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pudong new area peoples court of shanghai holds a press briefing on the trial of commercial factoring cases involving shftz from 2014 to 2019
[2020-04-09]

 

 

 

 

On April 9, 2020, Pudong New Area People's Court of Shanghai (hereinafter referred to as the ¡°Pudong New Area People's Court¡±) held a press conference, during which Vice President Bao Yehong briefed on the court's trial of commercial factoring cases involving the China (Shanghai) Pilot Free Trade Zone (SHFTZ) from 2014 to 2019. Reporters of media outlets participated in the cloud live broadcast of the press conference and raised questions online through the ¡°Ding Talk¡± App. The public can watch the live TV broadcast of the press conference through the Legal Channel.

Since its establishment in September 2013, the SHFTZ has witnessed a booming factoring industry with an expanding business scale and innovating business models in the area under its jurisdiction, which gives rise to many intricate legal issues unseen before as well as a surging number of commercial factoring cases filed to Pudong New Area People's Court year by year. In response to these issues, judicial measures need to be ramped up.

From 2014 to 2019, the commercial factoring cases involving the SHFTZ showed six major characteristics: the number of cases gradually increased with overall balance between the number of cases accepted and that of cases closed; the mediation and withdrawal rate was high and the social effects were good; the trial period was long and the property preservation rate was high; the amounts of the subject matter involved were unevenly distributed, with the majority being small and medium ones; more and more factoring companies got involved in factoring cases year by year, and the defendant companies were mostly in the tertiary industry; disclosed factoring is the main business type, and quite a number of undisclosed factoring cases involved legal disputes.

Pudong New Area People's Court made a number of targeted suggestions based on the major problems identified during the trial of the cases in four aspects, namely, the basic transaction relationship, the transfer of accounts receivable, the standardized operation of factoring companies, and business innovation. Also, in order to facilitate the financial reform and innovation of the SHFTZ and support the development of the core functional area of Shanghai as an international financial center, Pudong New Area People's Court has proposed four judicial measures: play its guiding role as a referee to promote the healthy development of factoring industry; improve the special financial adjudication mechanism and create a law-based business environment; step up efforts in communication and collaboration to prevent and resolve financial risks; integrate and expand multiple channels to create a three-dimensional and diverse dispute resolution mechanism.

 

Briefing of Pudong New Area People's Court of Shanghai on the Trial of Commercial Factoring Cases Involving SHFTZ from 2014 to 2019.docx

 


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