Meaning
Procedural doctrines in Chinese litigation dictate that court proceedings for civil disputes must be suspended if the underlying facts involve suspected criminal conduct. The application of xian xing hou min prevents parallel proceedings when a contract dispute involves contract fraud or seal forgery. This separation protects the integrity of the judicial process.
Criminal Precedence
If a civil defendant files a police report showing that the contract stamp was forged or that their employee committed contract fraud, the civil judge must review the evidence. Once the court determines that a criminal case is warranted, it transfers the case file to the public security bureau. The civil lawsuit is then frozen until the criminal investigation, prosecution, and trial are concluded.
This suspension ensures that civil liabilities do not override or conflict with criminal findings of guilt or innocence.
Corporate Protection
This procedural rule prevents fraudulent counterparties from securing civil judgments before a criminal investigation can uncover their illegal activities. It allows victimized enterprises to freeze litigation and gather evidence through state prosecutors.
Operational Delay
However, this doctrine can delay the resolution of legitimate commercial disputes for several years because criminal cases in China proceed slowly. Foreign creditors must prepare for these prolonged timelines if fraud is alleged.
