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Recently, Mr. Zhang Li, a senior partner of JAVY Law Firm, with his profound legal skills, keen market insight and deep understanding of the spirit of LPR reform, successfully represented a complex and challenging financial loan contract dispute case, which won a valuable legal victory for the party concerned, and also provided a valuable jurisprudential reference for the resolution of similar cases.

This case involves the Loan Contract signed on September 28, 2018 between a bank in Hebei, Shahe Sub-branch and Ms. Wang Shufen. The contract stipulates that the loan period is 10 years, the purpose of the loan is for decoration, and it is agreed that the loan will be repaid by equal monthly instalments of principal and interest, and the floating interest rate is 7.35%, i.e., “the base lending rate is floated by 50%, and in case of an adjustment to the base lending rate during the contract period, Party B will take the date of the adjustment to the base lending rate as the date of the adjustment of the base lending rate, and from the first day of the following month onwards, it will be based on the latest base lending rate in accordance with the floating percentage agreed upon in this paragraph. The adjusted loan interest rate shall be executed” ‘The overdue interest rate shall be determined by adding 50% on top of the borrowing execution rate’. Since September 21, 2023, Wang Shufen failed to repay the principal and interest on schedule. on July 4, 2024, a Hebei bank, Shahe branch, filed a lawsuit to the court, requesting the termination of the loan contract and demanding the repayment of the remaining unpaid principal, interest, penalty interest and compound interest.
The case was first heard on 9/24/2024. Relying on his deep understanding of the spirit of the “two-track” reform of China's lending rate, Mr. Zhang Li proposed that the “Loan Base Rate” has been replaced by the “Loan Market Quoted Rate” (LPR). It was suggested that the “Loan Base Rate” had been replaced by the “Loan Market Offer Rate” (LPR), and that the interest rate should be adjusted in accordance with the LPR authorized by the Central Bank from September 1, 2020 onwards, and should no longer be subject to the floating interest rate of 7.35%, and that the Plaintiff's overcharged interest rate should be set off against the principal. The Defendant claimed that the LPR had not been adjusted since the signing of the loan contract, and that “the interest rate on the stock of loans was still implemented in accordance with the original contract”; that the Plaintiff sent a text message to the Defendant after the Central Bank issued Announcement No. 30 on December 28, 2019, and that the Defendant continued to pay the principal and interest at the original interest rate and did not claim an adjustment, so it should not be adjusted.
On October 24, 2024, the case was heard again. Both sides on the relevant facts and financial policy, judicial interpretation of the understanding of the full debate. Finally, Shahe City People's Court issued a judgment on December 4, 2024, adopting the defendant's agency opinion: the interest rate of the loan contract in this case was converted to the Loan Market Quotation Rate (LPR) of more than five years plus 270bp to determine from September 1, 2020, and in case of LPR adjustment during the borrowing period, the execution interest rate was adjusted accordingly from the first day of the following month; the overdue interest rate was determined on the basis of the execution interest rate of the borrowing The overdue interest rate was determined by adding 50% to the borrowing execution rate. The Defendant's defense of conversion of interest rate benchmark and partial offsetting of loan principal by previous overpayment is reasonable and lawful, and is adopted.

The defendant in this case, Ms. Wang Shufen, engaged in the chain operation of household consumer goods business in recent years, due to the epidemic, financial constraints, partners withdrew their shares, encountered operational difficulties, and lawsuits, so the name of the Beijing and Jiawei Law Firm signed a perennial legal services agreement, by the senior partner, Zhang Li, Shi Yujie, and assistant lawyers, such as Zhao Can, Liu Zhizhi, composed of a legal services team for its provision of “private legal services”.“Private legal services”, civil and criminal cross-case gradually be resolved, a number of arrears of disputes can be settled or interest rate reductions.
Zhang Li lawyers believe that “interest rate cuts and reductions” is the basic financial policy to promote the private economy back to good times after the epidemic, the annualized interest rate of mortgage has entered the “3 era”, business loans or even lower, and the plaintiff bank is still 7.35%, overdue interest rate of 11%, obviously too high, so the plaintiff bank is still 7.35%, overdue interest rate of 11%.11%, obviously too high, such a thunderstorm, will pinch off the hope of the distressed enterprises to life. From 1993, the central government put forward the market interest rate reform to 2013 LPR “daily frequency offer”, from 2015 “dual-track coexistence” to 2019 “two-track unity”, from the central bank announcement No. 30 and so on.From the Central Bank's Announcement No. 30 and other financial policies to the Supreme Court's “Nine People's Minutes”, all reflect the concept of “financial inclusion”.In the face of the focus of the dispute and the agency predicament, Zhang Li did not retreat, three times to submit a reply, a total of more than 10,000 words, and ultimately adopted by the panel, the host judge oral praise.
“Relief in the heart and break the line”, Zhang Li lawyers in recent years is committed to private enterprise relief and bankruptcy liquidation and reorganization business, leading the team for small and medium-sized enterprises and business owners, entrepreneurs to provide high-quality and efficient legal services.Mr. Zhang led the team to provide high quality and efficient legal services for SMEs, business owners and entrepreneurs. JIA LAWYER handled the first case of company dissolution dispute under the new Company Law in Haidian Court, which was also represented by Mr. Zhang. This financial loan LPR conversion dispute case is the first of its kind in Hebei, its successful representation not only for the parties to recover the loss of funds, but also highlights the team of lawyers in the field of financial borrowing of Zhang Li's professional ability and practical experience in the promotion of private enterprises to alleviate the difficulties of promoting the healthy development of the financial market is of great significance.