ALL TEN questions are compulsory and MUST be attempted

1 In relation to the Enterprises Bankruptcy Law of China,state the legal effect of the acceptance of an application for bankruptcy by the court:

(a)in terms of the preservative measures against the assets of the debtor;(4 marks)

(b)in terms of the enforcement procedure against the relevant debtor;(4 marks)

(c)in terms of pending legal actions against a debtor.(2 marks)

(10 marks)

2 In relation to the Securities Law of China:

(a)explain the term sponsor in underwriting securities;(2 marks)

(b)state the objective of the legislation to set up the system of sponsorship in underwriting securities;(2 marks)

(c)state the various legal liabilities of a sponsor,in providing professional services,for his wrong doings or failure to perform his functions.(6 marks)

(10 marks)

3 In 2009 Mr Lee and the villager committee entered into a contract for the management of land,under which he obtained the right to manage the contracted piece of land in a small mountain for 30 years.The contract was duly registered with the relevant government authority in light of the Property Law.

One day when Mr Lee was planting trees on the mountain,he accidentally found a small coal mine in the mountain.Having discovered this information many villagers rushed to the mountain to exploit coal for sale.Mr Lee demanded the villagers stop the exploitation of coal,on the ground that he has been a legitimate holder of the right of management of land.Therefore，he should be a lawful holder of right to the coal mine under the land.On the other hand,the villagers refused to accept Mr Lee‘s position and insisted that Mr Lee's right to management of land would not extend to natural resources under the land.They held that the coal mine should be the common property of the villagers as a whole and they were entitled to dig coal.

Since Mr Lee and the villagers could not reach a settlement themselves,they filed a lawsuit against each other before the court for the determination of right.

Required:

Answer the following questions in accordance with the relevant provisions of the Property Law of China,and give reasons for your answer:

(a)describe what kind of property right Mr Lee has held regarding the mountain;(2 marks)

(b)describe who should hold the ownership of the coal mine in the mountain;(4 marks)

(c)state how the court should deal with the claim brought by Mr Lee for damages against villagers because some of the trees in the land were destroyed by villagers in digging coal.(4 marks)

(10 marks)

4 Natural Gas Company(Gas Company)and Yaowa Glass Company(Yaowa Company)entered into a supply contract.The major terms and conditions of the contract were that Gas Company would provide a minimum 4,000 m3 of natural gas daily for a period of five years at a fixed price;it should give a written notice five days in advance where it reduces the quantity of supply;Yaowa Company would provide a sum of RMB 100,000 yuan as a deposit for the performance of the contract.Yaowa Company paid the deposit pursuant to the supply contract upon the conclusion of the contract.Gas Company has been in decline since the beginning of 2010.In order to achieve extra profit,Gas Company sold more natural gas to other customers at a higher price by reducing the quantity of supply to Yaowa Company.One day Gas Company suddenly stopped providing natural gas to Yaowa Company without a notice in advance,which resulted in serious damage to the equipment of the latter.Due to unsuccessful negotiation between the two parties,Yaowa Company intended to seek the assistance from the people‘s court.

Required:

Answer the following questions in accordance with the relevant provisions of the Contract Law of China,and give your reasons for your answer:

(a)explain the legal nature of the deposit under the contract law,and state whether a claim for a refund of twice the amount of the deposit should be supported by the court;(4 marks)

(b)state whether a claim requiring specific performance of contract by Gas Company should be supported by the court where the Yaowa Company has already requested a refund of twice the amount of the deposit.(6 marks)