Source: Lawbridge Law Service Team

Yang Chunbao, Sun Zhen

Foreword

The wave of COVID-19 and the prevention and control measures that began in March 2022 have greatly impacted the economy of the entire Shanghai, and even the whole of China. Except for some industries related to epidemic prevention and anti-epidemic, the epidemic situation and prevention and control measures have caused serious negative effects on almost all industries to varying degrees. For those financing companies that have signed the "Vambling Agreement" with investment institutions such as private equity funds, can they use the epidemic and prevention and control measures as a "shield" for failing to complete the VAM target, so as not to fulfill the "Vambling Agreement" agreed? What about the obligations such as share repurchase and payment of performance compensation triggered by the failure of the bet? This article selects several relevant judicial precedents since the first outbreak of COVID-19 in 2020, and summarizes the mainstream judgment views of the judicial authorities on this issue through case analysis, with a view to judging the investment and financing parties who signed the "Gaming Agreement" (including Investment institutions and financing companies including private equity funds) provide useful reference.

Case 1

Disputes between Sichuan Kunbaienai Commercial Operation Management Co., Ltd. and Xie Jidong, Xie Jibin and the company

【(2021) Chuan 0108 Minchu No. 574】

The target company failed to meet the assessment standards due to the impact of the epidemic (i.e. force majeure). The investor’s request to repurchase the equity based on the actual capital contribution in accordance with the Investor Agreement obviously violates the principles of fairness and good faith, and will not be supported.

Brief introduction to the case

In September 2018, Kun Centennial Company (Party A), Xie Jibin (Party B 1), Xie Jidong (Party B 2), and other parties jointly signed the "Investor Agreement", stipulating that: Party A, Party B and other parties intend to establish a company , Party A holds 85.7% of the company's equity, Party B holds 10% of the company's equity, the rest of the company's equity is held by other parties, and the day-to-day operation of the company is in charge of Party B. Unless the written waiver is obtained from Party A and Party C, when the company is lower than 25% of the agreed operating index or loses money for two consecutive index assessment days, or when the company or Party B violates any guarantees made in Annex I of the agreement, Party A has the right to request Party B shall repurchase all the shares held by Party A in the company at the agreed price within ten working days or other time as required by Party A at that time and pay the consideration for the equity transfer. The annex to the agreement, "Operational Indicators Assessment Form" stipulates that assessments will be conducted every six months, and the operational indicators of each assessment cycle are agreed. After the signing of the agreement, Chengdu Manstime Zhongzhi Network Technology Co., Ltd. ("Mansong Time Company") was registered and established, and the subscribed capital contributions of all parties to the agreement were paid in May 2019. After the establishment of the Man Time Company, it leased shops from outsiders to operate Internet cafes. Due to the impact of COVID-19, the Internet cafes operated by Mantime Company will be closed from January 24, 2020. Xie Jibin and Xie Jidong stated that the Internet cafes operated intermittently in May and June 2020, but they were unable to make ends meet. By October 2020, because they could not pay the rent, the landlord locked the door and did not continue to operate. Kun Baibai Company then filed a lawsuit with the court on the grounds that Xie Jidong and Xie Jibin failed to make Manshitime Company meet the assessment standards in accordance with the agreement and annexes, requesting to order Xie Jidong and Xie Jibin to repurchase the shares of Manshitime Company held by them in accordance with the Investor Agreement and pay for the share repurchase.

