Disputes over the right of recourse on negotiable instruments

In the event that a bill is dishonored, if the holder's request for the drawer or acceptor to pay the bill amount fails to achieve a final recovery, they often exercise the right of recourse against all parties prior to the endorsement of the bill. After the prior party is pursued and paid, how to realize the right of re-recourse of the bill is the key issue of concern in this case.

The starting point for exercising the right of recourse on a negotiable instrument. The right of recourse on a bill refers to the right of the person whose bill is being pursued to pursue other bill debtors after they have settled the bill debt. According to Article 17 of the Negotiable Instruments Law of the People's Republic of China, the right of recourse of the holder against the prior party shall be exercised within six months from the date of refusal of acceptance or payment. The right of recourse of the ticket holder against the prior party shall be exercised within three months from the date of payment or the date of being sued. Let's all learn about the case handling process together!

Basic situation

In 2017, Company A signed an "Engineering Contracting Contract" with Company B. Company A fulfilled its obligations as stipulated in the contract, and Company B endorsed and transferred an electronic commercial acceptance bill with an amount of 100,000 yuan to Company A for the payment of the project funds. The drawer and acceptor are Company C, the payee is Company B. The endorsers of this bill are Company B, Company A and Company D in sequence, and the last holder is Company E.

Company E, the holder of the bill, filed a lawsuit with the court for a dispute over the right of recourse on the bill due to the refusal of payment upon presentation of the bill. The people's court ruled that Company D and Company A shall jointly and severally pay Company E the principal of 100,000 yuan and the interest of the electronic commercial acceptance bill within ten days from the date of the judgment taking effect. Company E applied for compulsory execution, and the People's Court deducted 100,000 yuan from Company A's bank account.

Case Analysis

After Company A fulfills its obligation to settle the bill, it acquires the rights of the bill holder and enjoys the right of recourse for the bill.

The issue of jurisdiction over the case. The law stipulates that this case shall be under the jurisdiction of the people's court at the place of payment of the bill and the place where the defendant is located.

The statute of limitations for Company A to file a lawsuit in court. On July 6, 2023, the People's Court deducted the amount of the bank bill deducted by Company A. Company A should exercise the right of re-recourse against the prior party within three months from the date of repayment, that is, file A lawsuit with the court before October 5, 2023.

According to Article 71 of the Negotiable Instruments Law of the People's Republic of China, the scope of exercise of the right of recourse on negotiable instruments includes three parts: (1) The entire amount that has been repaid; (2) The interest calculated at the rate prescribed by the People's Bank of China for the amount mentioned in the preceding paragraph from the date of repayment to the date of further claim for repayment; (3) The cost of issuing the notice. However, the Negotiable Instruments Law does not provide a clear definition of the scope of "the total amount already settled", especially regarding whether case acceptance fees, preservation fees, and enforcement fees in cases involving the right of recourse on negotiable instruments fall within the scope of the right of re-recourse on negotiable instruments, which is highly controversial.

Company A listed Company B (endorser) and Company C (drawer and acceptor) as co-defendants and filed a lawsuit with the people's court where the defendants are located. The court ruled: Company B and Company C shall jointly and severally pay Company A a bill amount of 100,000 yuan and interest within 90 days after the judgment takes effect (calculated based on 100,000 yuan, from July 6, 2023 to the actual performance date, at the loan prime rate published by the National Interbank Funding Center authorized by the Bank of China for one year).

Introduction to lawyers

Lawyer Guo Shuxia is a practicing lawyer and general partner at Jinyan Law Firm. Graduated from Zhengzhou University with a bachelor's degree in law. Having served as legal advisors for administrative organs, state-owned enterprises and other units for many years, I am proficient in administrative, civil, criminal and other litigation businesses as well as related non-litigation legal services.

Has been honored with titles such as "Outstanding Female Lawyer of Henan Province" and "Outstanding Lawyer of Jiaozuo City".

Contact Information

Telephone: 15903918836

Email: lawyergsx@126.com