Application Of Economic Law Judicial Enforcement

Research into the implementation of Economic Law, as an independent branch law, has been the bottleneck of Economic Law study. Although Economic Law implementation mainly depends on administrative act (that is why Economic Law is prone to be misinterpreted as economic administration law), implementation of judicial act by judges should also be an indispensable means for implementation of Economic Law. However, existing researches into judicial implementation of Economic Law mainly focused on public interest litigation or special litigation system of Economic Law, and are generally confined to such a research route as"judicial implementation of Economic Law→litigation of Economic Law→public interest litigation". The author holds that the structuring of public interest litigation (or Economic Law litigation) system is an important way of judicial implementation of Economic Law. However, public interest litigation (or Economic Law litigation) system is an independent litigation system different from ordinary civil litigation procedures and has not been established in China. As a judge, the author does not study the implementation of Economic Law via public interest litigation (Economic Law litigation) in this paper, but probes into another judicial implementation means of Economic Law targeting the issues in current judicial practice. That is to introduce Economic Law concepts in the hearing of so-called"civil and commercial disputes"cases in courts, and draw the judicial standards and conclusions different from traditional civil and commercial laws. That route is compatible with China's existing civil litigation system, and enables Economic Law to play an important part in reallocation of social rights and obligations.This paper takes the structure of"summary to generalization". Chapter 1"Overview of Thinking and Judicial Implementation of Economic Law"is the general principles of the paper, falling into four parts. Part 1 clears up the achievements and limitations of related judicial implementation of Economic Law in China, of which limitations are mainly reflected in the following areas: the regular psychological tendency of public interest litigation thinking with respect to the judicial implementation of Economic Law has not been broken; emphasis is placed more on theoretical demonstration and system structuring than empirical study; some basic concepts are not clear and uniform. Part 2 introduces the status that"civil and commercial disputes"hearing in China's courts lacks Economic Law thinking. It first reviews the background of"major civil"reform of the Supreme Court in 2000. Although the author admits that most cases governed by civil procedure law belong to civil and commercial cases and can be solved by accurately applying civil and commercial law. However, canceling"economic tribunal"can not thoroughly preclude the application of Economic Law theory and thinking in the hearing of some cases. However,"major civil"reform is to"pour a child together with bath water". After the reform, economic jurisprudence almost quit the judicial arena, and civil and commercial law prevails in the theoretical guidance for all the cases governed by civil litigation. It has the following adverse impacts: on the one hand, the self-development of economic jurisprudence is seriously restrained; on the other hand, using a civil and commercial law alone to treat the cases with the elements of Economic Law is difficult to improve social benefits, or meet the requirements on the consistency between justice in economic areas and the economic policy of the state. Part 3 first interprets the Economic Law thinking, indicating that it belongs to the methodology of jurisprudence (in this paper, it means legal applicable methods or legal interpretation methods, rather than jurisprudential study methods), by which judges find or select the legal applicable methods that most comply with value concept conclusions, under the guidance of value concept of Economic Law. It links with both guiding value concept of Economic Law and the selection of various versatile legal applicable methods. It embodies not only the concept character of Economic Law but also the common character of methodology. Then, the author gives a brief introduction to the three major genres of legal economics, holding that Economic Law thinking may draw upon the strength of institutional legal economics, and interpret valid legal provisions in a manner of entiretism, i.e. not be confined to the traditional rules of civil and commercial laws that reflect the nature of free market; strive for substantial reasonableness without prejudice to the legality in the form; try to look forward, pay attention to the influence of the judicial attitudes and standards adopted for a certain issue on the economic act selection of the people and even the macro-economic operation in the future. Part 4 demonstrates the basic route of applying Economic Law thinking to the current hearing of"civil and commercial"cases. First, Economic Law thinking is applied to legal application, and should have not any primitive semantics interpretation in violation of legal provisions in force. On this basis, Economic Law thinking may be incorporated into the"sociological interpretation of law"indicated by Mr. Liang Huixing, in a bid to pursue value objective of Economic Law by legal interpretation. However, the Economic Law value may be pursued by the following legally applicable means: absorption of negative externality and promotion of positive externality; correction of information asymmetry; rejection of illegal monopolization acts.Chapter 2"Interpretation of Economic Law on Consumption Disputes"analyzes Wang Hai-style disputes of"deliberately buying fake commodities". It first illustrates the consumer claim disputes incurred by deliberately