The First Intermediate People's Court of Hainan Province

Civil Judgement

(2021)Q96MC No.81

Plaintiff: Haikou Dingbofeng Trading Co., Ltd. Domicile: No. 1802, Building 7, Haidao Guoji Mingcheng Community, No. 11, North Jinfu Road, Xiuying District, Haikou City, Hainan Province.

Legal representative: Wang Lianchun, general manager.

Attorney: Wu Jianlong, lawyer from Hainan Tianhao Law Firm.

Defendant: HYENG ANDES (HAINAN) INDUSTRIAL LIMTTED. Domicile: Room 3-2-302, Haikuo Tiankong Guoruicheng Community (Boshiyuan) No. 10, Daying Shandong No.1 Road, Meilan District, Haikou City, Hainan Province.

Legal representative: Huang Hanqing, chairman.

Third party: HYENG INTERNATIONAL LIMITED. Domicile: Unit 907 SILVER CORD TOWER2 30 CANTON ROAD TSIM SHA TSUI KL HONGKONG CHINA.

Legal representative: Huang Weining, chairman.

Attorney for both the defendant and the third party: Li Quhua, lawyer from Hainan Eastgos Law Firm.

Attorney for both the defendant and the third party: Liu Han, lawyer from Hainan Eastgos Law Firm.

In the case of company dissolution disputes between the plaintiff Haikou Dingbofeng Trading Co., Ltd. (hereinafter referred to as Dingbofeng Company), the defendant HYENG ANDES(HAINAN)INDUSTRIAL LIMTTED (hereinafter referred to as HYENG ANDES) and the third party HYENG INTERNATIONAL LIMITED (hereinafter referred to as HYENG INTERNATIONAL), the Court accepted this case as filed on January 20, 2021 and heard the case in open court sessions on November 11, 2021 by legally applying the ordinary procedure. The proceeding was attended in court by Wang Lianchun, legal representative of Dingbofeng Company, together with attorney Wu Jianlong, as well as Li Quhua and Liu Han, attorney of both the defendant HYENG ANDES and the third party HYENG INTERNATIONAL, and by Huang Weining online, legal representative of the third party HYENG INTERNATIONAL. This case has been closed.

The plaintiff Dingbofeng Company claimed as follows: 1. Order the defendant HYENG ANDES(HAINAN)INDUSTRIAL LIMTTED to be dissolved; 2. The incurred attorney fees of RMB 160,000 in this case shall be borne by the defendant; 3. The litigation costs in this case shall be borne by the defendant. The facts and grounds are as follows: In early 2014, Huang Hanqing, chairman of the third party HYENG INTERNATIONAL LIMITED (hereinafter referred to as HYENG INTERNATIONAL), was interested in business opportunities in Hainan International Tourism Island, and invited Wang Lianchun to jointly set up a joint venture company in Haikou City for business development. For this purpose, Wang Lianchun incorporated Haikou Dingbofeng Trading Co., Ltd. (hereinafter referred to as Dingbofeng Company) on March 14, 2014, the plaintiff in this case where Wang Lianchuan was the sole shareholder holding 100% of shares (also the executive director and general manager). On July 28, 2014, the plaintiff Dingbofeng Company signed the Contract for the Sino-foreign Joint Venture with the third party HYENG INTERNATIONAL. On August 4, 2014, the plaintiff and the third party contributed RMB 10 million to set up HYENG ANDES(HAINAN)INDUSTRIAL LIMTTED (the defendant in this case, hereinafter referred to as HYENG ANDES), with the approval and permission of Department of Commerce of Hainan Province. The parties signed the Articles of Association on the basis of Contract for the Sino-foreign Joint Venture. Under the Contract and Articles of Association, the plaintiff Dingbofeng Company contributed RMB 1 million to hold 10% of shares, and the third party HYENG INTERNATIONAL contributed RMB 9 million to hold 90% of shares. The plaintiff Dingbofeng Company assigned one person (Wang Lianchun) as the director of the joint venture, and the third party HYENG INTERNATIONAL assigned Huang Hanqing and Huang Zuoning, (father-son relationship) as another two directors of the joint venture. Huang Hanqing was the chairman, and the above three persons constituted the board of directors, the highest authority of the joint venture. For the purpose of the incorporation by two shareholders, HYENG ANDES applied for the business scope as follows: “high-tech research and development, planting of tropical crops, rural infrastructure construction, providing exclusive information on leisure tourism and settling down in Hainan for senior people, sales of daily general merchandise and building materials, general import and export trades and sales.” Since the incorporation, the plaintiff appointed Wang Lianchun to convene the board meeting to discuss the resolution on many excellent businesses for several times, but the chairman and the director assigned by the third party HYENG INTERNATIONAL made no response, thus missing many business opportunities. The company has not been normally operated; Moreover, after the plaintiff and the third party injected the registered capital in full into the company, the chairman Huang Hanqing used all the registered capitals to purchase 3 commodity apartments without the resolution passed by the board of directors, which made the company have no working capital, and the third party did not make up the registered capital. The third party and its director shut their eyes to this matter and left it alone, seriously deviating from their obligations as the shareholder and the director of the company and infringing the lawful rights and interests of the plaintiff as the shareholder. In addition, only Wang Lianchun, one of three directors, always stayed in Hainan, so the board meeting cannot be held and resolved for a long time. Even after the chairman Huang Hanqing died on October 14, 2016 (the plaintiff was once concealed from this situation), the major shareholder HYENG INTERNATIONAL has not reassigned a new director. There were less than three members in the board of directors of HYENG ANDES for four years. The company lacked the internal governance structure and effective operation mechanism. Until September to November 2020, the major shareholder HYENG INTERNATIONAL knew that the store assets under the name of the company may create huge values, and then unilaterally assigned Huang Weining (the second son of Huang Hanqing) as the director of the new board and asked to hold the board meeting. This meeting did not discuss on the expenditures and compensations incurred by the plaintiff when the plaintiff alone maintained the company, but the third party forced the plaintiff to remove from the position of sole shareholder and the title in the company. The plaintiff was excluded from the legal status in the company and required to hand over the official seal and other materials. By doing this, the third party intended to solely control the company and assets and occupy the outcomes obtained by the plaintiff alone for many years. To realize this, the defendant made clear but useless objections on all matters in the meeting. In conclusion, HYENG ANDES has not been normally operated for a long term. The shareholder interests of the plaintiff have always been damaged, and it is impossible to exercise the shareholders’ rights. The contract purpose for the plaintiff to invest in HYENG ANDES can’t be achieved and, moreover, disagreements and conflicts between the shareholders made the corporate operation more difficult. Over these years, the corporate deadlock has been further deteriorated, but not improved. Therefore, in accordance with Article 182 of the Company Law of the People’s Republic of China and Paragraph I of Article I of the Regulations of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of the People’s Republic of China (II), the plaintiff requests the Court to order to dissolve HYENG ANDES.

