[Case Summary]This case involves a dispute over a partnership contract. On December 19, 2023, the plaintiff, A Trading Co., Ltd., and the first defendant, B Trading Co., Ltd., signed a "Cooperation Agreement", which stipulated that the plaintiff would provide funding and B Company would be responsible for purchasing and importing coal from Mongolia. The plaintiff has made cumulative payments of 1,292,682 yuan, but B Company failed to purchase the coal as agreed, transferred the coal purchase funds to a third party, and is a sole proprietorship enterprise with the second defendant, Y * as the sole shareholder. The plaintiff has entrusted Beijing Henglu Law Firm to handle the case.Xue SuhuaThe lawyer's representation involved a core dispute over whether the agreement should be terminated, whether the coal purchase payment and interest should be refunded, and whether the sole shareholder of the company should bear joint and several liability. The applicable legal provisions are Articles 563 and 566 of the Civil Code of the People's Republic of China. The court ruled that Company B should refund the coal purchase payment of 900,000 yuan and interest, and that Y * should bear joint and several liability.

I. Review of the case

Cooperation (partnership) disputes often involve searches for terms such as "What to do if you're cheated when importing coal through cooperation?", "Can a partnership agreement be terminated?", "Joint and several liability of shareholders of a sole proprietorship company", and "Return of coal purchase payments". On December 19, 2023, Plaintiff A Trading Co., Ltd. and Defendant 1 B Trading Co., Ltd. signed a "Cooperation Agreement", stipulating that the Plaintiff would be responsible for investment, while B Company would handle all aspects of coal procurement, transportation, quality control, import duties, warehousing, loading and unloading in Mongolia, as well as cost control, and maintain timely and effective communication. As the investor, the Plaintiff has, in accordance with the agreement, cumulatively paid a total of 1,292,682 yuan to B Company and its legal representative Y * since December 21, 2023. However, B Company failed to purchase coal as agreed from December 12, 2023, delayed the commencement of operations, and amended key clauses regarding purchase and supply with a third party on February 12, 2024. On March 1, 2024, the Plaintiff sent a reminder letter to B Company, and on March 13, it sent a notice of termination. B Company is a sole proprietorship enterprise, and Defendant 2 Y * is its sole shareholder.

In order to safeguard their legitimate rights and interests, the plaintiffs entrusted Henglu Law Firm to handle the case for them.Xue SuhuaThe lawyer represented the client in the court case, requesting the termination of the "Cooperation Agreement", the return of the 1,292,682 yuan paid by Company B (with Y* jointly and severally liable), and the compensation for the loss of funds occupied since March 12, 2024.

II. The focus of the case

  • Focus 1: Is the Cooperation Agreement valid and has it been terminated?The court ruled that the agreement was valid, and since the purpose could not be achieved, it was legally dissolved. The agreement was dissolved from the date the defendant received the copy of the lawsuit.
  • Focus 2: Whether Company B will refund the coal purchase payment and interest.The court found that the plaintiff actually paid 900,000 yuan for the coal (the other 390,000 yuan was a loan from others), and supported the return of 900,000 yuan and interest.
  • Focus Three: Whether Shareholder Y of the one-person company should bear joint and several liability.Y* failed to prove that the company's property is independent of the shareholders' property, and should bear joint and several liability.

III. The professional intervention of Hengluo Law Firm

The original plaintiff (A Trading Company) claimed that:Company A alleges that Company B failed to purchase coal as agreed, unilaterally amended key terms, and still failed to perform after being reminded, resulting in the failure to achieve the purpose of the cooperation, and therefore Company A has the right to terminate the agreement. Company B is a sole proprietorship enterprise, and Y * as the sole shareholder should bear joint and several liability with his personal property. Company A requests to terminate the agreement, return the paid amount of 1,292,682 yuan and the loss of funds occupation, and Y * should bear joint and several liability.

