Guiding Case No. 25

Huatai Property & Casualty Insurance Co., Ltd. Beijing Branch v. LI Zhigui and Zhangjiakou Subbranch of the Hebei Provincial Branch of Tianan Property Insurance Company Limited of China, An Insurer’s Subrogation Right Dispute

GC No.:
25
GC Date of Release:
2014/01/26
GC Batch No.:
6
Area(s) of Law:
Keyword(s):
Attachment:
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Subsequent Cases and Analysis

Other Subsequent Cases
Date of Judgment Case No. Case Name Deciding Court Analysis
2014/08/25 (2014)广铁中法立民终字第22号 郴州市苏仙区安雅物流有限责任公司与中国人寿财产保险股份有限公司广州分公司保险人代位求偿权纠纷二审民事裁定书 广州铁路运输中级法院 Available Upon Request

Full Text of the Guiding Case

Keyword(s)

Main Points of the Adjudication

Where an insured event arises from a third party’s harm to an insured subject, and the insurer, having paid an indemnity to the insured, initiates litigation by exercising through subrogation the insured’s right to request compensation from the third party, the court of competent jurisdiction [for that litigation] should be determined in accordance with the legal relations between the third party and the insured, who has been subrogated by the insurer, instead of the legal relations [defined] in the insurance contract. Where the third party infringes upon the insured’s legal interests, [the case] falls within the jurisdiction of the court at the place where the infringing acts occurred or the place where the defendant is domiciled.

Article 28 of the Civil Procedure Law of the People’s Republic of China

Article 60, Paragraph 1 of the Insurance Law of the Peoples Republic of China

Basic Facts of the Case

On June 1, 2011, Huatai Property & Casualty Insurance Co., Ltd. Beijing Branch (华泰财产保险有限公司北京分公司) ([hereinafter] referred to as “Huatai Insurance Company”) [1] signed a motor vehicle insurance contract with Beijing Yada Jindu Food and Beverage Management Co., Ltd. ([hereinafter] referred to as “Yada Jindu Food and Beverage Company”). The license plate number of the insured vehicle was Jing A82368. [2]  The insurance period started on June 5, 2011 at 00:00 and ended on June 4, 2012 at 24:00. On November 18, 2011, the insured vehicle, while being driven by a certain CHEN (陈某某) on the airport expressway in Chaoyang District, Beijing Municipality, got into a traffic accident with a vehicle bearing license plate Ji GA9120 [3] [and] driven by LI Zhigui (李志贵). [The accident] caused damage to the insured vehicle. The traffic management department determined that LI Zhigui bore full liability for the accident. After the accident, Huatai Insurance Company, in accordance with stipulations in the insurance contract, paid an indemnity of RMB 83,878 to the insured, Yada Jindu Food and Beverage Company, and obtained the subrogation right in accordance with law. Based on [the fact that] the vehicle that caused the traffic accident was insured under the compulsory traffic accident liability insurance for motor vehicles with the Zhangjiakou Subbranch of the Hebei Provincial Branch of Tianan Property Insurance Company Limited of China (天安财产保险股份有限公司河北省分公司张家口支公司) ([hereinafter] referred to as “Tianan Insurance Company”),[4] Huatai Insurance Company brought suit in the Dongcheng District People’s Court of Beijing Municipality in October 2012, requesting that defendants LI Zhigui (the driver who caused the accident) and Tianan Insurance Company be ordered to pay RMB 83,878 in compensation and to bear the cost of the litigation.[5]

The domicile of defendant LI Zhigui was Shacheng Town, Huailai County, Zhangjiakou Municipality, Hebei Province. The domicile of defendant Tianan Insurance Company was No. 108, Yanjing Road East, Shacheng Town, Huailai County, Zhangjiakou Municipality. The place where the insured event occurred was on the airport expressway in Chaoyang District, Beijing Municipality. The vehicle license of the insured vehicle recorded the owner’s address as No. 8, New Zhongxi Street, Gongti North Road, Dongcheng District, Beijing Municipality.

Results of the Adjudication

On December 17, 2012, the Dongcheng District People’s Court of Beijing Municipality rendered the (2012) Dong Min Chu Zi No. 13663 Civil Ruling: [the court] does not accept Huatai Insurance Company’s lawsuit. After the ruling was pronounced, the party [6] did not appeal. The ruling has already come into legal effect.[7]

Reasons for the Adjudication

In the effective ruling, the court opined: according to Article 60 of the Insurance Law of the Peoples Republic of China, an insurer’s subrogation right refers to a right enjoyed in accordance with law by an insurer to exercise, through subrogation, an insured’s right to request compensation from a third party liable for harm caused to the insured subject. The insurer’s subrogation right originates from direct provisions of law; [this right] is a statutory right of the insurer, not a contractual right arising from the insurance contract. Where an insured event arises from a third party’s harm to an insured subject, and the insurer, having paid an indemnity to the insured, initiates litigation by exercising through subrogation the insured’s right to request compensation from the third party, the court of competent jurisdiction [for that litigation] should be determined in accordance with the legal relations between the third party and the insured, who has been subrogated by the insurer. Where the third party infringes upon the insured’s legal interests, the litigation initiated as a result of the infringement, in accordance with Article 28 of the Civil Procedure Law of the People’s Republic of China, falls within the jurisdiction of the court at the place where the infringing acts occurred or the place where the defendant is domiciled. [Under these circumstances,] provisions [regulating] the jurisdiction of disputes concerning property insurance contracts are not applicable, [and thus] the place where the insured subject is located should not serve as a basis for jurisdiction.