The defendant HYENG ANDES contended that: I. Shortly after the death of Huang Hanqing, the former chairman of HYENG ANDES, Huang Weining, the legal representative of the third party, informed Wang Lianchun, the legal representative of Dingbofeng Company and negotiated to hold the board meeting for the matters of HYENG ANDES. Shortly after Huang Hanqing, the former chairman of HYENG ANDES, died on October 14, 2016, Huang Weining, the legal representative of the third party, informed Wang Lianchun, the legal representative of Dingbofeng Company, and Wang Lianchun attended Huang Hanqing’s memorial meeting. Huang Weining repeatedly communicated with Wang Lianchun from 2017 to 2020 to hold the board meeting to change the corporate affairs of HYENG ANDES, but Wang Lianchun put it off and refused to provide the shop lease contracts and financial reports of HYENG ANDES. Therefore, Dingbofeng Company’s claim that the death of the former representative was concealed, the third party did not reassign the director and the company had no effective operation mechanism has no factual basis. II. To solely control HYENG ANDES, Dingbofeng Company refused to communicate with Huang Weining, the chairman appointed by the third party, and render the lease contracts and E-bank. This behavior impeded the board meeting from being held in time. III. HYENG ANDES held four board meetings in 2020, and the resolutions conformed to the provisions of the laws and the Articles of Association. There were no situations where the board meeting cannot be held to make effective resolutions and corporate operation and management were beset with difficulties. IV. As Huang Hanqing, the former chairman of HYENG ANDES, died, in order to ensure the board of directors of HYENG ANDES performs its duties as soon as possible, HYENG ANDES held four board meetings on November 9, 2020, three directors of HYENG ANDES including Huang Weining, Huang Zuoning and Wang Lianchun attended the meetings and signed. The resolutions in the meeting were passed by 2/3 of attending directors. These resolutions conformed to the legal provisions and Article 17, 10 and 22 of the Articles of Association of HYENG ANDES. These resolutions were as follows: 1. Change Huang Hanqing, the director and chairman of HYENG ANDES appointed by the third party to Huang Weining as the director and chairman of HYENG ANDES; 2. The legal representative of HYENG ANDES is changed from Huang Hanqing to Huang Weining; 3. Change Article 36 of the Articles of Association of HYENG ANDES saying “The legal representative of joint venture is Huang Hanqing (as the chairman)” to “The legal representative of joint venture is Huang Weining (as the chairman)”; 4. The former legal address of Party A in the Articles of Association of HYENG ANDES is changed to Unit907 SILVER CORD TOWER2 30 CANTON ROAD TSIM SHA TSUI KL HONGKONG CHINA; 5. Decide to assign the chairman Huang Weining as the sole signatory of the corporate bank account of HYENG ANDES, and that Wang Lianchun will hand over the login user name and password, dynamic password authentication tool and other management tools of the corporate bank account and E-bank account of HYENG ANDES to the chairman Huang Weining for retention and use; 6. Remove Wang Lianchun from the position of general manager and executive deputy general manager, remove Huang Zuoning from the position of general manager; employ Huang Weining as the general manager and Huang Zuoning as the deputy general manager. Wang Lianchun would render related materials of daily operation and management as well as the personal seals of Huang Hanqing and Huang Zuoning to the legal representative and the general manager Huang Weining. By this point, HYENG ANDES had performed the duties of the board of meeting, the chairman and the general manager and completed their reconstruction. HYENG ANDES had all conditions based on which the board of directors makes effective resolutions, and had no situations where the company cannot hold the board meeting as claimed by Dingbofeng Company. The above situations do not meet the legal conditions for corporate dissolution. IV. Dingbofeng Company is still the shareholder of HYENG ANDES, and Wang Lianchun is still the director of HYENG ANDES assigned by Dingbofeng Company. There was no situation where the shareholder rights of Dingbofeng Company could not be exercised. Now Dingbofeng Company is still the shareholder of HYENG ANDES, and the legal representative of Dingbofeng Company is still the director of HYENG ANDES. The fact that the board of directors of HYENG ANDES had voting rights, Dingbofeng Company still exercises the shareholder rights and Wang Lianchun is removed from the position of general manager is the effective resolution passed by the votes of all the directors of the board of directors. The fact that Wang Lianchun does not serve the position of general manager does not mean Dingbofeng Company has no representative in the board of directors, Dingbofeng Company still can exercise the shareholder rights.

In response to the claim of Dingbofeng Company, the third party HYENG INTERNATIONAL stated as follow: we agreed with the defenses made by the defendant. There is no factual or legal basis to support the plaintiff’s claims. The change of the chairman of HYENG ANDES is the ordinary course of business, and there has not been deadlocks or difficulties in its business.

The parties submitted evidence concerning the claims according to law, and this Court organized the parties to conduct evidence exchange and cross-examination.

