Test Case on Disposal of a Defaulted Free Trade Zone Offshore Bond is Heard in Court Today, with Dean Jun Qian Serving as an Adjudication Panel Member | Info

Release time：2025-11-28    

On the afternoon of November 26, 2025, Shanghai Financial Court publicly heard a test case on the disposal of a defaulted free trade zone offshore bond. This was the second test case heard since the issuance of the Provisions of Shanghai Financial Court on the Mechanism for Testing Financial Market Cases. The adjudication panel for this case comprises four judges from the Shanghai Financial Court and three external experts.

Jun Qian, Executive Dean of Fudan International School of Finance, Professor in Finance, Member of Shanghai Stock Exchange Corporate Bond Listing Review Committee and Deputy Director of the First Academic Committee of Chinese Capital Markets Institute (hosted by China Securities Regulatory Commission), was invited to serve as a member of the adjudication panel along with two other experts to collectively provide robust intellectual support for the precise adjudication of disputed issues in the case.

Prior to the court hearing, multiple experts from the legal and financial sectors conducted in-depth research on the case and submitted third-party advisory opinions.

During the proceedings, the adjudication panel heard arguments from the applicant, as well as defense statements from the respondent and third parties. The key issues in this case focus on whether the free trade zone offshore bonds issued via blockchain bookkeeping are legal and valid, whether individual investors possess independent standing to sue, whether the involved bonds constitute cross-default or anticipatory breach, and whether the procedures and pricing for the disposal of domestic collateral are appropriate, among other matters. Representative attorneys for all parties engaged in multiple rounds of debate upon the facts of the case, relevant legal provisions, and judicial practices. Given that the bonds involved in the case are subject to the laws of the Hong Kong Special Administrative Region of China, the adjudication panel, upon the applicant’s request, permitted two practicing attorneys from the Hong Kong Special Administrative Region to serve as expert witnesses. They provided professional opinions on the application of law and addressed inquiries from all parties and the panel regarding issues such as whether individual investors can directly exercise their rights and the criteria for bond default.

The trial of this case is of great significance for constructing an offshore financial system that aligns with the Shanghai International Financial Center. The test case, centered around the core contentious issues, organized comprehensive debates among all parties involved, conducting a systematic legal risk stress test on the existing rules governing free trade zone offshore bonds. Against the backdrop of institutional opening-up, this case focuses on enhancing the compatibility of China’s financial market infrastructure rules with international standards, providing robust legal safeguards for the development of the RMB offshore market, and playing a crucial institutional supporting role in preventing cross-border financial risks and promoting high-level openness in the financial market.

The adjudication panel will adhere to the principles of independent deliberation, majority decision-making and the preservation of dissenting opinions. Based on the factual circumstances of the case, it will make verdicts on the substantive issues involved in the test case and issue a judicial opinion.

The trial transcripts and related materials from this hearing will be made publicly available on the official website of the Shanghai Financial Court (http://www.shjrfy.gov.cn).