In commercial litigation, the retrial process is often described as “dancing on the edge of a knife,” and it is extremely difficult to overturn a judgment that has already taken effect. Recently, in a retrial case involving a repair contract dispute represented by attorneys Lü Yue and Guan Jian of Beijing King&Capital Law Firm, the Shanxi Provincial High People’s Court, after reviewing the case, ultimately issued a retrial judgment that fully upheld the petitioner’s claim for 2,700,000 yuan (two million seven hundred thousand yuan) in repair costs and interest. This case successfully reversed the unfavorable outcomes of the first and second instances, highlighting the core value of the handling attorneys in sifting through complex evidence and navigating the retrial process.
I. Case Overview:
Defeats in Two Instances, Massive Repair Payment at Risk of Being Forfeited
The petitioner and the respondent had a long-standing business relationship involving repair services. Between August 2020 and July 2022, the parties successively signed multiple “Repair Contracts,” under which the petitioner was to repair equipment such as the electro-hydraulic systems of hydraulic supports for the respondent. However, during the settlement process, the respondent denied the existence of the “Repair Contract” signed on February 13, 2022, with a contract value of 2,700,000 yuan (Two Million Seven Hundred Thousand Yuan), arguing that no original copy of the contract existed and that the petitioner had not actually fulfilled its repair obligations.
In both the first-instance and second-instance proceedings, because the petitioner failed to effectively organize its evidence, both the Yunzhou District People’s Court of Datong City and the Datong City Intermediate People’s Court of Shanxi Province ruled that the petitioner had failed to provide the original contract and had insufficient evidence of performance. Consequently, they held that the petitioner should bear the adverse consequences of failing to meet the burden of proof and dismissed the claim for the 2,700,000 yuan (Two Million Seven Hundred Thousand Yuan) in repair fees. Faced with adverse judgments from both courts and the risk of losing a massive debt claim, the petitioner retained attorneys Lü Yue and Guan Jian of Beijing King&Capital Law Firm to handle the retrial proceedings.
II. The Path to a Breakthrough:
Precisely Identifying Grounds for Retrial and Securing the High Court’s Ruling to Hear the Case
Faced with the established rulings of consecutive defeats in the first and second instances, the legal team did not limit itself to repeatedly entangling in substantive disputes but swiftly shifted its focus to initiating and breaking through the retrial proceedings. After a comprehensive analysis of the original judgment documents, the legal team precisely identified fundamental deviations by the original court in the application of rules regarding the allocation of the burden of proof and in the factual determination of trade practices. These deviations directly led to unclear findings of basic facts and errors in the application of the law. Accordingly, the legal team lawfully filed a petition for retrial with the Shanxi Provincial Higher People’s Court, explicitly transforming the procedural and substantive defects in the original judgment into statutory grounds for retrial.
During the review stage of the retrial application, the legal team focused its arguments on the circumstances under which a people’s court shall conduct a retrial as stipulated in Article 211 of the Civil Procedure Law of the People’s Republic of China (2023 Amendment), clearly pointing out that this case fully met the statutory conditions set forth in subparagraph (2) of that article—“where the basic facts established in the original judgment or ruling lack evidentiary support”—and subparagraph (6)—“where there is a clear error in the application of the law in the original judgment or ruling.” Through a systematic review of the original trial case files, the legal team clearly demonstrated to the reviewing judge the double standards applied by the original court in evaluating evidence and the logical inconsistencies in its application of the law, thereby fully substantiating the necessity and legality of initiating retrial proceedings.
After conducting both a case filing review and a substantive review, the Shanxi Provincial High People’s Court determined that the applicant’s claims were factually clear and legally sound, and that the original judgment had indeed crossed the statutory threshold for retrial. To thoroughly ascertain the facts of the case and unify the standards for applying the law, the Shanxi Provincial High People’s Court issued a civil ruling in accordance with the law, deciding to hear the case directly. This ruling not only marked the case’s formal entry into the retrial proceedings but also embodied the higher court’s function of supervising and correcting errors in final judgments rendered by lower courts, thereby laying the procedural foundation for the fair adjudication of subsequent substantive disputes.
III. Legal Debate: Precise Application of the Law to Correct Double Standards and Mismatched Burden of Proof
During the retrial proceedings before the Shanxi Provincial High People’s Court, the legal team presented rigorous legal arguments centered on the focal points of the substantive dispute, prompting the retrial court to comprehensively review and correct the lower court’s erroneous judgment.
