Civil-criminal overlapping cases refers to cases that involve criminal legal relation, and civil and commercial legal relation, respectively, but have implicated relations between their legal facts. Generally, overlapping cases shall be dealt with by adhering to the principle of filing and trying the civil and criminal case separately.
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Nevertheless, judicial practice sometimes runs counter to this principle, and some courts even believe that the appeals of civil and commercial cases shall be invariably rejected as long as the cases involve a criminal offence. Regarding this issue, emphasis has been laid on the principle of a separate trial with unified adjudication in the Summaries of the National Conference for Work of Courts on the Trial of Civil and Commercial Cases, issued in 2019. Even so, local courts still have a long way to go in improving the trial results of such cases in practice.
Existing rules
According to the existing laws, if a civil or commercial case is found to involve a criminal offence during the trial, it may face the following results: (1) a separate trial, which shall be conducted for cases that involve economic dispute and suspected economic crime, respectively, based on different legal facts; (2) rejection of appeal, for the case accepted as economic dispute, when the case is deemed to be suspected of crime in the trial; (3) suspension of trial, for a civil and commercial case, if the criminal case is not concluded.
As mentioned above, the crux of processing civil-criminal overlapping cases lies in whether they involve the “identical” facts, or whether civil and commercial cases must be decided based on the outcome of criminal cases.
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Towards a breakthrough
Despite a multitude of difficulties, some litigants have managed to break through the dilemma of civil-criminal overlapping cases and proceed with the trial procedure of civil and commercial cases, which mainly comprises the following characteristics:
Discerning superior courts ruled to proceed with the trial. Regarding the first-instance verdict of rejecting the appeal of cases involving a criminal offence, the most straightforward means against it is that the superior court concerned is so discerning as to correct the verdict on its initiative. For example, Shanghai No. 1 Intermediate People’s Court adjudicated, in Hu 02 Min Zhong Case No. 9086 (2020), that, “based on the currently ascertained facts, we hold that there is no sufficient evidence for determining the basic legal relations claimed by Lu XX involves a criminal offence”. In Hu Min Zhong Case No. 401 (2020), Shanghai High People’s Court ruled that, “the case provided no evidence to testify that the fact of borrowing was related to the illegal taking of public deposits committed by Zhang XX and others, or that the signing or performance of the contract concerned was involved in a criminal offence”. In both cases, the superior courts took the initiative to correct their mistakes by ultimately ruling that the trial of the civil and commercial cases shall be continued.
Convincing proof of “different legal facts”. In legal practice, some courts of first instance will indiscriminately reject the appeal, regardless of whether the legal facts involved in such criminal legal relation, and civil and commercial legal relation, are identical. This tends to provide a point of breakthrough for second instance, or subsequent, trials. For example, Shanghai High People’s Court ruled in Hu Min Zhong Case No. 400 (2016) that, “the case is a dispute over the warehousing contract, in which Hainan Zhu XX Company claimed the right over the warehousing logistics service contract signed with Chang XX Company; as this is a different legal fact from the criminal case, the case shall proceed.”
Long-term stalling of criminal cases. For example, the Supreme People’s Court ruled in Zui Gao Fa Min Zhong Case No.166 (2019) that “the public security authority has not filed the case for three years since it was reported by the party not involved in the case, Jilin Alcohol Industry Group International Trade, on 28 April 2015”. Shanghai High People’s Court ruled in Hu Gao Min Er (Shang) Zai Zhong Zi Case No. 2 (2016) that, “although Ordos Public Security Bureau decided to investigate the contract fraud case of Ma XX on 18 August 2012, it has not yet reached any conclusion [by 8 March 2016]”. Ultimately, the courts ruled that both cases shall proceed.
Perseverance with exhausted remedies. As found by the authors during the retrieval of cases, a few litigants have persevered to manage a breakthrough by exhausting judicial remedies. For example, in Hu Gao Min Yi (Min) Zai Ti Zi Case No.7 (2013), Shanghai No. 1 Intermediate People’s Court gave its second-instance verdict of rejecting the appeal, following the first-instance rejection by Shanghai Baoshan People’s Court. Nevertheless, the litigant appealed against the verdict to Shanghai People’s Procuratorate. Upon trial, Shanghai High People’s Court ruled that “the case of investigating Hu XX involves his internal relationship with Dao XX Company, it has nothing to do with the plaintiff Ai XX. Therefore, the first-instance and second-instance verdicts that the case shall be transferred to public security authority are incorrect in determining facts and inappropriate in applying laws. This court shall correct it according to law”. Shanghai High People’s Court directed Shanghai Baoshan People’s Court to hear the case, with the ultimate judgment that the litigant Ai XX won the lawsuit, which can be regarded as a complete success.
Conclusions
Overall, civil-criminal overlapping cases are confronted with rejection of appeal once they involve a criminal offence. However, the authors believe that the phenomenon will reach its day of breakthrough. For the litigants in such situations, it is recommended that efforts should be made to seek a breakthrough by the above-mentioned means, and by exhausting all approaches to fight for their legitimate rights and interests.
Han Huixiao is a senior partner and Tang Jie is a partner at Dentons
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