Basic facts:
In December 2002, a certain branch of the Industrial and Commercial Bank of China in Guangzhou (ICBC) entered into a cooperation agreement with a certain industrial development company in Baiyun District and a certain real estate development company in Guangzhou, which are the developers (developers) of a certain real estate project in Baiyun District, stipulating that ICBC provides residential mortgage loan to the buyers of the real estate project and the developers provide interim guarantee for the property buyers’ mortgage. From Dec. 2002 onward, ICBC provided residential mortgage loan to property buyers meeting loan conditions according to the cooperation agreement, however, the property owners refused to repay their mortgages by reason of the fact that the properties are individual-funded properties which are not eligible for free trading on market. The property owners refused to resume repayment after being urged by ICBC and failed to prepay their loans before maturity as required by the bank. Consequently, ICBC brought a lawsuit to Yuexiu District People’s Court in Guangzhou moving for an order that the Personal Home Mortgage Contract signed between ICBC and the owners (defendants or borrowers) be cancelled, that the borrowers repay the principal of loan and the interest accrued thereon until the date of full repayment of loan, that the developers assume joint and several liability for the repayment of above-mentioned sums and that ICBC has the right to dispose of the mortgaged properties and the priority to receive payment from the mortgaged properties. The borrowers claimed that, the properties are individual-funded properties which are illegal, ICBC failed to exercise due diligence resulting in the ineligibility of the properties for trading on market. The borrowers refused to resume repayment and to cancel the loan contracts until the properties become eligible for trading on market.   
Lawyers’ statement:
Chinese laws and administrative regulations do not prohibit banks from providing loans to buyers of individual-funded properties. The loan contracts entered into between ICBC as a financial institution and the borrowers reflected the true intention of both parties, and therefore should be valid. The risks incurred by the granting of loans to buyers of individual-funded properties are operational risks assumed by ICBC and should not be used as the basis for the defendants to refuse repayment.  
Judgment of court:
The court supported ICBC’s claims, moreover, due to the numerosity of parties involved in the lawsuit, the court attempted to procure an amicable settlement between the parties. During such settlement, our lawyers provided active cooperation to the court and drew ICBC’s attention to the great social concern on this class action, suggesting that the bank should withdraw the case and end it with amicable settlement with the borrowers without damaging the bank’s own interest. The lawyers also made active effort in negotiating a settlement solution with the owners who inclined to a settlement. Through multilateral efforts, some owners agreed to continue performing their loan contracts, pay a late payment penalty and bear the litigation costs and ICBC agreed to withdraw the case.        
Lawyers’ remarks:
The legal facts are clear in this case, but the main problems consisted in the large number of owners refusing repayment which was more than 200. Accordingly, the key was to eliminate conflicts between the owners, the bank and the court and to maintain social stability. After discontinuance of repayment occurred, some owners were persuaded by the lawyers and the bank to continue repayment, however, there remained more than 100 owners who had misunderstanding about the legal relations in this case, as a result, they brought civil and administrative proceedings respectively against the developers, the Urban Planning Bureau of Baiyun District and the Real Estate Administration of Baiyun District.      
When the court was hearing the case of loan contract dispute, more than 200 people from the 100 families of property owners participated in court hearing and the court had to maintain order with more than 30 court policemen. During case hearing, the lawyers were threatened by some owners, and some owners even held several assemblies in front of the office buildings of government agencies including Baiyun District Government, Yuexiu District People’s Court, Guangzhou Municipal Government and Guangzhou Intermediate People’s Court, which caused a certain social impact. The lawyers made active effort in communicating and cooperating with multiple parties including the bank, the court, and the owners in order to arrive at a solution and alleviate the conflict between the owners, the bank and the government.        
During the execution stage after judgment is handed down, some owners refused to cooperate with the court in execution, and accordingly, the lawyers communicated with the judges to reach a solution in order to obtain owners’ cooperation. Through the lawyers’ effort, the case and execution were successfully completed to a substantial extent. While protecting the client’s interest, the lawyers successfully eliminated the conflict between parties to the lawsuit and contributed to social stability.