Hung Yun Jin Yuan (Xiamen) Real Estate Development Company Limited v. Stephen Peng and Hung Yun Group Limited 
〖Subject〗  ECONOMIC DISPUTE 
〖1st Inst date〗  
〖1st Inst Court〗  THE HIGHER PEOPLE'S COURT OF FUJIAN PROVINCE 
〖2nd Inst date〗  06-02-2006 
〖2nd Inst Court〗  THE SUPREME PEOPLE'S COURT 

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Hung Yun Jin Yuan (Xiamen) Real Estate Development Company Limited v. Stephen Peng and Hung Yun Group Limited

(Dispute over Contract on Advance Sale of Commodity House)

Civil Ruling of the Supreme People’s Court
No. 34 of (2006)

Appellant (Defendant in the first instance): Hung Yun Jin Yuan (Xiamen) Real Estate Development Company Limited, located at Units A, B and C, 1/F, Building No. 4, Huahong Garden, 325 Hexiang West Road, Xiamen, Fujian.
Legal Representative: Xu Liping, board chairman of the Company.
Authorized Agent: Lin Tao, lawyer of Fujian Zhiyuan Law Firm.

Appellee (Plaintiff in the first instance): Stephen Peng, male, born on August 15, 1945, Hong Kong resident, dwelling at Suite 28, 9/F, Focal Industrial Center, 21 Man Lok Street, Hunghom, Kowloon, Hong Kong.
Authorized Agent: Wang Ping, lawyer of Beijing Tianya Law Firm.
Authorized Agent: Wang Ying, lawyer of Beijing Tianya Law Firm.

With regard to the dispute between Hung Yun Jin Yuan (Xiamen) Real Estate Development Company Limited (the appellant, hereinafter referred to as HYJY Company), Stephen Peng (the appellee, called Peng hereafter) and Hung Yun Group Limited (defendant in the first instance) over a contract on advance sale of commodity house, the Higher People’s Court of Fujian Province (hereinafter referred to as Fujian Higher Court) made No. 38 (2005) civil ruling, and rejected HYJY Company’s objection to the jurisdictional power. HYJY Company was dissatisfied with the ruling, and appealed to the present Court. The present Court formed a collegial panel according to law, and examined the present case. The case has now been finalized.

It was found from the examination that, HYJY Company raised its objection to the jurisdictional power when submitting the defense in the first instance on the ground that it was not a qualified defendant in the present case, and pleaded the court to reject Peng’s lawsuit.

Fujian Higher Court held after the examination that, Items (1) through (3) of Article 108 of the “Civil Litigation Law of the People’s Republic of China” prescribe the prerequisites for bringing a lawsuit as follows: the plaintiff must be an individual, legal person or any other organization that has a direct interest in the case; there must be a specific defendant; there must be a concrete litigation claim, a factual basis, and a cause for the suit. Obviously, once the defendant is specific, the conditions are met. In the present case, Peng sued against two specific defendants who were qualified as litigation subjects. Therefore, in accordance with Article 24 of the “Civil Litigation Law of the People’s Republic of China”, i.e., “A lawsuit brought due to a contractual dispute shall be under the jurisdiction of the people’s court in the place where the defendant has his domicile or where the contract is performed”, and Paragraph 3 of Article 22, i.e., “Where the domiciles or habitual residences of several defendants in the same lawsuit are in the areas under the jurisdiction of two or more people’s courts, all of those people’s courts shall have jurisdiction over the lawsuit”, Fujian Higher Court should have jurisdictional power over the present case. Since HYJY Company’s assertion that neither itself nor Hung Yun Group Limited was a qualified defendant is irrelevant to the determination of the jurisdictional power in the present case, its objection to the jurisdictional power for Fujian Higher Court to accept the present case was not adopted by Fujian Higher Court. In accordance with Article 38, Item (2) of Paragraph 1 and Paragraph 2 of Article 140 of the “Civil Litigation Law of the People’s Republic of China”, Fujian Higher Court ruled to reject HYJY Company’s objection to the jurisdictional power.

HYJY Company was dissatisfied with the ruling of the first instance, and appealed to the present Court, still on the ground that it was not a qualified defendant and Fujian Higher Court misapplied the law.

The present Court held that, a party concerned shall have the right to raise the objection to the jurisdictional power. However, in accordance with Item (4) of Article 108 and Article 38 of the “Civil Litigation Law of the People’s Republic of China”, an objection to the jurisdictional power means whether the case is under the charge or jurisdiction of the people’s court. In the present case, HYJY Company raised an objection to the jurisdictional power on the ground that it was not a qualified defendant in the present case, and was not under any of the circumstances prescribed in the Civil Litigation Law on the objection to the jurisdictional power. Whether HYJY Company is a qualified defendant shall be determined after the substantive trial of the people’s court. However, Fujian Higher Court made the ruling on the ground of objection to the jurisdictional power, which was a wrong application of law, and the ruling should be revoked.

Since the ruling of the first instance was made with regard to HYJY Company’s objection to the jurisdictional power, and does not involve any litigation right of Hung Yun Group Limited, the present ruling does not have to indicate the litigation status of Hung Yun Group Limited in the present appellate case.

In accordance with Article 154 of the “Civil Litigation Law of the People’s Republic of China”, and Items (2) and (3) of Article 188 of the “Opinions of the Supreme People’s Court on Some Issues Concerning the Application of the Civil Litigation Law of the People’s Republic of China”, the present Court ruled as follows:

No. 38 (2005) civil ruling of Fujian Higher Court shall be revoked.

Presiding Judge Han Mei
Judge Li Mingyi
Acting Judge Song Chunyu
June 2, 2006
Court Clerk Song Ge