jingzhou District Court of Jingzhou City wrongfully seized property belonging to a party not involved in this dispute, forcibly towing away the private Lexus 400 sedan of Ms. Zhang Ling, an employee of Hankun Company.

Fourth, throughout the first and second trials of this case, no substantive hearing was ever conducted on the merits of the case, yet an erroneous substantive judgment was forcibly rendered."

Fifth, the case is scheduled to be 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 close attention and coordinate to halt the erroneous judicial actions of the Jingzhou Intermediate People's Court in Hubei Province.

On March 30, Chief Attorney Wang Tengfeng sent a "Report on the Erroneous Judicial Conduct of the Two-Level Courts in Jingzhou" 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 by the two-level courts, strongly urging the relevant leaders to pay attention to this case and make a correct decision in accordance with the law. This critical strike alarmed the highest levels of China's judicial system, and the directives from leaders at various levels shook the judges of the Jingzhou Intermediate Court, ultimately leading to a correct final ruling in this case.

(Compiled and commented by Guo Tianxi)

Zhiming Office

April 24, 2000