On 8 Nov. 2021, the Standing Committee of the People’s Congress of Hainan Province issued the proposed “Regulations on Enterprise Bankruptcy Proceedings in Hainan Free Trade Port (Draft)” (hereinafter “the Regulations”, 海南自由贸易港企业破产程序条例（草案）) for public comment through 28 Nov. 2021.
In terms of scope, the Regulations is to be applied where a debtor, whose domicile is within Hainan Free Trade Port, is incapable of paying off his due and payable debts and his property is not sufficient to pay off all the debts, or the debtor obviously lacks the capability to pay off his debts.
Compared to the “Enterprise Bankruptcy Law of the People’s Republic of China”(hereinafter “the Enterprise Bankruptcy Law”,中华人民共和国企业破产法), the Regulations has the following main features.
First, the scope of debtors subject to bankruptcy proceedings is expanded. Compared with the Enterprise Bankruptcy Law, the Regulations expands the scope of debtors from enterprise legal persons alone to enterprise legal persons, partnerships, and sole proprietorships.
Second, jurisdiction is further centralized. The Regulations clarifies that bankruptcy cases in Hainan Free Trade Port shall be under the jurisdiction of the people’s court of the debtor’s domicile, while cases under the exclusive jurisdiction of Hainan Free Trade Port’s specialized bankruptcy judiciary are excluded.
Prior to this, the “Hainan Free Trade Port Law of the People’s Republic of China”(海南自由贸易港法) has given Hainan greater legislative authority. The Regulations reflects its expanded legislative authority by its breakthroughs to the Enterprise Bankruptcy Law.
Cover Photo by Pavel Roev on Unsplash
Contributors: CJO Staff Contributors Team
