DeHeng Successfully Represented Client in a Series of Lawsuits of Objection to the Addition and Alteration of Person Subjected to Execution, Protecting Client from Risk of RMB 600 Million Debt Repayment

2025-07-25

DeHeng lawyers recently received a series of second-instance civil judgments from a provincial high court, which overturned the first-instance judgments of an intermediate court. The high court ruled that DeHeng’s client, which was a listed company, could not be added as a party subject to execution in the enforcement of related civil judgments, shielding the client from a RMB 600 million debt repayment risk.

This series of cases represents a classic example of objection lawsuits concerning the addition and alteration of the person/party subjected to execution. The client had previously invested RMB 600 million in a mining company through a Capital Increase Agreement, acquiring a portion of its equity. When the mining company became unable to repay its debts, a financial-institution creditor filed a lawsuit, and after winning the case, applied for compulsory enforcement. During the enforcement stage, the enforcement court, acting on the creditor’s application, determined that the client had engaged in “withdrawal of capital contribution” and ruled to add the client as a party subjected to execution, holding it liable for the mining company’s debts up to a RMB 600 million amount. The client subsequently filed an objection lawsuit with an intermediate court, requesting not to be added as a party subject to execution, but the first-instance court dismissed the claim.

The client then engaged DeHeng to file an appeal with the provincial high court. Faced with an unfavorable first-instance outcome and a multi-hundred-million-yuan liability risk, DeHeng lawyers meticulously analyzed the capital flow chain to dissociate the client from the fund recipients at critical time points. Simultaneously, they precisely addressed the legal elements, burden of proof, and standards of evidence required to establish “withdrawal of capital contribution,” and provided a robust legal argument regarding the nature of the investment. Ultimately, the provincial high court adopted DeHeng’s arguments and overturned the initial ruling.