Recently, Jia Zhiheng and Jiang Ning of Beijing King&Capital Law Firm represented a state-owned enterprise to apply for an execution supervision case, and successfully appealed in the Supreme Court to revoke the judicial auction procedure of a middle court after all the execution objections and reconsiderations were rejected, assisting the client in recovering tens of millions of yuan of losses.
In 2016, the client participated in a judicial auction organised by a middle court on an online platform due to business needs, and successfully bid for houses, state-owned land use rights and equipment seized by the court. After the delivery of the ruling on the auction sale, the client was unable to register the transfer for a long time and did not complete the delivery due to a series of administrative lawsuits involving property rights registration and mortgage confirmation lawsuits filed by the outsiders, execution objections and execution objection lawsuits involving the delivery, as well as non-cooperation of the executed person and possession and use of the subject property by other creditors. The customer has paid a high amount of auction money, for many years because of the related litigation, business needs change, and the subject of the auction equipment wear and tear, aging, the value of the serious depreciation, the purpose of the auction has long been unable to achieve.
The team of lawyers analysed that the cancellation of the auction is the best way to safeguard the rights and interests of the client. Revoke the judicial auction, involving the effectiveness of the implementation process, the stability of the legal order and the protection of the rights of the parties and other interests of the balance, the practical operation is extremely difficult. Article 21 of the Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Implementation Objections and Review Cases by the People's Courts and Article 31 of the Provisions of the Supreme People's Court on Several Issues Concerning the People's Courts' Network Judicial Auctions (hereinafter referred to as the “Interpretation of Online Auctions”) stipulate the circumstances under which auctions may be withdrawn, but it is not an easy task to fulfil the stipulated standards. And ‘net auction explanation’ in the case of the auction before the release, but in the auction after the formal implementation, the objection stage court that ‘net auction explanation’ should not be used as a basis for decision, the review stage of the objection to the results to be maintained.
The contractor's lawyers argued that delivery and transfer registration could not be completed for up to eight years after the auction, and that the purpose of the bidding could not be realised, and that the auction should be allowed to be revoked, or else the interests of the buyers would be seriously harmed, and the attractiveness of the judicial auction to potential bidders would be affected, impairing the efficiency of the judicial auction, and the execution supervision was accordingly brought to the Supreme Court.2024 On 9 December, the Supreme Court issued the ‘Guidance Opinions on Further Regulating the Work of Online Judicial Auctions’, which was also issued by the Supreme Court. Guiding Opinions on Further Regulating the Work of Online Judicial Auctions’ was also highlighted, ’Increasing the efforts to vacate and deliver real estate. Disposal of real estate, in addition to legal reasons, the enforcement court shall be responsible for the delivery of vacated, strictly prohibited in the auction notice statement ‘is not responsible for the vacated’.’ Visible, according to the judicial interpretation of the spirit of the provisions of the judicial documents, the delivery of the property sold at auction, is an important part of the auction process, enough to affect the purpose of the purchase.
After a number of additional materials, opinions, hearing sessions, the supreme court adopted the above views, ruled to revoke the auction, the implementation of the objections, review of the ruling, and require the implementation of the court to return the auction money and fruits.
During the representation of the case, the attorneys made every effort to assist the client in recovering the loss through firm conviction of rights protection, precise legal analysis, efficient communication and continuous attention to relevant regulations, which achieved good results and also provided ideas for handling cases with similar circumstances.
