China's Floating Charge Of The Legislative And Judicial Application

The Property Law passed in 2007 approved the floating charge system in China for the first time. But the specific rules related to floating charges are rather rough, especially compared with Britain from which the system originates. England Pattern, as a prototype, has been extended to the world, but due to its origin different from civil law system, its provisions seem fragmented and unsystematic; American Pattern changes a lot about floating charge in its traditional sense. Its provision is similar to consortium charge in civil law system, therefore it is not suitable to be adopted by civil law system; Scotland Pattern develops in modern age, absorbs the gist of England Pattern, and enjoys statute law position, all of which make it an excellent example of the floating charge system in China. Floating charge should be a mortgage system in which the enterprise and other business main bodies provide collateral which can freely circulated, and when stipulated or assumed causes appear, the collateral can be evaluated and used to pay off the creditor's rights. Floating charge system is characterized by the aggregate and fluidity of the collateral, by the transformability of the property, and by the freedom to dispose of the mortgagor. The floating charge system in China has the following shortcomings: the range of floating mortgage is narrow; no free treatment right of the floating mortgagor is stipulated; no realization method of floating mortgage is stipulated; relevant supporting measures are far from perfect. Besides, the judicatory application of floating charge is also in predicament. Therefore, this paper suggests the following ways to improve floating charge system in China: enlarge the range of floating mortgage through legislation; limit the treatment right of the floating mortgagor, stipulate the realization method though legislation, reform and improve relevant supporting systems; extend the court authority by endowing the court with the right of being appointed deputy manager and of issuing dissolution, strengthen the court's judicial right by censoring the normal business activities, enhance the trial time limit management to ensure the timely realization of the creditor.