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Accurately identify the subject qualification of overseas parties

Standardize the trial procedure of foreign-related commercial cases

[Basic case]
On June 12, 2003, Jinyuan Company and outsiders jointly funded and established Huaxia Company. According to the Articles of Association and joint venture contract of Huaxia Company on December 28, 2002, Jinyuan Group accounted for 38.5% of the registered capital. According to the national enterprise credit publicity system, Jinyuan Company is a shareholder of Huaxia Company. On January 25, 2019, Jinyuan Group sent a Request Letter to Huaxia Company, requesting to exercise the shareholder’s right to know and consult the company’s financial information. After receiving the letter, Huaxia claimed that the involved Jinyuan Group and its shareholder Jinyuan Company were not the same company, and the involved Jinyuan Group had no shareholder qualification and refused to provide financial information for reference. Jinyuan Group filed a lawsuit and requested Huaxia Company to provide financial information for Jinyuan Group’s reference.

[Judgment result]
The People’s Court held in the first instance that the Articles of Association, the joint venture contract and the industrial and commercial registration materials of Huaxia Company showed that Jinyuan Group was a shareholder of Huaxia Company, so Jinyuan Group had the shareholder qualification and was entitled to exercise the shareholder’s right to know. Huaxia Company filed an appeal against the judgment of the first instance.
The second instance of the Jiangsu Provincial Higher People’s Court held that foreign enterprises should submit identity documents to participate in the litigation, which should be notarized by the notary office in the country where they are located and authenticated by the Chinese embassy and consulate in that country. The evidence provided by Jinyuan Group shows that it was registered and established in California in 1997 and then moved to Nevada for registration. However, this evidence cannot be accepted without notarization and authentication. The Articles of Association of Huaxia Company states that its shareholder Jinyuan Company is registered in California, USA. The court of second instance logged onto the government website in charge of company registration in Nevada, the United States, and found out that Jinyuan Group was registered and established in Nevada, the United States, in 2018. There was no evidence to prove that the Jinyuan Group that filed the lawsuit was registered and established in California, the United States, in 1997. The evidence provided by Jinyuan Group is insufficient to prove that it is a shareholder of Huaxia Company, and Jinyuan Group lacks the qualification of the plaintiff. The court then decided to revoke the judgment of the first instance and reject the lawsuit of Jinyuan Group.

[Typical significance]
When a party participates in a lawsuit, it shall submit to the people’s court the materials used to prove its identity, and the same is true when a foreigner is a party. When the foreign party is an enterprise, because its registration and establishment are outside China, that is, the materials legally established by the enterprise are formed outside China, in order to ensure its authenticity, it is necessary to go through the corresponding notarization and certification procedures for these materials. The subject qualification of the parties is a procedural matter, and the court can ascertain the identity of the parties according to its authority. This case also reminds overseas enterprises to file a lawsuit to the people’s court, which should submit identification materials that meet the legal requirements.



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