secondary title
o1 basic case
On December 2, 2017, Company A, Gao, and Li signed the "Equity Transfer Agreement", agreeing that an enterprise would transfer its 5% equity of Company X to Gao for 550,000 yuan, and Li entrusted Gao to For financial management of personal digital currency assets, Mr. Gao did not repay Mr. Li’s related assets and income. Based on the income generated by the digital currency assets, Mr. Li agreed to pay 300,000 yuan for equity transfer to Company A on behalf of Mr. Gao. Mr. Gao directly paid Mr. A The enterprise pays 250,000 yuan for equity transfer. Gao returned all the monetary assets (20.13 bitcoins, 50 bitcoin cash, and 12.66 bitcoin diamonds) that Li entrusted him to conduct financial management to Li's e-wallet in three installments. After the agreement was signed, Gao did not fulfill his contractual obligations.Company A and Li applied for arbitration to the Shenzhen Arbitration Commission according to the arbitration clause agreed in the "Equity Transfer Agreement" signed between them and Gao on December 2, 2017. Company A and Li apply for arbitration, the main request is: change the 5% shares of Company X held by Company A to Mr. Gao, Mr. Gao pays 250,000 yuan for the equity to Company A, and Mr. Gao returns the digital currency to Mr. Li Assets 20.13 BTC (Bitcoin), 50 BCH (Bitcoin Cash), and 12.66 BCD (Bitcoin Diamond) assets equivalent to USD 493,158.40 and interest, Gao paid Li a liquidated damages of RMB 100,000.After the hearing, the arbitral tribunal held that Gao did not deliver bitcoins, etc., which were mutually agreed upon by both parties and regarded as having property significance, in accordance with the agreement in the contract involved in the case, which constituted a breach of contract and should be compensated. Referring to the public information on the closing prices of BTC (Bitcoin) and BCH (Bitcoin Cash) at the time of performance of the contract published on the okcoin.com website provided by Li, the arbitral tribunal estimated that the property loss to be compensated was US$401,780. The arbitral tribunal made a decision to change 5% of the shares of Company X held by Company A to Mr. Gao; Mr. Gao paid RMB 250,000 for the equity transfer to Company A; Mr. Gao paid US$401,780 to Mr. The exchange rate against RMB is settled in RMB); Gao pays Li a liquidated damages of RMB 100,000.Afterwards, Gao refused to accept the award and applied to the Shenzhen Intermediate People's Court to revoke the arbitration award on the grounds that the award violated social and public interests. The specific reasons are:The arbitration award is against the public interest of the society.
First of all, the public information referenced by the arbitration award on the estimation of the amount of property damage is the closing price published on the okcoin.com website. According to the "Announcement of the Central Cyberspace Administration of the People's Bank of China, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission on Preventing the Risks of Token Issuance and Financing", any so-called token financing transaction platform shall not engage in legal transactions after September 4, 2017. The exchange business between currency and tokens and "virtual currency" shall not be bought or sold or used as a central counterparty to buy or sell tokens or "virtual currency", and services such as pricing and information intermediary shall not be provided for tokens or "virtual currency". Therefore, starting from September 4, 2017, the okcoin.com website provides digital currency transactions and pricing are illegal. Moreover, since the digital currency cannot be traded on the above-mentioned website, the pricing of the digital currency on the above-mentioned website has no reasonable basis and cannot be accepted.
o2 Court decision
After the trial, the court held that the "Notice of the People's Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission on Preventing Bitcoin Risks" (Yinfa [2013] No. 289) clearly stipulates that Bitcoin does not have the same legal status as currency, and cannot and should not be used as currency in the market.In 2017, the People's Bank of China and other seven ministries jointly issued the "Announcement on Preventing Financing Risks of Token Issuance", which reiterated the above regulations.At the same time, from the perspective of preventing financial risks, it is further proposed that any so-called token financing trading platform shall not engage in the exchange business between legal tender and tokens, "virtual currency", and shall not buy or sell tokens or "virtual currency" as a central counterparty. "Virtual currency" and shall not provide pricing, information intermediary and other services for tokens or "virtual currency".The above-mentioned documents essentially prohibit the redemption, transaction and circulation of Bitcoin, and the speculation of Bitcoin is suspected of engaging in illegal financial activities, disrupting financial order and affecting financial stability.The arbitration award involved in the case awarded that Gao should compensate Li for US dollars equivalent to bitcoin, and then convert the US dollar into RMB. In essence, it supported the payment and transaction between bitcoin and legal tender in disguise, which was inconsistent with the spirit of the above-mentioned documents and violated the social norms. public interest, the arbitral award shall be set aside. The court will no longer review the other reasons for the application submitted by the applicant Gao.
