The Supreme People's Court ("SPC") has recently distributed the Provisions on Several Issues Concerning the Reconciliation in Enforcement (the "Provisions"), the Provisions on Several Issues Concerning the Guarantee in Enforcement, and the Provisions on Several Issues Concerning the Handling of Cases by People's Courts to Enforce Arbitration Awards, all of which shall take effect from March 1, 2018.
Encompassing 20 articles, the Provisions are formulated to address major issues as below. First, the reconciliation in enforcement is distinguished from the reconciliation not reached in enforcement; second, it is prohibited from issuing a verdict that the debt should be paid in kind, based on the reconciliation agreement; third, it is clearly stated that the enforcement applicant may bring a lawsuit to have the reconciliation agreement enforced; fourth, conditions are made clear when the enforcement of the original effective legal instrument could be resumed; and fifth, clarity is provided on the effect of guarantee-related stipulations in the reconciliation agreement. In particular, according to the Provisions, where the parties concerned agree on the guarantee stipulations in the reconciliation agreement, and the guarantor warrants before the people's court that it voluntarily accepts the direct compulsory enforcement when the party subject to enforcement refuses to perform the reconciliation agreement, the people's court, after the enforcement of the original effective legal instrument is resumed, may directly rule to enforce against the pledged property or the guarantor's property, according to the claim of the enforcement applicant and the guarantee stipulations.