The new judicial interpretation of private lending in 2021

*** and State Guarantee Law, Chinese People's *** and State Contract Law, Chinese People's *** and State Civil Procedure Law, Chinese People's *** and State Criminal Procedure Law and other relevant laws, combined with the trial practice, the formulation of this provision.

Article 1

The private lending referred to in these provisions refers to the act of financing between natural persons, legal persons, other organizations and among themselves.

Disputes arising from the granting of loans and other related financial businesses of financial institutions and their branches established with the approval of the financial supervisory authorities shall not be subject to these provisions.

Interpretation:The significance of this article does not lie in what type of application of this provision, but in what type of non-application of this provision.

Article 2

When the lender files a lawsuit with the People's Court, he shall provide documents of claims such as debit notes, receipts, debt notes and other evidence that can prove the existence of the legal relationship between the borrower and the lender.

Parties holding debit notes, receipts, debt notes and other documents of claim do not contain the creditor, the party holding the documents of claim to file a civil loan lawsuit, the people's court shall accept. The defendant of the plaintiff's creditor qualification to put forward a factual defense, the people's court after hearing that the plaintiff does not have the creditor qualification, the decision to dismiss the lawsuit.

Interpretation: the focus of this article is the second paragraph, such as debentures and other creditor's credentials are not contained in the creditor's claim, in the absence of transfer of claims and other creditor's subject to change, the court should rule that the plaintiff's lawsuit. People, then according to the "possession is all" principle of presumption, the holder of the creditor's certificate of conduct itself means that the holder has completed the initial burden of proof, if the debtor can put forward counter-evidence to prove that the real rights of other people, since it is allowed to override the original presumption.

Article 3

The borrowing and lending parties have not agreed on the place of fulfillment of the contract, or the agreement is unclear, and no supplementary agreement has been reached, and the place of fulfillment of the contract cannot be determined in accordance with the relevant provisions of the contract or the customary practice of the transaction, the place of fulfillment of the contract shall be the location of the party accepting the currency.

Article 4

Guarantor for the borrower to provide joint and several liability guarantee, the lender only sued the borrower, the people's court may not add the guarantor as *** with the defendant; lender only sued the guarantor, the people's court may add the borrower as *** with the defendant.

Guarantor for the borrower to provide a general guarantee, the lender only sued the guarantor, the people's court shall add the borrower as *** with the defendant; the lender only sued the borrower, the people's court may not add the guarantor as *** with the defendant.

Interpretation: the provisions of this article on the joint and several guarantees and general guarantees to distinguish between the borrower for the prosecution only, both the same result, can not add the guarantor, for the prosecution of the guarantor only, joint and several guarantees can be added to the debtor for the defendant with the ***, the general guarantees should be added to the guarantor with the defendant with the general guarantees, so that is because of the general guarantor enjoys This is because the general guarantor enjoys the right of first instance defense, only after the debtor has no enforceable property, the responsibility, therefore, in the absence of enforcement of the debtor's property, only sued the general guarantor, if the debtor does not add the debtor as *** with the defendant, the creditor's rights are difficult to realize.

Article 5

After the people's court has filed a case, if it finds that the private lending behavior itself is suspected of the crime of illegal fund-raising, it shall rule to dismiss the prosecution and transfer the clues and materials suspected of the crime of illegal fund-raising to the public security or procuratorate authorities.

If the public security or procuratorial authorities fail to open a case, or withdraw the case after opening an investigation, or the procuratorial authorities make a decision not to prosecute, or the people's court finds that the effective judgment does not constitute the crime of illegal fund-raising, and the person concerned files a lawsuit with the people's court on the same facts, the people's court shall accept the case.

Interpretation: this article involves two issues, one is suspected of illegal fund-raising in the private lending, pay attention to the specific for the crime of illegal fund-raising, rather than other crimes, should be whether or not it constitutes a criminal offense as a matter of preference, will be suspected of the crime of clues to the public security or procuratorate for review; Second, after review, if it is consistent with the crime of fund-raising elements of the criminal procedure, does not comply with the party has the right to once again to Private lending as the reason for the lawsuit, the court should be accepted, at this time does not violate the principle of "no longer a matter".

Article 6

After the people's court has filed a case, the people's court shall continue to hear the case of private lending disputes, and the people's court shall transfer to the public security or procuratorate the clues and materials of the suspected crime of illegal fund-raising, even though the case of the people's lending disputes is related to but not the same fact.