Referee's point of view

After hearing, the court held that the "Investor Agreement" signed by Kun Baibai Company, Xie Jibin, Xie Jidong, and other parties was essentially the sponsor agreement signed by all parties for the establishment of Manshui Company. The mandatory provisions of the regulations are binding on all parties. Combined with the stipulation of no assessment during the preparatory period in the Investor Agreement and the stipulation of the index assessment date in Annex II, it is concluded that the first assessment period should be from February 2019 to July 2019, and the second assessment period should be From August 2019 to January 2020. Xie Jibin and Xie Jidong claimed that they had achieved the assessment target during the first assessment period, and had feedback from other shareholders other than Party A of Longshiguang Company, and the court accepted the defense. After January 2020, due to the COVID-19 that started at the end of January 2020, the operation of Internet cafes was seriously affected or even closed for a long time, resulting in the company being in a state of loss and failing to achieve the goal of the Investor Agreement, but the situation is a force majeure factor As a result, Xie Jibin and Xie Jidong cannot be blamed. Kun Century Company's requirement to repurchase equity according to the actual capital contribution on the grounds that it did not meet the assessment standards at this stage obviously violates the principles of fairness and good faith. Kun Century Company also advocated that the company should repurchase shares if it suffered losses and failed to distribute dividends as agreed. In Annex 1 of the Investor Agreement, Xie Jibin and Xie Jidong promised that the company would not suffer losses for three consecutive months, but the company’s losses occurred during the outbreak of the epidemic. After that, Kun Century Company’s request to repurchase shares on the grounds that Xie Jibin and Xie Jidong violated this commitment also violated fairness and good faith. To sum up, none of the repurchase conditions advocated by Kun Century Company can be established, and it does not have the right to require Xie Jibin and Xie Jidong to repurchase shares in accordance with the Investor Agreement. However, given that Xie Jibin and Xie Jidong offered to repurchase the company's equity held by Kunbaienai Company at a certain amount (significantly lower than the repurchase price agreed in the investment agreement) in the court trial, Kunbaienai Company also stated that it did not support its claim in the court. In this case, agreeing to the repurchase plan proposed by Xie Jibin and Xie Jidong should be regarded as a new consensus on the repurchase of the shares. The court respected the opinions of both parties and finally ordered Xie Jibin and Xie Jidong to repurchase Kun with the amount proposed by them. The shares of Long Time Company held by Centennial Company.

Lawyer Reviews

We believe that the reason why the defendant in this case (that is, the gambling obligor involved in the investment agreement) was able to obtain a relatively ideal judgment result was determined by several factors. First, the court found that the equity repurchase clause of the investment agreement involved in the case was not triggered. The betting indicator of the investment agreement involved in the case is the performance assessment once every six months, and only if the assessment fails twice in a row, the plaintiff has the right to request the defendant to repurchase the shares. In the first assessment, the plaintiff provided evidence to prove that the assessment indicators had been met, but the second assessment cycle failed to meet the assessment criteria, and the third assessment cycle coincided with the outbreak of COVID-19. Therefore, the court determined that the reason for failing to meet the standards in the third assessment was force majeure caused by the epidemic, and the defendant did not need to take responsibility. Therefore, the target company has not yet met the conditions for equity repurchase of failing to meet the performance appraisal standards for two consecutive times, and the plaintiff has no right to require the defendant to perform the obligation of equity repurchase. Secondly, the defendant voluntarily requested to perform the obligation of equity repurchase at a low price to avoid the expansion of losses. During the trial, the defendant had expressed its willingness to buy back the equity of the target company held by the plaintiff at a certain amount (far lower than the actual investment amount of the plaintiff), which is relatively rare in similar disputes. Why would the defendant do this? As mentioned in the brief introduction above, because the target company failed to pay the rent of the Internet cafe, the landlord locked the Internet cafe in October 2020, and the Internet cafe has not continued to operate since then. If the third assessment cycle can be exempted from the responsibility for substandard performance due to force majeure, then the fourth assessment cycle that began in August 2020, and the subsequent assessment cycles, it will be difficult to use the epidemic as a "shield". "Well, after all, at that time, the epidemic control had already been lifted, people's lives had returned to normal, and the basis for the target company to achieve performance indicators no longer existed (the Internet cafes had closed). That is to say, even if the lawsuit “wins” this time, the plaintiff will sue again until the fourth and fifth assessment cycles expire in the future, and the defendant may still be unavoidable to perform the share repurchase obligation at the amount agreed in the investment agreement. We understand that the defendant proposed to buy back the equity of the target company held by the plaintiff at a “discounted price” during the trial precisely because he foresaw this risk. As the plaintiff, knowing that the Internet cafe has closed down, considering that even if he "wins the lawsuit" in the future, it may be just an empty rejoicing (unable to actually implement it), and based on the principle of timely stop loss, he finally agreed to the defendant's response. purchase plan. Although this case cannot be considered a "win-win", at least the outcome is not too bad, and it is worthy of reference by many investment and financing institutions.

