2021.05.04
Recently, the Shanghai Financial Court rendered a judgment of a case over a dispute arising from a loan contract between Sichuan Trust Co., Ltd and Tahoe Group. The case involved an amount of over CNY 4.797 billion, making it the biggest dispute case ever heard in the Shanghai Financial Court.
With such a large amount involved, the case understandably generated much public attention. The Shanghai Financial Court also attached great significance to the case. The court appointed President Zhao Hong as the chief judge, with a collegial panel formed with the President of the First General Adjudication Division Shan Suhua and the people's assessors. Systems including "AI Translation" and "Digital Evidence Produced and Evidence Cross-examined" were used in the trial, which was broadcast live over the Internet.
This case was carried out by the dispute resolution team of JunHe’s Shanghai office, which was led by Mr. WU, Lei. The team represented Sichuan Trust Co., Ltd., provided whole-process legal services to the client and eventually won the case.
This case involved a dispute over a financial loan contract and concerned issues in the operation of the contract items, legal requirements and practice. The core disputes focused on the following aspects:
Whether the trust guarantee fund to be paid by the trust company on behalf of the borrower should be deducted from the principal;
Whether the interest, at a rate of 0.21%, to be paid within ten days of the disbursement of the loan, constitutes what is called "heading interest" (interest paid in advance of the disbursement or deducted from the principal disbursed，which is illegal under PRC laws) and is deducted from the principal;
How to determine the overdue date of the loan;
Whether the loan penalty rate of 24% per annum charged by the creditor is too high.
The defendant raised many defenses during the trial including that the first part of the interest of 0.21% per annum within ten days after the granting of the loan, constituted "hacking off interest"; that the expenses of the trust guarantee fund deducted by the creditor when the loan was granted should be deducted from the principal; that the principal amount and the determination of the overdue date is incorrect; that the interest, the rate of the interest penalty and the loan penalty is too high; and that the lawyer fees shall not be included in the obligations.
JunHe’s team studied hundreds of the case’s pages in a very short time. Due to our extensive experience in similar cases and our efficient collaborations, we were able to sift through the relevant resolution documents and announcements that related to guarantees in this case; at the same time, we provided highly detailed and specific calculation instructions and lists, helping the court to promptly identify the facts.
Using our expert legal capabilities and in-depth understanding of the law, as well as our past research and experience in judicial cases, our team revealed the legal foundations and key issues involved in the very complex legal relations in this case, which laid a solid foundation for its success.
The court eventually accepted JunHe’s legal opinions and rendered in favor of our client’s claims.
