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In 2006, however, the Nanjing Intermediate People's Court heard the patent infringement case of Yuan Lizhong v. Yangzhou City Tongfa Air-Raise Actuator Factory & Yangzhong City Tongfa Industry Co. Ltd. This case was the first counter-suit for damages action brought as a reaction to malicious litigation. In March, 2009, the Supreme People's Court promulgated the Opinions of the Supreme People's Court on Several Issues Regarding the Implementation of the National Intellectual Property Rights Strategy ( Fafa [2009] No. 16) ("Opinion") which provides that: "The courts shall accept where appropriate and adjudicate cases that seek declaratory judgments of non-infringement and litigations that seek counter-suit for damages in claim of malicious litigations.”

The Opinion provides practical guidance to the people's courts in counter-suit for damages actions if in the face of malicious litigation.

Definition of Malicious Litigation and How to Determine "Malice"
When a party initiates litigation in the PRC, it must adhere to the "Honest and Credit" principle. Otherwise, the party will be considered to be abusing its right to litigate under the Chinese law. Based on this principle and general understandings described in academic research papers, we believe the definition for malicious litigation refers to "a groundless civil action filed without a violation of substantive rights or without factual basis and other justifiable reasons to pursue litigation and which will result in damages to the interests of the alleged parties". Among the elements referred to above, the key element is to determine if the party that initiated the groundless civil litigation is acting with "malice" towards the other party.

Counter-Suit for Damages Actions
Although the Opinion issued by the Supreme People's Court allows counter-suits for damages, it did not specify details on the application of such a practice. Since the counter-suit for a damages action is a type of litigation where a plaintiff prays for compensation for damages suffered from a malicious litigation, the proceeding at its core is a civil suit regarding infringement of rights and with the corresponding remedy for compensation.

Legal Trends for Counter-Suit for Damages Actions
Though there are not yet explicit provisions regarding malicious litigation in Chinese law, a basic legal mechanism for preventing malicious litigation is now being formed, particularly in the field of intellectual property. It is foreseeable that the people's courts will set stricter criteria for accepting such cases and impose tighter controls over granting interim injunctive measures.

1. Judicial Authority

On Feb12th, 1999 the Supreme People's Court promulgated the “ damages”clause  (J.E [1999] No.8), which stated:

 

When contracting parties have not reached an agreement on calculating late payment damages, People’s Courts may use the past-due loan interest charge set by the People’s Bank of China (PBC) as the standard for calculating late payment damages.

Based on the above judicial explanation, when contractual parties fail to reach an agreement on calculating late payment damages; courts will adopt financial institutions’ past due loan interest charge as the standard for calculating damages.  Multiple courts have affirmed this principle.

Since past due interest charges are frequently adjusted by the PBC, parties should expect to use the current rate at the time of bringing a claim to calculate late payment damages.

At present, according to “The Announcement on relevant RMB Loan Rate issues”, promulgated by the PBC on Dec 10th, 2003:

 

…the overdue loan interest rate will change from a fixed 2.1% per day to a floating 30%-50% per day of the current loan interest set by the PBC.

In other words, parties calculating late payment damages during litigation or arbitration; should apply the new floating standard of 30%-50% of the current benchmark loan rate per day, rather than the previous fixed 4% or 2.1% per day rates. The benchmark loan rate is adjusted frequently by the PBC for financial institutions.  

Contracting parties may contractually stipulate any method of calculating damages. However, a court may use its own discretion to adjust the parties’ agreed method. The breaching party may also move for a reduction of damages based on the non-breaching party’s actual losses.  Only a court or arbitration commission may decide whether to grant such a motion.


2. Keeping a Contract Airtight

In conclusion, after the transition from a fixed rate to floating rate for damages, conflicts may still arise during litigation or arbitration.

Therefore, it is important to not only clearly state in the contract that a breaching party will pay damages on a late payment, but also the method for calculating those damages.  For instance, “a breaching party will pay damages equal to a certain percentage of a late payment.” Parties may avoid the uncertainties of a floating rate with a well drafted agreement.

