What legal consequences may follow from altering a ¡°Quotation¡± into a ¡°Settlement Statement¡± and making false statements during litigation?

[Case Review]

A construction engineering company subcontracted a project from a group company. After the project passed completion acceptance, the two parties fell into dispute over project payment settlement. The construction engineering company brought a lawsuit before the people¡¯s court, alleging that the group company owed RMB 5 million in project payments and demanding full payment of the sum. During the proceedings, the group company filed a statement of defence, arguing that project payments should be settled based on actual measured work volumes; given the actual work completed by the construction engineering company, the amounts already paid had exceeded the total payable project amount; accordingly, no further payment was due; instead, the construction engineering company ought to refund part of the overpayment to the group company. At the court hearing, the construction engineering company submitted screenshots of chat records between the parties and a document entitled ¡°Project Settlement Statement.¡± It contended that a staff member of the group company had confirmed the settlement amount for the project, proving that the two sides had reached an agreement on settlement, and that the group company should pay the outstanding RMB 5 million in project payments. However, upon examination of the evidence by the group company and verification by the court, it emerged that the document originally sent by the group company¡¯s staff was in fact the ¡°Project Quotation.¡± After the evidence was put to the test in court, the construction engineering company admitted on the record that the ¡°Settlement Statement¡± it had submitted had been altered and falsified from the ¡°Quotation.¡±

[Ruling of the People¡¯s Court]

Upon review, the people¡¯s court held that whether the parties had concluded a settlement and the corresponding settlement amount constituted the key facts of the case. The ¡°Settlement Statement¡± submitted by the construction engineering company thus constitutes material evidence for assessing the parties¡¯ liabilities. The company tampered with the ¡°Quotation¡± to produce the purported ¡°Settlement Statement¡± and made false statements in the course of evidence-tendering. Such conduct seriously breached the principle of good faith in civil litigation, disrupted normal litigation order and case proceedings. For these reasons, the people¡¯s court imposed a fine of RMB 50,000 on the construction engineering company. After the decision was issued, the construction engineering company filed an application for reconsideration out of dissatisfaction. The court of second instance rejected the application and upheld the original decision. The company later voluntarily paid the fine in full.

[Judge¡¯s Insights]

I. Forgery of Material Evidence Will Be Severely Dealt with by Law

Chinese law sets out both civil sanctions and criminal penalties for acts of forging or destroying material evidence, according to the severity of such acts, forming a full-range regulatory regime. Article 114 of the Civil Procedure Law of the People¡¯s Republic of China stipulates: ¡°Where a litigation participant or any other person commits any of the following acts, the people¡¯s court may, depending on the seriousness of the circumstances, impose a fine or order detention; where such act constitutes a crime, criminal liability shall be pursued in accordance with the law: (1) forging or destroying material evidence so as to impede the people¡¯s court from hearing the case; ¡­¡± Paragraph 2 of Article 307 of the Criminal Law of the People¡¯s Republic of China defines the crime of assisting in destroying or forging evidence: any third-party person who assists a party in destroying or forging evidence shall, if the circumstances are serious, be sentenced to fixed-term imprisonment of not more than three years or criminal detention. In this case, the party concerned attempted to secure improper gains by forging evidence and shall be subject to severe legal punishment.

II. Be a Practitioner and Guardian of Good-Faith Litigation

Court proceedings represent a solemn judicial process based on facts and governed by law. Without a truthful factual foundation, fair adjudicative outcomes cannot be achieved. Where evidence is easily forged and facts wantonly distorted, it not only infringes upon the opposing party¡¯s legitimate rights and interests, but also erodes public confidence in judicial credibility. The law emphasizes good-faith litigation not merely because it serves as the logical starting point for judicial justice, but also because it acts as a vital touchstone for the social integrity system. Should dishonest conduct in litigation go unchecked, it will inevitably corrode the foundation of social integrity.

The fairness of judicial procedures relies on the good-faith observance of every participant. All litigation participants should bear in mind that ¡°no litigation matter is trivial, and integrity is the bottom line.¡± They must respect the law, uphold good faith, actively cooperate with judicial authorities to ascertain facts, and support their claims with authentic evidence. One must not, tempted by interests or driven by a sense of fluke, incur judicial sanctions or even more severe criminal consequences.

[Comments from a Deputy]

The authenticity of evidence in litigation is the premise and foundation of judicial justice. A party¡¯s act of submitting forged evidence is, in essence, a blatant challenge to judicial authority and a gross breach of the principle of good faith in litigation. Such dishonest conduct not only disrupts normal litigation order and wastes precious judicial resources, but may also mislead adjudication, harm the legitimate rights and interests of other parties, and severely erode public trust in the authority and credibility of the judiciary. Therefore, it deserves stern condemnation and punishment.

In this case, the people¡¯s court imposed a penalty in accordance with the law, demonstrating the firm resolve of judicial authorities to uphold the dignity of the law. The penalty acts both as a strong deterrent against dishonest conduct in litigation and consolidates the foundation for a fair and just litigation environment. It can effectively guide all litigation participants to respect the law and litigate in good faith, thereby fostering a social atmosphere featuring law-abiding conduct and integrity.

[Relevant Laws]

Civil Procedure Law of the People¡¯s Republic of China

Article 114 Where a litigation participant or any other person commits any of the following acts, the people¡¯s court may, depending on the seriousness of the circumstances, impose a fine or order detention; where such act constitutes a crime, criminal liability shall be pursued in accordance with the law:

(1) forging or destroying material evidence so as to impede the people¡¯s court from hearing the case;

(2) preventing a witness from testifying by means of violence, threats, or bribery, or instigating, bribing, or coercing another person to give false testimony;

(3) concealing, transferring, selling, or damaging property that has been sealed up or seized, or property that has been inventoried and ordered to be kept in the person¡¯s custody, or transferring property that has been frozen;

(4) insulting, defaming, framing, assaulting, or retaliating against judicial officers, litigation participants, witnesses, translators, appraisers, inspectors, or persons assisting in enforcement;

(5) obstructing judicial officers from performing their duties by means of violence, threats, or other methods;

(6) refusing to perform a legally effective judgment or order of the people¡¯s court.

Where a unit commits any of the acts prescribed in the preceding paragraph, the people¡¯s court may impose a fine or order detention against its principal person-in-charge or persons directly liable; where such act constitutes a crime, criminal liability shall be pursued in accordance with the law.

Article 118 The fine imposed on an individual shall be not more than RMB 100,000. The fine imposed on a unit shall be not less than RMB 50,000 and not more than RMB 1,000,000.

The period of detention shall be not more than 15 days.

A person under detention shall be placed in the custody of public security organs by the people¡¯s court. During the period of detention, if the detainee admits and corrects their mistakes, the people¡¯s court may decide to release them from detention early.