Article 7

Where the basic facts of a private lending case must be based on the results of the trial of a criminal case which has not yet been concluded, the people's court shall rule to suspend the proceedings.

Interpretation:This article is not controversial, the suspension of the civil case is the need to hear the case, because there are some prerequisite issues that need to be determined in the criminal case, which needs to be specifically mastered by the contractor judge.

Article 8

The borrower is suspected of committing a crime or the effective judgment found guilty, the lender sued to request the guarantor to assume civil liability, the people's court shall accept.

Interpretation:Because this belongs to two legal relationships, one is a criminal case, one is the legal relationship of the guarantee, so there is no question of criminal before civil. However, it should be noted that the admissibility does not mean win, if the proof of debt relationship is invalid, then the guarantor naturally do not have to bear the responsibility of guarantee, unless in the existence of fault when the corresponding fault responsibility.

Article 9

With one of the following circumstances, can be regarded as having Article 210 of the Contract Law on the effective elements of the loan contract between natural persons:

(a) cash payment, since the borrower receives the loan;

(b) bank transfers, electronic remittance or through the network lending platform, and other forms of payment, since the funds arrived at the borrower's account;

(b) the bank transfer, electronic remittance or through the network lending platform and other forms of payment, since the funds arrived at the borrower's account;

(c) the borrower is the only person in the country who can pay for the borrowed funds. The borrower's account;

(iii) if delivered in the form of a note, when the borrower acquires the right to the note in accordance with the law;

(iv) if the lender authorizes the borrower to have the right to dispose of a specific fund account, when the borrower acquires the right to actually dispose of the account;

(v) if the lender provides the loan in any other way as agreed upon by the borrower, and when the fulfillment of the loan is actually completed.

Interpretation:The basic purpose of this article is based on the materiality of the loan, only the actual payment of the loan, the loan contract is considered effective. The specific manner of transformation is also based on this principle.

Article 10

Except for the loan contract between natural persons, the parties claim that the private lending contract takes effect from the time of the establishment of the contract, the people's court shall support, but the parties have agreed otherwise or unless otherwise provided for by law or administrative regulations.

Interpretation: according to this provision, the contract of necessity is mainly limited to the private lending between natural persons, for the lending disputes between enterprises, or in accordance with the provisions of the traditional contract law shall prevail, to the contract comes into effect when it is established.

Article 11

Legal persons, other organizations and between them for production, business needs of private lending contracts, in addition to the existence of Article 52 of the Contract Law, the provisions of Article 14 of the present provisions of the circumstances, the parties to claim that the private lending contract is valid, the people's court shall support.

Interpretation: the enterprise for production, operation and lending is protected by law.

Article 12

Legal persons or other organizations within the unit through the form of borrowing to raise funds from employees for the unit's production and operation, and there is no contract law, Article 52, the circumstances set forth in Article 14 of these provisions, the parties claim that the private lending contract is valid, the people's court shall support.

Interpretation: with Article 11 corresponds to, as long as it is for the unit's production, operation, whether it is to the unit outside the borrowing, or to the unit within the staff borrowing, are in line with the provisions of the law, protected by law.

Article 13

The borrower or lender's lending behavior is suspected of committing a crime, or has been found to constitute a crime by a judgment in force, the parties to the civil litigation, the private lending contract is not ipso facto invalid. The people's court shall, in accordance with article 52 of the contract law, the provisions of article 14 of the provisions of the civil loan contract.

Guarantor to the borrower or lender lending behavior suspected of a crime or has been effective judgment that constitutes a crime, claiming that civil liability, the people's court shall be based on the validity of the private lending contract and the security contract, the parties to the degree of fault, according to the law to determine the civil liability of the guarantor.

Interpretation: not the lending behavior is suspected of a crime, private lending means invalid, this time, but also to examine whether the creditor is aware of the creditor's side or there is fault. If the creditor is not at fault, it should be a clear distinction between criminal behavior and civil behavior, according to the different effectiveness of the treatment, to protect the legitimate rights and interests of bona fide relative. For the guarantor, the same principle applies, if the lending behavior is invalid, the guarantee behavior as a contract, also invalid, should be in accordance with the rules of how to deal with the contract is invalid.

Article 14

With one of the following circumstances, the people's court shall determine that the private lending contract is invalid:

(a) the financial institutions to obtain credit funds and high-interest loans to the borrower, and the borrower knew or should have known;

(b) to other enterprises or to the unit of the employee's fund-raising funds obtained by the borrower and transferring the borrower Profit, and the borrower knew or should have known;

(c) the lender knew or should have known that the borrower borrowed money for illegal and criminal activities and still provide loans;

(d) contrary to public order and morals;

(e) other violations of laws, administrative regulations, the effectiveness of mandatory provisions.