buying fake commodities by true cases. Courts generally do not apply Article 49 of the Consumer Interest Protection Law (i.e."return one and compensate one"). Then, it points out that under the civil and commercial law, deliberately buying fake commodities obviously does not commit fraud, and there is theoretical barrier on"return one", not to speak of"compensate one". However, from the perspective of Economic Law thinking, the author draws three basic conclusions: (1) Consumer Interest Protection Law is aimed to protect the interests of whole consumers, and deliberately buying fake commodities helps protect their interests, and thus the people who deliberately buy fake commodities should be regarded as"consumers"; (2)"fraud"under the Economic Law is not confined to the victims being cheated. As long as a merchant deliberately sells fake commodities, it should commit fraud; (3) whether commodity trading is governed by the Consumer Interest Protection Law or not, the key point is whether the trading occurs in the retailing market, because commodities sold in such market are aimed at indefinite customers, without investigation into the intent and status of buyers (corporations are also consumers sometimes). Finally, using legal economics methods, the chapter conducts cost and return analysis of different judicial scales for whether"return one and compensate one"is applicable for deliberate purchase of fake commodities, from the angles of consumers, government agencies combating against fake commodities, law-abiding operators, sellers of fake commodities, and overall social benefits. It holds that the people who deliberately buy fake commodities should have the right to claim of"returning one and compensating one"under the Economic Law thinking.Taking the common commodity quality disputes in commercial trading contracts for example, Chapter 3"Interpretation of Economic Law on Circulation Disputes"illustrates that the"quality discrepancy period"provision of the Contract Law has been generalized by judges in hearing of many commercial cases. That is, when a retailer or downstream distributor requires its upstream distributor or producer to take back substandard commodities or bear related losses after it is returned commodities or claimed compensation due to product quality, the judge often rejects the claim of downstream distributor or retailer with the excuse of exceeding the quality discrepancy period stipulated in Contract Law or the quality of delivered commodities being deemed as compliance with quality requirements. Such judicial provision has led to the inability to retroactively investigate liability for product quality issues, and greatly impaired the crackdown on fake and sham products. The author holds that the quality discrepancy period provision of the Contract Law conflicts with the product liability provision of Product Quality Law in this respect. Product Quality Law generally belongs to Economic Law and under the guidance of Economic Law thinking, the applicability of quality discrepancy period provision should be restricted. To be specific, the trading contract disputes in retailing market should not apply the quality discrepancy period provision. In the circulation field, if the provision on product quality is stricter than the baseline stipulated by Product Quality Law, the quality discrepancy period provision may be applied in retroactive investigation of liability. However, if product quality can not meet the baseline, the quality discrepancy period provision should not be applicable. In retroactive investigation of tort liability, neither can the quality discrepancy period provision be applicable, the Product Quality Law is applicable. Finally, the chapter points out that the key points to application of Economic Law thinking lies in whether the selection of legal interpretation methods enables the judgment results conform to the value concept of Economic Law, but it does not preclude the use of such civil and commercial law concepts as"liability for breach of contract"and"tort liability".Chapter 4"Interpretation of Economic Law on Financial Disputes"takes the disputes for example that relate to the validity of minimum-guarantee clause of entrusted wealth management frequently occurring in judicial practices. This chapter holds that there are no theoretical resources supporting invalidity of minimum-guarantee clause of entrusted wealth management in the theory databank of civil and commercial laws. Although the article with the signature of"Gao Min Shang"(abbreviation of Supreme Court Civil and Commercial Tribunal) is prone to support the invalidity of minimum-guarantee clause, the theoretical interpretations confined in the civil and commercial laws are full of loopholes. From the angle of Economic Law and its value orientation, the author holds that the minimum-guarantee clause should be deemed as invalidity in consideration of its huge negative externality to encourage speculation in the stock market and aggravate systemic risk of stock market, although such clause is based on the intent of the interested parties. In the specific legal interpretation route, it may apply Article 52"Infringement upon Social and Public Interests"of the Contract Law to identify invalid options of a contract. Invalidity of the minimum-guarantee clause should not affect the effect of other clauses of the entrusted wealth management contract, such as profit distribution clause. If it is identified that the minimum-guarantee clause is invalid and wealth management suffers loss, the trustee should not be judged to return principal and deposit interest of same period to the trustor (same as the validity of minimum-guarantee clause) according to the document of"Gao Min Shang", nor should trustor bears loss risks on its own judged by some courts. However, the loss should be shared according to the degree of