Court Orders Repayment of CNY 60000 Loan with Interest

A court in Eastern China City has ordered a borrower to repay a loan of CNY 60,000 plus overdue interest to a lender, following a dispute over an unpaid personal loan. The defendant failed to appear in court or respond to the claims. The judgment clarified the applicable interest rate in the absence of a written agreement.

The plaintiff, Mr. Li, filed a lawsuit on October 27, 2011, against the defendant, Mr. Wang, alleging that Mr. Wang borrowed CNY 60,000 on July 12, 2011, for business purposes. Mr. Wang issued a promissory note promising repayment within two months, and stated that if he defaulted, the plaintiff could dispose of his property. After the loan, Mr. Wang did not repay the principal, although he paid interest until September 11, 2011. Mr. Li sought repayment of the principal and interest at four times the benchmark lending rate from September 12, 2011, until full payment. Mr. Wang did not submit any written defense or evidence.

The court held a public hearing on March 12, 2012. The plaintiff appeared through his legal representative, Mr. Zhao. Mr. Wang was properly served with notice but did not attend the hearing and provided no defense. The plaintiff submitted the original promissory note as evidence. The court reviewed the document and found it credible and sufficient to prove the existence of the loan and the defendant’s default. The evidence was admitted without challenge.

The court found that a valid loan agreement existed between the parties and that Mr. Wang failed to repay within the agreed two-month period, constituting a breach of contract. Under the Contract Law of the People’s Republic of China, the borrower must repay the principal. The court also ruled that since the parties did not agree on an interest rate, the overdue interest should be calculated using the benchmark lending rate published by the People’s Bank of China for the same period. The claim for interest at four times that rate was rejected.

The court applied Articles 107, 206, 207, and 211 of the Contract Law. Article 206 requires repayment of borrowed money at the agreed time. Article 207 provides for payment of overdue interest if the borrower fails to repay. Article 211 states that if interest is not agreed, it is presumed interest-free, but the lender may still claim statutory interest for delay. The court held that without a written interest clause, the plaintiff could not demand a higher rate. The defendant’s absence did not prevent the court from proceeding under the Civil Procedure Law