Interpretation:The creditor there is serious fault or suspected of illegal and criminal, the loan contract is invalid. Article 15 of the plaintiff to borrow, receipts, notes and other creditor's documents as the basis for private lending litigation, the defendant based on the underlying legal relationship of the defense or counterclaim, and provide evidence to prove that the dispute over the claim is not caused by the act of private borrowing and lending, the people's court shall be based on the facts of the case, in accordance with the underlying legal relationship of the trial.

Article 15

The provisions of the preceding paragraph shall not apply to the agreement on claims and debts reached by the parties through conciliation, settlement or liquidation.

Interpretation:This article is based on the principle of seeking truth from facts, if it is ascertained that the basic legal relationship involved is not a borrowing relationship, then it should be dealt with in accordance with the true underlying legal relationship.

Article 16

Plaintiff only based on debit notes, receipts, notes and other credentials to file a civil loan lawsuit, the defendant defendant has repaid the loan, the defendant shall provide evidence to prove its claim. Defendant to provide evidence to prove its claim, the plaintiff should still be the establishment of the borrowing relationship, the burden of proof.

The defendant defendant has not actually occurred and can make a reasonable explanation, the people's court shall be combined with the amount of money, money delivery, the economic ability of the parties, the local or between the parties to the transaction, trading habits, the parties to the change of property, as well as the witness testimony, and other facts and factors, a comprehensive judgment to check the fact of borrowing and lending is occurring.

Interpretation: this article is the burden of proof in private lending cases in how to apply the specific provisions.

Article 17

Plaintiff only based on the financial institution transfer certificate to file a civil loan lawsuit, the defendant defends the transfer of money to repay the two sides of the previous loan or other debts, the defendant should provide evidence to prove its claim. The defendant to provide evidence to prove its claim, the plaintiff should still be the establishment of the borrowing relationship, the burden of proof.

Interpretation: this is a typical loan case without a note how to deal with the situation, if the defendant puts forward a defense, and provide evidence, then the plaintiff should still provide evidence to prove that the establishment of civil lending. In judicial practice, if only by transferring the proof of the establishment of private lending relationship, if the defendant does not recognize, generally difficult to obtain support, then the plaintiff generally choose to sue again for unjustified enrichment, whether or not it can be supported, the results are different. In accordance with the provisions of this article, the defendant is not denied, it should also provide evidence to refute, if the evidence provided by the defendant is sufficient to refute the plaintiff's claim, the plaintiff should provide evidence to confirm the existence of private lending relationship, or should bear the consequences of the failure to prove.

Article 18

According to the "on the application of the Chinese people's *** and national civil procedure law" interpretation of article 174, paragraph 2, the plaintiff has the burden of proof refuses to appear in court without good reason, after reviewing the existing evidence can not be confirmed by borrowing and lending, borrowing and lending, the main facts of the case, the people's court of the facts of its claim will not be determined.

Interpretation: this article is about the burden of proof in the case of borrowing and lending in the specific application of the provisions.

Article 19

The people's court hearing civil loan disputes found that the following circumstances, shall strictly examine the reasons for the occurrence of the loan, time, place, source of money, delivery, the flow of money, as well as the relationship between the borrowing and lending parties, the economic situation and other facts, and comprehensively determine whether it belongs to the false civil litigation:

(a) the lender clearly does not have the ability to lend ;

(ii) the facts and reasons on which the lender's lawsuit is based are obviously not in line with common sense;

(iii) the lender is unable to submit a proof of claim or there is a possibility of forgery in the submitted proof of claim;

(iv) the parties involved participate in the civil loan litigation for several times within a certain period of time;

(v) one or both of the parties without justifiable reason refuse to Attend the court to participate in the litigation, the proxy for the borrowing and lending facts are unclear or contradictory statements;

(vi) the parties have no dispute about the occurrence of the facts of borrowing and lending or pleadings are obviously inconsistent with the common sense;

(vii) the borrower's spouse or partner, the outsider's other creditors to put forward a factual basis for the objections;

(viii) the parties in other disputes In other disputes there is a low price transfer of property;

(ix) the parties improperly waive their rights;

(x) other circumstances in which there may be a false private lending lawsuit.

