Facts

Company B lent Company D RMB 100 million under a loan agreement. H Industrial Company and F Company signed a guarantee contract and assumed joint and several liability for D’s obligations. On maturity D repaid only RMB 16.5 million. B sued in the Intermediate People’s Court for the balance, interest and costs.

Issues

Whether the guarantees were validly executed and within corporate authority; whether the guarantors could rely on defences available to the principal debtor; the calculation of interest and default interest; and the priority between the creditor and other secured parties.

Approach

Wang Lin acted for the creditor. The case turned on documentary discipline: the guarantee contract, board resolutions and the correspondence recording demands. Where a guarantor is a company, an internal resolution supporting the guarantee is often decisive.

Outcome

The court upheld the claim against the principal debtor and the guarantors, with interest calculated to the date of actual payment.