According to YunTing Law Firm’s announcement dated 11 June 2025, LegalOne included a major asset transaction arbitration handled with the participation of Li Shu in its Deals of the Year 2024 in China. The matter, in which the client obtained contractual penalties amounting to hundreds of millions of renminbi, received a Remarkable rating.
Transaction background
The client became involved in a dispute with a company and a major state-owned commercial bank over a significant asset transaction. Under the transaction arrangements, the bank, as a key stakeholder in the asset disposal, was required to ensure that the client obtained full ownership and control of the assets on time, or bear joint liability for the company’s breach. Although the client paid as agreed, delivery and transfer of the assets were not completed as required, preventing development and use of the assets and causing losses.
A phased strategy
The source reports that Li Shu’s team was instructed after two earlier arbitration applications had failed to resolve the dispute and the client had lost confidence. The team reassessed the transaction and allocation of responsibility, proposing an initial arbitration claim for contractual penalties together with a claim that the bank was jointly liable. The aim was to relieve immediate financial pressure and establish a foundation for resolving the wider dispute.
The substantial value and complex facts and legal relationships led to multiple hearings, evidential inquiries and extensions of the arbitration timetable. During pandemic restrictions, the team drove more than ten hours to collect evidence on site. Working with the client, it used aerial photography and surveying to document occupation and non-delivery of the assets, providing visual evidence of the breach.
Principal issues and award
The team addressed performance, limitation periods, the nature of the bank’s obligations and the calculation of contractual penalties. It argued that the bank had undertaken joint liability, rather than a guarantee subject to guarantee-period rules. According to the announcement, the tribunal accepted the relevant arguments. Considering actual losses, financing costs, contractual terms, expected benefits and comparable cases, it awarded contractual penalties amounting to hundreds of millions of renminbi and held the bank jointly liable for payment.
The report states that additional penalties continued to accrue while the breach persisted, at an annual amount of tens of millions of renminbi based on the calculation it described. The precise amounts and calculation method are governed by the arbitral award.
Payment and subsequent proceedings
According to the announcement, the bank subsequently paid all amounts specified in the effective award. Its applications to set aside the award and resist enforcement were rejected by the courts. This completed the first phase of the team’s overall strategy and provided a basis for addressing the remaining dispute. The report does not establish that all subsequent aspects of the wider dispute have been resolved.
This was a team matter. The article is adapted from YunTing’s official announcement, focusing on Li Shu’s involvement and the case recognition. Original publication date: 11 June 2025.