Judicial Criteria Of Bankruptcy Revocation Rights

In recent years, commercial banks are playing a more important role insupporting small and medium-sized enterprises as the rapid development of finance.As Banks in china is learning more and more advanced methods from theinternational banks to manage the lending, the acceleration clauses are frequentlystipulated in loan agreements for protecting banks from the credit risk. Theacceleration clauses give banks rights to terminate the loan agreement earlier, stoplending, and ask for repayment of bank loan when the borrower can’t pay, become oris likely to become insolvent. The banks believe the acceleration clauses arereasonable and can protect benefits of banks maximally when the debtor has financialcrisis or other negative situations. However, Debtors hold that the acceleration clauseis one kind of standard clauses which are formulated in anticipation by banks andcontains the exemptible and restrictive clauses regarding its liability. It violates theprinciple of fairness. Many disputes arise from the above controversy. For solving thiskind of disputes, this article will fully discuss the definition, legal basis, legal nature,legal effect of acceleration clauses and then give the answer of whether or not bankshave the right to deduct money from the borrower’s deposit account when theborrower becomes or is likely to become insolvent. This article divided into fourchapters. The main contents are as follows:Chapter one includes three part. First, this chapter describes legal disputes arising from the acceleration clause, mainly describes two cases and summarizes themain controversy of this kind of cases. The second part introduces the definition, legalcharacteristics and specific examples of the acceleration clause. The third partexplains relevant provisions about the acceleration clause in current laws andregulations in chinChapter two describes the jurisprudence of bankruptcy revocation system. Thischapter mainly discusses legal nature, and legal purpose bankruptcy revocation.Through compared to bankruptcy revocation system of American, Japan and German,mainly analysis the application scope of bankruptcy revocation.Chapter three discusses the bankruptcy revocation system in China, andseparately analysis the object and procedure of bankruptcy revocation in China.Chapter four contains two parts. First part discusses whether the borrower hasthe right to ask for court to revoke the bank’s deducting money. I conclude that theborrower has the right to revoke because the legal nature of bank’s deducting moneyis biased during the bankruptcy procedure. The second part gives my suggestionsabout the judicial criteria to judges when they are handling cases relevant to theacceleration clause.In concluding, I sum up that the acceleration clause is a useful clause in thecontract and plays a very important role in protecting the un-default party’s interests.However, if the borrower is going bankruptcy or is likely to go bankruptcy, deductingmoney directly by banks according to the acceleration clause is violate the principleof fairness and can be revoked by court pursuant to article32of “bankruptcy law”.