The lack of ability to pay due to reasons such as the bankruptcy of a subcontractor or an illegal subcontractor is itself one of the original intentions of the judicial interpretation that empowers the actual construction worker to break through the privity of the contract to cla

In the construction market, it is very common to subcontract or illegally subcontract, and borrow qualifications to affiliate construction. In the case of the bankruptcy of the subcontractor, illegal subcontractor or affiliated person (hereinafter collectively referred to as the contractor), the project involved in the case Does the payment belong to the contractor's bankruptcy estate? Can the actual constructor claim that the contractor pays the project price directly to him? The author specifically searched several judicial cases on this issue for readers’ reference.

Case

Case 1 Yang Chaomin and Suqian Zhensu Construction Engineering Co., Ltd. Daqing Oilfield Real Estate Development Co., Ltd. and other construction projects subcontract Dispute case

Trial court : Suqian Intermediate People's Court of Jiangsu Province

Case number : ( 2020) Su 13 Min Zhong No. 3835

Judicial Interpretation

The judicial interpretation stipulates that the actual constructor breaks through the privity of the contract to claim rights from the contractor, which is a special institutional arrangement made by the judicial interpretation to protect the rights and interests of migrant workers. The lack of ability to pay due to reasons such as the bankruptcy of a subcontractor or an illegal subcontractor is itself one of the original intentions of the judicial interpretation that empowers the actual construction worker to break through the privity of the contract to claim rights against the contractor. The subcontractor or illegal subcontractor should not be based on the Bankruptcy is used to deny the actual builder's right to claim the project price from the contractor. Judging from the actual situation, after the contractor transfers or subcontracts the construction project, the contractual obligations of the construction project shall be performed by the actual constructor, and it is more in line with the requirements of substantive fairness for the actual constructor to obtain the project payment.

Case 2 Liaoning Jinqing Construction Group Co., Ltd. Kangping County Xiguantun Mongolian Manchu Township People's Government's external debt collection dispute case

Trial court : Liaoning Provincial Higher People's Court

Case number : (2020) Liao Min Final No. 1057

Key Points of the Judgment

After Jinqing Company obtained the project involved in the case, it violated legal provisions and contract stipulations by subcontracting the project to Gao Jingyang, a non-party who was not involved in the case. Gao Jingyang organized personnel for the construction, and Gao Jingyang was the actual constructor of the project involved. Jinqing Company only provided bank accounts and cooperated with the procedures for declaring project payment. Jinqing Company did not invest corresponding costs in the actual construction of the project. Before Jinqing Company entered bankruptcy proceedings, the Xiguan Township government paid the project payment to Jinqing Company, and Jinqing Company paid it to Gao Jingyang. However, Jinqing Company has entered the bankruptcy liquidation process. If Jinqing Company's appeal is supported, there will be a dispute over whether the money is the bankruptcy property of Jinqing Company or the property of the actual builder. The relevant judicial interpretations of construction projects and the "Reply of the Supreme People's Court on the Issue of Priority to Reimbursement of Construction Project Prices" both protect the interests of migrant workers on the basis of protecting the rights and interests of actual constructors. If the projects organized by the actual constructors will be awarded corresponding If the project funds are included in the bankruptcy estate, the interests of the vast number of migrant workers behind the actual construction workers will not be protected.

Case 3 Shen Jinbiao and Domestic Industrial Suzhou Xinxing Building Materials Co., Ltd. Jiangsu Zhongyuan Construction Group Co., Ltd. Construction Project Construction Contract Dispute Case

Trial Court : Suzhou Intermediate People's Court, Jiangsu Province

Case No. : (2019) Su 05 Minzai No. 92

Judgment Summary

The "Construction Project Construction Contract" signed by Defeng Company and Zhongyuan Company is the true intention of both parties. Its content does not violate the prohibitive provisions of national laws and regulations and should be legal and valid. In this case, Shen Jinbiao is the actual constructor, and Defeng Company is the contractor. According to law, Shen Jinbiao, the actual constructor, shall be liable to Shen Jinbiao within the scope of the unpaid project price. Whether Zhongyuan Company is bankrupt or not will not affect the scope of Defeng Company's above-mentioned obligations.