The plaintiff Dingbofeng Company submitted four sets of evidence to support its claims. The first set of evidence is as follows: Exhibit 1 is the business license of HYENG ANDES to prove basis information of HYENG ANDES, including the amount of registered capital, date of incorporation, registered address, business scope and members of the board of directors; Exhibit 2 is the name pre-approval form of the foreign-invested enterprise and name pre-approval notice of the foreign-invested enterprise to prove HYENG ANDES passed the name approval on June 5, 2014 and entered the procedure of incorporation; Exhibit 3 is the application report, the permit and approval form of the foreign-invested enterprise issued by the Department of Commerce of Hainan Province, and the reply of Department of Commerce of Hainan Province to the contracts and the Articles of Association to prove HYENG ANDES passed the approval of incorporation by Department of Commerce of Hainan Province on August 4, 2014; Exhibit 4 is the Contracts and the Articles of Association of Sino-foreign joint venture to prove: 1. HYENG ANDES is the Sino-foreign joint venture, and the highest authority is the board of directors; 2. The board of directors sets up 3 seats. The plaintiff assigned one director Wang Lianchun, and the third party assigned two directors Huang Hanqing and Huang Zuoning. Huang Hanqing is the chairman of the company; 3. The voting rules for the resolutions of the board of directors are as follows: special matters require the unanimous consensus, and other matters require 2/3 of voting rights; 4. The agreed conditions for dissolution; Exhibit 5 is the report of Hainan Zhongzhi Credit Accounting Firm to prove that the registered capital of HYENG ANDES is RMB 10 million, and the plaintiff performed the obligation to inject the capital in September 2014 after the incorporation; Exhibit 6 is the voucher of RMB 10 million capital contribution by the plaintiff and the third party to prove that the plaintiff and the third party have performed the obligation to inject the capital. The second set of evidence is as follows: Exhibit 7 is the settlement agreement, and Exhibit 8 is the Wechat records with the personnel of Lifeng Wood Company, to prove that the minority shareholder appointed the director Wang Lianchun to recover RMB 51,780 of house door refund through litigation for HYENG ANDES; Exhibit 9 is the refund application of Yen Coffee Trading Company, Exhibit 10 is the short message record on the recovery of refunds with Yan Chaosheng, the sole shareholder of Yen Coffee Trading Company, Exhibit 11 is the payment voucher of RMB 300,000 to Yen Company, Exhibit 12 is the payment voucher of RMB 300,000 recovered by Wang Lianchun and transferred to the company, and Exhibits 9 to 12 prove: 1. The company initially decided to operate the coffee trading business, but this was unilaterally rejected by Huang Hanqing, the director appointed by the major shareholder, and the recovery of RMB 300,000 deposit that has been paid was put aside. 2. Wang Lianchun, the director appointed by the minority shareholder, recovered RMB 300,000 for many years after the major shareholders rejected the above business, and finally it was collected and returned to the company account. Compared with the major shareholders’ omission and non-performance of its shareholder obligations, the minority shareholder actively protected the company’s rights and interests at its own expense, but the losses suffered by the minority shareholder have not been compensated so far. The third set of evidence: Exhibit 13 is the Income Statement from 2014 to 2019, to prove that the company basically had no business every year, and also spent several hundred thousand yuan in various administrative expenses such as personnel salaries and taxes. The company suffered from long-term losses, but the major shareholder never proposed to hold the board meeting to supplement the funds or save the operation by other means. There was also no discussion on compensating minority shareholder for the expenses it has paid for the company. The company has already been in serious difficulties in operation and management, and its continued existence will cause losses to all the shareholders. The fourth set of evidence: Exhibit 14 is the notarization to prove that the chairman Huang Hanqing died on October 14, 2016, the board of directors could not meet the legal conditions for the establishment due to the lack of one person from this day, and the major shareholder has not convened discussion on the election and re-establishment, the decision-making body of the company was dummy when the chairman was alive, and could not be restored for a long time after the death of the chairman. This resulted in the operating difficulties and the deadlock between the shareholders; Exhibit 15 are the letters signed by the plaintiff from September to November 2020, and Exhibit 16 is the Wechat records between Wang Lianchun, the director appointed by the minority shareholder, and Huang Zuoning, the director appointed by the major shareholder, from September to November 2020, to prove: 1. Since the establishment, the major shareholder has not propose to discuss any resolutions on the development of the company, so the company has been not normally operated for a long time and beset with many difficulties. 2. After the death of the chairman Huang Hanqing, the deadlock between the major shareholder and the minority shareholder was further worsened, and they failed to reach an agreement on the development of the company, resulting in frequent conflicts; 3. The major shareholder and minority shareholder have not reached an agreement on the purchase of equity, and it is impossible to solve the conflicts and disputes through reconciliation. Exhibit 17 is the notices of the first to fourth illegal “board of directors” meetings of HYENG ANDES in 2020, and Exhibit 18 is the minutes of the first to fourth illegal “board of directors” meetings of HYENG ANDES in 2020, to prove: 1. On November 9, 2020, the major shareholder made an unexpected proposal to convene four board meetings in one day, obviously not for normal operation purposes, but to expel the minority shareholder. For example, at the fourth meeting, the major shareholder directly dismissed Wang Lianchun from the general manager, and required to hand over the official seal and put the enterprise under the control of the major shareholder, which actually means that the minority shareholders will be expelled from the company. As a result, the minority shareholder’s rights to know and participate in the company are not guaranteed; 2. In order to protect its own interests, the minority shareholder was forced to attend all the meetings. However, the minority shareholder opposed all resolutions because they think this violated the Articles of Association and laws. Because these were not normal and legal board meetings, relevant resolutions were illegal and infringed on the interests of the minority shareholder; The above evidence can prove that the conflicts between two shareholders were intensified and the deadlock of the company was further worsened. Exhibit 16 is the Summons and Notice of Collegial Panel made by Meilan Court related to the (2021) Q0108 MC No. 6325, Exhibit 17 is the Civil Complaint of HYENG ANDES, Exhibit 18 is the Evidence Catalogue provided by HYENG ANDES, Exhibit 19 is the Civil Pleading provided by Wang Lianchun, and Exhibit 20 is the Evidence Catalogue provided by Wang Lianchun, to together prove: 1. Chinese shareholder and foreign shareholder of HYENG ANDES had disputes on the title of company seal and license, and the deadlock cannot be resolved. Foreign shareholder in the name of HYENG ANDES sued and asked Wang Lianchun, member of the board of directors, to return the company official seal and license; 2. This case proved that the foreign shareholder made an invalid Resolution of the Board of Directors with the intention to expel the legitimate seat of the minority shareholder in the company and infringe the interests of the minority shareholder, but also intended to achieve the ultimate goal to control the company by actually controlling the official seal and license through the lawsuit for returning the license; 3. The Chinese minority shareholder and their appointed director Wang Lianchun, as the senior management of HYENG ANDES in Hainan Province who have managed the company for a long time, at least have the right to ensure that the rights and interests of the Chinese shareholder are not harmed, and the right to know of the minority shareholder is not further infringed after the company is completely controlled by the major shareholder by holding the official seal and license. If the official seal is controlled by the major shareholder, it may dispose of the company’s assets and properties by mortgage and realization and other ways, resulting in the company’s assets being occupied by foreign parties. The rights and interests of the minority shareholder will be further damaged due to the survival of HYENG ANDES. Therefore, this meets one of conditions for dissolution as specified in Article 182 of the Company Law saying “Where a company experiences serious difficulties in its business and the shareholders will suffer serious damages if the company continues its operation”.

