Court Orders Repayment of CNY 2.1 Million Loan
The Civil Court of an Eastern China City has ruled in favor of a lender in a private lending dispute, ordering the borrower to repay CNY 2.1 million plus interest. The case involved a series of loans made in late 2009, followed by partial repayment and a renewed promissory note. The borrower failed to appear at trial, leading to a default judgment that upheld the lender’s claims.
The plaintiff, Mr. Li, brought the lawsuit against defendant Mr. Wang in February 2012. Mr. Li alleged that between October and December 2009, Mr. Wang borrowed a total of CNY 2.15 million in three separate transactions for business purposes. Mr. Wang later repaid only CNY 50,000 of the principal. Despite repeated demands, the balance remained unpaid. In April 2011, Mr. Wang issued a new promissory note acknowledging a debt of CNY 2.1 million, promising repayment by June 1, 2011. After the deadline passed with no payment, Mr. Li filed suit seeking the principal and interest from the due date. Mr. Li also initially named Ms. Yang as a co-defendant but later withdrew that claim, and the court approved the withdrawal.
At the hearing on March 14, 2012, Mr. Li’s legal representative appeared, while Mr. Wang did not attend despite proper summons. The court deemed Mr. Wang’s absence as a waiver of his right to defend and cross-examine. Mr. Li submitted five pieces of evidence: three loan receipts from 2009 covering CNY 440,000, CNY 1,000,000, and CNY 710,000 respectively; a July 2010 commitment letter promising repayment of CNY 2.1 million; and the April 2011 promissory note. The court found that all evidence met the requirements for valid proof and corroborated Mr. Li’s account. The defendant offered no evidence or written defense.
The court held that a lawful lending relationship is protected under Chinese law. The evidence clearly showed that Mr. Wang borrowed CNY 2.15 million and still owed CNY 2.1 million after partial repayment. Mr. Wang’s failure to repay by the agreed date constituted a breach of contract, triggering his civil liability. Although the parties did not specify interest in the loan agreements, the court ruled that Mr. Li was entitled to statutory interest from the date of default, calculated at the benchmark rate set by the People’s Bank of China.
According to relevant law, specifically Articles 206 and 207 of the Contract Law, a borrower must repay the principal when due and is liable for damages for delay. The Civil Procedure Law allows default judgment when a defendant properly summoned fails to appear. The court reasoned that because Mr. Wang signed multiple documents acknowledging the debt, the loan was valid and enforceable. The interest claim, though not contractually agreed, was permissible under judicial interpretations governing private lending disputes. The court also noted that if Mr. Wang failed to comply within the specified period, he would owe double the interest for delayed performance.
The court ordered Mr. Wang to pay Mr. Li CNY 2.1 million within ten days of the judgment, plus interest from June 2, 2011 at the PBOC benchmark rate until full payment. Mr. Wang was also ordered to bear half of the court costs, or CNY 11,800. The judgment may be appealed within 15 days of service. This case highlights the importance of maintaining clear written evidence of loans and the legal consequences of default. Borrowers should note that even without explicit interest terms, courts may award statutory interest from the maturity date.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.