Second-Instance Reversal: Dacheng Lawyers Secure Complete Victory for Central Enterprise in Financial Leasing Dispute

 

Recently, the legal team led by Chen Sinan from Dacheng Shenyang Office achieved a full reversal for a central enterprise in a series of financial leasing dispute appeals. The Intermediate People's Court of Jinzhou, Liaoning Province issued a final judgment revoking the first-instance ruling, reclassifying the transaction from invalid private lending to valid financial leasing, and upholding all claims including rent, liquidated damages, legal fees and vehicle priority rights, protecting the legitimate rights and state-owned assets.

 

I. Incorrect First-Instance Ruling Poses Severe Operational Risks

 

In the first instance, the court incorrectly held that the transaction did not constitute a financial leasing relationship, classifying it as invalid private lending (unlawful lending) and dismissing all claims for rent, liquidated damages and security rights, awarding only nominal funds occupation interest.

 

This erroneous ruling posed fatal risks to the licensed financial leasing central enterprise with nearly 10 years of compliant operation:

It directly invalidated the commercial vehicle sale-and-leaseback model, paralyzing regional operations;

It would have triggered mass losses across Liaoning and nationwide, causing massive state-owned asset losses;

It severely undermined investment confidence and posed potential compliance and criminal risks.

 

II. Targeted Arguments Secure Second-Instance Victory

 

After being retained, Chen Sinan's team focused on the dual “financing + leasing” nature of financial leasing and built a rigorous argument to reverse the ruling.

Qualification & Validity: Evidence proved the enterprise held valid financial leasing permits; the contract fully specified leased assets, term, rent and ownership transfer, meeting the Civil Code requirements.

Sale-and-leaseback & Possession Modification: The transaction was a typical vehicle sale-and-leaseback with ownership transferred via possession modification; assets were identifiable, in use and registered with the PBC Credit Reference Center.

Self-Property Mortgage: The team demonstrated the validity of self-mortgage in vehicle sale-and-leaseback. Under the unified movable property guarantee regime, such security is recognized for vehicles where ownership is transferred via possession modification.

 

III. Precedent Value: Unifying Standards and Supporting Industry Growth

 

The second-instance judgment clarifies the boundary between sale-and-leaseback and private lending, upholds the validity of possession modification and self-mortgage, and corrects the “leasing in name, lending in substance” misclassification. It sets an important precedent for similar cases in Liaoning and nationwide.

 

Dacheng's professional advocacy achieved a full reversal, safeguarding central enterprise rights and state-owned assets while providing strong judicial guidance for the compliant and stable development of the financial leasing industry.