On May 12th, the author's "Which court should have jurisdiction over shareholder defect capital reduction?" due to space limitations, only elaborated on the jurisdiction of company capital reduction disputes, and did not discuss the jurisdiction of shareholder liability disputes for harming the interests of company creditors. The following supplement is provided.

Different causes of action correspond to disputes over company capital reduction and shareholder liability for damaging the interests of company creditors

The cause of a company's capital reduction dispute is the third level cause of action under the category of "disputes related to the company", which grants the company's creditors the right to request based on Article 177 of the Company Law. When a company needs to reduce its registered capital, it must prepare a balance sheet and an inventory of assets. The company shall notify its creditors within ten days from the date of making a resolution to reduce its registered capital, and make a public announcement in a newspaper within thirty days. Creditors have the right to demand the company to repay their debts or provide corresponding guarantees within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they do not receive the notice.

The cause of action for disputes over shareholders' liability for harming the interests of company creditors is the fourth level of action under the category of "disputes related to the company". The basic norms for the right of claim granted to company creditors are Article 20 of the Company Law. Company shareholders should comply with laws, administrative regulations, and the company's articles of association, exercise shareholder rights in accordance with the law, and shall not abuse shareholder rights to harm the interests of the company or other shareholders; It is not allowed to abuse the independent status of the company's legal person and the limited liability of shareholders to harm the interests of the company's creditors. If shareholders of a company abuse their shareholder rights and cause losses to the company or other shareholders, they shall bear compensation liability in accordance with the law. If a company's shareholders abuse the independent status of the company's legal person and the limited liability of shareholders, evade debts, and seriously harm the interests of the company's creditors, they shall bear joint and several liability for the company's debts. The legal principle refers to the system of denying the legal personality of a company.

The corresponding causes of action of the two are different, and the determined jurisdiction court is also different.

Differences and Similarities between Jurisdictional Courts for Disputes over Company Capital Reduction and Shareholders' Liability for Damage to the Interests of Company Creditors

The determination of the jurisdiction court for disputes related to company capital reduction is based on Article 22 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China. Litigation filed due to disputes such as shareholder registration, request for change of company registration, shareholder right to know, company resolution, company merger, company division, company capital reduction, and company capital increase shall be determined in accordance with Article 27 of the Civil Procedure Law. Article 27 of the Civil Procedure Law stipulates that litigation arising from disputes over the establishment, confirmation of shareholder qualifications, distribution of profits, dissolution, etc. of a company shall be under the jurisdiction of the people's court of the place where the company is domiciled. The dispute over the reduction of capital by a company belongs to a special geographical jurisdiction as explicitly stipulated, and the court of jurisdiction is the people's court of the place where the company is domiciled.

The jurisdiction court for disputes over shareholder liability for damaging the interests of company creditors is highly controversial in litigation practice.

One view is that the dispute over the liability of shareholders for harming the interests of creditors of the company is the cause of action under the item of "disputes related to the company", which belongs to disputes related to the company, and should be subject to the jurisdiction of the people's court in the place where the company is located in accordance with the provisions of the Civil Procedure Law and judicial interpretation on the special territorial jurisdiction of company disputes. Article 257 of the Guidelines for the Application of Key Points and Norms of Claim Rights in Civil Cases of the Supreme People's Court also supports this viewpoint, stipulating that such disputes should be based on the general principle of territorial jurisdiction and be under the jurisdiction of the people's court of the place where the company is domiciled in accordance with Article 27 of the Civil Procedure Law.

Another point of view is that the dispute over the liability of shareholders for harming the interests of corporate creditors is essentially a shareholder tort, not a corporate organizational behavior. Therefore, disputes over liability for damages to the interests of the company do not belong to company organization litigation, but rather to infringement disputes. According to Article 29 of the Civil Procedure Law, "A lawsuit brought due to an infringement shall be under the jurisdiction of the people's court of the place where the infringement occurred or where the defendant has his domicile".

In addition to the above views, there are different opinions on whether the creditor's place of residence has jurisdiction in different courts. Due to multiple precedents of the Supreme People's Court ruling that the location of the creditor's residence has jurisdiction over disputes over the liability of shareholders for damaging the interests of company creditors, it is now determined that the judgment standard for the jurisdiction of the creditor's residence in disputes over the liability of shareholders for damaging the interests of company creditors is basically unified. For specific details, please refer to (2021) Supreme Court Civil Ruling No. 33, (2018) Supreme Court Civil Ruling No. 80, and (2018) Supreme Court Civil Ruling No. 162.

In summary, the jurisdiction court for disputes over company capital reduction is clear and unique compared to the jurisdiction court for disputes over shareholders' liability for damaging the interests of company creditors, and can only be the location of the company. The jurisdiction court for disputes involving shareholders harming the interests of company creditors may be either the location of the company, the location of the infringement, the location of the defendant, or the location of the creditors. Therefore, the choice of cause of action for defective capital reduction litigation varies, and the determination of the court of jurisdiction also varies. As an agent, when filing or responding to litigation, one should choose a more favorable cause of action for oneself to determine a relatively convenient court of jurisdiction.