Dacheng Acquires Injunction against Payment of RMB1bn in Foreign-related Independent Guarantees for Client - Trends

In the course of performing a EPC contract in which a client of Dacheng was commissioned to build a power plant in a South Asian country, the owner of the project claimed, on malicious grounds, payment from the Guarantee Bank of approximately RMB1bn based on twelve advance payment guarantees and performance guarantees.

Within 15 days’ time, a Dacheng team which was composed of Beijing-based senior partner Jiang Rongqing, Jinan-based attorney Cheng Zhen and Qingdao-based attorneys Zhang Hongtao and Zhang Yanna successfully acquired from the competent court an injunction preventing the payment from being made to the owner by the Guarantee Bank. The issuance of the injunction secured the client’s major assets and paved the way for an international arbitration to be brought up by the client in accordance with arbitration clauses agreed upon with the owner.

The case in question is the biggest one in terms of the amount involved amongst publicly searchable foreign-related independent guarantee payment injunction cases in China to date. It is also another important breakthrough made by Jiang Rongqing in the area of independent guarantee following a former case in which Jiang represented Pakistan’s GCL cement producer in the acquisition of an independent guarantee payment injunction. Jiang is an external specialist sitting on the independent guarantee trial guidance drafters’ team of the Supreme People’s Court and the sole legal advisor on a national-level team handling letter of guarantee matters related to Libya.