Case 4 Mingye Construction Group Co., Ltd., Yuan Wenzhong Construction Project Construction Contract Dispute Case

Trial Court : Supreme People's Court

Case No. : (2020) Supreme Court Civil Application No. 2906

Judgment Summary

Mingye Company Basis The case involved the " construction contract " and it was not inappropriate to claim rights from the Chongxian Subdistrict Office. However, as the actual constructor, Yuan Wenzhong required the Chongxian Subdistrict Office to assume responsibility within the scope of the unpaid construction project price in accordance with the provisions of the judicial interpretation, which would inevitably lead to Mingye Company was unable to fully claim the above claims. During the first and second instance trials, Yuan Wenzhong did not directly claim credit against the Chongxian Subdistrict Office. The first and second instance courts judged Chongxian Subdistrict Office based on judicial interpretations on the basis of finding out that the Chongxian Subdistrict Office still owed Mingye Company for the project. The office shall be liable to Yuan Wenzhong within the scope of the unpaid construction project price. Therefore, it was not inappropriate for the first and second instance courts to fully ascertain the facts of the case and judge the Chongxian Sub-district Office to bear responsibility directly to Yuan Wenzhong based on relevant judicial interpretations.

Case 5 Shuai Zhaoqiang and Chongqing Gezhouba Rongchuang Jinyu Real Estate Co., Ltd. Construction Project Contract Dispute Case

Trial Court : Chongqing First Intermediate People's Court

Case No. : (2021) Yu 01 Min Zhong No. 1898

Referee Purpose

The premise that the contract developer shall bear direct liability to the actual constructor is that the contract developer shall be responsible for payment to the actual constructor within the scope of the project payment owed to the contractor; and such payment liability shall not exceed the amount paid by the contractor to the actual constructor of payment. In the project involved in the case, Shuai Zhaoqiang was the actual constructor based on his affiliation with Fuli Construction Company, but he was not the only or last-hand actual constructor. Some projects were not constructed by Shuai Zhaoqiang, and some projects were subcontracted by Shuai Zhaoqiang. Give it to others to work on. The accounts receivable of Fuli Construction Company should be paid to all actual constructors of the project involved, not just to Shuai Zhaoqiang. Shuai Zhaoqiang asked Sunac Jinyu Company to bypass Fuli Construction Company and directly pay him all the money Sunac Jinyu Company owed Fuli Construction Company, which harmed the interests of other actual construction workers. In the event that Fuli Construction Company enters bankruptcy proceedings, Fuli Construction Company's accounts receivable shall be distributed among Fuli Construction Company's multiple creditors in accordance with the law. Shuai Zhaoqiang asked Sunac Jinyu Company to bypass Fuli Construction Company and directly pay him all the money owed by Sunac Jinyu Company to Fuli Construction Company, which harmed the interests of other creditors.

Analysis

Article 43, paragraph 2, of the "Interpretation of the Supreme People's Court on the Applicable Legal Issues in the Trial of Construction Contract Dispute Cases (I)" (Fa Interpretation [2020] No. 25) (hereinafter referred to as the New Interpretation I) stipulates that, If the actual constructor claims rights against the contractor as the defendant, the people's court shall add the subcontractor or illegal subcontractor as the third party in the case. After ascertaining the amount of the construction project price owed by the contractor to the subcontractor or illegal subcontractor, It was ruled that the contract developer shall be liable to the actual constructor within the scope of the unpaid construction project price. However, when the contractor becomes bankrupt, there is still some controversy in practice as to whether the project payment involved in the case should be recognized as the contractor's bankruptcy property, and whether the actual constructor can claim the project payment directly from the contractor. The author believes that the bankruptcy of the contractor should not be an obstacle for the actual constructor to claim the project payment from the contractor. (This article is based on the assumption that the construction project has passed the acceptance test.) The reasons are as follows:

