The medal of "Shengheng Law Firm's Legal Rights Protection" is still displayed at the front desk of Shengheng Law Firm. Behind this medal is the professional testimony of Shengheng Law Firm's successful resolution of the first international financing factoring dispute case in Liaoning many years ago. At that time, Shengheng Law Firm and the team of lawyers led by Xu Fengbiao, with their precise interpretation of international rules and solid legal foundation, built a defense line for financial institutions' rights and interests. Their professional performance is still a benchmark case in the industry today.
 

The first case of cross-border business disputes hides complex challenges
To understand the value of this case, it is necessary to first clarify the core logic of international factoring business. As a common financial service model in international trade, factoring business takes "debt transfer+supporting services" as its core. Factoring provides three major supports for exporters and suppliers: trade financing, risk control, and account management. Among them, the "export dual factoring" model requires cooperation between factoring companies in exporting and importing countries to control cross-border risks in accordance with international rules.
As the first international financing factoring dispute case in Liaoning region, this case involves complex relationships among multiple parties and across countries from the start of business to the outbreak of disputes. Going back to June 2004, the bank represented by Shengheng Law Firm signed an "Export Factoring Business Agreement" with a certain import and export company, agreeing to provide export double factoring services in accordance with the General Rules for International Factoring Business of the International Factoring Federation (FCI), and approved a payment limit of $500000 for the US trading partner of the import and export company through a US import factor to ensure the promotion of cross-border credit sales trade.
At the beginning of the cooperation, the import and export company issued a total of 17 orders, and the first 10 payments were all received normally. From November to December 2004, the import and export company issued 7 more orders and transferred all corresponding debts to the bank before applying for factoring financing. After the bank reviewed and issued the funds according to the agreement, the financing maturity dates were concentrated from February to April 2005. The turning point occurred in February 2005, when a US importer filed a return claim against the import-export company on the grounds of "unqualified floor chamfering". On the 28th of the same month, the bank received a dispute notice from the US import factor.
According to the Export Factoring Business Agreement, if a dispute notice is received within 30 days after the invoice expires, the bank has the right to recover the financing principal and interest in advance. However, the import and export company not only refused to fulfill its repayment obligations, but also distorted the logic of factoring business, filing a lawsuit on the grounds that "the bank did not resolve the trade dispute first and did not pursue the guarantee payment from the import factoring company", claiming that this case is a "factoring business dispute" rather than a "financing dispute", and demanding that the bank bear the risk of bad debts and compensate for losses. Although the first instance court supported the bank's claim, the import and export company appealed against the judgment, and the case entered a critical stage of the second instance.
Professional dismantling and precise argumentation to win judicial recognition
Faced with the dilemma of intertwined cross-border rules and complex legal relationships, Shengheng Law Firm was entrusted by the bank to form a special team led by Lawyer Xu Fengbiao. From fact sorting, rule interpretation to court debates, the team broke through the focus of disputes layer by layer.
The team first reviewed the core materials such as factoring agreement terms, financing issuance vouchers, and dispute notification documents one by one, accurately identifying the key points of the case: the bank received the dispute notification within 30 days after the invoice expired, which fully complies with the agreement's provision of "early recovery of financing principal and interest", and the claim for rights is based on legal evidence. At the same time, the team delved into the "General Rules for International Factoring Business" and clarified two core boundaries - "Factoring companies only need to formally review disputes and have no obligation to substantially resolve trade disputes" and "Import factoring companies' bad debt guarantees only apply to" undisputed and refused "accounts", directly breaking the unreasonable misinterpretation of business rules by import and export companies and laying a solid foundation for winning the case.
In the second trial, the lawyer team led by Xu Fengbiao conducted a key argument on the legal relationship between financing and factoring business: on the one hand, it clearly defined that "financing is a relatively independent link in factoring business", and banks have the right to decide whether to issue financing based on risk assessment; On the other hand, it is emphasized that after the importer raises a quality dispute, the import factor no longer has a guarantee payment obligation, which fully complies with the rule of factoring business that "only assumes responsibility for undisputed accounts". The import and export company's refusal to repay with "unresolved disputes" lacks legal basis.
At the same time, the team submitted key evidence such as communication emails between import and export parties, fax notifications of import factor disputes, and fully restored the timeline and factual details of the case, allowing the court to fully recognize the compliance of the bank's performance. In the end, the second instance court fully adopted the agency opinion of Shengheng Law Firm and determined that the Export Factoring Business Agreement was legal and valid. The bank had fulfilled its notification obligations as agreed and had the right to recover the financing principal and interest in accordance with the agreement and international rules. The court ruled to "reject the appeal and uphold the original judgment", successfully recovering the bank's economic losses.
Deeply cultivating financial legal services and continuously empowering the healthy development of the industry
The victory in this case not only effectively safeguards the rights and interests of a single financial institution, but also demonstrates the core competitiveness of Shengheng Law in the field of financial and commercial disputes - it not only understands the commercial logic of financial business, but also is familiar with the legal details of international rules. It can accurately dissect the focus of disputes in complex cross-border cases and build a legal defense line for customers.
For many years, Shengheng Law Firm has always taken professionalism as its core, deeply rooted in the field of financial legal services, and continuously provided accurate and efficient legal support. In the face of new challenges in future international trade, law firms will continue to keep up with the pace of industry development, use professional capabilities that keep up with the times to help enterprises prevent cross-border risks, and continuously contribute solid legal strength to the healthy development of China's financial market.