Interpretation: false lawsuit, the harm is very much. For false lawsuit, with the reality of speculative, but will eventually be severely punished by law. Undeniably, even if the judge that there may be false lawsuits, but because of the difficulty of evidence, the judge is difficult to determine the existence of false lawsuits, which makes false lawsuits wind, and difficult to correct. This article is an effort, but the results of how to be seen.

Article 20

The plaintiff shall not be permitted to apply for dismissal of the plaintiff's application for false civil loan litigation, and shall, in accordance with the provisions of Article 112 of the Civil Procedure Law, reject his request.

Participants in litigation or others maliciously create, participate in false litigation, the people's court shall, in accordance with the provisions of Articles 111, 112 and 113 of the Civil Procedure Law, shall be fined, detained; constitutes a crime, it shall be transferred to the judicial organs with jurisdiction to pursue criminal responsibility.

Unit maliciously create, participate in false litigation, the people's court shall fine the unit, and may be its principal person in charge or directly responsible for the person to be fined, detained; constitutes a crime, shall be transferred to the judicial organs with jurisdiction to pursue criminal responsibility.

Interpretation:This article is about the legal responsibility of false litigation.

Article 21

The people's court shall not support the lender's request for assumption of the guarantee liability if the lender has signed or sealed the debenture or loan contract on the debenture, receipt, note, etc., but has not indicated the identity of the guarantor or assumption of the guarantee liability, or if the lender can't be presumed to be the guarantor through other facts.

Interpretation: the premise of this article is, is the clarity of the debt relationship, if only write the name, not marked identity, there are a variety of possibilities, may not necessarily be a guarantor, it may be an introducer, relations, etc., and if the guarantor, may involve joint and several liability. For joint and several liability, there must be a clear provision of the law, otherwise it can not be established, and so stipulated.

Article 22

The borrowing and lending parties through the network lending platform to form a lending relationship, the network lending platform providers only provide media services, the party requesting it to assume the responsibility of guarantee, the people's court shall not support.

The people's court shall support the request of the lender for the online lending platform provider to bear the guarantee responsibility if the lender expressly or with other evidence proves that it provides guarantee for the lending through the webpage, advertisement or other media.

Interpretation: this article is for the specific role of the network lending platform for the division, if only to provide a medium, naturally not obliged to assume the responsibility of guarantee, but if its behavior in the early stage of its voluntary to become a guarantor, it is a different story.

Article 23

Enterprise legal representative or responsible person in the name of the enterprise and the lender signed a private lending contract, the lender, the enterprise or its shareholders can prove that the borrowed funds for the legal representative or responsible person for the personal use of the enterprise, the lender request will be listed as legal representative or responsible person of the enterprise with the defendant or the third party, the people's court shall be allowed.

Enterprise legal representative or person in charge of personal name and the lender to sign a private loan contract, the loan is used for the production and operation of the enterprise, the lender requests the enterprise and the individual *** with the responsibility, the people's court shall support.

Interpretation: this article applies to enterprises and legal representatives are at fault, by the creditor according to the specific application of the loan to determine the main body of the lawsuit, not who signed the loan agreement who repaid the loan.

Article 24

The parties to enter into a contract of sale as a guarantee of private lending contract, the loan expires after the borrower can not be repaid, the lender requesting the performance of the contract of sale, the people's court shall be in accordance with the legal relationship between the private lending trial, and the parties to the change of litigation request. If the parties refuse to change, the people's court ruled to dismiss the lawsuit.

After the entry into force of the judgment made in accordance with the legal relationship between private lending, the borrower does not fulfill the monetary debt determined by the effective judgment, the lender may apply for the auction of the subject matter of the contract of sale, in order to repay the debt. On the auction proceeds of the price and the repayment of the difference between the principal and interest of the loan, the borrower or the lender has the right to claim the return or compensation.

Interpretation: assuming that the purpose of the contract of sale is a loan contract security, then the contract of sale does not exist in the true meaning of the contract, although the two sides signed the form of the contract of sale, but belongs to the conspiracy of false meaning, should be dealt with according to the true meaning of the two sides.

Article 25

The borrowing and lending parties did not agree on the interest, the lender claims to pay the interest within the borrowing period, the people's court shall not support.

Borrowing and lending between natural persons on the interest agreement is unclear, the lender claims to pay interest, the people's court shall not support. In addition to lending between natural persons, lending and borrowing of interest is not clear, the lender claims interest, the people's court shall be combined with the content of the private lending contract, and according to the local or the parties to the transaction, trading habits, market interest rates and other factors to determine the interest rate

Interpretation: lending and borrowing between natural persons did not agree on the interest rate, as there is no interest, for the claim of interest at this time, will not be supported. For business disputes between the loan, is different from the natural person, should be determined in accordance with the specific trading habits, generally in accordance with the bank lending rate for the same period of time to calculate the interest rate.