Case 2

Dispute over equity transfer between Shanghai Shijing Investment Management Co., Ltd. and Zhou Jinjin

【(2021) Hu 01 Min Zhong No. 15741】

The gambling obligor who suffers from force majeure is obliged to notify the investors of the target company. If he fails to fulfill the obligation of notification, and fails to resume performing his obligations after the effect of force majeure is eliminated, he shall not be exempted from liability.

Brief introduction to the case

In August 2019, Zhou Jinjin and Shijing Company signed the "Agreement on the Transfer of Investment Income from the Movie "Summer of July 7th", which stipulated that Shijing Company is the producer of the film and has the right to transfer the rights and interests of the film within its shareholding. The shares held by Jing Company will be transferred. Zhou Jinjin invested 120,000 yuan, accounting for 0.3% of the total investment, and 0.3% of the film can be distributed. The tentative release date of the film is 2020. The Lion King Company promises to complete the release of the film before December 31, 2020. If it is not completed, the Lion King Company will pay the weekly gold contribution amount plus the annualized 10% income, and return the weekly gold share before June 30, 2021. purchase. The agreement also stipulates a force majeure clause. Since then, the two parties signed the "Film "Summer of July 7th" Investment Income Transfer Agreement in December 2019, stipulating that Zhou Jinjin will invest an additional 80,000 yuan, accounting for 0.16% of the total investment, and holding 0.16% of the film can distribute income. After the film was not released as scheduled, Zhou Jinjin then sued the court of first instance for the cancellation of the two "Film "Summer of July 7th" Investment Income Transfer Agreement signed by both parties, and requested that Shijing Company be ordered to return Zhou Jinjin's capital contribution and pay investment income. .

Referee's point of view

After hearing, the court of first instance held that the "Agreement on the Transfer of Investment Income from the Movie "Summer of July 7th" was the true representation of the parties, and the content of the agreement did not violate the mandatory provisions of laws and regulations, and should be legal and valid. After the agreement is signed, both parties should abide by it. The film in question has not been released yet, and the repurchase conditions have been fulfilled. Shijing Company should repurchase the investment share of Zhou Jinjin as agreed, and pay Zhou Jinjin the corresponding income. Lion King said that the filming was not completed due to the impact of the new crown pneumonia epidemic, so the force majeure clause stipulated in the agreement can be applied to exempt from liability. In this regard, the court of first instance held that COVID-19 could be attributed to legal force majeure, but the agreement involved in the case stipulated that Shijing Company was obliged to notify Zhou Jinjin, and after the force majeure event or its impact was terminated or eliminated, both parties should immediately resume performance. their respective obligations; if the force majeure event and its impact last for more than 30 days and cause either party to the agreement to lose the ability to continue to perform the agreement, either party has the right to terminate the agreement. Shijing Company did not fulfill its obligation to notify Zhou Jinjin, and now the whole country has resumed work and production. If Shijing Company has lost the ability to perform the agreement, Zhou Jinjin also has the right to terminate the agreement according to the contract. Therefore, the reason of defense of Shijing Company cannot be established. The court of first instance thus supported Zhou Jinjin's request to rescind the agreement, as well as Shijing's request to return the investment funds and pay the proceeds. Lion King Company refused to accept the appeal. The court of second instance rejected his appeal and upheld the original judgment.