The cross-examination opinions of the defendant HYENG ANDES and the third party HYENG INTERNATIONAL on the exhibit submitted by the plaintiff: They have no objection to the authenticity, relevancy, legitimacy of Exhibit 1, and only objects what is to be proved, because the business license does not state the members of the board of directors. They have objections to the authenticity, relevancy, legitimacy of Exhibit 2 because there is no seal of the registration authority. They have no objection to the authenticity, relevancy, legitimacy of Exhibit 3. They have no objection to the authenticity, relevancy, legitimacy of Exhibit 4, and only objects what is to be proved, because general matters in the procedure rules of the board of directors should be passed by 50% (inclusive) of shareholders attending the board meeting. They have no objection to the authenticity, relevancy, legitimacy of Exhibit 5 and 6, and only objects what is to be proved, because there is no evidence to prove the registered capital of the plaintiff is the self-owned capital. They have objections to the authenticity, relevancy, legitimacy of Exhibits 7 to 12, and only objects what is to be proved, because the evidence verifies that the daily operation and management of HYENG ANDES is controlled by the minority shareholder, that is the plaintiff, but not operated by the operation and management agency as specified by the Articles of Association. They have objections to the authenticity, relevancy, legitimacy of Exhibit 13, and only objects what is to be proved, because the financial and accounting reports of a foreign-invested enterprise should be audited by an auditing agency, but the third party has never been informed of the annual accounting reports of HYENG ANDES; The rentals of the houses under the name of HYENG ANDES have been controlled by the plaintiffs for several years. They have no objection to the authenticity, relevancy, legitimacy of Exhibit 14, and only objects what is to be proved, because Wang Lianchun, the legal representative of the plaintiff, was aware of the death of Huang Hanqing, the legal representative of HYENG ANDES; According to the provision of the Articles of Association of HYENG ANDES, the board of directors is not elected, but appointed; The management agency of the company has not been affected, which does not constitute the situation of operating difficulties and deadlock between the shareholders. They have no objection to the authenticity, relevancy, legitimacy of letters on November 10 and November 25 in Exhibits 15 and 16, and only objects what is to be proved, because after the death of the chairman Huang Hanqing, the third party has been communicating with Wang Lianchun, the director appointed by the minority shareholder, on the company operation and management (the third party has provided evidence), but the director dodged the truth, delayed and evaded the responses; The third party had to give the letter to Wang Lianchun on September 29, 2020, informing him that it had appointed Huang Weining as the chairman of HYENG ANDES; After HYENG ANDES held the board meeting on November 9, 2020 and made the decision in accordance with the Articles of Association, Wang Lianchun sent a letter to dissolve the company on November 10, 2020 in order to continue to control the company; The minority shareholder manipulated HYENG ANDES to send a letter and refused to perform the obligation of information disclosure, depriving the third party of the right to know. They have no objection to the authenticity, relevancy, legitimacy of letters on September 18, 2020 because HYENG INTERNATIONAL never received the letter, which was produced by HYENG ANDES under the control of Wang Lianchun by backdating. The express on that day was the Lease Contract, not the letter. They have no objection to the authenticity, relevancy, legitimacy of Exhibit 17 and 18, and only objects what is to be proved, because, for Wang Lianchun’s action of delay in evading and depriving the third party of the right to know, in order to ensure that the board of directors of the company can perform their duties as soon as possible and improve the efficiency of the decision, HYENG ANDES has held four board meetings according to the Company Law and the Articles of Association of HYENG ANDES, in which Wang Lianchun voluntarily attended the meetings. The board of directors has made resolutions in accordance with the law and the Articles of Association of HYENG ANDES. However, the plaintiff refused to do this. They have no objection to the authenticity, relevancy, legitimacy of Exhibits 19 to 21, proving that HYENG ANDES exercised the right to claim for the withdrawal of the license in accordance with the resolution of the board of directors. They have no objection to the authenticity and relevancy of Exhibit 22, but have objections to the legitimacy because this is the personal statements by Wang Lianchun and insufficient to be used as the evidence. The cross-examination opinions on the Contract for Sino-foreign Joint Venture in Exhibit 23 are the same as Exhibit 4; They have no objection to the authenticity, relevancy, legitimacy of the notice of acceptance made by the First Intermediate People’s Court of Hainan Province; The cross-examination opinions on two reply letters are the same as Exhibit 15; They have objections to the authenticity, relevancy, legitimacy of the labor contract because registration information related to the general manager is not consistent with registration information of the company, and does not meet the provisions of the Articles of Association; They have no objection to the authenticity, relevancy, legitimacy of chat records with Huang Weining, but only objects what is to be proved, because Huang Weining legally performed his duties as a new director appointed by the major shareholder and the company.

The defendant HYENG ANDES did not submit any evidence.

