Can a lender sue at their place of residence for a debt incurred in a different location?

Basic Case Summary

From January to March 2019, the defendant Zhang borrowed a total of 240,000 yuan from the plaintiff Wang, who resides in Qilin Town, Juyong County, claiming financial difficulties in his business. After repeated demands, the defendant only repaid 52,000 yuan, leaving the remaining debt unpaid. To protect his legal rights, the plaintiff filed a lawsuit, demanding the defendant repay the remaining 188,000 yuan.

During the submission of the defense, the defendant Zhang raised an objection to jurisdiction, arguing that he has lived in Pukou District, Nanjing City for many years, with his habitual residence in Nanjing. According to the Civil Procedure Law and relevant judicial interpretations, the court with jurisdiction should be the court where the defendant habitually resides, i.e., Pukou District People’s Court, Nanjing.

Judicial Review

The key issue in this case is whether the plaintiff can choose the court at his residence to file the lawsuit.

This is a private lending dispute. Neither party agreed on the jurisdiction court nor specified the place of contract performance. As the lender in the loan agreement, Wang demands repayment from Zhang, the borrower. Since Wang is the recipient of the money, his residence is considered the place of performance of the loan contract. Therefore, both Wang’s and Zhang’s residences have jurisdiction over this case. Wang’s residence is in Qilin Town, Juyong County, Shandong Province. Wang chose to file the lawsuit in Juyong Court, which has jurisdiction as the court of the contract’s place of performance. This is appropriate, and Zhang’s jurisdiction objection is unfounded.

The court rules to dismiss Zhang’s jurisdiction objection.

Judicial Explanation

The core of this case is to clarify whether both parties have a clear agreement on jurisdiction and to interpret Article 18, Paragraph 2 of the Supreme People’s Court’s Interpretation on the Application of the Civil Procedure Law of the People’s Republic of China, regarding the “place of performance.” For private lending disputes where the lender demands repayment and the parties have no clear or no agreement on the place of performance, the plaintiff may file suit in the court where he resides (either his residence or habitual residence). The court at that location has jurisdiction. In this case, Wang chose to sue Zhang, who resides elsewhere, in his own residence court, which complies with the law, and that court has jurisdiction.

Legal References

Civil Procedure Law of the People’s Republic of China

Article 22: Civil lawsuits filed by citizens shall be under the jurisdiction of the defendant’s domicile court; if the defendant’s domicile and habitual residence are different, the court of habitual residence shall have jurisdiction. For legal persons or other organizations, the court of the defendant’s domicile shall have jurisdiction. If multiple defendants’ domiciles or habitual residences are in more than two jurisdictions, all such courts have jurisdiction.

Article 35: Parties to a contract or other property rights dispute may, in writing, agree to select the court of the defendant’s domicile, place of performance, place of contract signing, plaintiff’s residence, or location of the subject matter, provided it does not violate the law’s rules on jurisdictional levels and exclusive jurisdiction.

Supreme People’s Court Interpretation on the Application of the Civil Procedure Law of the People’s Republic of China

Article 18: If the contract specifies the place of performance, that place is the place of performance. If not specified or unclear, and the dispute involves monetary payment, the place of performance is the recipient’s location; for real estate delivery, the real estate location; for other obligations, the location of the obligor. For contracts settled immediately, the place of transaction is the place of performance. If the contract has not been performed and neither party’s residence is at the specified place, the court of the defendant’s domicile shall have jurisdiction.

Supreme People’s Court Regulations on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases

Article 3: If the parties do not specify or clearly specify the place of performance, and no supplementary agreement is reached later, and the relevant contract clauses or trading habits cannot determine the place, the place of performance shall be the location of the recipient of the currency.

Source: Juyong Court

【Source: Licheng Procuratorate】