Official Reply of the Supreme People's Court on Whether the Land Right Use of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property (Revised in 2020)
Official Reply of the Supreme People's Court on Whether the Land Right Use of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property (Revised in 2020)
Official Reply of the Supreme People's Court on Whether the Land Right Use of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property (Revised in 2020)
Fa Shi [2020] No. 18
December 29, 2020
(Adopted at the 1245th Session of the Judicial Committee of the Supreme People's Court on October 11, 2002; and amended in accordance with the Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property adopted at the 1823rd meeting of the Judicial Committee of the Supreme People's Court on December 23, 2020)
To the Higher People's Court of Hubei Province:
The Request for Instructions on Whether the Land Right Use of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property and the Determination of the Effect of Relevant Mortgages (E Gao Fa [2002] No.158) has been received from your court. Upon serious deliberation, we hereby present the following reply:
Article 1 In accordance with Item 3, Paragraph 1 of Article 58 of the Land Administration Law of the People's Republic of China and Article 47 of the Interim Regulations of the People's Republic of China on the Assignment and Transfer of the Rights to the Use of State-owned Urban Land, the right to use state-owned land obtained by an insolvent enterprise through allotment shall not be considered to be insolvent property and the relevant people's government may take back and dispose of the land when the enterprise declares bankruptcy. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council.
Article 2 Enterprises have no right to dispose of the right to use state-owned land that it has obtained through allotment. If it is to create any mortgage with the right to use the state-owned land, the effectiveness of the mortgage contract will not be affected without approval from the people's government or land administrative department with the authority of examination and approval. If the statutory examination and approval procedures are handled and the mortgage is registered in accordance with the law, the mortgage right shall be established upon registration. In accordance with Article 51 of the Law of the People's Republic of China on the Administration of Urban Real Estate, a mortgagee has the preferential rights to be paid off with the proceeds incurred from the conversion of the mortgaged property or from the auction or sale of the mortgaged property, after paying the corresponding transfer fee of the land use rights according to the law. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council.
Article 3 Where state-owned enterprises create mortgages on key equipment, complete sets of equipment, and buildings, if there is no other circumstance of statutory invalidity, the mortgage contracts shall not be deemed invalid only on the ground that they have not been approved by the competent government authority.
This Official Reply shall be implemented as of the promulgation date. Cases currently being tried or soon to be tried shall be subject to this Official Reply, excluding cases of legally effective judgment or orders which will be retried.
This Reply is hereby given.
......
Fa Shi [2020] No. 18
December 29, 2020
(Adopted at the 1245th Session of the Judicial Committee of the Supreme People's Court on October 11, 2002; and amended in accordance with the Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property adopted at the 1823rd meeting of the Judicial Committee of the Supreme People's Court on December 23, 2020)
To the Higher People's Court of Hubei Province:
The Request for Instructions on Whether the Land Right Use of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property and the Determination of the Effect of Relevant Mortgages (E Gao Fa [2002] No.158) has been received from your court. Upon serious deliberation, we hereby present the following reply:
Article 1 In accordance with Item 3, Paragraph 1 of Article 58 of the Land Administration Law of the People's Republic of China and Article 47 of the Interim Regulations of the People's Republic of China on the Assignment and Transfer of the Rights to the Use of State-owned Urban Land, the right to use state-owned land obtained by an insolvent enterprise through allotment shall not be considered to be insolvent property and the relevant people's government may take back and dispose of the land when the enterprise declares bankruptcy. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council.
Article 2 Enterprises have no right to dispose of the right to use state-owned land that it has obtained through allotment. If it is to create any mortgage with the right to use the state-owned land, the effectiveness of the mortgage contract will not be affected without approval from the people's government or land administrative department with the authority of examination and approval. If the statutory examination and approval procedures are handled and the mortgage is registered in accordance with the law, the mortgage right shall be established upon registration. In accordance with Article 51 of the Law of the People's Republic of China on the Administration of Urban Real Estate, a mortgagee has the preferential rights to be paid off with the proceeds incurred from the conversion of the mortgaged property or from the auction or sale of the mortgaged property, after paying the corresponding transfer fee of the land use rights according to the law. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council.
Article 3 Where state-owned enterprises create mortgages on key equipment, complete sets of equipment, and buildings, if there is no other circumstance of statutory invalidity, the mortgage contracts shall not be deemed invalid only on the ground that they have not been approved by the competent government authority.
This Official Reply shall be implemented as of the promulgation date. Cases currently being tried or soon to be tried shall be subject to this Official Reply, excluding cases of legally effective judgment or orders which will be retried.
This Reply is hereby given.
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