一 The actual constructor broke the contract Relativity, the legal basis for claiming project payment from the contractor

Adhering to the principle of contract relativity is a basic principle of civil law . The relativity of a contract includes the following three aspects: The first is the relativity of the subject , that is, the contractual relationship only binds the specific subject who concluded the contract and has no legal effect on non-contracting parties; the second is the relativity of the content , That is to say, only the parties to the contract can enjoy the contractual rights and bear the contractual obligations. No one other than the parties can claim the contractual rights or bear the contractual obligations; third is the relativity of liability , and the liability for breach of contract can only be between the parties in the specific contract relationship. If a breach of contract occurs, the breaching party shall be liable for breach of contract to the non-breaching party. Non-contracting parties shall not be liable for breach of contract, and contract parties shall not be liable for breach of contract to non-contracting parties. We have also noticed that due to the high development of the market economy and rapid social progress, substantive inequality between civil subjects in the transaction process has become an increasingly serious problem, and the protection of vulnerable groups such as consumers and workers has become an increasingly serious problem. It highlights that contract law is gradually moving from formal justice to substantive justice. In some specific areas, for the purpose of protecting vulnerable groups or achieving substantive justice, special provisions of the law may be allowed to break through the privity of contract. In the field of construction contracts, the law allows the actual constructor to break through the privity of the contract and claim the project payment directly from the contractor.

"The Interpretation of the Supreme People's Court on the Applicable Legal Issues in the Trial of Construction Project Construction Contract Disputes" (hereinafter referred to as the old Interpretation 1) stipulates in the second paragraph of Article 26 that if the actual constructor claims rights against the contractor as the defendant, the people's The court may add a subcontractor or an illegal subcontractor as a party to the case, and the contractor shall only be liable to the actual constructor within the scope of the unpaid project price. The "Interpretation (II) of the Supreme People's Court on Applicable Legal Issues in the Trial of Construction Project Contract Disputes" (hereinafter referred to as the old Interpretation II) further extends and strengthens the rights and interests of the actual constructor. Article 24 stipulates that the actual constructor shall If the defendant claims rights for the defendant, the people's court shall add the subcontractor or illegal subcontractor as the third party in the case. After ascertaining the amount of the construction project price owed by the contract developer to the subcontractor or illegal subcontractor, the People's Court shall judge that the contract developer owes shall be responsible for the actual construction workers within the scope of the price paid for the construction project. Article 43 of the new Interpretation 1 published by the Supreme People's Court on December 29, 2020 still follows the provisions of Article 24 of the old Interpretation 2 without substantial modifications. Both the old and new interpretations stipulate that the actual constructor can directly claim the project payment from the contractor, which strengthens the specificity and independence of the actual constructor's right of action against the contractor. Its main purpose is to solve the problem of the whereabouts of the counterparty with whom the actual constructor has a contractual relationship. When the actual constructor lacks the ability to pay due to unknown reasons, bankruptcy, deterioration of credit status, etc., and the actual constructor has no way to complain, a special relief channel is provided for the actual constructor to claim the project price, that is, the actual constructor is allowed to break through the privity of the contract and file a lawsuit A lawsuit with the contractor as the defendant. Judging from the inheritance of the value orientation of judicial interpretation, this right remedy channel of the actual construction worker should not be affected by the bankruptcy of the contractor. On the contrary, the bankruptcy of the contractor is one of the legal reasons for the actual construction worker to claim the project payment from the contractor.

