In the case of dispute over loan contract for ship operation between Bank of China
Limited Dandong Branch (hereinafter referred to as Bank of China Dandong
Branch) as the plaintiff and Dandong Jinshengshui Fishery Co., Ltd. (hereinafter
referred to as Jinshengshui Company), Dandong Feng’ao Ship Industry Co.,
Ltd. (hereinafter referred to as Feng’ao Company), Song X and Zhang X as the
defendants31, as agreed, Feng’ao Company’s term of guarantee was up to the
date when the ship was registered for mortgage. Since the lender Bank of China
Dandong Branch and the borrower Jinshengshui Company failed to register
the mortgage for the ship as agreed in the loan contract, the consequence of
unreasonable extension of the guarantee term shall not be borne by Feng’ao
Company. Moreover, Bank of China Dandong Branch did not pay the loan to
Feng’ao Company, the borrower’s counterparty and the guarantor of the loan
contract, as agreed in the loan contract, and changed the loan recipient who had
been agreed in the contract. In accordance with Article 24 of the Guarantee Law of
the People’s Republic of China which provides “When the creditor and the debtor
change the principal contract, they shall have beforehand the written approval from
the guarantor. The guarantor assumes no more guarantee responsibilities if the
change is made without its approval”, the Court rejected Bank of China Dandong
Branch’s request for Feng’ao Company to bear joint and several responsibility.