On 18 August 2026, the Council of Justices of the Supreme People’s Court adopted Resolution No. 03/2026/NQ-HDTP, providing guidance on the application of certain legal provisions in resolving deposit disputes (“Resolution 03”). Effective from 15 October 2026, Resolution 03 provides specific guidance aimed at ensuring the consistent application of the law in resolving disputes arising from deposit agreements in practice.
Key Highlights
Form and Validity of Deposit Agreements
Regarding deposit form, Resolution 03 clarifies that a deposit agreement constitutes a civil transaction and may be established verbally, in writing, or through specific conduct, unless otherwise required by law. A deposit agreement may be incorporated into a separate contract or included as a provision in the contract containing the secured obligation.
Regarding deposit validity, a deposit agreement is valid if it satisfies all conditions for the validity of a civil transaction under Article 117 of the Civil Code 2015 (the “Civil Code”), including in the following circumstances:
- where the terms of a deposit agreement intended to secure the conclusion and/or performance of a contract are unclear, resulting in the contract not being concluded or performed; or
- where a deposit agreement is intended to secure the conclusion of a contract which, if concluded at the time the deposit is made, would be invalid.
Regarding enforceability against third parties, the time at which a deposit arrangement becomes enforceable against third parties is determined in accordance with the laws governing security for the performance of obligations. Resolution 03 further clarifies that:
- where a deposit arrangement is enforceable against third parties, the depositary’s right to reclaim the deposited assets remains unaffected and is not extinguished if such assets are transferred to another person through sale, gift, exchange, assignment or other transfers of ownership, or where another person possesses, uses or benefits from the deposited assets without a lawful basis; and
- where deposited assets secure multiple obligations, and the deposit arrangement is enforceable against third parties, the depositary’s priority of payment is determined in accordance with the Civil Code.
Deposited Assets
Deposited assets may include money, precious metals, gemstones or other valuable assets (such as shares, bonds and digital assets), provided that such assets are not prohibited from or restricted in transactions, can be delivered into the possession of the depositary and have an ascertainable monetary value at the time the deposit is made. The value of the deposited assets may be greater than, equal to or less than the value of the secured obligation. The monetary value of the deposited assets is determined by agreement between the parties. In the absence of such agreement, the first-instance court will determine their value.
Unless otherwise provided by law or agreed by the parties, the following rules apply where the deposited assets are jointly owned:
- in case of the common ownership by integration, the consent of all co-owners is required; and
- in case of the common ownership by share, the depositor may only use the portion of the assets under its ownership as the deposit.
Consequences of Breach of Deposit Agreement
Where the parties have not agreed on deposit penalties:
- if the depositary refuses to conclude or perform the contract, it must return the deposited assets and pay an additional amount equivalent to the value of those assets; or
- conversely, if the depositor refuses to conclude or perform the contract, the deposited assets will belong to the depositary.
Where a deposit dispute arises, and the parties have not agreed otherwise on the treatment of the deposit:
- if the deposit is intended to secure the conclusion of a contract, its performance or both, the party at fault for the failure to conclude or perform the contract, or for the contract being declared invalid, is subject to a deposit penalty under the Civil Code. No deposit penalty applies where both parties are at fault or where the failure results from a force majeure event or objective hindrance; and
- if the deposit is intended solely to secure the conclusion of a contract, no deposit penalty applies where, after the contract has been concluded, a breach occurring during its performance results in non-performance, or the contract is subsequently found to be partially or wholly invalid.
Where the parties agree on a deposit penalty exceeding the value of the secured contract, the first-instance court will consider and determine a deposit penalty not exceeding the contract value. In addition, the court may consider and grant a claim for interest on the deposited amount in accordance with the Civil Code. However, interest on a deposit penalty is not recoverable unless otherwise provided by law or agreed by the parties.
Resolution 03 also clarifies the relationship between deposit penalties and other remedies, as follows:
- Deposit penalty and compensation for damage: In the absence of an agreement between the parties, the court may consider and grant claims for both a deposit penalty and compensation for damage in accordance with applicable law.
- Deposit penalty and contractual penalty: Where the parties agree that the defaulting party is subject to both a deposit penalty and a contractual penalty, the court may grant the claim for the deposit penalty but will not grant the claim for the contractual penalty.
Statute of Limitations for Deposit Disputes
Under Article 8 of Resolution 03, the applicable statute of limitations depends on the nature of the claim:
- Claims for deposit penalties, compensation for damage, and other claims arising from a deposit agreement: Three (3) years from the date on which the claimant knew or should have known that its rights and interests had been infringed.
- Claims for a declaration that a deposit agreement is invalid: Two (2) years from the occurrence of the relevant circumstances prescribed in Article 132.1 of the Civil Code.
- Claims for the return of deposited assets: No statute of limitations applies.
Conclusion
Overall, Resolution 03 provides greater legal clarity and promotes consistency in resolving deposit disputes, particularly regarding the validity of deposit agreements, the consequences of breaches and the application of relevant remedies. Accordingly, individuals and businesses should review and structure their deposit agreements with clear provisions on the purpose of the deposit, the parties’ respective rights and obligations, and the consequences of breaches to mitigate legal risks and potential disputes.