二 Bankruptcy law respects non-bankruptcy law norms

In judicial practice, the reason why there is a dispute over whether the actual builder can directly claim the project payment from the contractor when the contractor goes bankrupt is because on the one hand it suffers from current laws and judicial interpretations There are no clear regulations. On the other hand, the regulations most similar to this kind of situation, such as the old interpretation 1, interpretation 2 and new interpretation 1, are all based on the system design made in a non-bankruptcy context. As for how to deal with it in a bankruptcy context, Not clear. The Bankruptcy Law is a special law that fairly handles the relationship between creditor's rights and debts of enterprises under abnormal conditions. It respects the norms of non-bankruptcy laws and is also an important principle of the bankruptcy law. This principle includes the following three aspects: First, in civil law, the basic expectation of creditors is that they can be repaid based on all the debtor’s property, while the scope and content of the debtor’s property can only be determined by rules outside the bankruptcy law, such as companies. It is determined based on legal , civil law, etc.Second, legal persons can carry out activities in the social economy as independent entities. On the one hand, their internal organizational rules (corresponding to legal norms such as company law) make them substantive; on the other hand, their external market rules (corresponding to legal norms) For example: Civil Code ) also treats it as an independent subject. As long as the legal person has not been canceled, it should be observed regardless of whether it is bankrupt or not. Third, in terms of economic effects, since civil entities participate in market transactions based on non-bankruptcy legal norms, if the fact of bankruptcy can change these transaction rules, it will cause moral hazard and prompt the debtor to file for bankruptcy based on improper motives. , obtain additional benefits that cannot be obtained in normal transactions. In other words, the basis of rights and obligations in bankruptcy law should respect and apply non-bankruptcy law norms, and bankruptcy law cannot create or change it on its own. Of course, restrictions on rights such as suspension of calculation of interest should respect the special provisions of the bankruptcy law, but even so, the basic rights of the parties, such as the principal of the creditor's rights, etc., are not denied due to bankruptcy.

In the field of construction projects, whether it is the old Interpretation 1, Interpretation 2 or the new Interpretation 1, stipulates that the actual constructor can directly claim the project payment from the contractor, and requires the court to find out that the contractor owes the subcontractor or After the amount of the illegal subcontractor's construction project price is determined, the contract developer shall be liable to the actual constructor within the scope of the unpaid construction project price.

In judicial practice, when the construction project is accepted and there are no other negative factors, the actual builder’s request that the contractor pay the unpaid project fee to him will almost always be supported by the court. Even when the project payment is preserved or executed by other creditors of the contractor, if the actual builder raises an objection to the execution, it can still be supported by the court, such as the lawsuit brought by outsiders such as Xu Ya and Zhao Lianchun Jiangsu Chengtuo Construction Engineering Co., Ltd. to object to execution case [Case No.: (2019) Suminzai No. 548], Jiangsu High Court ruled that the road project involved in the Jingjiu Road was completed by Xu Ya, the actual constructor, and passed the completion acceptance, and the project involved in the case was done by Xu Ya Labor Office As a result, all the project fees payable by the contractor Food Industry Company are specific to Xu Ya, the actual constructor, and are not the liability property of the contractor Chengtuo Company. It was ruled that should suspend the implementation of . According to the principle of bankruptcy law respecting non-bankruptcy law norms, the non-bankruptcy law norms that the actual constructor can directly claim project payment from the contractor should still be respected and applied during bankruptcy proceedings.

三 The payment of the project fee by the contractor to the actual constructor does not constitute individual settlement.

The reason why the Bankruptcy Law prohibits individual settlement is because after the people's court accepts the bankruptcy application, it shall pay equitably to all the creditors of the debtor in accordance with the law. Repayment will lead to the reduction of the debtor's liability property, thereby diluting the repayment ratio of other creditors and harming the interests of other creditors. As for the prerequisites for judging whether individual repayment is constituted, firstly, it is necessary to confirm whether the creditor's rights and debts truly exist, and secondly, it is necessary to confirm whether the debt performance subject is the bankrupt debtor. Although the creditor's rights and debts truly exist, the subject responsible for repayment is not the bankrupt debtor, then There is no issue of individual settlement at all.

