The Symposium on the Hot Legal Issues of China's Independent Guarantee was held by the Beijing Banking Law Society and the Centre of International Banking Law and Practice of CUPL in Beijing DHH Law Firm on 25 Sept, 2020.
Gao Xiang, Gao Shengping, Zhu Hongsheng, Liu Bin and other experts and scholars from the Beijing Banking Law Society attended the conference and delivered speeches or keynote addresses. Experts from the guarantee group of the ICC China Banking Committee and experts in legal practice conducted a round-table discussion on the hot issues involved in the latest judgment cases on independent guarantees.
The participants of the conference included legal authorities, banking experts, judicial experts and legal practitioners. More than 200 people onsite and online participated and interacted in real time, focusing on the system orientation, legal status, theoretical basis and practical hot issues of the independent guarantee in China’s legal system, especially in the context of the civil code. It realized the theoretical empowerment of the independent guarantee practice by academic research, promoted the practice of independent guarantee to guide the judicial trial and academic research, and deepened the banking industry’s practical understanding of the legal risk prevention of independent guarantee.
The meeting began with a speech by Prof. Gao Xiang from the College, President of the Beijing Banking Law Society & Executive Chairman of the Commission of Commercial Law and Practice of China Chamber of International Commerce (ICC China). On behalf of the Beijing Banking Law Society, President Gao Xiang first welcomed the experts and guests and introduced the background, purpose and orientation of the establishment of the Society, recalling the evolution of the legislative and judicial position of the independent guarantee in China’s legal environment. Gao put forward the important proposition of the system orientation and legal status of the independent guarantee after the adjustment of the legal system of guarantee in the Civil Code, called on the banking industry, ICC China and the Supreme Court to jointly promote China’s accession to the United Nations Convention on Independent Guarantees and Stand-by Letters of Credit as soon as possible. Finally, with the specific cases of the Supreme Court, he explained the principles and standards in the practice of independent guarantee.
In her speech, Yu Min, Director of the Secretariat of ICC China, congratulated on the convening of this conference, described ICC China’s effort in the promotion the participation of the Chinese banking industry and Chinese enterprises in the formulation and interpretation of international banking practices and rules, as well as in the formulation of national legislation and judicial interpretation. He looked forward to promoting exchanges and interactions among academic research, legal practice and banking through closer cooperation with institutions such as the Beijing Banking Law Society, and to strengthening academic and practical research on independent guarantees to provide Chinese enterprises with legal support and guarantee to better participate in international business activities.
During the keynote speech, Deputy Dean of the Law School of Renmin University of China & Vice President of the China Case Law Society Prof. Gao Shengping, Head of the Group of Letter of Guarantee Experts of the ICC China, ICC DOCDEX expert, member of the ICC Banking Committee Working Group on Letter of Guarantee & member of the drafting group of international standard practice (ISDGP) of the ICC Banking Committee Zhu Hongsheng, and Executive Director of the Centre for International Banking Law and Practice & Associate Professor at the School of Civil, Commercial and Economic Law of CUPL Liu Bin shared their wisdom and insights on the institutional position of independent guarantee in the Chinese legal system, its normative principles and bases and normative technologies.
Based on his experience in drafting and discussing the Civil Code, especially the legal system of guarantee, Gao Shengping, from the perspective of the legislative idea, the normative attribute and the normative system of the Civil Code, expounded the systematic relationship between independent guarantee and civil code and the legal status of non-typical guarantee, and explained the economic and social basis of the guarantee system of civil code, which emphasizes the subordination and the restriction of independence. Gao stressed that the Civil Code is a system of private law norms, and the legal validity of the independent guarantee is not lost because the Civil Code does not provide for it; on the contrary, because the independent guarantee has not been named yet, it has given the industry more room for innovation. “As the non-typical guarantee, it follows the industry practice and the agreement of the parties, and of course, it is bound by the rules of interpretation of the expression of will and the standard clauses of the Civil Code”, said Gao.
As a well-known expert on practices and business rules in the Chinese and international banking industry, from the perspective of business practice, Zhu Hongsheng responded to Gao Shengping’s view that the legal norms of independent guarantee should respect business practice and party autonomy. He restated the commercial practice basis of independent guarantee and the normative attribute of international practice. Recalling the debate in the Supreme Court on the drafting of the judicial interpretation of the independent guarantee, Zhu pointed out that the normative position of the independent guarantee itself should not belong to the traditional system of Guarantee in civil law and it should belong to the rule system of letter of credit. Zhu also elaborated his own views on the identification and independence of independent bond, the latest development of the judicial judgment standard of bond fraud identification and payment termination and the special problems of fraud identification and payment termination in the case of transfer of bond. He affirmed the efforts made by the Supreme Court in respecting international practice and maintaining the international credit of China’s banking industry according to specific cases.
Liu Bin explained the legitimacy and necessity of the broad independent guarantee system from the perspective of the dual nature of civil and commercial affairs and business practice. He believed that a more fine-grained distinction is made between the true meaning and the legal effect of different guarantees. By listing a variety of guarantees or types of legal arrangements that have a guarantee function, Liu presented more examples of guarantees or guarantee functions than fully subordinated guarantees. He proposed that legislation and judicature should be more inclusive and open, and more abundant types of guarantee and normative system should be gradually constructed.
The experts’ high-level and in-depth discussion not only cleared the theoretical confusion, but also offered the solution and response to the practice of certain key problems, which aroused bursts of applause and warm response from all the participants at the conference.
Finally, based on a recent Supreme Court decision on the case of transfer of bond, a round-table discussion on four controversial issues was held, including Bond non-payment, claims, fraud and follow-up recovery. Deputy Head of the Group of Experts on Letter of Guarantee of the ICC China Banking Committee Wang Guijie, experts of the Group Chen Lifang and Wang Zhigang, lawyers from the Beijing DHH Law Firm Yang Dongqin, Gan Wenmiao and Tian Dapeng gave speeches respectively.
