The Supreme People's Court Thursday issued a long-awaited judicial interpretation on auctions or sales of properties involved in civil cases.
The action, expected to take effect next year, will regulate and improve court-ordered actions.
Priority will be given to auctions involving debtors' properties after they are sealed, held or frozen during the course of court actions, according to the 36-clause interpretation.
Some properties can be sold off if both parties involved in the cases agree to do so. This will aid in the sales of gold or silver and products made from them, seasonal commodities and goods that are difficult to manage.
Auctions should be characterized by openness, transparency and fair competition to help prevent illegal conduct and maximize prices of the properties, said Huang Songyou, vice-president of the Supreme People's Court at a news conference in Beijing on Thursday.
Meanwhile, it will be conducive to protecting and maximizing creditors' rights and protecting their legal interests, Huang said.
The interpretation also stipulates ways of identifying assessment agencies and auctioneers, saying the courts can help examine concerned agencies after both parties are in agreement.
If parties fail to reach an agreement on the choice of auction agencies, courts can help determine one through random designation.
Open tenders are another way to decide on auction agencies.
In recent years, illegal activities have found their way into the auctioning process when designated by local courts, according to Huang. "Some court officials were roped in by assessment and auction agencies and became corrupt," Huang said.
The interpretation increases the transparency of the auction activities and helps prevent illegal conduct, he said. It also stipulates the auction cannot be conducted without bottom prices.
Movable properties are not allowed to be auctioned more than twice and immovable properties not more than three times.
(China Daily November 26, 2004)