According to the provisions of Article 43 of the New Interpretation 1, subcontractors and illegal subcontractors are the third party to ascertain the facts of the case in the lawsuit in which the actual constructor claims the project payment from the contractor. After the contract developer owes the subcontractor or illegal subcontractor the amount of the construction project price, the contract developer shall be judged to be liable to the actual constructor within the scope of the construction project price owed. That is to say, for the project payment owed by the contractor, the payment entity is the contractor, and the collection entity is the actual constructor. In other words, the project payment owed by the contractor is not paid to the contractor, and the actual construction fee should be collected by the contractor. , nor paid by the contractor. Therefore, the project money does not belong to the contractor's property. The payment of the project money by the contractor to the actual constructor does not detract from the contractor's property, nor does it increase the liability of the contractor, nor does it constitute any violation of the contractor's individual rights to the actual constructor. pay off.

Another view is that the employer's responsibility to pay the project payment is to bear joint and several guarantee liability to the contractor. Even so, the employer's payment of the outstanding project payment to the actual constructor still does not constitute individual settlement. According to the "Supreme People's Court" Article 23 of the Interpretation on the Application of the Guarantee System in the Civil Code of the People's Republic of China stipulates that the actual constructor may declare claims to the administrator during the contractor's bankruptcy proceedings, or may request the guarantor to assume liability.

四 Incorporating the project payment into the contractor’s bankruptcy estate does not meet the requirements of substantive justice

In situations such as subcontracting, illegal subcontracting, and affiliated construction, the contractor does not participate in the actual construction of the project, and the construction project is left to the actual constructor himself Organize construction. In the case of subcontracting and illegal subcontracting, although the construction contract signed by the subcontractor and illegal subcontractor with the contractor is legal and valid, they have no intention to participate in the construction of the project and instead leave the project to others to complete. , which itself usually only acts as a middleman and earns related benefits. In the case of affiliation, the actual constructor borrows the contractor's qualifications to sign a construction project construction contract with the contractor. The contractor itself has no intention to enter into a contract with the contractor, and has no intention to participate in the construction of the project. There is no substantive legal relationship between and , and profits are usually earned by charging affiliate fees. Whether it is subcontracting, illegal subcontracting or affiliated construction, the contractor has not invested human or material resources in the construction project from beginning to end. It usually only lends or leases the company's qualifications and cooperates with the actual construction workers to handle relevant procedures. The construction projects are usually carried out by the actual construction workers. People invest their own manpower, material and financial resources to organize and implement the project, purchase and lease building materials and building components by themselves, make independent settlements, and are responsible for their own profits and losses. The parties to perform the obligations of the construction project construction contract are all actual constructors.

After the contractor goes bankrupt, if the project money is included in the contractor's bankruptcy estate, this will lead to a paradox: The contractor has not paid any construction costs for the project, but can obtain all the project money and use the project money for the project. Repayment of all creditors of the contractor; the actual constructor invested a large amount of construction costs and actually completed the construction obligations of the construction project construction contract, but could not directly obtain the full project payment, but had to declare the creditor's rights and pay off the project in proportion. When the contractor is not bankrupt, the actual constructor can directly claim and collect the project payment from the contractor. After the contractor becomes bankrupt, he cannot claim against the contractor and can only declare claims to the contractor's manager. Those who received the project funds did not participate in the actual construction, and those who actually performed the construction did not receive the project funds. This obviously does not meet the basic requirements of substantive justice, and also clearly violates the principle of fairness that should be followed in civil law. On the contrary, the actual constructor, as the actual performer of the construction contract obligations of the construction project, has actually performed the contract obligations. According to the basic civil law principle of the unification of rights and obligations, it is appropriate for the actual constructor to obtain the project payment.

五 Incorporating the project payment into the contractor’s bankruptcy property is not conducive to solving a series of problems involved in the project.

The previous article demonstrates from a legal perspective the legality and reasonableness of the actual builder being able to directly claim the project payment from the developer in the event of the contractor’s bankruptcy. nature, although problem solving must be carried out in accordance with the law, whether in a bankruptcy or non-bankruptcy context, we cannot simply apply the law mechanically. We must also consider legal facts and social realities to achieve legal and social effects. of unity.

