What about non-starting corporate loans during epidemic prevention and control? Early or postponed? Here comes the judge! The Spring Festival holiday is over, and people are not returning to work as in previous years. In order to effectively control the epidemic, the company's resumption of work hours and delays in school start-ups have not only affected people's hearts, but also affected all aspects of socio-economic operations. Consumption is tightening, economic operations are slowly recovering, small and medium-sized enterprises are struggling to survive, and well-known companies are not immune. According to reports, Xibei Catering, which has 400 stores, has basically closed its offline stores. Chairman Jia Guolong told the media that he expects to lose 700 to 800 million yuan in revenue one month before and after the Spring Festival. If the epidemic is not available in a short time With effective control, the cash on Xibei's account lasted less than 3 months.
Enterprises cannot operate effectively, so what about corporate loans? In this regard, the reporter interviewed two judges, Zhou Yucai and Xiao Yang, of the Third People's Court of Chaoyang District People's Court in Beijing. The judge stated that the prevention and control of the epidemic had an impact on the operation of the enterprise. Although the epidemic situation constituted a force majeure event, in general, the borrower would not be unable to perform, nor could it relieve the borrower's responsibility for repayment and the liability for breach of contract due to delayed performance. Borrowers cannot be lucky because the epidemic prevention and control affects the operation of the enterprise. Instead, they should uphold the principle of good faith and perform their repayment obligations in full and on time as agreed in the contract.
Question 1: During the epidemic, can financial institutions require the financial loan contract to be cancelled in advance, stop or delay the issuance of loans, and recover the loans in advance on the grounds that the epidemic has affected the operation of the borrowing enterprise? The judge said that the People ’s Bank of China, the Ministry of Finance, the Banking Insurance Regulatory Commission, the Securities Regulatory Commission and the Foreign Exchange Bureau jointly issued the “Notice on Further Strengthening Financial Support for the Prevention and Control of Pneumonia of New Coronavirus Infection” (hereinafter referred to as the “Notice”), and clearly proposed The wholesale and retail, accommodation and catering, logistics and transportation, cultural tourism and other industries affected by the epidemic situation, as well as the enterprises that have development prospects but are temporarily affected by the epidemic situation, especially small and micro enterprises, shall not draw loans blindly, withdraw loans, or press loans.
Those who have been severely affected by the epidemic situation may find it difficult to repay at maturity, they may be extended or renewed. Through appropriate reduction of loan interest rates, increase of credit loans, and long-term and medium-term loans, we will support relevant enterprises to overcome the impact of the epidemic disaster. Government financing guarantee re-guarantee institutions at all levels should cancel counter-guarantee requirements and reduce guarantee and re-guarantee fees. For financing guarantee re-guarantee institutions in areas affected by the epidemic, the state financing guarantee fund halved the re-guarantee fee. In this social situation and policy background, financial institutions should implement it in accordance with regulatory requirements and actual conditions.
Therefore, during the period of prevention and control of the epidemic, or even for a period of time after the epidemic has ended, financial institutions generally do not draw down loans, break loans, or press loans. However, it does not rule out that during or before or after the epidemic, there may be cases in which the court fails to make repayments or the financial institution requests termination of the contract and early repayment to the court. It is recommended that the financial institution and the borrowing company take the actual situation to resolve the situation first. If it fails, the people's court will comprehensively analyze the impact of the epidemic on the enterprise, the legal or agreed reasons for the termination of the contract, and make judgments on the claims of the financial institution.
Question 2: In corporate lending, can the lending company suspend the performance of the lending obligation or require the cancellation of the loan contract and prepayment on the grounds that the epidemic situation has affected its own business or the business of the borrowing company? The judge held that, because the loan relationship between enterprises is not subject to the above-mentioned Notice, the two parties should perform their rights and obligations in accordance with the relevant provisions of the Contract Law and the contract stipulated by the two parties. If the borrower has not overdue and does not meet the conditions for termination as stipulated in the contract The lender cannot suspend the performance of the lending obligation or terminate the contract on the grounds that the epidemic has affected its own business, otherwise it shall bear the corresponding breach of contract liability. The lender may request the termination of the contract when the reasons for the termination of the contract comply with the statutory or agreement, such as in the event of an expected breach or a fundamental breach.
It is currently in a special period of epidemic prevention. If business operations and financing are indeed affected by the epidemic, it is recommended that the companies on both sides communicate and negotiate. The borrower can obtain lenders' understanding by providing guarantees, mortgages, and other credit enhancement measures. The epidemic affects borrowers who have temporarily lost their ability to repay, and appropriate grace and support are given. Through negotiation, new arrangements for borrowing and repayment are made to avoid the expansion of losses and reduce the cost of dispute resolution after the fact. If the lender (whether it is a financial institution or not) recovers the loan in advance or delays the delivery of the loan without legitimate reasons during this period, the borrower may request the financial institution to continue to perform the contract and bear the liability for breach of contract.
Question three: Can the borrower refuse to repay or defer repayment on the ground that the epidemic situation constitutes force majeure? The judge stated that force majeure is an objective situation that cannot be foreseen, unavoidable and insurmountable. In view of the severe development of the current epidemic situation, strict control measures implemented by the government, and far-reaching effects on daily life and production, the epidemic situation can be regarded as force majeure in civil law from a macro perspective and overall. According to the Contract Law, if the contract cannot be performed due to force majeure, according to the influence of force majeure, part or all of the liability shall be released. Inability to perform here refers to objective inability to perform, such as the inability to deliver a specific property as stipulated in the contract, or in a contract involving personal factors, the death of a key person or permanent incapacity, which is referred to as inability to perform.
However, the main obligation of both parties in the loan contract is to pay money. Money is a kind of thing. Generally, money debts cannot be fulfilled, and only delays in performance or refusal to perform may occur. Prevention of the epidemic affects the company's ability to repay, causing its performance to be delayed, which is "difficult to perform" and not "impossible to perform". Therefore, although the epidemic situation constituted a force majeure event, it did not result in the borrower's failure to perform, and the borrower's obligation to repay cannot be waived. If there is a "difficulty to perform" situation that requires repayment, it should be determined through consultation with the lender, or with the lender in accordance with the relevant provisions of the Notice.
Question four: The enterprise borrows for production and operation, and the production and operation cannot be carried out due to the prevention and control of the epidemic situation. Can the enterprise require the cancellation or change of the loan contract and the repayment in advance? The judge pointed out that in reality, some companies borrowed for production and operation, but the production and operation activities affected by the epidemic could not be carried out, such as purchasing goods for the Spring Festival and the Lantern Festival, and contracting activities for venue leasing. If the funds were used for the original purpose, As a result of the huge losses, the funds have no other purpose in their hands and generate interest, so the borrower wants to terminate the contract. At this time, if there is an agreement on early repayment in the contract, it will be implemented according to the agreement.
When there is no agreement in the contract, the parties to the contract should first negotiate. Failure to negotiate, if the company can prove that the contract was concluded before the epidemic occurred and the epidemic situation cannot be foreseen at the time, its borrowings are used for specific purposes, and the continued performance of the contract affected by the epidemic will cause large losses to the borrower and repay in advance Reducing the burden on the enterprise will not cause too much impact on the lender. Based on the principle of fairness, it can allow the lender to cancel or change the contract and pay in advance on the basis of appropriate compensation. If the lender is a financial institution and has agreed on an early repayment fee, it can consider the impact of the epidemic situation and local policies to respond to the epidemic situation to reduce the fee as appropriate.