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.
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