· Area of Law： Legislative Affairs

· Level of Authority： Local Judicial Documents

· Date issued：02-09-2017

· Effective Date：02-09-2017

· Issuing Authority： Higher People's Court of Shanghai Municipality

· Status： Effective

Notice of the Higher People's Court of Shanghai Municipality on Issuing the Detailed Rules for the Implementation of Online Judicial Auction by the Courts in Shanghai Municipality (for Trial Implementation)
(February 9, 2017)
The No. 1 and No. 2 Intermediate People's Courts of Shanghai Municipality; the No. 3 Intermediate People's Court of Shanghai Municipality (the Shanghai Intellectual Property Court, and the Shanghai Intermediate Court of Railway Transportation); the Shanghai Maritime Court; and the people's courts of all districts and the Shanghai Railway Transportation Court:
In order to implement the Provisions of the Supreme People's Court on Several Issues concerning Online Judicial Auction by the People's Courts, further standardize activities of online judicial auction in Shanghai Municipality, guarantee openness, impartiality, justice, honesty, and high efficiency, and safeguard the lawful rights and interests of the parties, in light of the actual circumstances of judicial auction in Shanghai Municipality, the Detailed Rules for the Implementation of Online Judicial Auction by the Courts in Shanghai Municipality (for Trial Implementation) is hereby developed and issued for trial implementation. All courts in Shanghai Municipality shall effectively implement the relevant provisions of these Detailed Rules and all operating departments shall strengthen collaboration and cooperation. Feedback on any problem encountered in the work shall be given to the case-filing tribunal and the enforcement bureau of the Higher People's Court of Shanghai Municipality in a timely manner.

