[Direct answer]In the Beijing area, it is possible, and the law does not limit the number of times that a settlement agreement can be executed. According to Article 237 of the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023 and implemented on January 1, 2024), during the execution process, the parties may reach a settlement agreement on their own; if the other party fails to perform the settlement agreement, the applicant for enforcement may apply to resume the execution of the original effective legal document. After the execution is resumed, the parties may still negotiate a settlement for the remaining debt. In practice, it is common to first reach a settlement, then resume the execution after a breach of contract, and then negotiate a second settlement for the remaining balance. However, it should be noted that the statute of limitations for applying for enforcement is two years, and repeated concessions may give the other party time to transfer assets. It is recommended that each settlement be in writing and include a provision for accelerated breach of contract penalties, and necessary reference materials should be consulted when necessary.Creditor's rights and debts, and enforcement casesColumn.
I. Problem Background and Typical Scenarios
Such problems often occur in several situations: First, after the first reconciliation, the other party only made payments for one or two installments before defaulting. The creditor wants to know if they can make further concessions; Second, when the installment plan is halfway through, the other party proposes to adjust the amount or extend the time limit, hoping to sign a new agreement; Third, after resuming enforcement, a new reconciliation is reached, but the creditor worries that too many reconciliations might be detrimental; Fourth, the other party's business is temporarily facing difficulties but still has long-term payment capacity. The creditor is willing to accept installment payments in exchange for full repayment; Fifth, when the reconciliation overlaps with the procedures of Terminal Enforcement and Resuming Enforcement, the creditor cannot distinguish the order of priority. When handling similar cases in the Beijing area, the court usually respects the parties' autonomy of will, but will remind them that the reconciliation does not affect the right to resume enforcement, and the relevant procedures can be referred to for reference.Creditor's rights and debts, and enforcement casesColumn.
II. Key points of contention
Focus One: Is there a limit on the number of settlements? The law does not set an upper limit. The actual constraints lie in the creditor's own willingness to compromise and the time limit for applying for enforcement. Focus Two: Regarding the time limit for applying for enforcement, the time limit is two years. The calculation and rules for suspension and interruption directly affect multiple settlement arrangements. Focus Three: Can enforcement be resumed after a second settlement? If the previous settlement was not fully implemented and a new agreement is reached, the creditor can still apply to resume enforcement of the original effective legal document after a breach of contract. Focus Four: Can the settlement amount be lower than the original debt? This falls within the scope of the parties' right to dispose of their property, and the law does not prohibit it. Focus Five: Procedural coordination: Can property be investigated and controlled during the settlement period, and does the settlement lead to the suspension of enforcement proceedings? Focus Six: The risk of multiple compromises: The longer the delay, the higher the probability of the other party's assets being lost. Specifically, the current effective laws and regulations and judicial rulings shall prevail. For arrangements involving contract performance and debt restructuring, reference can be made to relevant provisions.Business and contract disputes in enterprisesColumn.
III. Professional analysis by Henglue Lawyers
In the cycle of reconciliation and recourse for damages, the key is to ensure that "the clues to the assets remain intact and the responsible parties are not evaded". Taking a dispute over shareholders' liability for harming the interests of the company's creditors handled by our firm as an example: Ma * and a company had a dispute over an intermediary contract. After the Beijing Chaoyang District Court ruled that the company should return the intermediary service fee of 423,500 yuan, the company failed to comply with the judgment. Ma * applied for enforcement, but the enforcement was terminated due to the company having no assets available for enforcement. Ma * then entrusted our lawyer, Yun Hang, to continue pursuing the recourse for damages. The lawyer retrieved the business registration files and found that the company's shareholders, Liu * and Zhang *, each subscribed to a capital contribution of 9 million yuan and 1 million yuan, with the subscription period ending on September 23, 2039. However, there were no records of actual capital contributions in the files. The lawyer argued that the company had no assets available for enforcement after exhausting all enforcement measures, and had failed to apply for bankruptcy despite meeting the bankruptcy criteria. Therefore, the shareholders' capital contributions should be accelerated to maturity, and a lawsuit was filed against the shareholders for harming the company's creditors' interests. The court determined that the company was unable to pay off its due debts and clearly lacked solvency, and the shareholders no longer enjoyed the benefits of the subscription period. It ruled that Liu * and Zhang * should bear supplementary compensation liabilities for the company's inability to pay off debts within the unsubscribed amounts of 9 million yuan and 1 million yuan, respectively. This case shows that reconciliation and final enforcement are not the endpoints. As long as we continue to investigate the assets and responsible parties, there are still channels for creditors to recover their claims. This case was handled by Beijing Henglu Law Firm.Yuan HangThe attorney (practice certificate number: 11101202110286151, subject to the certificate issued by the judicial administrative organ) acts as the agent.
