Can the plaintiff transfer the creditor's rights to a third party during the lawsuit?

Can the plaintiff transfer the creditor's rights to a third party during the lawsuit?

Let’s first talk about the scenarios of the two cases handled by our team:

Scenario 1 (financial claims):

The asset management company received the transfer of the bank’s Non-performing asset claims. During the enforcement stage of the court, the applicant applied to change the execution, and the court accordingly issued an execution ruling agreeing to the change.

Scenario 2 (non-financial claims):

The buyer owed money to our customer A, and was sued to court by A. Due to the strategic adjustment of the group, it is planned to close down and cancel A, and at the same time arrange for another company B of the group to assume the creditor's rights. A and B have signed a creditor's rights transfer agreement and intend to notarize it to the purchaser. The first-instance verdict has not yet been made. We have pre-communicated with the judge of the case and hope that the subject can be changed during the lawsuit and the buyer will repay the money directly to B. After hearing this, the judge said simply, "No, how about you withdraw the lawsuit and file a new lawsuit." Withdraw?

Financial claims.

Conclusion 1:

After suing but before receiving an effective judgment, the bank transferred the creditor's rights to the asset management company. The court can change the subject of litigation to the asset management company upon application.

Basis:

"Provisions of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Cases Involving the Acquisition, Management, and Disposal of Assets Formed by Non-Performing Loans of State-owned Banks by Financial Asset Management Companies" (Second) Article 1 stipulates: "After a financial asset management company transfers the claims of a state-owned bank, the people's court may change the subject of litigation to the transferee based on the application of the original creditor bank or the financial asset management company for cases that have been filed by the original creditor bank before the transfer of claims and have not yet been concluded. A financial asset management company with claims."

Reference:

The Supreme Court (2014) Min Er Zhong Zi No. 251, "Cinda Heilongjiang Branch requested to The change of China Construction Bank Xinyang Branch to its own company shall be approved by this court in accordance with the above provisions. ”

Conclusion 2:

The court may rely on the transferor’s or transferee’s application and valid documents. Creditor's rights transfer agreement, ruling to change the subject of litigation or execution.

Basic:

Article 3 of the Supreme People’s Court’s “Supplementary Notice on Issues Concerning the Acquisition and Disposal of Non-Performing Bank Assets by Financial Asset Management Companies” (Fafa [2005162]) stipulates: “ When a financial asset management company transfers or disposes of non-performing claims that have been involved in litigation, enforcement or bankruptcy procedures, the people's court shall make a ruling to change the subject of litigation or enforcement based on the creditor's rights transfer agreement and the application of the transferor or transferee. "

Non-financial claims.

Conclusion 1:

In the lawsuit, although the plaintiff transferred the creditor's rights to a third party outside the case, this does not affect the plaintiff's qualifications as a litigation subject and litigation status, and he still has the right to continue to participate. litigation.

Basic:

Interpretation of the Supreme People's Court on the application of the "Civil Procedure Law of the People's Republic of China" (the latest amendment will take effect on April 10, 2022) (Part 2 (called "Interpretation of the Civil Procedure Law") Article 249, Paragraph 1: "During litigation, the transfer of the civil rights and obligations in dispute shall not affect the litigant qualifications and litigation status of the parties. The legally effective judgments and rulings made by the People's Court shall The transferee has binding force. "

Reference: Supreme Court Case (2020) Supreme People's Court No. 13.

Conclusion 2:

The transferee can apply to change the plaintiff, and whether to agree or not is decided by the court. After the court rejects the application to change the plaintiff, the transferee may propose to participate in the lawsuit as a third party. Whether to agree or not is still decided by the court.

Basic:

Article 249, Paragraph 2 of the Interpretation of the Civil Procedure Law: “If the transferee applies to participate in the lawsuit as a third party without independent claim rights, the People’s Court may If the transferee applies to bear the lawsuit on behalf of the party, the people's court may decide whether to allow it based on the specific circumstances of the case; if it is not allowed, it may be added as a third party without independent claim rights. "Article 250 "In accordance with this article. Article 249 of the Interpretation stipulates that if the people's court allows the transferee to undertake the litigation on behalf of the party, it shall rule that after the party is changed, the litigation process shall continue with the transferee as the party, and the original party shall withdraw from the litigation. The litigation actions shall be binding on the assignee.

”

Conclusion 3:

If the obligee identified in the effective legal document transfers the creditor’s rights before entering the execution procedure, the transferee of the creditor’s rights can directly apply for execution as the applicant for execution. After it has begun In the execution procedure, the executor can be changed based on the application of the creditor's transferee.

Reference: Supreme Court Guidance Case No. 34 Li Xiaoling and Li Pengyu applied for execution of Xiamen Ocean Industry (Group) Co., Ltd. Xiamen Ocean Industry Corporation executes reconsideration motion

Suggestions:

Credit transfer agreements sometimes occur between two subsidiaries of the same group. For this kind of structural situation. Equity adjustment, because it belongs to the same parent company, the legal risks are controllable; sometimes it occurs between the two market entities of the transfer and acquisition of bad debts. In this case, a complete text is required and the transferor needs to be restrained after the transfer of the debts. Litigation with due diligence or cooperation in changing the subject of litigation/execution to ensure the realization of the transferee’s subsequent benefits