Annex: Detailed Rules for the Implementation of Online Judicial Auction by the Courts in Shanghai Municipality (for Trial Implementation)
Annex:
Detailed Rules for the Implementation of Online Judicial Auction by the Courts in Shanghai Municipality (for Trial Implementation)
In order to implement the Provisions of the Supreme People's Court on Several Issues concerning Online Judicial Auction by the People's Courts (Interpretation No. 18 [2016], Supreme People's Court, hereinafter referred to as the “Provisions on Online Auction”) and standardize the work of online judicial auction by the courts in Shanghai Municipality, the following detailed rules are developed:
I. Definition of “online auction”
1. The term “online judicial auction” as mentioned in these Detailed Rules refers to an act of public disposal of properties involved in cases by means of online electronic bidding through an online judicial auction platform selected from the database on lists of online judicial auction service providers as determined by the Supreme People's Court (see Annex 1).
II. Basic Principles
2. Adhering to openness and fairness. The whole process of judicial auction shall be made known to the public by network-based means, so as to accept social supervision, enhance social participation and transparency of judicial auction activities, further standardize judicial auction activities, sustain judicial authority, and improve judicial credibility.
3. Adhering to the free will of the parties. The enforcement applicant shall select an online platform from the database on lists of online judicial auction service providers as determined by the Supreme People's Court; when the enforcement applicant fails to select an online platform or the selections of multiple enforcement applicants are inconsistent, the people's court shall designate an online platform.
4. Adhering to protection of lawful rights and interests. The operating procedures for online judicial auction shall be standardized and elaborated and the advantages of Internet platforms, such as high participation and sufficient bidding, shall be given full play, so as to realize maximized value of liquidated properties and fully protect the lawful rights and interests of creditors and debtors.
5. Adhering to giving priority to online auction. Where the courts in Shanghai Municipality dispose of properties involved by means of auction, they shall preferentially adopt the method of online judicial auction. Where it is inappropriate to adopt the method of online auction under laws, administrative regulations, and judicial interpretations, with the approval of the leader in charge of enforcement, the properties involved may be disposed of by adopting other methods.
6. Adhering to uniform administration. The Higher People's Court of Shanghai Municipality shall establish a leading group for online judicial auction, which conducts uniform administration of online judicial auction by the courts in Shanghai Municipality. Under the leading group for online judicial auction, an office for online judicial auction shall be set up to conduct the specific administration and perform duties.
7. Adhering to separation of enforcement and auction. In the process of online judicial auction, the duties that should be performed by the people's courts shall be separately undertaken by the office for online judicial auction and the enforcement bureau, so as to realize division of work with individual duties. The relevant auxiliary work of online judicial auction may be undertaken by entrusted social institution or organizations.
III. Division of Duties
8. The leading group for online judicial auction under the Higher People's Court of Shanghai Municipality consists of the vice president in charge of case-filing (group leader), persons in charge of the case-filing tribunal and the enforcement bureau (deputy group leaders), and persons in charge of the inspection office, the administrative equipment department, and the information division (members). The leading group for online judicial auction shall be responsible for such administration work of online judicial auction as development, implementation, and supervision of online judicial auction policies in Shanghai Municipality. The leading group for online judicial auction shall hold meetings on a regular basis and in general, a meeting shall be held on a quarterly basis.
The office for online judicial auction (hereinafter referred to as the “office for online auction”) shall be set up in the case-filing tribunal.
The intermediate people's courts, basic-level people's courts, and special courts in Shanghai Municipality shall establish corresponding leading groups for online judicial auction and offices for online auction, and carry out the work of online judicial auction.
9. The office for online auctions shall be responsible for the following matters in the process of an online judicial auction:
(1) entrusting the identification, inspection, evaluation, auditing, storage, custody, and transportation of the subject matter of auction and serving the relevant report;
(2) determining the status quo of properties subject to auction;
(3) determining the amounts of the reserve price of auction and the security deposit as well as the payment methods and the burden of taxes and dues;
(4) notifying the parties and the persons with the preemptive right;
(5) preparing and issuing auction announcements and special warnings, uploading videos and photographs, and completing the relevant settings of preemption codes;
(6) contacting online service providers and auxiliary institutions and supervising online auction activities and auxiliary work;
(7) handling the settlement of auction payments and the delivery of properties subject to auction; and
(8) other matters related to online judicial auction.
10. The enforcement bureau shall be responsible for the following matters in the process of an online judicial auction:
(1) preparing a ruling on auction;
(2) confirming such items as the encumbrance of the subject matter of auction, the person with the preemptive right, and the special warning;
(3) deciding to postpone the auction or ruling to suspend or revoke the auction;
(4) preparing a ruling on the auction completion;
(5) issuing a written notice on assisting in enforcement of the transfer of property certificates;
(6) carrying out house relocation and transfer and other clearing of the subject matter of auction;
(7) any other duties that should be performed by the enforcement institution according to the law.
IV. Operating Procedures
11. Where it is necessary to dispose of properties by means of auction in the process of enforcement, the enforcement bureau shall prepare and serve the ruling on auction. Afterwards, the enforcement bureau shall transfer the properties to the office for online auction under the court, which conducts such specific matters as entrustment of evaluation and handling of online judicial auction. After the completion of online judicial auction and the settlement of auction payments, the office for online auction shall transfer the letter of confirmation on auction completion to the enforcement bureau. Upon receipt of the letter of confirmation on auction completion, the enforcement bureau shall prepare and serve the ruling on auction completion in a timely manner. The office for online auction shall handle the delivery of properties subject to auction in a timely manner.
12. The office for online auction shall organize enforcement applicants to select an online service provider from the database on lists of online service providers as determined by the Supreme People's Court; where the enforcement applicant fails to select an online service provider or the selections of multiple enforcement applicants are inconsistent, the office for online auction under the enforcement court shall report to the office for online auction under the Higher People's Court of Shanghai Municipality, which then uniformly and randomly designates one online service provider from the database on lists of online service providers as determined by the Supreme People's Court.
13. The Higher People's Court of Shanghai Municipality shall establish a uniform database on lists of online judicial auction auxiliary institutions in Shanghai Municipality (see Annex 2). Members of the database on lists shall be selected from social institutions or organizations with certain qualification levels and be made known to the public.
Where it is necessary to determine an auxiliary institution in the process of an online judicial auction, the office for online auction under the enforcement court shall submit the application to the office for online auction under the Higher People's Court of Shanghai Municipality. The office for online auction under the Higher People's Court of Shanghai Municipality shall randomly determine an auxiliary institution from the register of auxiliary institutions through computer matching and then it shall issue a letter of entrustment to the determined auxiliary institution. Upon strength of the letter of entrustment, the auxiliary institution shall contact the office for online auction under the enforcement court and handle the specific matters. The determination of an auxiliary institution shall be made known to the public on a regular basis and the inspection office shall dispatch personnel to conduct on-site supervision, in which the person in charge of the auxiliary institution and the dispatched personnel may participate.
