(Ratified by 1256th meeting of judicial committee of Supreme Court on November 11, 2002)
Reference No: fa shi No.  38
Announcement of P.R.C. Supreme Court
"Reply of the Supreme People's Court to the Problems of Application of Judicial Interpretation Related to Guaranty Dispute Cases and Recognition of Forms of Surety Liability," which was ratified and rectified by the 1256th meeting of the judicial committee of the Supreme People's Court on November 11, 2002, is now publicized and will come into effect as of December 6, 2002.
November 23, 2002
Shandong High People's Court,
We acknowledge safe receipt of your referendum related to application of Guaranty law (Y/R No. Lu Fa Min Er Zi 2002 2). After consideration and research, we reply as follow:
1. Regulations on Some Surety Problems in Hearing Disputes Arising from Economic Contracts, which was issued by the Supreme Court, file number 1994 8, applies to the disputes of a guaranty which took place after implementation of this regulation and the guaranty cases which have not come to an end in the first or second trial although took place before implementation of this regulation. This regulation does not apply to the retried guaranty disputes on which there have been a valid decision and judgment before the implementation date of this regulation. The Guaranty Law and its relevant judicial interpretation apply to the guaranty actions and disputes that took place after P.R.C. Guaranty Law came into force.
2. If there are no stipulations or explicit stipulations in respect to form of surety liability in the surety agreement established before the Guaranty Law came into force, it shall be regarded as common surety. If it is explicitly stipulated in the surety agreement that warrantor assumes the surety liability only when the warrantee cannot perform his/her obligations, it shall be regarded as common surety. If it is explicitly stipulated in the surety agreement that warrantor assumes surety liability when warrantee does not perform his/her obligation and common surety cannot be drawn from the intention of agreement, it shall be regarded as surety with joint and several obligation.
This reply does not apply to the guaranty disputes on which there have been valid decisions or judgments before the implementation date of this reply. The guaranty disputes will be tried according to the concerned party's application or the decision of the procedure for trial supervision. (the end)