IV. Practical suggestions and legal basis
Action recommendations: First, sign a written agreement for each reconciliation, conduct it under the supervision of an enforcement judge, or submit it to the enforcement court promptly to avoid relying solely on verbal commitments. Second, control the pace of concessions: retain a higher proportion of the principal in the first reconciliation and adjust it moderately in the second to avoid making major concessions at the outset. Third, pre-set accelerated breach clauses, stipulating that all remaining funds will become due and enforceable if any installment is breached. Fourth, continuously monitor the other party's assets and business operations. If any clues to their assets are discovered during the reconciliation period, promptly apply for investigation and seizure. Fifth, note that the statute of limitations for enforcement applications is two years. The implementation period of multiple reconciliation agreements should be documented in legal documents to prevent disputes arising after the deadline passes. Legal basis: Articles 237 and 268 of the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023 and effective from January 1, 2024) set out the basic rules for enforcement reconciliation and terminating the current enforcement process. The "Regulations of the Supreme People's Court on Issues Concerning Enforcement Reconciliation" (effective from January 1, 2019) clarify the validity of reconciliation agreements and the conditions for resuming enforcement. The "Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China" (current version effective from April 10, 2022) stipulates the resumption of enforcement after the termination of the current enforcement process.
5. Henglue Law Firm's Reminder
Risk Alert: First, frequency does not equal effectiveness. Every concession you make may result in a 1-point decrease in the actual recovery rate. You should base your decision on the other party's actual repayment ability. Second, if the settlement does not revoke the seizure, the other party will have more controllable assets after breaching the contract. You should think carefully about whether to retain or withdraw the preservation measures before signing the agreement. Third, verbal promises of making further concessions do not have any legal significance in the enforcement process. It is essential to put them in writing. Fourth, if the other party delays the settlement to secretly dispose of its assets, you can apply for the resumption of enforcement and claim corresponding responsibilities. It is recommended to evaluate the property clues and responsible parties before each settlement and seek legal advice when necessary.Beijing Henglu Law FirmOn the official website, there are similar columns, and there's always a bottom line when making concessions.
VI. Frequently Asked Questions
Q1: How many times can a case be settled through mediation?
There is no time limit in law, and in theory, it is possible to reach a settlement multiple times. After the other party breaches the contract in the first settlement, you can apply to resume the enforcement of the original effective legal document. After the enforcement is resumed, the two parties can still negotiate the remaining debt again; if a new agreement is signed before the previous agreement is fully performed, the enforcement can also be resumed after the new agreement is breached. The real constraint lies not in the number of times, but in the application period for enforcement, the other party's property status, and the creditor's own room for compromise. It is recommended to formalize each arrangement in a written agreement and set up accelerated breach clauses in advance.
Q2: What conditions must be met for each reconciliation?
First, both parties voluntarily negotiate and reach an agreement without any fraud or coercion. Second, the content of the agreement must be legal and cannot harm the national interests, public interests, or the rights and interests of third parties. Third, it is best to adopt a written form and have both parties sign it, either under the supervision of an enforcement judge or submitted to the enforcement court for retention. Fourth, for agreements implemented in installments, the amounts, deadlines, and accelerated breach clauses should be clearly specified. The more specific the content of the settlement agreement is, the more solid the basis will be for the other party to claim to resume enforcement or hold the party accountable in accordance with the agreement after a breach occurs.
Q3: How much does it cost to mediate multiple times?
Reaching a settlement itself does not require paying additional fees to the court. The enforcement fees shall be borne by the party subject to enforcement in accordance with the law. The main cost is the attorney's fee, which is determined through negotiation based on the scale of the property and the complexity of the plan, with no unified standard. If a lawyer is engaged to participate in the negotiation, draft the agreement, and monitor the performance, the fees are usually charged in stages. In addition, there may be a small amount of fees for continuing preservation and searching for property. It is recommended to stipulate in the settlement agreement that the defaulting party shall bear the costs of realizing the creditor's rights, transferring the costs to the defaulting party.
Q4: Would repeated reconciliations extend the deadline for applying for enforcement?
Please note that the application for enforcement has a two-year time limit, and the rules on suspension and interruption apply. The performance period stipulated in the settlement agreement and the circumstances where the other party partially fulfills its obligations can generally be used as relevant factual basis for calculating the time limit. However, the specific determination shall be subject to the currently effective judicial interpretations and judicial rulings. It is advisable to formalize the settlement agreement in writing, specify the performance arrangements, and keep records of each breach of contract and collection action. When the time limit is approaching, it is necessary to apply for resuming enforcement in a timely manner to avoid losing the opportunity for compulsory enforcement due to the expiration of the time limit.
Q5: What should I do if the other party violates the agreement after reaching a settlement?
The first step is to fix the text of the new agreement and the evidence of breach of contract, including payment records and collection records; the second step is to apply to the enforcement court to resume the enforcement of the original effective legal documents, and continue to enforce the unperformed part, and deduct the performed part accordingly; the third step is to submit property clues or apply for renewed investigation and control at the same time; the fourth step is to add responsibilities or file a separate lawsuit if the other party transfers property or the shareholders fail to make actual capital contributions, etc.; the fifth step is to entrust a lawyer to coordinate when necessary, and you can refer to it for reference.Creditor's rights and debts, and enforcement casesColumn.
This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.
If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →\nLegal services for creditor-debtor disputes·Attorney Yuan Hang·Beijing Henglu Law Firm
Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.