In this case, the third party committed road traffic infringing acts and caused the insured event. [Thus,] the insured had a right to request compensation from the third party for harm [resulting] from the infringement. [In any case] where an insurer exercises its subrogation right to bring suit against an [infringing] third party, [the case] should fall within the jurisdiction of the court at the place where the infringing act occurred or the place where the defendant is domiciled. Here, since the two defendants’ domiciles and the place where the infringing act occurred were outside Dongcheng District, Beijing Municipality, the Dongcheng District People’s Court of Beijing Municipality had no jurisdiction over the lawsuit and should rule [that the lawsuit] not be accepted.

Endnotes

*           The citation of this translation of the Guiding Case is: 《华泰财产保险有限公司北京分公司诉李志贵、天安财产保险股份有限公司河北省分公司张家口支公司保险人代位求偿权纠纷案》(Huatai Property & Casualty Insurance Co., Ltd. Beijing Branch v. LI Zhigui and Zhangjiakou Subbranch of Tianan Property Insurance Company Limited of China Hebei Provincial Branch, An Insurer's Subrogation Right Dispute), China Guiding Cases Project, English Guiding Case (EGC25), Apr. 4, 2014 Edition, available at https://cgc.law.stanford.edu/guiding-cases/guiding-case-25.

This document was primarily prepared by Jeffrey Chivers, Aaron Gu, Oma Lee, LIU Shuo, WAN Lijiao  (Alicia), and Xiaoxia Zhuang. The document was finalized by Barbara Yu, Jordan Corrente Beck, Dimitri Phillips, and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and reflects formatting of the Chinese document released by the Supreme People’s Court.

The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme People’s Court of the People’s Republic of China and was released on January 26, 2014, available at http://www.chinacourt.org/article/detail/2014/01/id/1209341.shtml. See also 《最高人民法院关于发布第六批指导性案例的通知》 (The Supreme People’s Court’s Notice Concerning the Release of the Sixth Batch of Guiding Cases), Jan. 26, 2014, available at http://rmfyb.chinacourt.org/paper/images/2014-01/29/03/2014012903_pdf.pdf.

[1]           Translators’ note: the name “华泰财产保险有限公司” is translated here as “Huatai Property & Casualty Insurance Co., Ltd.” in accordance with the translation used in 《关于华泰财产保险有限公司修改章程的批复》 (Reply Concerning Amendment to the Articles of Incorporation of Huatai Property & Casualty Insurance Co., Ltd.), issued by中国保险监督管理委员会 (China Insurance Regulatory Commission) on July 9, 2012, available at http://www.circ.gov.cn/tabid/5171/infoid/209521/frtid/5239/default.aspx.

[2]           Translators’ note: the identifier “京” (“Jing”) preceding the alphanumeric “A82368” is the abbreviation of Beijing, where license plate A82368 was likely registered.

[3]           Translators' note: the identifier “冀” (“Ji”) preceding the alphanumeric “GA9120” is the abbreviation of Hebei Province, where license plate GA9120 was likely registered.

[4]           Translators’ note: the name “天安财产保险股份有限公司” is translated here as “Tianan Property Insurance Company Limited of China” in accordance with the company’s website, http://www.95505.com.cn/gkxxpl/index.jhtml.

[5]           Translators’ note: the proportion of the damages and costs that each defendant was ordered to pay is not clear from the original text.

[6]          Translators’ note: according to Article 123 of the Civil Procedure Law of the People’s Republic of China, when a court receives from a party a statement of complaint or an oral complaint and finds after examination that it does not meet the requirements for acceptance, the court should make an order within seven days to reject it. The article further provides, “The plaintiff, if not satisfied with the order, may file an appeal” (“原告对裁定不服的,可以提起上诉”). Thus, the term “party” here must refer to “Huatai Insurance Company”. 《中华人民共和国民事诉讼法》 (Civil Procedure Law of the People’s Republic of China), promulgated on Apr. 9, 1991, amended on Oct. 28, 2007 and Aug. 31, 2012, available at http://www.gov.cn/flfg/2012-09/01/content_2214662.htm.

[7]         Translators’ note: the original text reads “裁定已发生法律效力”. According to Article 155 of the Civil Procedure Law of the People’s Republic of China, judgments and rulings that “have already come into legal effect” are judgments and rulings of the Supreme People’s Court as well as judgments and rulings which, according to law, may not be appealed or which have not been appealed within the prescribed time limit. See id.