Lawyers in the company law team of our firm represented our client to win Shanghai Linfo Investment Partnership  (Common Partnership) v. Dongwu Fund Management Co., Ltd. securities investment consulting case recently decided by the appeal court.

Private fund managers have collected money from a wide range of people in society for securities investment by issuing contract funds since the Temporary Rules on Regulation and Administration of Private Funds took effect on August 21st, 2014. A rare disaster in the equity sector caused terrible loss to investors involved. Key issues in the above case included allocation of liabilities among parties involved and return of additional investment funds.

Shanghai No.1 Intermediate Court found that additional investment funds paid by Shanghai Linfo Investment Partnership for the assets management plan should be fully repaid. The court decided on the basis of the good-faith principle included in Article Seven of the General Principles of the Civil Law. It is a rare case of legal practice. Legal opinions on the basis of the claim right contained in the legal instrument can be used as a guide to similar cases. This is an classic case for fund managers to prevent occupational risks by clarifying rights and obligations of contract fund investors, consultants and managers.

Lawyers Ge Weijun, Bai Lituan and Nie Shengnan in the company law team of Shanghai DeBund Law Offices advised on this case.