In relation to the basic legal system of China:<br>(a) (i) explain the term judicial interpretation; (3 marks)<br>(ii) explain the legal basis for the Supreme People’s Court to issue a judicial interpretation. (3 marks)<br>(b) Article 428 of the Contract Law of China provides that upon the implementation of this law, the previous contract laws shall be simultaneously abolished. Based on this provision, the Supreme People’s Court has issued a Judicial Interpretation on the Application of the Contract Law.<br>In relation to this Judicial Interpretation, state the rule of the applicable law to deal with a contractual dispute brought to the people’s court after the date of implementation of the Contract Law but the contract was concluded before that date. (4 marks)

Yado Steel Co Ltd (Yado Steel) entered into a loan agreement with Industry Bank to borrow RMB 20 million yuan for its expansion programme. Yado Steel provided its office building as property mortgaged for the debt, and made the registration as required. Mr Ding, one of the shareholders of Yado Steel, placed a guarantee letter of general liability in favour of Industry Bank.<br>Due to poor performance, Yado Steel failed to repay the debt when it came to maturity. Meanwhile, Industry Bank, under a restructuring plan, transferred the credit of RMB 20 million yuan together with the right of pledge to Oriental Assets Management Co (OAM). It also made a written notice to Yado Steel and Mr Ding, but failed to transfer the right of mortgage to OAM. On the contrary, Industry Bank concluded an agreement with Yado Steel before it went bankrupt, and settled other debts owed by the latter through the sale of the office building as mortgaged for the loan. Having found this fact, OAM, as a transferee of the credit, requested the court to order Mr Ding to bear its guarantor’s liability for the debt. Mr Ding asserted that he was a pledger with a general liability and would be responsible for the debt only if the things mortgaged could not satisfy the debt.<br>Required:<br>Answer the following questions in accordance with the relevant provisions of the Property Law and the Contract Law, and give your reasons for your answer:<br>(a) State whether the defence of Mr Ding should be supported by the court. (6 marks)<br>(b) State what was the cause of this dispute between OAM and Industry Bank. (4 marks)

In relation to the Securities Law of China:<br>(a) explain a takeover by offer of a listed company; (3 marks)<br>(b) explain what happens after the expiration of the duration of the takeover by offer. (7 marks)

In relation to the Property Law of China:<br>(a) state the rules relating to the transfer of mortgaged property during the period of mortgage; (7 marks)<br>(b) state the rules relating to the transfer of credit which is secured by a mortgage. (3 marks)

In relation to the Contract Law of China:<br>(a) explain what is ‘a contract by unauthorised agent’; (3 marks)<br>(b) state the legal effect of a contract by unauthorised agent; (3 marks)<br>(c) state what measures can be taken by the counterparty to a contract by unauthorised agent in dealing with the effect of such a contract. (4 marks)

X fails to perform their obligation and Y seeks to exercise the right of mortgag.Which of

A. The mortgaged property may be converted by auction
B. The mortgaged property may be converted by being sold off
C. Parties may agree upon the means of realising the mortgage right
D. Parties may agree that the mortgaged property be used for offsetting the debts as per its value in the mortgage agreement

A company must allocate annual after-tax profits to the statutory common reserve fund on distribution. What is the percentage to be allocated？

A. 5%
B. 10%
C. 15%

Under which of the following circumstances may employees dissolve a labour contract？

A. The employer is declared bankrupt
B. The business licence of the employer has been revoked by the government
C. The employer is ordered to close its business by a competent court
D. The employer fails to provide labour protection or working conditions specified in the labour contract

What is jurisdiction by designation？

A. The jurisdiction agreed by the parties in their contract to hear their disputes
B. The jurisdiction authorised by the people’s court at a higher level to try cases of first instance
C. The jurisdiction decided by people’s courts at the same level, if all these courts have jurisdiction over a particular case
D. The jurisdiction decided in accordance with the location of the subject matter

Ms Huang, a shareholder of the Daqing Limited Liability Company (Daqing), found that the general manager, Mr Ding, had accepted bribes from several suppliers, which materially caused losses to Daqing, and adversely affected the interests of all shareholders.<br>Further examination, through a Certified Public Accountant firm, disclosed that there were a lot of affiliated transactions between Daqing and Everbright Co, which was the majority shareholder of Daqing. Mr Ding was recommended by Everbright Co and appointed by Daqing’s board of directors, which was substantially influenced by Everbright Co. With a series of such transactions Daqing transferred huge profits to Everbright Co and adversely affected Daqing.<br>Required:<br>(a) State whether Ms Huang was entitled to take legal action against Mr Ding for his illegal behaviour of accepting bribes which adversely affected all the shareholders. (2 marks)<br>(b) State TWO different legal actions Ms Huang was entitled to take to protect the rights of Daqing and its shareholders due to the affiliated transactions with Everbright Co. (4 marks)