The third party HYENG INTERNATIONAL submitted the following evidence: Exhibit 1 is the Articles of Association of Sino-Foreign Joint Venture Enterprise- HYENG ANDES (HAINAN) INDUSTRIAL LIMITED, to prove: 1. The board of directors of HYENG ANDES is the highest authority of the company; 2. The board of directors of the company consists of 3 directors, including 2 directors appointed by HYENG INTERNATIONAL and 1 director appointed by Dingbofeng Company; The company sets up one chairman appointed by HYENG INTERNATIONAL, and two deputy chairmen appointed by HYENG INTERNATIONAL and Dingbofeng Company respectively; 3. Major matters of the company have been unanimously approved by all directors present at the board meeting; General matters shall be adopted with the approval of 50% (inclusive) of the directors present at the board meeting; 4. The legal representative of the company shall be the chairman. Exhibit 2 is the Certificate (file No.: FF-50909-20(su)) issued by the lawyer Feng Lixian from Leung Chan & Pang Law Firm, to prove that HYENG INTERNATIONAL passed the resolution on September 28, 2020 to appoint Huang Weining as the chairman and legal representative of HYENG ANDES; to authorize Huang Weining to change the business registration of HYENG ANDES’s legal representative and sign on relevant documents; to authorize Huang Weining to handle with related affairs of HYENG ANDES on behalf of the company, sign affix valid seals on relevant documents. Exhibit 3 is the Notice on Appointment of Directors and Chairman of HYENG ANDES (HAINAN) INDUSTRIAL LIMITED and express notes of HYENG INTERNATIONAL, to prove that HYENG INTERNATIONAL appointed Huang Weining as the director and chairman of HYENG ANDES on September 29, 2020 in accordance with the Articles of Association of HYENG ANDES. Exhibit 4 is the Notification Letter, Domestic Speedpost Order and mail inquiry records of HYENG INTERNATIONAL to prove that HYENG INTERNATIONAL served the Notification Letter to the plaintiff and the director Wang Lianchun appointed by the plaintiff on October 26, 2020, informing that Huang Weining had been appointed as the chairman of HYENG ANDES. Exhibit 5 is the Minutes of the Resolution in the First Meeting of the Board of Directors of HYENG ANDES (HAINAN) INDUSTRIAL LIMITED in 2020, to prove the resolution of the first meeting of the board of directors of HYENG ANDES in 2020: to confirm that the director and chairman of the board of directors appointed by HYENG INTERNATIONAL is changed to Huang Weining; The legal representative of HYENG ANDES is changed from Huang Hanqing to Huang Weining. Exhibit 6 is the Acquisition of Financial Records of HYENG ANDES (HAINAN) INDUSTRIAL LIMITED and Mail Delivery Forms of HYENG INTERNATIONAL to prove that HYENG INTERNATIONAL exercised the shareholder’s right to know according to law and the Articles of Association, and required HYENG ANDES and Wang Lianchun, the director appointed by the plaintiff, to provide monthly statements of bank accounts and financial accounting reports of HYENG ANDES. Exhibit 7 is the Summons ((2021)Q0108MC No. 6325) made by Meilan Primary People’s Court, Haikou, to prove that HYENG ANDES had prosecuted Wang Lianchun, the director appointed by the plaintiff to return HYENG ANDES’s business license. Exhibit 8 is the Enterprise Credit Information Publicity Report of HYENG ANDES and minutes of the board meetings of HYENG ANDES (HAINAN) INDUSTRIAL LIMITED (October 10, 2016), to prove: 1. HYENG ANDES has been normally publicizing the annual report of the enterprise since the incorporation, and the total assets in 2019 were at least RMB 9.57 million, and the owner’s equity was at least RMB 8.29 million (subject to audit if necessary). There are no serious operating difficulties, and the conditions for dissolution are not met; 2. Under the control of Wang Lianchun, the director appointed by the plaintiff, HYENG ANDES did not disclose information relating to the status of its assets; 3. The board of directors of HYENG ANDES has made institutional arrangements for the working capital. Exhibit 9 is the Wechat records (I) between Huang Weining and Wang Lianchun and the video of the memorial site, to prove that Wang Lianchun, the director appointed by the plaintiff, attended Huang Hanqing’s memorial meeting and was aware of his death. Exhibit 10 is the Wechat records (II) between Huang Weining and Wang Lianchun, to prove: 1. This case is not caused by the serious operating difficulties of HYENG ANDES, but by the director Wang Lianchun appointed by the plaintiff controlling HYENG ANDES’s business license and financial information, bank seal and refusing to hand them over; 2. The properties owned by HYENG ANDES have been rented. According to the resolution of the board of directors, it is enough to cover the daily operating funds and does not constitute the operational difficulties; 3. What Wang Lianchun mailed on September 18, 2020 was the lease contract, and the mail has been returned, but not the Letter on Requesting HYENG INTERNATIONAL LIMITED to Appoint the Director and Related Matters. Exhibit 11 is the short message chat records between Huang Weining and Wang Lianchun, to prove that Wang Lianchun manipulated HYENG ANDES to issue the Letter on Requesting HYENG INTERNATIONAL LIMITED to Appoint the Director and Related Matter on September 18, 2020, which was backdated, and the document mailed by Wang Lianchun on that day was the Lease Contract, which had been returned by the Hong Kong General Post Office; HYENG INTERNATIONAL appointed Huang Weining as the chairman of the board of directors in accordance with the Articles of Association of HYENG ANDES.

The cross-examination opinions of the plaintiff Dingbofeng Company on the evidence submitted by the third party were as follows: It has no objection to the authenticity, relevancy, legitimacy of Exhibit 1 and only objects what is to be proved, because the legal representative of the company may not be the chairman of the board of directors; It has no objection to the authenticity, relevancy, legitimacy of Exhibit 2; It has no objection to the authenticity, relevancy, legitimacy of Exhibits 3 and 4 and only objects to what is to be proved, because Huang Weining has not been qualified as the chairman; It has no objection to the authenticity and relevancy of Evidence 5, but objects to the legitimacy because HYENG INTERNATIONAL has the right to appoint Huang Weining as the director, but without the resolution of the board of directors, has no right to serve as the chairman and legal representative of HYENG ANDES; For Exhibit 6, we have not received relevant documents, and we recognize the authenticity, but not recognize the relevancy, legitimacy and the content. It has no objection to the authenticity, relevancy and legitimacy of Exhibit 7, but we hold that the return of business license should be decided by the unanimous voting; It has no objection to the authenticity, relevancy and legitimacy of Exhibit 8 and only objects to what is to be proved, because the case No. 2148 of the Supreme People’s Court has guided the dissolution of the company due to operating difficulties is not only judged by whether the company is profitable. The judgement of operating difficulties depends on the internal operation. The actual total assets of the company should actually be audited by the auditing agency, and all the current assets and cash deposits as well as actual profits can be reflected in the audit report. This does not reach RMB 9.57 million as claimed by the other party; It has no objection to the authenticity, relevancy and legitimacy of Exhibit 9 and only objects what is to be proved, because Wang Lianchun was informed before the memorial meeting after Huang Hanqing died; It has no objection to the authenticity, relevancy and legitimacy of Exhibit 10 and only objects what is to be proved because We sent the lease contract and other documents on Wechat, and there was no refusal to cooperate. We did not reply clearly on Wechat that we would mail the lease contract documents to the other party. The mail opened on the spot was the content of the letter we sent on September 18. The rentals from leasing the properties of HYENG ANDES were not sufficient to cover the expenses for daily operations. Moreover, total assets are not equal to profits. The rental income of the company is used to pay the real estate tax, property certificate tax, labor remunerations, property expenses, water and electricity expenses and other expenses. All expenses were included in the company account, and can be traced. After deducting the above expenses, the actual income is almost negligible, and the taxes mentioned above are not a one-time payment, but an annual payment; It has no objection to the authenticity, relevancy and legitimacy of Exhibit 11 and only objects what is to be proved as same as Exhibit 10;

The cross-examination opinion of the defendant on the evidence submitted by the third party was as follows: It recognizes the authenticity, legitimacy, relevancy of the evidence submitted by the third party.