fault of the two parties, with due consideration to the profit distribution clause. Thus, both trustor and trustee may restrain their speculation impulse, so as to promote the healthy development of stock market.Chapter 5"Interpretation of Economic Law on Enterprise Restructuring Disputes"takes the rule of"debt transferring with assets"for example that was created in the judicial interpretation of the Supreme Court on the hearing of enterprise restructuring disputes. In this chapter, although the author holds that the rule of"debt transferring with assets"may restrict debt evasion by enterprises through restructuring, the Supreme Court's theoretic reply of theory of civil and commercial laws on the corporate property system to the rule can not explain why asset transferee should use its own property other than transferred property to pay up remaining debts to the transferor. Besides, there were contradictions between the final judgments on related enterprise restructuring by the Supreme Court in recent years. The author also does not agree to fully deny the judicial interpretation of"debt transferring with assets"using the traditional rescission right theory of the civil and commercial laws. In the opinion of the author, the"successor liability system"originating from the US case law is consistent with China's Economic Law thinking. Guided by the Economic Law thinking, China may study out its own"successor liability rule"in course of judicial practice to replace the rule of"debt transferring with assets"under the guidance of the Economic Law thinking. The chapter analyzes how to apply successor liability rules in the judicial process, and holds that the rules can internally absorb the negative externality of impairment of indefinite creditors following asset transfer by appropriate contract arrangements in course of restructuring. This chapter also interprets the priority of creditors' interests over successors'interests in enterprise restructuring from the angle of Economic Law.Chapter 6"Interpretation of Economic Law on Corporate Will Disputes"probes into the judicial application of Article 16 (clause of regulating corporate guarantee) of Company Law revised in 2005. With respect to the issue regarding whether the guarantee decision right should be returned to shareholders'meeting or naturally be granted to the board of directors when there is no such provision in the articles of association, the chapter holds that we should first analyze the nature of a company's guarantee acts and the objective of public power intervention. A company's guarantee is a kind of operation conduct, in which profits and risks co-exist. If such risks are only allocated among interested parties, public power intervention is not necessary. The effect intervention of corporate guarantee by justice started in late 1990s when listed companies faced huge negative externalities incurred by guarantee. Therefore, the revised Company Law should measure the validity of corporate guarantee from the angle of absorption of negative externality. This chapter analyzes the effect of corporate guarantee on this basis.Chapter 7"Anti-Monopoly by Ordinary Civil Procedures"is not an overview of anti-monopoly civil litigation, but places emphasis on anti-monopoly judicial investigation of disputes on commercial contracts that contain illegal monopolization clause and appear in the form of ordinary civil and commercial contracts. This chapter holds that in the initial period of implementation of Antimonopoly Law of China, the illegalities of monopolization agreement acts and abuse of dominant position in vertical market can be identified directly by justice; however, the illegality of concentration acts of operators and abuse of dominant position in horizontal market should be identified by anti-monopoly law enforcement agencies (justice may examine the identification act of anti-monopoly law enforcement agencies by administrative litigation). On this basis, the chapter further expounds the anti-monopoly judicial investigation of fixed acts of vertical pricing in chained trading contract disputes, and the anti-monopoly judicial investigation of abuse of vertical market domination position by large retailers in the disputes between large retailers and small and medium-sized suppliers, and holds that the Administrative Measures on Fair Transactions of Retailers and Suppliers promulgated previously may be applicable as a lower level law of the Anti-monopoly Law. Finally, the chapter briefly describes the identification of illegal monopolization of anti-monopoly civil compensation lawsuits, scope of subject qualifications of plaintiff and the monopoly loss calculation methods.This paper is not intended to uphold that Economic Law thinking takes a leading position in hearing of civil lawsuit disputes in place of civil and commercial law thinking. It is only to clear the cases that are titled"civil and commercial"disputes governed by civil procedures but are difficult to be justified only depending on civil and commercial law concepts, thinking and methods, and need to be reinterpreted by the concept, thinking and methods of the Economic Law. These cases may be account for only a small part of the total"civil and commercial"cases heard by courts, but should not be overlooked.The issues described in Chapters 2-7 of this paper are not the special cases that occur occasionally, but are enumerated by typical cases. Underlying these cases are the general issues that may impact on the act selection of market players in related markets, market competition order regulations, the increase/decrease of consumer welfare and even the results of economic regulation using different judicial standards or scales.Research methods in this paper mainly include judicial interpretation method, economic analysis method and empirical analysis (typical case analysis) method.