Liability for Evading Obligations in Enforcement

Liability for Evading Obligations in Enforcement

A party against whom enforcement is sought may be subject to civil or even criminal liabilities if he colludes with others in bad faith to evade his obligations under any legal process in the process of arbitration or mediation. Such liabilities may be a fine, detention, or even imprisonment depending on the severity of his violation and the consequences incurred thereby.

An entity that has the obligation to provide assistance in investigation or enforcement actions may also be subject to civil or administrative liabilities or disciplinary penalties.

For example, The Civil Procedure Law states,

The Civil Procedure Law states,

“Article 116 Where a party against whom enforcement is sought colludes with others in bad faith to evade his obligations under any legal process through litigation, arbitration, or mediation, the people's court shall impose a fine or detention on them, where appropriate, or hold them criminally liable according to law.

Article 117 Where an entity that has the obligation to provide assistance in investigation or enforcement actions commits any of the following acts, the people's court may, in addition to ordering the entity to perform its obligation of assistance, impose a fine:

(1)            refusing or frustrating the investigation or collection of evidence by the people's court;

(2)            refusing to provide assistance in the inquiry, seizure, freezing, transfer, or liquidation of the property upon receipt of a notice of enforcement assistance from the people's court;

(3)            refusing to withhold the income of the party against whom enforcement is sought, perform the formalities for the transfer of the relevant property certificates, surrender the relevant papers, certificates, or other property upon receipt of a notice of enforcement assistance from the people's court; or

(4)            refusing to provide assistance in enforcement otherwise.

Where an entity commits any of the acts set forth in the preceding paragraph, the people's court may impose a fine on the principal of the entity or the person directly liable for the act, hold them in detention in case of their failure to perform their obligations of assistance, and make a judicial proposal to the supervisory authority or any other competent authority for disciplinary penalties.”

Article 118 A fine to be imposed on an individual shall not be more than RMB 100,000. A fine to be imposed on an entity shall not be less than RMB 500,000 or more than RMB 100,000.

A term of detention shall not be more than 15 days.

Detainees shall be referred for custody by the competent police authorities. Where a detainee admits and rectifies his violations during the detention, the people's court may decide to release him from detention in advance.

Article 119      Compulsory presence, fine, and detention shall be approved by the president of the people's court.

A compulsory summons shall be issued for compulsory presence.

A written decision shall be made for the imposition of a fine or detention. Where a party challenges a decision for the imposition of a fine or detention, he may file a petition with the people's court at the next higher level for a reconsideration. The enforcement of the decision shall not be suspended during the period of reconsideration.

Article 120      Compulsory measures for intentional violations of civil proceedings shall be decided by the people's court. An entity or individual who seeks to recover a debt by illegally restraining another person or distraining another person's property shall be held criminally liable according to law or be detained or fined.”