As to the evidence submitted by the parties, the Court holds that the authenticity of the evidence submitted by the plaintiff other than Exhibit 2 is recognized. The authenticity of the evidence submitted by the third party is recognized. The relevancy of the evidence submitted by the parties and the content of evidence will be verified according to facts.

According to the evidence admitted by the Court and findings of the court trial, the Court makes the following of facts:

On July 28, 2014, the plaintiff Dingbofeng Company and the third party HYENG INTERNATIONAL signed the Contract for Sino-foreign Joint Venture. According to the contract, HYENG INTERNATIONAL subscribed and contributed RMB 9 million, accounting for 90% of the shares, while DingBofeng Company subscribed and contributed RMB 1 million, accounting for 10% of the shares, to incorporate HYENG ANDES. The total amount of investment, operating years, business scope of HYENG ANDES were specified in the contract. On August 4, 2014, Department of Commerce of Hainan Province issued the QSWPZ [2014] No.21 reply to approve the establishment of HYENG ANDES, the legal representative being Huang Hanqing, the total amount of investment, registered capital and business scope of the joint venture. HYENG ANDES obtained the business license on August 14, 2014, with a registered capital of RMB 10 million. The legal representative is Huang Hanqing, and the domicile is Room 3-2-302, Haikuo Tiankong Guoruicheng Community (Boshiyuan) No. 10, Daying Shandong No.1 Road, Meilan District, Haikou City, Hainan Province. The term of business operation is from August 14, 2014 to August 14, 2044. The business scope is: high-tech research and development, planting of tropical crops, imports-exports and domestic sales of seeds seedlings (excluding seed production and transgenic seedlings), coffee beans and coffee products; rural infrastructure construction; consulting services of leisure and old-age care, tourism and vacation; warehouse management services; sales of food, daily necessities, building materials, import and export trade and sales of general goods and various technologies.

After HYENG ANDES was incorporated, the plaintiff Dingbofeng Company appointed Wang Lianchun as the director of the joint venture, and HYENG INTERNATIONAL appointed Huang Hanqing and Huang Zuoning (the father-son relationship) as the director of the joint venture, to form the board of directors of HYENG ANDES as the highest authority of the company. Huang Hanqing is the chairman, and Huang Zuoning and Wang Lianchun are the deputy chairmen.

Since the establishment, HYENG ANDES has not carried out any business within its business scope and has not held board meeting every year according to the Articles of Association of the company. The plaintiff claimed that the expenses incurred by the company from 2014 to 2019 had been borne by the plaintiff, and the company was operating with debts, and provided the profit statement of the company over the years to prove it. However, the sources of financial expenses were not reflected in the profit statement of the company, and the defendant and the third party did not recognize it, which could not reflect the operating conditions and specific expenses of the joint venture.

On October 14, 2016, Huang Hanqing, the chairman of HYENG ANDES, died. Wang Lianchun, the legal representative of Dingbofeng Company, attended Huang Hanqing’s memorial meeting. On September 18, 2020, HYENG ANDES issued the Letter on Requesting HYENG INTERNATIONAL LIMITED to Appoint the Director and Related Matter to HYENG INTERNATIONAL. On September 29, 2020, HYENG INTERNATIONAL appointed Huang Weining as the director and chairman of HYENG ANDES, and sent an email to inform Dingbofeng Company of this matter. On October 26, 2020, Huang Weining as the convenor (with the company signature and seal of HYENG INTERNATIONAL) sent four notices of the board meeting to the directors of HYENG ANDES, which stated the contents of the meeting: I. Change Huang Weining to the chairman and legal representative; II. Change the Articles Of Association; III. Change the signatory of the company bank accounts and uses of the corporate E-bank account; IV. Change the operation, management and organization agencies and the list of important personnel of the company. On November 9, 2020, Huang Weining as the convenor presided over the meeting of the board of directors of HYENG ANDES and approved four minutes of the meeting (approved by 2/3 of voting rights of the board of directors): I. Change Huang Weining to the chairman and legal representative of the company; II. Change the legal representative of the company and change the address of HYENG INTERNATIONAL; III. Change the signatory of the company bank account and uses of the corporate E-bank account, and require Wang Lianchun to hand over the E-bank management tools; IV: 1. Dismiss Wang Lianchun; 2. Dismiss Huang Zuoning; 3. Employ Huang Weining as the general manager; 4. Employ Huang Zuoning as the deputy general manager; 5. Wang Lianchun will hand over the official seal and financial seal of the company; 6. Wang Lianchun will hand over the materials related to daily operation and management affairs; 7. Wang Lianchun will hand over the personal seals of Huang Hanqing and Huang Zuoning. Four minutes of the meeting stated that Huang Weining and Huang Zuoning (Huang Weining as his proxy) agreed on the above matters, while Wang Lianchun disagreed.

It is further found that during the litigation of this case, on March 11, 2021, this Court entrusted Hainan Mediation Center of China Council for the Promotion of International Trade (China International Chamber of Commerce) (hereinafter referred to as Mediation Center) to mediate this case. On June 30, 2021, the Mediation Center issued a Mediation Feedback Letter to the Court, informing this Court that the Mediation Center organized more than ten rounds of negotiations between the plaintiff and the third party in the process of mediation because the parties failed to reach a mediation agreement and were unwilling to sign a written confirmation of uncontroversial facts. Both parties mainly focused on the compensation amount of the third party HYENG INTERNATIONAL to the plaintiff Dingbofeng Company (Wang Lianchun). Dingbofeng Company proposed RMB15 million, which was reduced to RMB 7-8 million during the mediation process, while HYENG INTERNATIONAL raised it from RMB 1.2 million to RMB 6 million. In the end, both parties could not reach an agreement on the compensation amount.

It is also found that the plaintiff Dingbofeng Company, registered as a limited liability company (wholly owned by natural person), was established on March 14, 2014 with a registered capital of RMB 1 million, and Wang Lianchun is the sole shareholder holding 100% of the shares.

It is also found again that on April 2, 2021, Huang Weining sued Wang Lianchun, the legal representative of the plaintiff Dingbofeng Company in the name of HYENG ANDES, and the claim was to order Wang Lianchun to return the official seal and business license of HYENG ANDES.

