Meaning
Statutory authority for the seizure of property before a final judgment exists under the PRC Civil Procedure Law. This article 103 preservation enables a claimant to prevent the dissipation of assets by a defendant during legal proceedings. The application requires evidence that the property is at risk of being moved or destroyed.
Statutory Basis
Courts in China rely on the specific provisions of the civil procedure law to grant orders that restrict property rights. This article 103 preservation functions as a tool for ensuring that a future judgment can be satisfied. A claimant must provide a security to the court, which often takes the form of cash or a guarantee letter from an insurance company.
The court reviews the necessity of the measure based on the specific circumstances of the dispute. If the applicant fails to provide the required security, the court will dismiss the request for asset seizure.
Asset Control
Financial institutions and land registries receive direct instructions from the judiciary to block transactions. Once article 103 preservation is active, the defendant cannot sell or transfer the titled property or move funds from bank accounts. This restriction remains in place until the litigation concludes or the court issues a subsequent order to release the assets.
Procedural Limit
The authority to freeze assets does not extend to property that is not owned by the defendant. This article 103 preservation only applies to assets within the jurisdiction of the Chinese courts. If a claimant seeks to freeze assets abroad, they must look to international treaties.
The measure is strictly confined to the value of the claim plus reasonable costs.
