Property Preservation and Act Preservation

Abstract

AbstractIn China, some defendants will, upon becoming aware of being sued, take various methods to transfer and/or hide their property or the subject matter in dispute. In such circumstances, even if the plaintiff wins the case, it may still find it difficult to be actually compensated. In order to solve this problem, the plaintiff can apply to the Chinese court for property preservation. Chinese courts will take such preservation measures as sequestering, seizing and/or freezing according to the type of property to be preserved, which are the same as those taken by the courts during the enforcement procedure. In order to avoid “winning the case but still losing money”, it’d be better for the plaintiff to consider applying for property preservation and collect property clues of the defendant before case filing. Act preservation is a temporary remedy to avoid the parties from suffering “irreparable damage” during the civil proceedings. The act preservation is highly similar to the “interlocutory injunction” in common law countries and the “provisional injunction” in civil law countries such as Germany and Japan. Chinese courts, when examining the application for act preservation, need to balance the interests between the parties and the public. In recent years, the number of cases, especially those related to intellectual property and unfair competition, subject to the act preservation measures has been on the rise. If the application for act preservation is erroneous, the applicant shall be liable for compensation to the respondent. In intellectual property and unfair competition cases, there are clear-cut standards for determining whether an application for act preservation is erroneous or not.