This Court holds that this case is about dispute over company dissolution. And since the third party HYENG INTERNATIONAL is a company registered in the Hong Kong Special Administrative Region, this case is also a dispute relating to Hong Kong. HYENG ANDES is a company registered and established in the Chinese mainland. According to Article 14(1) of the Law of the People's Republic of China on Choice of Law for Foreign-related Civil Relationships, “The laws at the locality of registration shall apply to such items as the civil rights capacities, civil acts capacities, organizational institutions, rights and obligations of shareholders, etc. of a legal person and its branch, the mainland law shall be applied to this case as the applicable law for resolving disputes in this case. According to Article 217 of the Company Law of the People’s Republic of China: “The provisions of this Law shall apply to foreign-invested limited liability companies and companies limited by shares; where the laws on foreign investment provide otherwise, such provisions shall prevail..” HYENG ANDES is a limited liability company of joint venture by Hong Kong and Chinese mainland, so the Company Law of the People's Republic of China and other relevant laws and regulations shall apply to this case. On the basis of the pleadings of all parties, combined with the court investigation and the valid evidence, the focus of the dispute in this case is whether HYENG ANDES meets the conditions for dissolution.

Regarding the right to institute an action in this case. According to Article 182 of the Company Law of the People's Republic of China, saying “Where a company experiences serious difficulties in its business and the shareholders will suffer serious damages if the company continues its operation, a shareholder or a group of shareholders holding 10% or more of the shares of the company may, in the absence of any other means, request for a mandatory dissolution of the company by a people's court.”, the shareholders holding more than 10% of the shares may request the people’s court to dissolve the company. Dingbofeng Company holds 10% of the shares in HYENG ANDES, which is in compliance with the above-mentioned legal provisions, so it has the right to file a lawsuit to this matter.

Regarding whether HYENG ANDES meets the statutory conditions for dissolution, according to the Company Law of the People's Republic of China and relevant judicial interpretations, this specifically depends on whether it meets the following three elements: I. The company faces serious difficulties in operation; II. The continuous existence of the company will cause great losses to the shareholders; III. The dilemma cannot be solved by all possible means. Therefore, from aspects of above, this Court finds that:

I. Regarding whether the company faces serious difficulties in its business. According to the Article 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (II), only when the company has failed to call a meeting of shareholders for two consecutive years or longer, or a meeting of shareholders has not been able to adopt any valid resolution for two consecutive years or longer, or long-term disagreement between the directors of the company cannot be settled through meetings of shareholders, and the operation and management of the company are in great difficulties; and the continuous existence will cause great losses to the interests of shareholders, the requirements of company dissolution are met. In this case, the defendant HYENG ANDES held the general meeting on October 26, 2020, and a resolution was made thereof. The plaintiff Dingbofeng Company claimed that the resolution was invalid, but did not file a lawsuit to confirm the invalidity of this resolution, so the first two conditions are not met. However, due to the long-term disagreement between the directors of the company, they were not settled through shareholders’ meeting, the Court will focus on examining whether the defendant experiences serious difficulties in its business, and consider it from the following two aspects in combination with the specific circumstances of this case:

1. From the perspective of foreign business operation of HYENG ANDES. On the basis of the ascertained facts, the business scope of HYENG ANDES is: high-tech research and development, planting of tropical crops, rural infrastructure construction, exclusive information service for leisure, old-age care and tourism, sales of daily necessities and building materials, and general import and export trade and sales. From the incorporation to the end of 2020, its office was purchased by the company, and there were only three properties under the name of the company, and it did not actually carry out its main business. The annual inspection, daily maintenance and other management work of the company have been managed by Wang Lianchun, the director and general manager of the company assigned by the plaintiff, but he did not operate the main business. Therefore, the plaintiff’s claim that the company faced serious difficulties in operation after the third party re-elected and re-assigned its representative is inadmissible in this Court.

2. From the perspective of internal organization operation of HYENG ANDES. To judge whether there are serious difficulties in the operation and management of the company, a comprehensive analysis shall be made from the operating state of the company's organization, with the focus on whether there are serious internal obstacles in the company's operation and management, and whether the company's authority and management institutions are in a stalemate due to intensified conflicts. According to the evidence submitted by all parties and the letters between the plaintiff, the defendant and the third party, when the registered place of the company changed after the establishment, it could effectively convened a board meeting and passed the resolution and changed the industrial and commercial registration. Furthermore, as of 2020, the company successfully passed the annual inspection for a total of six years without holding board meeting. Therefore, there are no internal obstacles to the operation and management. For the foregoing reasons, the plaintiff's claim that the defendant company has experienced serious difficulties in its business cannot be supported by this Court.

II. Whether the continuous existence of the company will cause great losses to the shareholders. The plaintiff claimed that the continuous existence would cause it to suffer heavy losses on the grounds that its actual control, dividends and right to know would be damaged. First of all, regarding the actual control, according to the Articles of Association and Article 4 of the Company Law, shareholders of a company shall be entitled to gains on assets, participation in major decision-making and selection of managers etc. in accordance with the law., which are not only owned by minority shareholders, but also by the third party, HYENG INTERNATIONAL, which holds 90% of the shares. The plaintiff provided evidence to prove that the company's continuous existence would cause it to suffer heavy losses, which proved that the resolution passed by the board of directors caused its interests to be damaged. However, these are different legal relationships that the existence of the company would cause shareholders to suffer heavy losses and the resolution of the board of directors violated the interests of minority shareholders. Therefore, the plaintiff did not present evidence to prove that if the company continues to exist, its rights as a shareholder will be damaged in a certain aspect, and its shareholding right, voting rights and right to know as the minority shareholder have not been denied in the general meeting, the board meeting or the industrial and commercial registration, so the plaintiff's claim that the company's continuous existence will cause it to suffer heavy losses as a shareholder is inadmissible by this Court.

III. Regarding whether the current difficulties can be solved by any other means. “They cannot be solved by any other means” is the precondition for a lawsuit to request for a mandatory dissolution of the company. This precondition is not only a procedural condition for accepting the review, but also a stringent condition for the entity review. In this case, it can be considered mainly from the following three aspects:

1. Whether the plaintiff can participate in the operation and management by any other means; Through the evidence presented by both parties, it can be known that at present, the official seal and the original copy of the business license of the company are held by Wang Lianchun, the legal representative of the plaintiff, and the plaintiff is still the minority shareholder of the defendant company, who can still participate in and know the company's business management activities by attending the general meeting, and Wang Lianchun, the legal representative of the plaintiff, still participates in the daily business management of the company, such as annual inspection, leasing real estate under the name of the company, controlling financial books, and paying salaries.

