The People’s Republic of China (“PRC“) recently launched two initiatives in relation to enterprise bankruptcies. These initiatives will provide significant benefits to both applicants and creditors when they seek to exercise their respective rights during the enterprise bankruptcy process. 

On 1 August 2016, the Supreme People’s Court (the “SPC“) launched the Information Website for National Bankrupt Enterprises Recombinational Cases (the “Website“). The Website will be used as a centralised information system through which information and actions relating to enterprise bankruptcy proceedings will be published and undertaken.

On 27 September 2016, Beijing established the first specialised bankruptcy court in the PRC under its No. 1 Intermediate People’s Court (for Shanghai, Tianjin, Chongqing). Eleven other provinces are also expected to set up specialised bankruptcy courts under their respective intermediate people’s courts later this year.

New information website for bankrupt enterprises

The Website is a new centralised information system aimed at increasing transparency and credibility in the enterprise bankruptcy process. The Website will be used by the people’s courts and bankruptcy administrators to disclose information and publish notices, including legal documents, debtor financial information and creditor claims, during the bankruptcy process.

The guiding principle is that the information published on the Website should be consistent with the people’s court records. To further promote the use of the Website, any information disclosed through traditional means must also be published on the Website, and such publication will have the same legal effect as if the information had been disclosed or submitted through traditional means.

The Website is split into the following two platforms:

  • judge’s working platform; and
  • bankruptcy administrator’s working platform.

Judge’s working platform for applicants

Applicants for compulsory enterprise bankruptcy can submit their applications on the Website through the judge’s working platform. The people’s court must notify the applicant of acceptance, rejection or the requirement for supplemental documents in relation to the application within 7 days from the date of the application. Once the people’s court approves the application, the applicant must still submit the physical documents with the people’s court.

Bankruptcy administrator’s working platform for creditors and restructuring investors

Creditors can take the following actions through the bankruptcy administrator’s working platform:

  • submit their claims by uploading the relevant documents onto the Website;
  • attend creditors’ meetings and vote; and
  • challenge a bankruptcy administrator’s decision on a claim.

All of the above actions have the same legal effect as if the creditor had conducted them through traditional means.

Restructuring investors can also use the Website to request specific information from the bankruptcy administrator pursuant to the relevant restructuring settlement agreement.

New bankruptcy courts

The Beijing bankruptcy court was established pursuant to the Notice Concerning the Plan for Establishing Liquidation and Bankruptcy Trial Divisions in Intermediate Courts issued by the SPC in August 2016 (the “Plan“). The Plan aims to establish bankruptcy courts under people’s intermediate courts across the PRC and increase the number of judges and support staff focusing on bankruptcy-related issues.

In light of the economic downturn, the Plan was implemented in response to the steady increase in compulsory enterprise bankruptcy cases in the PRC. It is likely that the number of bankruptcy cases in the PRC will continue to rise. These specialised bankruptcy courts are meant to help facilitate the timely rebirth of companies through restructuring and settlement, and the efficient liquidation of companies with no prospects of recovery.


Instead of having to apply or claim through traditional means, applicants and creditors can now make applications and claims more conveniently through the Website. The setting up of dedicated judicial resources for enterprise bankruptcy proceedings will better position the PRC for the increasing number of enterprise bankruptcy cases. Despite the convenience, applicants and creditors should still obtain legal advice before utilising the Website to exercise their rights.

Although the practical impact of the Website and bankruptcy courts will not be clear for some time, these initiatives are positive steps forward for the PRC and will promote greater supervision, efficiency and transparency in the enterprise bankruptcy process.


Partner, Hong Kong
Email: Kwun-Yee Cheung

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