Online judicial auction gains momentum in China

Chinese courts are going online to handle assets seized in lawsuits.

Nearly 700 courts in 21 provincial areas registered accounts on sf.taobao.com, the nation's largest online site for judicial auctions, as of February. So far nearly 90,000 auctions have been finished, figures from the site show.

In November 2014, an auction of real estate properties seized by a court in Jiangsu set the sf.taobao.com price record after reaching 350 million yuan (55.88 million U.S. dollars).

There has been frequent criticism over transparency when courts handle assets seized. Often transaction prices are far below the actual value of items being auctioned, with court workers and auction agents sometimes suspected of making under-the-table deals to rig the auctions in their favor.

In July 2012, a BMW sedan was sold on Taobao.com after being seized in a lawsuit by the Beilun District People's Court in Ningbo City, Zhejiang. It marked the country's first judicial auction to take place on a third-party commercial website without an agent.

So far, all courts in Zhejiang, Jiangsu, Henan, Fujian, Beijing and Guizhou province have opened accounts on Taobao.com and pilot auctions have been launched for courts in 15 other provinces, including Guangdong, Yunnan and Sichuan.

China's top court recently pushed forward reforms encouraging online auctions.

On Feb. 26, the Supreme People's Court issued a blueprint reforms that said judicial auctions should be increased and the focus should be on to do so online.

Chu Hongjun, vice president of Jiangsu Provincial Higher People's Court, said online auctions are more transparent than traditional judicial auctions and can break geographical restrictions, attract more bidders and deter corruption.

With no commission required and a higher auction rate and premium rate, online auctions can help solve difficulties in enforcing verdicts and maximize the interests of creditors and debtors, Chu said. Endi