Since a breaching party may ask to reduce damages for late payment, we suggest parties clarify in the agreement that there is assent and understanding to the said calculating method even if the non-breaching party incurs no actual loss.  In the event of a dispute it is also important to state there will be no reduction of damages.  A solid agreement should state the non-breaching party, in addition to late payment damages, may also claim other damages.  In other words a non-breaching party may also claim a “delay in performance” which could give rise to other damages. Furthermore, a non-breaching party may also pursue other remedies such as continued performance, compensation for losses, etc.

 

关于计算标准的法律问题 

作者：程世刚律师，金杜律师事务所诉讼仲裁组（国内诉讼部）

    司法实践中，因逾期付款时的债务人违约责任约定不明而常发生争议。债权人在债务人逾期付款时可以主张逾期付款违约金，但就逾期付款违约金计算标准理解不一。不同当事人主张的逾期付款违约金计算标准不同，不同法院采取的裁判准则也不一致，导致对该问题的认识及做法混乱。现就上述问题进行简要阐述。

一、逾期付款违约金计算标准的司法解释及其理解

最高人民法院于1999年2月12日公布的“关于逾期付款违约金应当按照何种标准计算问题的批复”（法释[1999] 8号）规定：“对于合同当事人没有约定逾期付款违约金标准的，人民法院可以参照中国人民银行规定的金融机构计收逾期贷款利息的标准计算逾期付款违约金。中国人民银行调整金融机构计收逾期贷款利息的标准时，人民法院可以相应调整计算逾期付款违约金的计算标准。参照中国人民银行1996年4月30日发布的银发[1996] 156号《关于降低金融机构存、贷款利率的通知》的规定，目前，逾期付款违约金标准可以按每日万分之四计算。”

最高人民法院于2000年11月15日公布的“关于修改《最高人民法院关于逾期付款违约金应当按照何种标准计算问题的批复》的批复”（法释[2000]34号）规定：“将最高人民法院法释[1999]8号批复中‘参照中国人民银行1996年4月30日发布的银发(1996)156号《关于降低金融机构存、贷款利率的通知》的规定，目前，逾期付款违约金标准可以按每日万分之四计算’的内容删除。”

综合上述司法解释，应当认为，在当事人未约定逾期付款违约金标准时，法院计算逾期付款违约金的标准是“中国人民银行规定的金融机构计收逾期贷款利息的标准”，即通常所谓的银行罚息标准。这一原则是确定的，也是法院在审判实践中一贯坚持的。

而鉴于逾期贷款利率由中国人民银行公布并不断调整，因此，当事人在计算逾期付款违约金时也应适用变更后的逾期贷款利率。

目前，根据中国人民银行2003年12月10日发布的“关于人民币贷款利率有关问题的通知”，“逾期贷款罚息利率由现行按日万分之二点一计收利息，改为在借款合同载明的贷款利率水平上加收30%-50%”。因此，当事人在诉讼或仲裁中计算逾期付款违约金时，其标准既不是日万分之四，也不是日万分之二点一，而是在“贷款利率”水平上加收30%-50%。作为加收基础的“贷款利率”，通常为人民银行公布的同期（如一年期）金融机构贷款基准利率。

至于主张加收的标准是30%或50%或其他，当事人可以自行确定。当然，法院有权在自由裁量权范围内予以调整。对方当事人也可以实际损失为依据请求适当减少，是否减少由法院或仲裁机构决定。

二、利用逾期付款违约金保护自身权益

如上所述，中国人民银行将罚息利率由固定利率变为浮动利率后，在诉讼或仲裁主张逾期付款违约金时仍会存在标准上的争议，为明确权利义务，我们建议当事人在合同等相关文件中明确约定逾期付款时应当支付逾期付款违约金，以及逾期付款违约金的计算标准，如迟延一日支付逾期金额一定比例的违约金。通过明确具体的约定，避免上述浮动利率带来的不确定性。

考虑到对方当事人可能申请减少逾期付款违约金，我们建议当事人在合同等相关文件中明确“债务人认可约定的逾期违约金计算标准，并认可约定的逾期付款违约金已经充分考虑了逾期付款行为给债权人造成的实际损失，在双方发生争议时逾期付款违约金不进行调整”。

此外，在合同等相关文件中，也应明确约定逾期付款违约金可以和其他违约责任并用，即将逾期付款违约金定性为专为“迟延履行”约定的，除此之外，债权人还可要求债务人承担继续履行、赔偿损失等违约责任。