Laws of the People's Republic of China

the Supreme People's Court

Announcement of the Supreme People's Court

Fa Shi [1998] No.1

Official Reply of the Supreme People's Court to the Question on How to Liquidate a Joint Venture in the Trial of a Dispute Case Arising from the Chinese-Foreign Joint Venture Contract, adopted at the 950th Meeting of the Judicial Committee of the Supreme People's Court on December 5, 1997, is promulgated on January 15, 1998 and comes into force as of the date of its promulgation.

the Supreme People's Court

January 15, 1998

Official Reply of the Supreme People's Court to the Question How to Liquidate a Joint Venture in the Trial of a Dispute Case Arising from the Chinese-Foreign Joint Venture Contract

To the Higher People's Court of Shandong Province:

The Report on Request for Instruction to the Question How to Liquidate a Joint Venture in the Trial of a Dispute Case Arising from the Chinese-Foreign Joint Venture Contract [(1996) Lu Jing Chu Zi No.44] has been received. After deliberation, the reply is hereby given as follows:

The first opinion in your court's request for instructions is agreed, i.e., where the foreign party to the Chinese-foreign equity joint venture brings a lawsuit in the People's Court, claiming that the joint venture be dismissed and claiming the other party's liabilities for breach of contract, the People's Court shall make a judgment on such issues as the validity of the joint venture contract, whether to terminate the joint venture contract, and the liability for breach of contract, etc.. The issue concerning the liquidation of the joint venture shall be handled in accordance with the relevant provisions of Regulations for the Implementation of Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures, and Measures for the Liquidation of Foreign-Invested Enterprises. And the liquidation organized by the People's Court has no legal basis. If a domestic limited liability company has a similar situation, the relevant provisions of the Company Law of the People's Republic of China shall apply.