Subrogation System

The system of creditor's subrogation is an important part of the debt preservation system. Established in "The Contract Law of PRC", which itself came into force on October 1, 1999, the system of creditor's subrogation is of great theoretical and practical significance. Unfortunately, the stipulations for the creditor's subrogation system were not clear and concrete in the Contract Law. As a result, the Supreme People's Court issued"Interpretation of Certain Issues Concerning the Application of the Contract Law of PRC". Under this explanation, our creditor's subrogation system differs a lot with the traditional creditor's subrogation system with regard to the object and the effect etc. There is much disputation about the difference in the theory. The subrogation right litigation is a new kind of litigation, and there are no relevant provisions on how to exercise the right of subrogation, which has caused different understanding in the judicial practice and impaired the authority of the judicial system. In this article, comparative study between our creditor's subrogation system and the traditional creditor's subrogation system is present and the advantages and disadvantages of them are pointed out. Some advice on how to reconstruct and perfect our creditor's subrogation system is given in the theory and practice. This article can be divided into four parts: In the first part, the basic theories of the right of creditor's subrogation are introduced. Based on this, the concept and the nature of the creditor's subrogation system are discussed in the article.The second part of this article presents a comparative research of the traditional creditor's subrogation system and our creditor's subrogation system on the requisites, the range of the object, the effect etc. The stipulations of the system of subrogation in France, Japanese and the area of Taiwan are introduced. The advantages and disadvantages of our creditor's subrogation system and the traditional creditor's subrogation system are pointed out.In the third part, the disputations on our subrogation system are made, especially on the range of objects and the effect of application. It is stated here that the scope of the objects of our creditor's subrogation should be enlarged. And the effect of application should resume the traditional rule of warehousing. Some advice is given on how to perfect the traditional rule in our country.In the fourth part, suggestion on how to apply our creditor's subrogation system in the judicial practice at present is given. The status of the debtor in the litigation should be affirmed. The right and obligation between the creditor and the debtor should be balanced.