Article 26

The lending and borrowing parties agreed interest rate does not exceed 24% per annum, the lender requests the borrower to pay interest at the agreed rate, the people's court shall support.

The interest rate agreed between the borrower and the lender exceeds 36% per annum, and the interest rate agreed for the exceeding part is invalid. The borrower requests the lender to return the interest paid in excess of 36% per annum, the people's court shall support.

Interpretation: the provisions of this article essentially establishes the rule, if the agreement interest rate within 24%, the law to support; if between 24% -36%, if the parties voluntarily pay, the court shall support, if refused to pay, the court does not support; for more than 36%, the court absolutely does not support even if the parties to pay voluntarily.

Article 27

The amount of money borrowed as stated in the documents of claim such as debit notes, receipts, and debt notes is generally recognized as the principal amount. Where interest is deducted in advance from the principal amount, the people's court shall recognize the amount actually lent as the principal amount.

Interpretation: the actual amount received as the principal, for the advance deduction of interest is not recognized.

Article 28

Borrowers and lenders of the previous loan principal and interest settlement of the interest will be credited to the principal amount of the later loan and reissue of documents of claim, if the previous interest rate does not exceed 24% per annum, reissue of documents of claim for the amount of money can be recognized as the principal amount of the later borrowing; more than the part of the interest can not be credited to the principal amount of the later borrowing. The agreed interest rate exceeds 24% per annum, the party claiming that the interest on the exceeding part cannot be included in the principal of the later loan, the people's court shall support.

Calculated in accordance with the preceding paragraph, the sum of the principal and interest to be paid by the borrower after the expiration of the borrowing period cannot exceed the sum of the initial borrowing principal and the interest calculated on the basis of the initial borrowing principal at the rate of 24% per annum for the entire borrowing period. The people's court will not support the lender's request for the borrower to pay the excess.

Interpretation:The core idea of this provision is that the interest can not exceed 24%, more than part, if the debtor does not recognize, the court will not support.

Article 29

Where the borrowing and lending parties have agreed on the overdue interest rate, the agreement shall be followed, but not exceeding 24% per annum.

Where there is no agreement on the overdue interest rate or where the agreement is unclear, the people's court may differentiate between different situations:

(1) Where neither the interest rate within the borrowing period nor the overdue interest rate has been agreed upon, and the lender asserts that the borrower shall pay the interest during the period of occupying the funds at the rate of 6% per annum from the date of overdue repayment, the people's court shall support the assertion;

(2) where the interest rate within the borrowing period has been agreed upon But did not agree on the overdue interest rate, the lender claims that the borrower from the date of overdue repayment in accordance with the interest rate within the borrowing period to pay interest during the occupation of funds, the people's court shall support.

Interpretation: if there is no agreement on the interest rate within the borrowing period, the overdue interest is entitled to be paid in accordance with 6%, if there is an agreement on the interest rate within the borrowing period, the overdue interest can be claimed in accordance with the interest rate within the borrowing period. Of course, the interest can not exceed 24%.

Article 30

The lender and the borrower both agreed on the late interest rate, and agreed on the default or other costs, the lender can choose to claim the late interest, default or other costs, can also be claimed together, but the total exceeds 24% per annum, the people's court shall not support.

Interpretation:Interest, liquidated damages and other charges can co-exist, but cannot exceed 24% of the annual interest rate.

Article 31

The borrower may repay the loan in advance, but the parties agree otherwise. If the borrower repays the loan in advance and claims that the interest should be calculated according to the actual borrowing period, the people's court shall support it.

Article 32

After the implementation of these provisions, the people's courts shall apply these provisions to newly accepted cases of private loan disputes of the first instance. If the lending and borrowing act occurred before August 20, 2019, the upper limit of the protected interest rate may be determined by referring to four times the quoted market interest rate for a one-year loan at the time of the plaintiff's lawsuit.

Article 33

After the promulgation and implementation of these Provisions, the Several Opinions on the Trial of Lending and Borrowing Cases by the People's Court issued by the Supreme People's Court on August 13, 1991 shall be repealed at the same time; and judicial interpretations previously issued by the Supreme People's Court that are inconsistent with these Provisions shall no longer be applicable.