Recently, the enforcement judges of Haikou Maritime Court have brought into full play the role of a judgment debtor’s attorney for explanation of law and successfully urged the judgment debtor to fulfil its obligations. This flexible move has duly protected the enforcement applicant’s lawful rights and interests.

In early 2013, the enforcement applicant, Li, rented the premises of the judgment debtor, a ship engineering company in Hainan, for operations in relation to shipbuilding. In July the same year, out of material shortage and operational needs, the judgment debtor borrowed eight shipbuilding steel plates from Li for own use, and issued to Li a receipt for the loan specifying that the values of the steel plates were CNY 29,196. The former general manager of the judgment debtor, Zhang, signed the receipt and on 20 May 2015, as the enforcement applicant requested for the payment, put down on it a written promise to pay Li promptly after receiving relevant costs. Afterwards, as changes were made to the name and legal representative of the ship engineering company in Hainan, the enforcement applicant got into a dispute with the judgment debtor over the facts of the loan of the steel plates and relevant legal relationships. An action was thus brought before Haikou Maritime Court. The court made a judgment in the first instance to confirm the loan of the steel plates and order the judgment debtor, the ship engineering company in Hainan, to pay CNY 29,000 to the enforcement applicant for the steel plates. No appeal was lodged and the judgment of first instance took effect. However, the judgment debtor did not fulfil its obligations to pay as ordered in the judgment. The enforcement applicant thus applied to Haikou Maritime Court on 6 November 2018 for enforcement.

After entertaining the case, the enforcement judges promptly issued a notice of enforcement to the judgment debtor ordering it to fulfil its obligations to pay, but the judgment debtor still defaulted on its obligations. The enforcement judges inquired the legal representative of the judgment debtor and learnt that the main reason for the judgment debtor’s refusal to make the payment was that it considered the loan of the steel plates a personal act of the former general manager, Zhang, rather than the company’s act and therefore the current company should not be obliged to pay. The enforcement judges repeatedly explained the reasons for the effective judgment and the validity of its enforcement, but the persuasion failed to work. While conducting property investigation and preparing for further enforcement measures, the enforcement judges found through deeper study of the case that both parties had submitted themselves to the judgment and did not lodge an appeal after the first instance. This could be a foundation for reconciliation. Moreover, the attorney acting for the judgment debtor in the proceedings was the company’s legal counsel and had acted for it in multiple actions. The lawyer had good legal proficiency and could be helpful to the court to facilitate negotiations. The enforcement judges then decided to explain law to the judgment debtor’s lawyer and take advantage of his speciality to persuade the legal representative of the judgment debtor to fulfil its obligations.

Through plenty of communication, the lawyer gained a clearer understanding of the validity of the effective judgment and decided to follow the enforcement judges’ advice and explain law to the legal representative of the judgment debtor from the perspective of a legal counsel. Through this effort, the legal representative understood that the promise and signature were put down on the receipt by Zhang in its official capacity, and that the company should be liable for paying for the borrowed steel plates, whereas the changes to the legal representative and internal creditor-debtor relationships of the judgment debtor were not within the scope of the case. The lawyer further illustrated the legal liability as well as possible financial losses, damage to reputation and other consequences that might be caused by the defiance of an effective court judgment. This thoroughly cleared up the judgment debtor’s doubt as to whether it should fulfil the obligations. The judgment debtor has recently taken the initiative to pay up the amount to the enforcement applicant. This dispute in relation to the contract for the loan of ship construction materials, which has lasted for nearly five years, is successfully resolved.