To sum up, part of the reasons for the applicant Gao's application to set aside the arbitral award are valid. After reporting to the Supreme People's Court for verification, in accordance with the provisions of Article 58, Paragraph 3 of the Arbitration Law of the People's Republic of China, the ruling is as follows:o3 Chain Law Review
In this case, the important reasons why Shenzhen Intermediate People's Court revoked the arbitration award involved in the case were:It is believed that the arbitration award violates the social public interest.
Article 58 of the "Arbitration Law" and Article 237 of the "Civil Procedure Law" respectively stipulate the specific circumstances under which the court revokes or refuses to enforce domestic arbitral awards. "Contrary to the public interest" is the only ground that the court can voluntarily invoke to annul or not enforce a domestic arbitral award.
Among them, Article 58 of the "Arbitration Law" stipulates that if a party submits evidence to prove that the award has any of the following circumstances, it may apply to the intermediate people's court where the arbitration commission is located to revoke the award:(1) There is no arbitration agreement; ... (6) The arbitrators extorted and accepted bribes, engaged in malpractices for personal gain, and perverted the law when arbitrating the case.If the people's court has established a collegial panel to review and verify that the award falls under any of the circumstances specified in the preceding paragraph, it shall rule to revoke it.If the people's court finds that the award is contrary to the public interest, it shall rule to revoke it.However, my country's laws do not clearly define what is "social public interest".In the "New Interpretation and New Interpretation of the Arbitration Law and Supporting Regulations" published by the People's Court Press, the definition of "social public interest" is as follows:Protecting the public interest is a common practice in modern countries, and it is also one of the judicial principles of our country.The so-called social public interest refers to the public interest commonly referred to in jurisprudence, and it refers to the interests belonging to all members of society. Social and public interests, personal interests, and local interests have both a unified and coordinated aspect, as well as a contradictory and conflicting aspect. Violations of social and public interests can be manifested in various forms, and it is difficult to list them all in detail. The common ones are violations of the basic systems and norms of our country's laws, and violations of the basic principles of social and economic life.Natural and legal persons will be protected by national laws only if they exercise their rights within the scope permitted by law. Therefore, this law stipulates that if the people's court finds that the arbitral award violates the public interest, it shall rule to revoke it.Let’s look back at the award of the Arbitration Commission. The original award stated that “Gao paid US$401,780 to Li (according to the exchange rate of US dollar to RMB on the date of the award)”.As far as the above ruling is concerned, the following contents are essentially determined:1. Recognize the property attributes of digital assets such as Bitcoin;2. The value of digital assets is determined based on the closing price of Bitcoin published on the okcoin.com website provided by the applicant. This also means directly linking digital assets such as Bitcoin to legal tender;3. Gao needs to pay Li a compensation.The author believes that item 1 is definitely not a problem. Regarding the property attributes of Bitcoin, you can refer to the previous article of Chain Law: The Bitcoin Property Damage Compensation Case was selected as the 2020 Excellent Case of the National Court System.The official WeChat account of the Supreme People's Court previously announced the "National Court System's 2020 Excellent Case Analysis and Selection Activity Winners List", which was sponsored by the Supreme People's Court and undertaken by the China Institute of Applied Law. Among them, "Li Shengyan, Brandon Smit v. Yan Xiangdong, Li Min, etc. Property Damage Compensation Dispute Case - The Legal Attributes of Bitcoin and Its Judicial Remedies" compiled by Judge Liu Jiang of Shanghai No. 1 Intermediate People's Court Among the 2,745 excellent case analyzes initially evaluated and selected by the Higher People’s Court, it stood out and was selected into the 2020 Excellent Cases of the National Court System.Because when the Supreme People's Court selects cases, the main considerations include the judgment results and the correct application of the law, the typicality and guidance of the case, the main points of the judgment and the writing of the case notes. To some extent, this also means that the case In the judgment, the determination of the property attributes of Bitcoin and the judicial relief for Bitcoin-related cases have been recognized by the Supreme People's Court.The problem occurs in item 2.According to the provisions of the September 4th Announcement: any so-called token financing trading platform shall not engage in the exchange business between legal tender and tokens, "virtual currency", and shall not buy or sell tokens or "virtual currency" as a central counterparty. Do not provide pricing, information intermediary, etc. services for tokens or "virtual currencies".In other words, Chinese laws do not recognize the legitimacy of digital asset trading platforms, and prohibit any organization from engaging in exchange, pricing, and information intermediary services. Since its legality is not recognized, its website