(1) Reconstructing the Logic for Determining the “Performance First, Signing Later” Business Practice Based on the Characteristics of a Contract for Work and the Context of the Pandemic
Repair contracts fall under the legal category of contracts for work. According to Article 770 of the Civil Code of the People’s Republic of China: “A contract for work is a contract under which the contractor completes work in accordance with the client’s requirements, delivers the results of the work, and the client pays remuneration. Work includes processing, custom manufacturing, repair, reproduction, testing, inspection, and other similar tasks.” The core characteristic of a contract for work lies in the emphasis on the delivery of the results of the work, rather than an absolute insistence on the completeness of the contractual form. Under the special circumstances of the pandemic, the legal acts of offer and acceptance were completed when the parties transmitted scanned copies or photographs of the stamped contract via WeChat. Although the original electronic medium was lost due to objective reasons, in light of the transaction practice established through the parties’ long-term cooperation—namely, “repair and acceptance first, followed by the signing of a written contract and settlement”—it is sufficient to conclude that the contractual relationship between the parties had been substantively established.
Article 490, Paragraph 2 of the Civil Code of the People’s Republic of China explicitly stipulates: “Where laws or administrative regulations require, or the parties agree, that a contract be concluded in writing, if the parties have not adopted the written form but one party has already performed its principal obligations and the other party has accepted them, the contract is concluded.” Accordingly, even in the absence of a paper original in the traditional sense, the fact that the petitioner actually delivered the repair results and the respondent accepted them has caused the contract in question to be legally concluded and take effect. The court of first instance fully recognized this commercial practice when ruling on the six prior repair contracts, yet treated the subject matter of this case in isolation, disregarding the identical transactional model. This action directly violates Article 10 of the Civil Code of the People’s Republic of China regarding custom as a source of law: “Civil disputes shall be resolved in accordance with the law; where the law does not provide for a matter, custom may be applied, provided that it does not contravene public order and good morals.” ” By severing the continuity of the commercial custom, the court of first instance committed a clear error in the application of the law.
(2) Precise Application of the Standard of Proof of High Probability in the Context of Lost Electronic Data and Subcontracted Performance
Under the extremely adverse circumstances of “no original contract” and “lost WeChat records,” the allocation of the burden of proof and the determination of the standard of proof became the key to resolving the impasse. During the retrial proceedings, the legal team systematically organized and submitted a body of circumstantial evidence: ranging from work logs of third-party construction personnel, before-and-after comparison images of equipment repairs, and the respondent’s own admissions regarding the repairs in other business contexts, to the issuance of value-added tax invoices and tax deduction records. This multidimensional evidence formed a rigorous, closed loop.
Article 108 of the “Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China (2022 Amendment)” establishes the standard of proof in civil litigation: “Where the People’s Court, after reviewing the evidence provided by the party bearing the burden of proof and considering the relevant facts, is convinced that there is a high probability that the fact to be proven exists, it shall recognize that such fact exists. ”Given the existence of subcontracting in the contract-for-services arrangement, the fact that third-party construction personnel did not retain direct evidence does not negate that the applicant for retrial has fulfilled the primary burden of proof. The chain of circumstantial evidence submitted by the applicant for retrial has met the standard of proof of a high degree of probability. If the respondent asserts that “the work was not actually performed,” the respondent is legally required to provide counterevidence. Since the respondent cannot provide contrary evidence to prove that the equipment was not repaired or that the respondent repaired it independently, the respondent must bear the legal consequences of failing to meet the burden of proof. The court of first instance erroneously imposed an unduly heavy burden of proof on the petitioner for retrial, seriously deviating from the principle of adjudication based on evidence.
IV. Judgment:
High Court Reverses Ruling, Demonstrating the Value of Professional Legal Advocacy
After a comprehensive review, the Shanxi Provincial High People’s Court fully adopted the legal team’s arguments. The court determined that the new evidence submitted by the applicant for retrial was sufficient to prove the authenticity and actual performance of the “Repair Contract” in the amount of 2,700,000 yuan (Two Million Seven Hundred Thousand Yuan). The respondent claimed that the contract had not been actually performed but failed to provide valid rebuttal evidence; therefore, its defense was not valid.
Ultimately, the Shanxi Provincial High People’s Court issued a retrial judgment: it set aside the original second-instance judgment and revoked the second item of the first-instance judgment; while upholding the first item of the first-instance judgment, it ordered the respondent to pay the petitioner the repair costs of 2,700,000 yuan (Two Million Seven Hundred Thousand Yuan) plus corresponding interest within ten days after the judgment takes effect. With this, all of the petitioner’s core claims were satisfied, and the economic losses were successfully recovered.
V. Attorney’s Concluding Remarks:
Deepening Professional Expertise, Serving as a Steadfast Defender of Clients’ Legitimate Rights and Interests
This case is a typical example of a complex commercial dispute in which a losing position was successfully reversed through the retrial process. Faced with consecutive setbacks in both the first and second instances, the attorneys’ professional competence, exhaustive examination of evidence, and precise grasp of legal principles proved to be the key to breaking the deadlock. As legal professionals with many years of experience in the legal industry, we firmly believe that retrial proceedings are not only a remedy for correcting errors but also a litmus test of a lawyer’s professional depth. Beijing King&Capital Law Firm will continue to uphold the professional philosophy of expertise, rigor, and diligence, meticulously unraveling every case to secure the maximum lawful rights and interests for our clients.
Translated with DeepL.com (free version)