Lawyer Reviews

According to the judge's opinion in this case, we believe that the defendant in this case had the opportunity to be exempted from or relieved of the obligation to perform the gambling agreement. Because both the first-instance and second-instance courts identified COVID-19 as force majeure, and determined that the failure to perform the VAM indicator (the movie was released on schedule) was affected by force majeure. However, the defendant's failure to perform the notification obligation in a timely manner as stipulated in the investment agreement constituted a breach of contract. Therefore, both the first-instance and the second-instance court determined that the defendant could not be exempted due to force majeure. The party that encounters force majeure shall perform the "notification obligation" in a timely manner, which is stipulated in the Civil Code, in order to minimize the losses that may be caused to the other party. It is a pity that the defendant in this case failed to fulfill the notification obligation stipulated in the investment agreement, and was finally ordered not to be exempted from liability. Here, it is recommended that the majority of the financing parties of the "Vambling Agreement" (that is, the founding shareholders or actual controllers of the target company) should notify all investors in a timely manner when a force majeure event occurs, and provide relevant information about the occurrence of force majeure within the time limit agreed in the agreement. Certificates, notices and means of providing proofs should be sent as far as possible by courier or post where the receipt information can be queried, and complete copies of delivery documents and notification letters should be kept. After confirming that the notice and proof have been served on the other party, the follow-up performance should be actively negotiated, and “seeing in court” should be avoided as much as possible.

Case 3

Disputes related to the company, such as Zhaosu County State-owned Assets Investment and Operation Co., Ltd., Xinjiang Yongxing Road and Bridge (Group) Co., Ltd.

【(2021) New 4026 No. 900 of the Republic of China】

In the event that one party to the VAM Agreement (that is, the controlling shareholder of the target company) fails to perform the payment obligation, and there is a breach of contract, if an epidemic (force majeure) occurs during the delay in performance, the breaching party cannot be exempted from liability

Brief introduction to the case

In April 2020, Zhaosu County State-owned Assets Investment and Operation Co., Ltd. (Party A) signed an investment agreement with Xinjiang Yongxing Road and Bridge (Group) Co., Ltd. (Party B) to jointly fund the establishment of SDIC Yongxing Company. Party A invests 20 mu of land it owns, accounting for 10% of the equity of SDIC Yongxing Company. The agreement also stipulates that from the date of establishment of the company for production, Party B will pay the prescribed dividend of 600,000 yuan each year, 600,000 yuan for the first year before June 30, 2020, and 600,000 yuan for the second year before June 30, 2021. , and so on. Otherwise, Party A has the right to withdraw the capital contribution, and Party B shall unconditionally purchase Party A's capital contribution at the market appraisal price of the land use right contributed by Party A, and shall bear the liquidated damages. During the operation period of the company, in the event of force majeure such as natural disasters and state expropriation, which will cause heavy economic losses to SDIC Yongxing Company, both parties can negotiate with party A for fixed share. On March 11, 2021, Party A issued a notice to Xinjiang Yongxing Road and Bridge (Group) Co., Ltd., requiring it to pay a fixed dividend of 600,000 yuan and overdue liquidated damages within 3 days, otherwise the investment agreement will be automatically terminated after the 3 days expire. On March 16, 2021, Xinjiang Yongxing Road and Bridge (Group) Co., Ltd. replied and urged Party A to reduce or exempt the fixed dividend for 2020 by referring to the relevant policies issued by the state during the epidemic period and the agreement of the investment agreement. Since then, Party A and Party B have conducted several written communications on whether to terminate the investment agreement and whether Party B can be exempted from paying the fixed dividends in 2020, but no result has been reached. Party A then sued the court, requesting confirmation that the investment agreement signed by both parties has been terminated, and requesting that Xinjiang Yongxing Road and Bridge (Group) Co., Ltd. pay dividends and liquidated damages to it in accordance with the contract, and order Xinjiang Yongxing Road and Bridge (Group) Co., Ltd. Group) Co., Ltd. purchased the 10% equity of SDIC Yongxing Company held by it according to the pricing method agreed in the contract.