data cannot be used as the basis for judicial rulings. Combining with the court's judgment, from this point of view, a basic requirement for the public interest is that "natural persons and legal persons will be protected by national laws only if they exercise their rights within the scope permitted by law. This is the ruling of the Shenzhen Intermediate People's Court The idea of setting aside the arbitral award.Some people may have doubts. In the above-mentioned excellent cases of the Supreme Court, the amount of compensation that needs to be compensated is clearly confirmed.Here we need to be clear: In the (2019) Hu 01 Min Zhong No. 13689 Judgment of Shanghai No. 1 Intermediate People's Court, it is stated as follows:From a civil point of view, the appellant's act of forcing the appellee to transfer out Bitcoin violated the appellee's property rights. The effective criminal ruling also stated that the appellant voluntarily returned the property obtained from the appellee. Therefore, the appellant should return the disputed Bitcoin to the appellee regardless of the law or the appellant’s promise in the lawsuit. Regarding the amount of bitcoins in dispute. According to the notarial certificate submitted by the appellee, the number of bitcoins in dispute was 18.87997062. According to the counting habit, the court of first instance retained two decimal places and rounded up to 18.88, which was not inappropriate. Misappropriation of other people's property, if it cannot be returned, it shall be compensated at a discounted price. Usually, the determination of the compensation amount needs to take into account factors such as the market price at the time of the property damage, the price at which the infringed party obtained the property, the income obtained by the infringer, the amount of compensation claimed by both parties, etc., and shall be determined based on the actual situation of the case.In this case, the CoinMarketCap.com website is not a virtual currency transaction price information release platform recognized by my country, so the transaction price data of Bitcoin on the website cannot be directly used as the standard for determining the loss of the appellee. The appellee could not provide the court with the price of the bitcoins he obtained, and the appellant stated that the bitcoins were frozen, that is, there was no profit amount for the infringer in this case. In the second instance, if the appellant needs to return bitcoins to the appellee, but the appellant fails to do so, how to determine the discounted compensation standard for bitcoins, the appellant confirmed to this court that bitcoins should be compensated at a rate of 42,206.75 yuan per bitcoin , the appellee also accepted the discounted compensation standard, so this court calculated the compensation amount based on the standard of 42,206.75 yuan for each bitcoin.The original text of the judgment reads: "Appellant Yan Xiangdong, Li Min, Sun Fei, and Cen Shengfang (SAMSINGFONG) shall jointly return 18.88 bitcoins to the appellee Li Shengyan and Brandon JOSEPHSMIETANA within ten days from the effective date of this judgment. , if it cannot be returned, it will be compensated at RMB 42,206.75 each.”There are two points worth noting in the above judgment:
1. The CoinMarketCap.com website is not a virtual currency transaction price information publishing platform recognized by my country, so the transaction price data of Bitcoin on the website cannot be directly used as the identification standard for the loss of the appellee;
2. When the appellant is unable to return, how to determine the discounted compensation standard of Bitcoin, the appellant confirmed to this court that the compensation for each Bitcoin is 42,206.75 yuan, and the appellee also accepts the discounted compensation standardIn other words, the case in Shanghai did not cite any website data to price Bitcoin. The amount determined in the court’s judgment was made with the consent of both parties, which is different from the arbitration committee’s ruling in this article.
Such a case also reflects the current status of judging cases involving digital assets by my country's judiciary - the standards are different.In fact, in some criminal cases, in order to determine the amount involved in the criminal suspect, a special price appraisal will be carried out on the digital assets involved in the case. For example, in the Plustoken case a few days ago, the price identification center of the local price bureau identified the assets involved in the case. . In addition, for some cases of theft of bitcoins, due to the issue of pricing bitcoins, some courts finally found it as a crime of illegally obtaining computer information system data, which essentially denied the "property" attribute of bitcoins. According to this approach, it may bring difficulties to the solution of other criminal legal issues in practice and form a loophole in criminal punishment.It is also worth noting that in this revocation case, it was mentioned in the original judgment that the revocation judgment was made after reporting to the Supreme People's Court.Combining the case of Shanghai and the cancellation case of Shenzhen this time, we can still draw the following conclusions:
1. The property attribute of Bitcoin is certain;2. Arbitration and courts are not suitable to link digital assets with legal tender in any form in judgment (civil).Finally, after the case is dismissed, the original applicant can go to the court to sue again. When designing litigation ideas and claims, full attention should be paid to the second point above, such as designing the appeal as "returning the corresponding digital assets".
