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How to Freeze Defendant’s Assets in Chinese Court?

When you file a lawsuit in Chine, freezing defendant’s property is a powerful tool. The procedure is called property preservation. Once freezed, the defendant can not transfer or hide his/her property to avoid performing the legal obligations. This article tells you how Chinese lawyers can help you to apply for property preservation.



First Stage:Before applying for property preservation

Step1: Investigate defendant’s property

This step is the most important step in the process of applying for property preservation. On the one hand, the plaintiff should submit the specific information on the defendant’s property or at least, some clues of those property to the Chinese court. Otherwise, it may hard for the court to clearly know what properties of defendant can be preserved. On the other hand, the location of the defendant’s property determines which Chinese court has jurisdiction. As a result, Investigating the defendant’s property is extremely important for a successful property preservation.

1.If the counter-party is a natural person

(1)movable property

·If the counter-party is a natural person, Chinese lawyer can act on behalf of the plaintiff investigate about the vehicles in the name of the counter-party in the Vehicle Administration Center.

·As for the bank account, if the plaintiff does not exactly know any clue of the person’s accounts, the lawyer can try to request the court to investigate and to freeze the accounts within the value of preserver property.

(2)real estate

As for the real estate, it is hard to reach success because only the accurate address of the real estate is known, can the lawyer take investigation in the Real Estate Registration Center.

2.If the counter-party is a company

(1)movable property

If the counter-party is a company, Chinese lawyer can investigate on the properties including the company’s business registration information, the bank account registered with the authority, etc.

(2)real estate

If the counter-party is a company, Chinese lawyer can investigate on the company’s real estate. Also, for the real estate like buildings or houses, the accurate addresses should be known by the plaintiff for investigation purposes.

Step2: Determinate of the court with jurisdiction

After investigating defendant’s property, the plaintiff can know the specific locality of the property, according to this, Chinese lawyer can help the plaintiff know which court has the jurisdiction and help he/she select the court that is most favorable to he/she for the application. And It should be noted that the principle of determining the jurisdiction differs at different stages of the application:

1.If the plaintiff applies for property preservation before instituting a lawsuit or applying for arbitration, he/she can apply to the Chinese court at the locality of the property, the domicile of the counter-party, or other Chinese court with jurisdiction over the case.

2.If the plaintiff applies for property preservation during the lawsuit, he/she can apply to the Chinese court that trails this case for property preservation.

3.If the plaintiff applies for property preservation before execution, he/she can apply to the execution court for property preservation.

Step3: Prepare the materials that need to be submitted to the court

Chinese lawyer can help the plaintiff prepare the materials that use to apply for property preservation according to the provisions of the court with jurisdiction. These materials mainly include:

1.Property preservation application;

2.Evidence of the subject qualifications;

3.The specific information on the defendant’s property or at least, some clues of those property;

4.Materials proving the legal relationship between the parties.

Step4: Prepare related expenses

Before applying for property preservation, the plaintiff needs to prepare the money that might need to pay for apply the property preservation, and Chinese lawyer can help the plaintiff clearly know what kind of fees and the amount of the fees he/she needs to pay for applying for property preservation. These expenses mainly include the application fee and the guarantee.

1.The application fee

The plaintiff needs to pay the application fee for property preservation to the court,and according to Measures for the Payment of Court Fees(《诉讼费用交纳办法》), the fee is in the range from RMB 30 to 5000 and the fee shall be paid based on the amount pf preserved property at three rates.

2.The guarantee

In practice, the court usually would ask the plaintiff to provide some guarantee. the fee is also paid based on the amount of property preserved at different rates from 0.5% to 6% for the total amount of claim.

Second stage:Applying for property preservation

Step1: Submit application materials

In the process of applying for property preservation, Chinese lawyers can help plaintiff submits the materials that use to apply for property preservation to the court with jurisdiction.

Step2: Pay the application fee

In the process of applying for property preservation, Chinese lawyers can help the plaintiff submit the application fee when applying for property preservation.

Third stage:After the application is approved

Step1: Pay the guarantee (if need)

After the property preservation is successfully preserved, it would have a great influence on the counter-party’s normal business or operation. Therefore, if the plaintiff loses the suit finally, while the defendant suffers damages from the preservation, the plaintiff needs to compensate for that even if he has no fault. So in practice, the court usually would ask the plaintiff to provide some guarantee, in case the said risks occur. Chinese lawyers can help plaintiffs dealing with this matter.

1.If the plaintiff applies for property preservation before instituting a lawsuit or applying for arbitration, the plaintiff shall provide guarantee for such application; If the plaintiff fails to provide such guarantee, the court would reject the application.

2.If the plaintiff applies for property preservation during the lawsuit, the Chinese court may order the plaintiff to provide guarantee. If the plaintiff refuses to provide such guarantee, the court would reject the application.

3.If the plaintiff applies for property preservation before execution, the court may not require the plaintiff to provide guarantee.

Step2: Apply for the next legal procedure

1.Apply for sue or arbitration

If the plaintiff applies for property preservation before instituting a lawsuit or applying for arbitration, according to The Civil Procedure Law (民事诉讼法), he/she needs to institute lawsuit or apply for arbitration within 30 days after the Chinese court adopts property preservation measures, otherwise, the people’s court shall revoke the property preservation order. Therefore, it must be noted that after the application for property preservation is approved, the plaintiff must apply for sue or arbitration in time to ensure that the defendant's property remains in the state that cannot be transferred or hided, and lawyers can help plaintiffs dealing with this matter..

2.Apply for execution

If the plaintiff applies for property preservation after the legal document takes effect and before entering the execution procedure, according to The Judicial Interpretation of Civil Procedure Law(民事诉讼法司法解释), he/she needs to apply for execution procedure within five days after the expiration of the time limit for satisfaction, otherwise, the court shall revoke the property preservation order. Therefore, it is important that after the application for property preservation is approved, the plaintiff must apply for execution procedure timely to ensure that the defendant's property can be successfully execute, Chinese lawyers also can help plaintiffs dealing with this matter.

 

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