Referee's point of view

After hearing, the court held that the investment agreement signed by the two parties was true and valid, and it was a financing agreement signed between the plaintiff as the investor and the financier, and was intended to resolve the uncertainty, information asymmetry and agency of the two parties regarding the future development of the target company. Cost-designed agreements that include equity repurchase, monetary compensation, etc. to adjust the valuation of the target company in the future. It is also an agreement on whether the uncertain goals in the future will be realized on their respective rights and obligations. Currently, it is commonly known as a "gambling agreement" in my country's capital market. Regarding the issue of whether the conditions of the equity repurchase clause stipulated in the investment agreement have been fulfilled, according to the agreement, the defendant has not fulfilled the payment of dividends as agreed for two consecutive years, and has not fulfilled it after being urged by the plaintiff. The agreement stipulated to repurchase the equity of the target company held by the plaintiff. The defendant believed that the new crown pneumonia epidemic was a force majeure and believed that it had no obligation to repurchase the plaintiff's equity and pay liquidated damages. This court believes that the outbreak of the new crown pneumonia epidemic should be identified as a force majeure that cannot be foreseen, unavoidable, and insurmountable. In this case, according to the agreement, the defendant should pay 600,000 yuan in dividends before June 30, 2020. Without the influence of the epidemic, the defendant did not pay the dividends, which was a breach of contract; from July to August 2020, Zhaosu The county has been affected by the epidemic for a short time, but as of the trial date of the case, the defendant has not paid the dividends that should be paid before June 30, 2021, which is a fundamental breach of contract. The court then ordered the confirmation of the termination of the investment agreement signed by the plaintiff and the defendant, and ordered the defendant to repurchase the plaintiff's shareholding in the target company and pay a corresponding amount of liquidated damages.

Lawyer Reviews

Although the trial court of this case identified COVID-19 as force majeure, the outbreak of the epidemic was much later than the deadline for the target company's controlling shareholders to pay the target company's dividends to investors. Therefore, the impact of the epidemic is not that the target company's controlling shareholders could not be on time. Obstruction of performance. The occurrence of force majeure during the overdue performance period cannot be a defense for the controlling shareholder of the target company.

Case 4

Fan Huaying, Huang Shifangxin Investment Co., Ltd. and other contract disputes

【(2021) E 0203 Min Chu No. 294】

The epidemic prevention and control measures are not the main reason for the delay in the listing of the target company, and the obligor of the VAM (that is, the founding shareholder of the target company) should perform the repurchase obligation after the failure of the VAM.

Brief introduction to the case

In December 2017, Fan Huaying signed the Capital Increase and Share Expansion Agreement with Fangxin Company and Fangtong Company and agreed that Fangtong Company intends to increase capital and share, Fan Huaying is an individual investor, and Fangxin Company is the largest shareholder of Fangtong Company. Fan Huaying subscribed for 0.77% equity of Fangtong Company at one time. After the completion of the capital increase, Fangtong Company finally realized the successful listing of the company on the domestic stock exchange (Shanghai Stock Exchange or Shenzhen Stock Exchange). Fangxin Company promises that if Fangtong Company fails to be successfully listed on the domestic stock exchange before the end of 2020, it will repurchase the equity of Fangtong Company held by Fan Huaying in full, and the repurchase amount is 10% of the capital increase and share expansion. Fan Huaying's actual payment amount, plus an annualized 8% interest on the use of funds. Before the end of 2020, Fangtong Company did not complete the listing on the Shanghai Stock Exchange or Shenzhen Stock Exchange, and Fangxin Company did not perform the contract to Fan Huaying as agreed. Fan Huaying then sued the court and requested the defendant to repurchase the investment capital in full. money and pay interest.