2. Whether the plaintiff can claim its own management right through other channels. According to the ascertained facts, although the defendant company passed the board resolution by a two-thirds of the voting rights to replace the board members (positions), legal representatives and company management personnel, the plaintiff's legal representative still controls the company's license, which led to the failure to change the corresponding industrial and commercial registration, and still participates in the daily operation and management activities of the company as the shareholder and the holder of the official seal and the original and duplicate of the business license. If the plaintiff holds that the resolution of the board of directors infringes on the rights and interests of its shareholders or is not formed, invalid or revocable, it can file another lawsuit to solve it. This is not within the scope of court review of this case.

3. Whether the plaintiff can realize his own claims by withdrawing from the company's operation by transferring equity and other means. In this case, during mediation entrusted by this Court, the plaintiff's appeal aims at the division of the company’s property and compensation for its efforts in maintaining the operation and increasing the value of the property. However, because of the disagreement between the plaintiff and the third party on the amount of compensation, both parties failed to reach an agreement on mediation. It can be seen that the conflict between the plaintiff and the third party lies in the disputes over the rights and interests such as shareholders' right to know, the right to request profit distribution and the right to operate and manage. According to Article 1(2) of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (II), “Where any shareholder of a company initiates a company dissolution action on the grounds that his or its rights and interests, such as the right to know and the right to request profit distribution, have been harmed, or that the company suffers losses or its assets are inadequate to pay off all of its debts, or that the company has not gone through liquidation after its enterprise legal person business license has been revoked, etc., the relevant people's court shall not accept the action.” Even if the conflict between shareholders in this case is intensified, and it may seem that “they cannot be solved by other means”, but simply granting the shareholders' right to dissolve the company will easily lead to the abuse of litigation rights. Through the litigation and mediation activities between the plaintiff and the third party, it can be seen that the plaintiff can realize his own claims by withdrawing from the company's operation by transferring equity and other means.

As stated above, the Court holds that the plaintiff's claim to dissolve the company on the grounds that the company is experiencing serious difficulties in its business and the shareholders will suffer serious damages if the company continues its operation lacks factual and legal grounds. According to Article 14(1) of the Law of the People's Republic of China on Choice of Law for Foreign-related Civil Relationships, Article 180 (5) and Article 182 of the Company Law of the People's Republic of China, Article 1 of Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (II), Article 64 of the Civil Procedure Law of the People's Republic of China and Article 90 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, it ordered as follows:

The claims of the plaintiff Haikou Dingbofeng Trading Co., Ltd is denied.

The case acceptance fee is RMB 3,600, and shall be borne by the plaintiff Haikou Dingbofeng Trading Co., Ltd.

Any Party dissatisfied with this judgement shall appeal to Hainan High People’s Court via this Court within 15 days from the service of this judgement in the number of copies correspondent to the number of oppents.

Presiding judge: Lu Jinghua

Judge: Hou Zhiping

Judge: Long Shujuan

December 27, 2021

Clerk: Feng Junhao

Relevant Laws:

Law of the People's Republic of China on Choice of Law for Foreign-related Civil Relationships

Article 14 The laws at the locality of registration shall apply to such items as the civil rights capacities, civil acts capacities, organizational institutions, rights and obligations of shareholders, etc. of a legal person and its branch.

If the main business place of a legal person is inconsistent with the locality of registration, the laws of the main business place may apply. The main business place of a legal person shall be its habitual residence.

Company Law of the People's Republic of China

Article 180 A company shall be dissolved for the following reasons:

(I) expiry of the term of operation stipulated in the articles of association of the company or occurrence of an event which triggers the dissolution as provided in the articles of association of the company;

(II) a resolution on dissolution has been passed by the board of shareholders or a shareholders' general meeting;

(III) where the dissolution is required by a merger or division;

(IV) the business licence is revoked or the company is ordered to be closed down;

(V) a dissolution of the company is ordered by a people's court in accordance with the provisions of Article 182.

Article 182 Where a company experiences serious difficulties in its business and the shareholders will suffer serious damages if the company continues its operation, a shareholder or a group of shareholders holding 10% or more of the shares of the company may, in the absence of any other means, request for a mandatory dissolution of the company by a people's court.

Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (II)

Article 1 Where any shareholders that separately or aggregately hold 10% or more of all the shareholders’ voting rights of a company lodge a company dissolution case for any of the following causes, if which conforms to the provisions in Article 182 of the company law, the people's court shall accept the case:

(I) Where the company has failed to call a meeting of shareholders or a general meeting of shareholders for two consecutive years or longer, and the operation and management of the company are in great difficulties;

(II) Where due to the fact that the statutory quorum or the quorum specified in the articles of association of the company cannot be present at the time of voting by shareholders, a meeting of shareholders or a general meeting of shareholders has not been able to adopt any valid resolution for two consecutive years or longer, and the operation and management of the company are in great difficulties;

(III) Where long-term disagreement between the directors of the company cannot be settled through meetings of shareholders or general meetings of shareholders, and the operation and management of the company are in great difficulties; or

(IV) Where the operation and management of the company are in other great difficulties, and the continued existence of the company will cause great losses to the interests of shareholders.

Where any shareholder of a company initiates a company dissolution action on the grounds that his or its rights and interests, such as the right to know and the right to request profit distribution, have been harmed, or that the company suffers losses or its assets are inadequate to pay off all of its debts, or that the company has not gone through liquidation after its enterprise legal person business license has been revoked, etc., the relevant people's court shall not accept the action.

Civil Procedure Law of the People's Republic of China

Article 64 A party shall be responsible for providing evidence in support of his or her allegations.

Where a party and his or her attorney are unable to collect evidence on their own for reasons beyond their control, or where the people's court deems that the evidence is necessary for the trial of the case, the people's court shall investigate and collect the evidence.

The people's court shall thoroughly and objectively investigate and verify evidence in accordance with legal procedures.

Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China

Article 90 Each party concerned shall provide evidence to prove the facts based on which such party concerned makes a claim or contradicts the claim of the other party concerned, save as otherwise provided by the law.

Where any party concerned fails to provide evidence or provides insufficient evidence to prove the facts before a judgment is made, the party concerned with the burden of proof shall bear adverse consequences.

Written by: Lu Jinghua

Proofread by : Feng Junhao

Printed by: Chen Rui

The First Intermediate People's Court of Hainan Province

Printed on December 27, 2021

(12 copies in total)