Summary Of Dissertation On Creditor's Right Of Subrogation In China Law

Creditor's Right of Subrogation ("CRS") established by Contract Law further theoretically strengthens the legal structure of China's guarantee law. However, there are still many legal issues and theoretic disputes with respect to CRS left for both jurisprudent and judicial department to study and clarify. In this dissertation, the author tries to make a legal research on CRS based on fundamental legal principles and judicial practice. In history, CRS heavily influenced continental law system states after its being legislatively established by Civil Code of France for the first time in the world. According to the conventional civil law theories, CRS is one of the methods to preserving an obligation and has a legal nature similar to the right of formation but with content of administrative right. CRS has the following important characteristics: (1) creditor claims the right against the debtor of creditor's debtor instead of such creditor's debtor; (2) creditor claims its CRS in the name of itself; and (3) creditor's debtor shall be responsible to bear the legal consequence arising out of creditor's claim for CRS. Before the final establishment of CRS in China law, there was a lengthy trip due to Chinese historic conventions and social backgrounds. At the present, CRS is mainly provided by Article 73 of Contract Law and relevant judicial interpretations issued by the Supreme People's Court. Comparing relevant legal principles of CRS established by conventional civil law theories with those provided by China law, differences are shown at the following points: (1) the effectiveness of exerting CRS; (2) the object of CRS; (3) the way of exerting CRS. The author does not agree to the present legal provisions with respect to creditor's right of directly receiving compensation from the debtor of creditor's debtor because the real purpose and the essential value of CRS is just to preserve an obligation. In order to find out a better way of applying CRS, the author puts forward several suggestions about CRS according to status in quo of Chinese judicial practice and relevant legal provisions. The author also draws a conclusion that it is necessary to allow the application of CRS during arbitral procedures in addition to legal action proceedings. The following legal issues should be considered when applying CRS: (1) how to understand the legality of the obligation; (2) how to confirm a failure to exert the obligation and a due obligation; (3) conciliation, settlement and withdrawal of the case; (4) unlimitedly extending right of action based on CRS; (5) limitation of actions; (6) how to decide a qualified subject of CRS; (7) how to resolve the possible conflicts between applying CRS and the procedural principle of non bis in idem; and (8) debtor's legal position in CRS action proceeding. In China law, there are several defects existing in relevant CRS legal provisions. Necessary amendments and improvements should be made in order to have CRS legally functioned to the maximum extent.