Referee's point of view

 After hearing, the court held that the content of the "Agreement on Capital Increase and Share Expansion" signed between the plaintiff Fan Huaying, the defendant Fangxin Company, and the third party Fangtong Company did not violate the mandatory provisions of laws and administrative regulations, and was a true representation of the parties, which was legal and valid. , the parties shall perform their obligations in accordance with the contract. Fangtong has not yet been listed, and has triggered the equity repurchase clause in the Capital Increase and Share Expansion Agreement. Therefore, the plaintiff Fan Huaying's claim for the defendant Fangxin Company to repurchase the full amount of its equity interest in Fangtong Company plus an annualized 8% interest on the use of funds should be supported. The defendant Fangxin Company argued that the delay in the listing of Fangtong Company due to the epidemic was caused by force majeure. After investigation, due to the impact of the epidemic, Hubei Province launched a first-level response to major public health emergencies on January 24, 2020, and adjusted it to a third-level response on June 12, 2020. The court held that the listing time stipulated in the contract was not during the outbreak of the epidemic. From December 2017, when Fangtong Company decided to increase its capital and shares, the company should actively prepare for listing matters. Influence, but not the main reason for the company's listing lag. Fangtong Company and Fangxin Company stated that they had actively fulfilled their obligations to go public, and there was no evidence to prove that the epidemic affected production and operation and resulted in a delay in listing, and by the time the court debate ended, nearly five months had passed since the time of listing agreed in the contract. , Fangtong has not yet been listed. Therefore, the court did not accept the defendant's defense. The court finally upheld the plaintiff's claim.

Lawyer Reviews

The target company's listing period stipulated in the "Capital Increase and Share Expansion Agreement" involved in the case is three years, and it has been more than two years since the signing of the "Capital Increase and Share Expansion Agreement" when the epidemic broke out. The expiry of the listing period has been less than 10 months. Therefore, the trial court of this case did not support the defense of the target company's controlling shareholder's claim of exemption from gambling obligations on the grounds of the epidemic. We suggest that the financiers of the "Vambling Agreement" (that is, the founding shareholders or actual controllers of the target company) should collect evidence as much as possible to prove that the target company is in the "Capital Increase and Share Expansion Agreement" (including the VAM disputes) After the signing of the terms) and before the outbreak of the epidemic, there are obstacles that can seriously affect its normal operations and prevent it from achieving the agreed betting targets (including listing within a time limit or completing the corresponding performance indicators, etc.) Obligation, must fully prove the direct causal relationship between the epidemic and the failure to go public, rather than generalities, otherwise it will be difficult to get the support of the court or arbitration institution.

Case 5

Contract disputes between Guo Jianping and Fujian Jinghengtang Health Management Co., Ltd. and Lu Jia

【(2020) Min 0802 Min Chu No. 5966】

Although COVID-19 and floods occurred during the implementation of the "Vambling Agreement", the epidemic and natural disasters did not affect the approval and handling of the qualifications involved in the case by the relevant government departments, and did not affect the realization of the goal of gambling (obtaining the qualifications involved in the case). The gambling obligor (the controlling shareholder of the target company) shall not be exempted from this liability.

Brief introduction to the case

In October 2019, Guo Jianping signed a "Shareholding and Cooperation Agreement" with Liao Chengfeng, Lin Yuan, Jinghengtang Company, Zuowei Company, and Lu Jia. Four shareholders, Jinghengtang Company and Zuowei Company, unanimously agreed to withdraw their 25% shares in Sirius Company, and Guo Jianping would hold the shares and introduce Guo Jianping to join and cooperate. The agreement also stipulates that within six months after Guo Jianping's first share capital reaches the bank account of Sirius Company, if Sirius Company fails to obtain special industry licenses such as "shooting sports gun commercial shooting range service projects" and start operations as scheduled, Jingheng Tang Company shall be liable for breach of contract, that is, Jinghengtang Company shall be responsible for returning Guo Jianping's investment shares in full and compensate Guo Jianping for his investment losses. Since then, Guo Jianping paid the investment funds according to the contract, but Tianlang Company has not obtained the special industry license such as "shooting sports gun commercial shooting range service project" and started operation. Transfer funds and compensate for investment losses.