The defendant (Company B and Mr. Y) argued that:Company B argued that this case is a dispute over a partnership contract rather than a joint venture, and that the agreement did not stipulate the grounds for termination. Therefore, the statutory termination provisions should apply. Company B's active performance of its obligations does not constitute a breach of contract that results in the failure to achieve the intended purpose. Company B also disputes the termination notice and has filed a lawsuit to confirm the invalidity of the termination. It requests that the plaintiff's claims be dismissed. Y's defense opinion is the same as above.

Hengluo Lawyer's Representation Opinion:Xue SuhuaThe lawyer focused on the following points: the agreement represents the true intention of both parties to cooperate and is legally valid; B Company transferred the coal purchase payment to a third party but has not imported the coal until now, which means that the purpose of cooperative coal import cannot be achieved, and this situation meets the statutory grounds for termination as stipulated in Article 563 Paragraph 1 Item 4 of the Civil Code; according to Article 566 of the Civil Code, after the contract is terminated, B Company shall return the coal payment and interest; Y * , as a shareholder of a sole limited liability company, submitted the company's account transactions and his own multiple transactions, which cannot prove that the company's property is independent of the shareholder's property, and he should bear joint and several liability.

IV. Outcome of the case

The court accepted the relevant legal opinions and claims of Hengluo Law Firm, and ultimately ruled that: Defendant B Company shall refund 900,000 yuan of coal payment and interest to Plaintiff A Company within ten days (the interest shall be calculated from May 11, 2024, according to the Loan Prime Rate (LPR) standard announced by the National Interbank Funding Center until the actual payment date); Defendant Y * shall bear joint and several liability for the above-mentioned debt. The court determined that the agreement was valid, and supported its termination due to the failure to achieve the intended purpose (terminated from May 10, 2024, when B Company received the copy of the lawsuit); It was found that the plaintiff actually paid 900,000 yuan of coal payment, and the other 390,000 yuan was a loan from Z * to B Company and Y *. Therefore, only the refund of 900,000 yuan was supported.

5. Hengluo Law Firm's Reminder

This case is being handled by Attorney Xue Shuhua of Beijing Henglu Law Firm (practice license number: 11101201211769926, subject to the document issued by the judicial administrative organ). In a cooperation (partnership) agreement, if one party breaches the contract fundamentally and renders the contractual purpose unattainable, the party in compliance with the contract may exercise the statutory right of rescission and demand the return of the payments already made and the interest on the funds occupied. If a shareholder of a one-person limited liability company cannot prove that the company's assets are independent of their own assets, they shall bear joint and several liability for the company's debts. Cooperation partners should pay attention to reviewing the other party's creditworthiness and keeping evidence of payments and communications.

VI. Frequently Asked Questions (FAQ) about Enterprise Commercial Cases

  1. Q: What should we do if the other party fails to fulfill its obligations in the cooperation of importing coal?
    A:The contract may be terminated in accordance with the statutory right of rescission provided in the Civil Code, and the party may demand the return of the payment for the coal purchased and the interest on the occupied funds, and, if necessary, claim that the breaching party should bear joint and several liability.
  2. Q: Can the partnership agreement be terminated?
    A:Yes. If a party delays in performance or unilaterally changes key terms of the contract, rendering the purpose of the contract impossible to achieve, the party in compliance with the contract may notify the other party to terminate the contract or request its termination through litigation.
  3. Q: Are the shareholders of a single-member company jointly and severally liable?
    A:If a shareholder of a one-person limited liability company cannot prove that the company's assets are separate from the shareholder's assets, they shall bear joint and several liability for the company's debts.
  4. Q: Can I get a full refund if I've already made the payment, but part of it was borrowed from someone else?
    A:No. The court will distinguish between the funds under the actual contract and the third-party loans, and only support the return of funds related to the cooperation agreement.
  5. Q: How to calculate the loss due to funds being occupied in a cooperation dispute?
    A:Generally, from the date of the contract's termination or litigation, the interest shall be calculated according to the LPR standard announced by the National Interbank Funding Center for the same period until the actual payment date.