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Shanghai Courts Effective at Solving Foreign-Related Cases

A few days after the Spring Festival, a foreigner came to the First Intermediate People's Court of Shanghai, to present Judge Xi Qianghua a silk banner bearing Chinese characters saying "just, strict law enforcement."

Gerhard Liebchen, the foreigner, is the president of the Shanghai Branch of the Commerzbank from Germany. He came to express his gratitude to the judge who helped the company take back a 3.5 million-US-dollar loan in accordance with the law.

Four years ago the branch signed a financing agreement with the Chongqing Trust Investment Co. to extend US$6 million in credit to the trust company, which should have returned money within one year. However the trust company defaulted US$3.5 million of payment in arrears after the maturity.

The branch proceeded against the trust company last year, which was required to pay off the money in later ruling by the court. But the trust company excused itself from the legal duty.

To protect the foreign company's rights and interests, the judge flew three times to Chongqing, a municipality in southwest China where the trust company is based, to make thorough investigations into the trust company's property.

The court decided to confiscate a Beijing-based hotel owned by the trust company and to auction it off as payment. Finally the pressured trust company repaid the debt.

"Such a big case is not likely to be ended within months, even in Germany. It proves that China is strong in law enforcement," Gerhard Liebchen said.

As China's largest commercial and economic center, Shanghai has attracted lots of foreign-funded companies, and more foreign company-concerned cases have been reported. Shanghai courts at all levels endeavor to give swift and timely solution to the cases strictly in accordance with Chinese laws, said court officials.

Last year the First Intermediate People's Court of Shanghai set a record in the number of cases settled and money involved, and most of these cases were concerned with foreign-funded companies.

Effective court work has earned Shanghai courts favorable comments from foreign companies, which said that they would persuade their partner companies to invest in Shanghai, where there is a safe legal system.

(People's Daily 02/12/2001)

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