V. Auxiliary Work
14. In the process of an online judicial auction, the enforcement court may entrust the auxiliary institution with conducting the following auxiliary work of auction:
(1) inquiring information on the registration of property rights of the subject matter of auction;
(2) inquiring information on registered permanent residence and payment of property fees and public utility charges;
(3) inquiring information on industrial and commercial registration and taxation involved in the subject matter of auction;
(4) conducting field investigation and identifying the actual occupation and usage of the subject matter of auction and the encumbrance;
(5) preparing the explanatory notes of properties subject to auction, videos, photographs, and other materials;
(6) demonstrating properties subject to auction, accepting consultation, guiding the check, and sealing up samples;
(7) conducting identification, inspection, evaluation, auditing, storage, custody, and transportation of the subject matter of auction;
(8) assisting in handling the delivery of the subject matter of auction and the formalities for transfer of property rights and tax payment; and
(9) other auxiliary work of auction that may be entrusted.
15. Where the auxiliary institution completes all auxiliary work entrusted by the enforcement court, it may charge the corresponding expenses of auxiliary work after the completion of the online judicial auction. Such expenses shall be charged from the auction completion payment. The charging standards for the auxiliary work shall be separately determined.
VI. Determination of Base Prices
16. Before the online judicial auction starts, the price of the subject matter of auction shall be evaluated, the reserve price shall be determined, and the reserve price of auction is the starting price. The starting price for the first auction may not be lower than 70% of the evaluated price and the starting price for the second auction may not be lower than 80% of the starting price for the first auction.
17. Where the subject matter of auction is raw material for production, article for daily use, or other movable property and it falls under any of the following circumstances, it may be directly subject to online judicial auction without being evaluated:
(1) The value is low (in general, the price of the subject matter per piece is not more than CNY 10,000.
(2) Both parties reach consensus on the value.
The office for online auction shall determine whether the price of the subject matter is not more than CNY 10,000. When the parties reached consensus on the value, there shall be a written record. The reserve price for a direct auction shall be subject to the price determined by the office for online auction or the price on which the parties reach consensus.
VII. Postponement of Auctions
18. Before the closure of the bidding procedure of an online judicial auction, under any of the following circumstances, the people's court shall decide to postpone or rule to suspend the auction:
(1) The applicant expresses that deferred enforcement or revocation of the application for enforcement is allowed.
(2) The person subject to enforcement has paid all enforcement funds.
(3) The enforcement of the legal instrument serving as the basis for enforcement is suspended or such legal instrument is revoked.
(4) The people's court has accepted an application for bankruptcy where the person subject to enforcement is the debtor.
(5) The people's court has accepted the application of the person subject to enforcement for revoking the arbitral award or not enforcing the arbitral award or the notarized debt instrument.
(6) A party not involved in the case raises any justifiable objection to the subject matter of enforcement.
(7) The obligees in cases regarding recovery of support for elderly parents, support for other adult dependants, and child support die.
(8) any other circumstance where the auction should be postponed or suspended.
19. Where the enforcement personnel deem that it is necessary to postpone or suspend an auction, the postponement or suspension shall be approved by the director of the enforcement bureau. Upon receipt of the decision on postponement or ruling on suspension, the office for online auction shall immediately notify the online service provider of ceasing the auction and announce the reason or ground on the online judicial auction platform.
20. Where it is necessary to restart the auction after the reason for postponement or suspension disappears, the original designated auxiliary institution shall continue undertaking the relevant auxiliary work without separately determining the auxiliary institution; if it is not necessary to restart the auction, the office for online auction under the enforcement court shall notify the auxiliary institution and simultaneously submit it to the office for online auction under the Higher People's Court of Shanghai Municipality for recordation.
VIII. Supervision and Assessment
21. The leading group for online judicial auction shall guide and conduct supervision over the online judicial auction carried out by the office for online auction and the enforcement bureau. The inspection office shall conduct supervision over the whole process of online judicial auction and investigate and punish any disciplinary offense identified in a timely manner.
22. The office for online auction shall conduct supervision over online judicial auction service providers and the following items are mainly included:
(1) supervising the issuance of online auction announcements and special warnings and the demonstration of auction items;
(2) supervising the qualifications of bidders participating in auctions and the prepayment of security deposits;
(3) supervising the process of online auctions on online judicial auction platforms;
(4) supervising the generation of letters of confirmation on completion of online judicial auction payment of the auction prices; and
(5) other items requiring supervision.
23. Where an auxiliary institution falls under any of the following circumstances, its qualification for undertaking auxiliary work of online judicial auction shall be suspended or cancelled:
(1) The institution or the person in charge of the institution is given an administrative or criminal punishment due to their violation of laws or disciplines.
(2) The institution refuses to accept entrusted matters without justified reasons or completes the entrusted matters by exceeding the prescribed time limit.
(3) The institution fails to observe the relevant regulations and requirements of the people's court and fails to make rectifications in a timely manner.
(4) The institution does not pass evaluations organized on a regular basis.
(5) any other matters indicating that the institution is inappropriate to serve as an auxiliary institution.
Any auxiliary institution whose qualification for engaging in auxiliary work is cancelled may not be included in the database on lists of auxiliary institutions of online judicial auction within three years.
24. The Higher People's Court of Shanghai Municipality shall, on a regular basis, organize evaluations on the work quality, efficiency, and services of auxiliary institutions. The work of evaluations shall be organized and implemented by the office for online auction under the Higher People's Court of Shanghai Municipality and be jointly participated by the offices for online auction and enforcement bureaus under the courts at various levels in Shanghai Municipality.
IX. Others
25. Where the courts in Shanghai Municipality dispose of properties involved by means of realization of properties through the Internet platforms, they shall refer to these Detailed Rules. Where an auction institution is entrusted with conducting online auction through the Internet platform in the enforcement procedure, these Detailed Rules shall serve as reference in implementation. Where there is no provision on online judicial auction activities, other provisions on judicial auction shall apply.
These Detailed Rules shall come into force on the date of issuance. Where the provisions of the Higher People's Court of Shanghai Municipality on online judicial auction are inconsistent with these Detailed Rules before the implementation of these Detailed Rules, these Detailed Rules shall prevail.
The power to interpret these Detailed Rules shall remain with the leading group of online judicial auction under the Higher People's Court of Shanghai Municipality.