A Study On The Effectiveness Of "Credit Enhancement Measures" Provided By Companies Beyond Their Authority

In addition to the typical security methods,credit enhancement measures such as debt addition,third-party difference compensation,maturity repurchase and liquidity support have also arisen in practice.These "credit enhancement measures" have their own advantages and room for application compared with typical guarantee methods.In an environment of breaking rigid redemption and frequent debt defaults,both issuers and investors of financial products tend to choose credit enhancement measures that can take effect without going through corporate resolutions to circumvent typical guarantees.The first provision on credit enhancement measures at the level of legal documents is found in Article 91 of the Minutes of the National Court Work Conference on Civil and Commercial Trials,and Article 36 of the Interpretation of the Supreme People’s Court on the Application of the Relevant Guarantee System of the Civil Code of the People’s Republic of China,which follows,refines the credit enhancement measures on the basis of the above-mentioned laws,but the provisions of these two articles on credit enhancement measures do not directly clarify the legal nature of the company’s external credit enhancement measures.Under the trend of supervision of adjudication and the increasingly strict governance of illegal guarantees,the above two provisions on credit enhancement measures have left a "hole" for credit enhancement measures that cannot be automatically classified as guarantees.Financial institutions and other market entities try to circumvent the strict supervision of the company’s external guarantee through more and more sophisticated transaction structure design,which has become the last line of "vitality" for market entities to alleviate their inner institutional anxiety.In this context,the determination of the nature of credit enhancement measures is quite controversial,and in judicial practice,there is much disagreement in the handling of the company’s ultra vires to provide credit enhancement.If the company does not regulate the behavior of providing "credit enhancement measures" in excess of its authority,then the credit enhancement measures that can circumvent the company’s resolutions will be popular,and more credit enhancement measures similar to guarantees will be innovated in future financial practice,which will undoubtedly empty article 16 of the Company Law and other relevant norms,which will bring a huge impact on financial security and financial order.This paper takes the "credit enhancement measures" provided by the company beyond its authority as the research object,first analyzes the legal nature of the "credit enhancement measures" as an atypical guarantee,and the rules of the company’s external guarantee can be applied,and then on this basis,the judgment path of the effectiveness of the company’s ultra vires "credit enhancement measures" in judicial judgments is improved.The article is divided into four chapters,logically divided into three parts.Part Ⅰ,Chapter Ⅰ,raises questions.After defining the concept of "credit enhancement measures" studied in this paper,the adjudication views on the legal nature and effectiveness of "credit enhancement measures" in judicial adjudication are sorted out,and it is found that there is a large controversy.Different adjudications have divergent views on the legal nature,application of rules and determination of the validity of the "credit enhancement measures" provided by the company to the outside world,mainly forming four views: "independent contract theory","debt joining theory","guarantee contract theory" and "atypical guarantee theory".Under each point of view,it is not only the difference in the determination of the legal nature,but also the difference in the application of the rules and the judgment of the validity of the credit enhancement act.The second part,chapter 2&3,analyzes the problem,and the second chapter explains the necessity and feasibility of the application of its rules by reconstructing the legal nature of "credit enhancement measures".In adjudication practice,the company’s act of providing credit enhancement measures to the outside world is regarded as a kind of free commercial arrangement,and judges often judge the rights and obligations of the parties according to the specific content of the credit enhancement documents,and the attitude towards the legal nature of "credit enhancement measures" is either not to make a clear determination,or to identify them as one of the guarantees,debt additions,and independent contracts,and does not automatically believe that the "credit enhancement measures" have the attribute of security.Through the analysis of these cases,it can be found that there are shortcomings in the classification of "credit enhancement measures" into any of the above legal natures.The natural guarantee function of "credit enhancement measures" is beyond doubt and will not be eliminated due to the lack of subordinate attributes of credit enhancement behavior.Therefore,according to the understanding of the security attributes that can be abstracted from credit enhancement measures,it is appropriate and necessary to incorporate credit enhancement measures into the security system as a kind of atypical security to maintain the security of commercial transactions.This is also mentioned in the understanding and application of the Minutes of the National Court Civil and Commercial Trial Work Conference: "Atypical security includes atypical personal insurance and atypical property insurance,the former includes credit enhancement measures such as difference compensation,due repurchase,liquidity support,and guarantee liability limited to the value of specific property,and the latter includes assignment security,retention of title,financial lease,factoring,etc." After the "credit enhancement measures" are included in the guarantee framework,the company’s external provision of "credit enhancement measures" can be applied by analogy to the rules of the company’s external guarantee.After the "credit enhancement measures" are incorporated into the guarantee law system,the effectiveness of the company’s legal representative’s ultra vires to provide credit enhancement measures can be determined by reference to the validity of the company’s legal representative’s ultra vires external guarantee.At present,the "statutory representation restriction theory" is a general theory that explains the effectiveness of the company’s ultra vires security,so Chapter 3 uses the "statutory representation restriction theory" to analyze the company’s ultra vires to provide credit enhancement.Analyzing article 16 of the Company Law and article 504 of the Civil Code,which is involved in this theory,it can be found that there are still several points that can be improved in the use of the "legal representation restriction theory" to determine the company’s ultra vires and credit enhancement behavior,one is that it cannot be directly used to determine the validity of the credit enhancement document,and can only determine whether it is effective for the company;second,the reasonable review obligation of the counterparty is not specifically clarified;the third is that the effect of the company’s ultra vires to increase credit under the circumstances of the relative’s malicious intent is not clarified.The fourth part,Chapter IV,solves the problem,that is,on the basis of the "statutory representation restriction theory",the judgment path of the company’s ultra vires and credit enhancement effect is improved.The first is to judge the validity of the credit enhancement document itself;second,to clarify the specific review content,standards,etc.of the counterparty;and finally,in the case of the malicious intention of the counterparty,the rule of no right to act as an agent is applied by analogy,and in the case of ultra vires to increase credit,the legal effect of the company is given the right of retrospection attributable to the company.