Incorporating the project payment into the contractor's bankruptcy estate is not conducive to the continuation and quality assurance of the construction project. The actual construction workers invested a lot of construction costs and directly participated in the project construction. They were essentially the leaders of the project progress and project quality. After the contractor goes bankrupt, if the project payment is included in the contractor's bankruptcy estate and the actual constructor declares his claims to the bankruptcy administrator in accordance with the provisions of the bankruptcy law to obtain repayment, it will not only dilute the project payment receivable by the actual constructor amount, and often delays the collection of actual construction labor payments.As a result, the construction project is likely to be suspended or unfinished due to financial problems, and the quality of the project will also be difficult to guarantee.

Incorporating the project payment into the contractor’s bankruptcy estate is not conducive to the protection of the rights and interests of construction workers. Construction has high requirements for enterprise qualifications. According to the provisions of laws and regulations such as the "Construction Law" and " Construction Enterprise Qualification Management Regulations ", construction enterprises can only operate within the scope of the qualification license after obtaining the Construction Enterprise Qualification Certificate Engage in construction activities within. my country's economy and society have been developing at a rapid pace all year round. There is a huge demand for infrastructure construction and renewal. The construction market is not fully developed. Construction units with construction qualifications are not enough to meet the needs of the huge construction market. The construction industry is a labor-intensive industry and is the industry that absorbs the most rural surplus labor. Most of the construction workers are migrant workers, but they do not have construction unit qualifications. In this way, is caused by a shortage of qualified units on the one hand, and a surplus of unqualified labor on the other. Therefore, non-compliance phenomena such as subcontracting, illegal subcontracting, and affiliated construction are becoming more and more common in the construction market. If Incorporating project funds into the contractor's bankruptcy estate will inevitably affect the payment of wages to the majority of construction workers among the actual construction workers, affect the survival rights of construction workers and their family members, and can easily lead to unstable risks such as mass incidents.

Incorporating the project payment into the contractor’s bankruptcy property is not conducive to the smooth advancement of the bankruptcy proceedings. In bankruptcy practice, many administrators and courts tend to include project funds into the bankruptcy estate, believing that this will increase the total amount of the bankruptcy estate and increase the repayment ratio of all creditors.

However, if you think carefully with a global perspective, it is not difficult to find that this kind of operation is actually very difficult to achieve expectations, and will even increase the difficulty of hearing bankruptcy cases, which is not conducive to the smooth advancement of the bankruptcy process. First, the project funds are included in the bankruptcy estate, and the claims of the actual builder for the project funds will also be included in the total bankruptcy debt. Although the total amount of bankruptcy property has increased, the total debt and the number of creditors will also increase accordingly. Moreover, the project payment is usually large in amount, and the actual builder, as a creditor, accordingly enjoys greater voting rights in the bankruptcy proceedings. When it is unable to obtain the expected project payment, it will inevitably become resistant to the various voting plans formulated by the administrator, increasing the Difficulty in passing the plan through voting. Second, the construction industry is highly professional, and construction projects involve multiple stakeholders such as developers, contractors, actual constructors, supervisors, material suppliers, building component lessors, and even borrowers, and the legal relationships involved are extremely complex. If the project funds are included in the bankruptcy estate, other legal and factual issues involved in the construction project, such as claims and debts, and the resumption and continuation of the project, must also be included in the bankruptcy proceedings, making the bankruptcy proceedings more difficult.

In summary, whether it is following the legal logic and legislative purpose of current laws and judicial interpretations, or from the perspective of substantive justice and safeguarding the interests of social development such as protecting the rights and interests of construction workers, ensuring project construction and quality, and efficiently promoting bankruptcy procedures, When the contractor goes bankrupt, the project money should not be included in the bankruptcy property, and the actual constructor can directly claim the project money from the contractor.

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