Criminal–Civil Disputes

In business dealings, a single set of facts can call for both criminal liability and civil recovery. Which route to take first, whether both can run at the same time and who is ultimately responsible often determine whether losses can be recovered.

A judicial interpretation issued by the Supreme People's Court, in force from 22 September 2026, confirms that criminal proceedings do not automatically take priority. Where a civil dispute and a criminal case do not arise from the same facts, the civil case can generally proceed.

Typical situations

A counterparty in a contract or loan dispute may have committed fraud, and it is unclear whether to report to the police or sue first, or a civil case has been suspended or dismissed after a police report.
An employee, legal representative or other person signed a contract, loan or guarantee in a company's name, including with a forged company seal, and the question is whether the company is still liable.
A borrower is suspected of a crime, and the lender wants to recover from guarantors or co-debtors, or a guarantor wants to challenge or limit its liability.
Assets belonging to a third party have been seized or frozen in a criminal case.
The police declined to open a case, or the prosecutors declined to prosecute, and the victim needs to pursue civil remedies instead.
A final civil judgment conflicts with facts established in a criminal case or is otherwise wrong, and needs to be corrected through retrial or prosecutorial supervision.

Selected matters: the contract fraud and loan fraud cases above, in which criminal proceedings were coordinated with the victim companies' civil remedies; and a bank guarantee dispute in which the client company had lost on final appeal and its application for retrial had been rejected. Mr. Yin persuaded the procuratorate to recommend a retrial, and the court overturned the judgment and dismissed the claims against his client company.