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Court rules on property rights
By Cao Desheng (China Daily)
Updated: 2004-11-25 22:09
The Supreme People's Court (SPC) yesterday issued a long-awaited judicial
interpretation on auctions or sales of properties involved in civil cases.
The action, expected to take effect next year, will regulate and improve
court-ordered actions.
Priority will be given to auctions involving debtors' properties after they
are sealed, held or frozen during the course of court actions, according to the
36-clause interpretation.
Some properties can be sold off if both parties involved in the cases agree
to do so. This will aid in the sales of gold or silver and products made from
them, seasonal commodities and goods that are difficult to manage.
Auctions should be characterized by openness, transparency and fair
competition to help prevent illegal conduct and maximize prices of the
properties, said Huang Songyou, vice-president of the Supreme People's Court at
a news conference in Beijing yesterday.
Meanwhile, it will be conducive to protecting and maximizing creditors'
rights and protecting their legal interests, Huang said.
The interpretation also stipulates ways of identifying assessment agencies
and auctioneers, saying the courts can help examine concerned agencies after
both parties are in agreement.
If parties fail to reach an agreement on the choice of auction agencies,
courts can help determine one through random designation.
Open tenders are another way to decide on auction agencies.
In recent years, illegal activities have found their way into the auctioning
process when designated by local courts, according to Huang.
"Some court officials were roped in by assessment and auction agencies and
became corrupt," Huang said.
The interpretation increases the transparency of the auction activities and
helps prevent illegal conduct, he said.
The interpretation also stipulates the auction cannot be conducted without
bottom prices. Movable properties are not allowed to be auctioned more than
twice and immovable properties are not allowed to be done more than three times.
The Supreme People's Court mapped out judicial interpretations since the
number of the civil cases involving property auctions has been increasing in
recent years and the existing law of civil procedure cannot meet the current
demand, Huang said.
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