On July 26, 2015, Hebian Coal Mine (Party A) signed a management contract with Ouyang (Party B), stipulating that Party B would manage the production and operation of the Duge Coal Mine, both above and below ground, for a period of five years. On November 29, 2016, Hebian Coal Mine entered bankruptcy liquidation proceedings. On March 22, 2017, the administrator of Hebian Coal Mine decided to terminate the management contract signed between Ouyang and Hebian Coal Mine in accordance with Article 18 of the Enterprise Bankruptcy Law. If losses are incurred due to the termination of the contract, a claim for damages may be filed with the administrator. Ouyang's claim was not confirmed by the administrator, and he subsequently filed a lawsuit with the court.

Regarding the time of termination of the management contract in question. Article 18, Paragraph 1 of the Enterprise Bankruptcy Law stipulates: 'After the people's court accepts the bankruptcy application, the administrator has the right to decide to terminate or continue to perform the contract that was established before the bankruptcy application was accepted but has not been fully performed by both the debtor and the other party, and shall notify the other party. If the administrator fails to notify the other party within two months from the date of acceptance of the bankruptcy application, or fails to reply within 30 days from the date of receiving the other party's notice, it shall be deemed as termination of the contract.' In this case, the bankruptcy application was accepted on November 29, 2016. Although the administrator did not notify Ouyang and others to terminate or continue to perform the contract within two months thereafter, it cannot be concluded that the contract in question has been terminated based on the provisions of the law and the specific circumstances of this case. Firstly, the Enterprise Bankruptcy Law Article 18 is intended to protect the legitimate rights of the contract counterparty and avoid the administrator from failing to make a decision on whether to continue performing the contract for a long time, which puts the contract in an uncertain state and damages the interests of the contract counterparty. Therefore, this article restricts the administrator's right to choose to perform the contract, that is, if the administrator fails to notify or reply to the contract counterparty within the statutory time limit, the administrator loses the right to require the other party to continue performing the contract, but it cannot be directly presumed that the contract is terminated, and whether the contract is terminated still needs to be determined based on the specific circumstances. . Secondly, after the bankruptcy was accepted in this case, Ouyang and others were still constructing and maintaining the coal mine, and the administrator never raised any objection to this before clearly notifying the termination of the contract, that is, the administrator made an implied expression of intention to continue performing the contract. Finally, during the trial of this case, neither party claimed that the contract was terminated two months after November 29, 2016, that is, January 29, 2017. On the contrary, both parties recognized the time of termination of the contract on March 22, 2017. The administrator's act of issuing a termination notice on March 22, 2017, further confirmed the fact that the contract was not terminated before the notice of termination.

In the process of handling bankruptcy cases, there was once a view that the understanding of Article 18 of the Enterprise Bankruptcy Law was that if the administrator did not make a decision on whether to continue performing the contract that had not been fully performed by both parties within two months from the date of acceptance of the bankruptcy case, it would be deemed as termination of the contract. In fact, this understanding is not accurate. First of all, from the time a bankruptcy case is accepted by the people's court to the time the administrator is formally appointed, it is often not the same time dimension, and the period in between is often several months or even longer. Therefore, if we fully understand it in accordance with the provisions of the bankruptcy law, there may not be an administrator within two months from the date of acceptance of the bankruptcy case, and there is no way to talk about whether to perform or terminate the contract. Secondly, the administrator's right to terminate the debtor's contract is not necessarily limited to two months from the date of acceptance of the bankruptcy case, or two months from the date the administrator accepts the appointment with reference to this provision. In practice, the time when the administrator sends a notice of termination of the contract to the counterparty can often be recognized as the time when the administrator makes an expression of intention to terminate the contract, and a debt for damages will be generated accordingly, and the counterparty can claim the corresponding debt. Third, if the administrator does not immediately terminate the contract with the other party after taking over, it should be regarded as the administrator's tacit approval of continuing to perform the contract, and the relevant rights and obligations will continue to exist and will not be naturally suspended or eliminated as the debtor enters the bankruptcy procedure. Therefore, as an administrator, it should comprehensively investigate the debtor's contract performance after taking over and make corresponding treatment in a timely manner based on the facts; as a counterparty, it should carefully take various measures to perform the contract and make a rational commercial and legal judgment on the debtor's subsequent contract performance ability. Once the administrator terminates the contract, it needs to claim rights in accordance with the procedures stipulated by the bankruptcy law.

(2022) Supreme Court Minzai No. 55, Ouyang, et al. v. Shuicheng County Duge Riverbank Coal Mine Ordinary Bankruptcy Claim Confirmation Dispute Civil Retrial Civil Judgment