Legal Effects of the Exercise of Creditors' Right of Subrogation--Annotation on the Interpretation Path of Article 537 of the Chinese Civil Code
DOI:
https://doi.org/10.54691/s8drb130Keywords:
Creditor’s Right of Subrogation, Direct Compensation Rules, Rules of Warehousing.Abstract
Since the subrogation system was introduced into China, the legal effect of creditors' exercise of subrogation rights has been a matter of contention, particularly with regard to the interpretation of Article 537 of the Chinese Civil Code. This article analyses the legislative history and judicial practice of subrogation rights in China, as well as the effect of the exercise of subrogation rights from the perspective of comparative law, starting from Article 537 of the Chinese Civil Code. Furthermore, this paper will examine the "rules of warehousing combined with set-off rules", "priority compensation", "restrictive rules of warehousing" and other methods of interpreting the aforementioned irrationality. In conclusion, it was determined that Article 537, Paragraph 1 of the Chinese Civil Code pertains to the "direct compensation rules," while Paragraph 2 pertains to the interpretation of the note provisions.
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