Referee's point of view

After hearing, the court held that the "Shareholding and Cooperation Agreement" signed by Guo Jianping and Liao Chengfeng, Lin Yuan, Jinghengtang Company, Zowei Company, and Lu Jia was the true representation of the parties, and its content did not violate laws and administrative regulations. Legally valid. In this case, Guo Jianping fulfilled the capital contribution obligations stipulated in the agreement involved in the case. However, Tianlang Company has not yet obtained the special industry license for "Sports Shooting Gun Commercial Shooting Range Service Project" and opened for business. Therefore, Guo Jianping has the right to claim that Jinghengtang Company shall bear the liability for breach of contract according to the agreement, that is, to return Guo Jianping's actual payment in full. investment funds and compensation for investment losses. In the lawsuit, Lu Jia claimed that the occurrence of COVID-19 at the beginning of 2020 and the subsequent flooding affected the processing of special industry licenses and the progress of the decoration project of the shooting range involved in the case, so as to claim immunity. In this regard, the court held that although COVID-19 and floods occurred during the performance of the agreement involved in the case, the epidemic and natural disasters did not affect the approval and handling of the special industry licenses involved in the case by relevant government departments. The court finally upheld Guo Jianping's claim.

Lawyer Reviews

The stake-taking and cooperation agreement stipulated in the case is that the target company obtains a special industry license within a time limit and conducts business operations, which is different from the time-limited listing and financial indicators. The realization of this kind of gambling index depends on two conditions. On the one hand, the target company needs to prepare the relevant materials for applying for the industry license within a time limit, and on the other hand, it needs the timely approval of the relevant competent authorities. In this case, although an epidemic broke out during the gambling period stipulated in the agreement, the court believed that this did not affect the approval of the industry license by the relevant competent authorities. Therefore, the reason why the target company involved in the case failed to complete the gambling target within the time limit was its own ( Failure to prepare the application materials for industry licenses in time) rather than the impact of the epidemic. It is suggested that the majority of the financing parties of the "Vambling Agreement" (that is, the founding shareholders or actual controllers of the target company), if the agreed gambling indicators involve the target company obtaining relevant qualifications or licenses within a time limit, they should ensure that they are flawless (should be prepared If all application materials are provided to the investor for review and the application is submitted in a timely manner), as far as possible to collect the proof materials that the relevant competent authorities have delayed or interrupted the time limit for approval due to the epidemic, as a defense for not being able to perform the contract in a timely manner. Applying to the court or arbitration authority to change the terms of the betting will delay the completion of the betting target for a certain period of time.

Epilogue

The three-year epidemic has indeed caused many financing companies that have signed the "Vambling Agreement" to face difficulties, and their production and operations have stagnated. However, from the above cases, we can see whether the epidemic situation and prevention and control measures can solve the "urgent need" that the gambling target cannot be achieved, that is, whether the epidemic can be determined by the court or arbitration agency as a force majeure or a force majeure that prevents the completion of the gambling target. The factors of changing the situation depend on whether there is a direct and specific causal relationship between the epidemic and the prevention and control measures and the inability to achieve the target of gambling [1]. Therefore, for the above case, it is necessary to consider the industry in which the financing company is located and the time of the outbreak. Comprehensive judgment is made on the relationship between the time limit for gambling and the time limit for approval by the relevant government authorities. Lawyer Yang Chunbao made a detailed analysis of this in the article "How Entrepreneurs Can Cautiously Face the Risk of Failure of Gambling Caused by the Epidemic", which can be referred to. In addition, Lawyer Yang Chunbao has a series of introductions on "Vambling Gambling" on Bilibili (UP main: Lawyer Yang Chunbao), which I believe will be helpful to practitioners in the field of private equity investment and the majority of financing companies. Welcome to check it out. .

B station space:

https://space.bilibili.com/662160055

[1] "Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Proper Trial of Civil Cases Involving the New Coronary Pneumonia Epidemic (2)"

15. For disputes arising from the performance of the "performance gambling agreement" between its shareholders, actual controllers and investors, the people's court shall fully consider the actual situation of the impact of the epidemic or epidemic prevention and control measures on the performance of the target company, and guide both parties to negotiate to change or cancel the agreement. contract. If the parties fail to reach an agreement through negotiation, and it is obviously unfair to one party to continue to perform according to the agreed performance standards or the amount of performance compensation, the people's court shall, in light of the actual circumstances of the case, modify or terminate the contract according to the principle of fairness; Loss caused by cancellation.