The liquidation of an international cooperation agreement is the process of terminating and finalizing the rights and obligations of the parties after the agreement has been fully completed, or for other reasons such as expiration, termination, or inability to continue executing the agreement. Such a process typically involves reviewing and confirming the completed work, settling outstanding financial obligations, and preparing the liquidation minutes.

I. Overview of the liquidation of international cooperation agreements 

1. What is the liquidation of an international cooperation agreement?

The liquidation of an international cooperation agreement is the process of terminating and completing the rights and obligations of the parties after all agreed terms have been fulfilled.

Such a process usually includes reviewing, verifying, and recording the completed work, including quantity, quality, and any additional matters arising during execution. 

2. Circumstances requiring the liquidation of international cooperation agreements

The liquidation of international cooperation agreements is usually conducted in the following circumstances:

  • Completion of obligations as agreed in the agreement: When all obligations and tasks specified in the agreement have been fulfilled by the parties.
  • Expiration of the agreed term: When the agreement has reached the end of its validity period without an extension.
  • Suspension or termination of the agreement: When one party decides to suspend or terminate the agreement according to the agreed terms.
  • Inability to continue executing the agreement: When the parties cannot or do not wish to continue implementing the agreement due to certain reasons.

The liquidation enables the parties to confirm the rights and obligations already performed, thereby minimizing unnecessary legal disputes.

II. Legal regulations on the liquidation of international cooperation agreements

1. Principles of the liquidation

The liquidation of international cooperation agreement is generally governed by the following principles:

  • Completion of the agreement: The agreement is liquidated upon the full execution of the agreed tasks.
  • Expiration of the agreement term: The agreement may be liquidated once its validity period ends without an extension.
  • Mutual agreement: The parties may suspend or terminate the agreement based on mutual agreement.
  • Force majeure: The agreement may be terminated due to force majeure such as natural disasters, war, or circumstances beyond the control of the parties.
  • Compliance with applicable laws: The liquidation process must comply with the laws of the relevant jurisdictions and any international treaties to which the parties are members. 

2. Procedures for the liquidation of international cooperation agreements

The liquidation of international cooperation agreements is the process of terminating the rights and obligations of the parties after agreement completion or termination. Below are the essential steps in the liquidation procedures:

  • Identifying the time for liquidation:
  • The agreement has been fully completed. 
  • The agreement has expired and is not renewed.
  • The agreement is terminated or suspended.
  • Preparing liquidation documents:
  • Liquidation minutes.
  • Documents related to execution of the agreement (invoices, acceptance records, financial reports, etc.).
  • Conducting the liquidation:
  • The parties jointly review and verify executed and outstanding obligations.
  • Preparation of the liquidation minutes, specifying completed items, payments made, and any remaining obligations.
  • Execution of the liquidation minutes by the authorized representatives of the parties.
  • Finalizing the procedures:
  • Sending the liquidation minutes to the relevant parties.
  • Archiving the liquidation documents in accordance with legal requirements.

3. Forms of liquidating international cooperation agreements

Common forms of agreement liquidation include:

  • Liquidation in writing: The parties prepare written liquidation minutes specifying fulfilled obligations, payments, and any remaining duties. The document must be signed by the parties’ legal representatives.
  • Liquidation by conduct: In certain cases, the agreement may be considered liquidated through actual performance, such as delivery of goods, payment, or fulfilment of other obligations without formal minutes.
  • Liquidation through intermediaries: The parties may engage third parties, such as lawyers or consulting firms, to support and ensure the process is lawful and impartial.
  • Liquidation through arbitration or court: In case of disputes, the parties may request an arbitral tribunal or court to resolve the matter and issue decisions regarding liquidation.

III. Questions related to the liquidation of international cooperation agreements

1. Common circumstances for the liquidation

The liquidation of international cooperation agreements often occurs in the following situations:

  • Completion of obligations.
  • Expiration of the agreement without renewal.
  • Suspension or termination according to agreement or force majeure.
  • Impossibility of continued execution, such as when a party dissolves, becomes bankrupt, or when an individual party passes away.

2. Is prior notice required before liquidating the international cooperation agreement? 

Prior notice is not always mandatory but is generally recommended to ensure transparency and prevent disputes.

3. Is early liquidation permissible?

The international cooperation agreement may be liquidated before its expiry, subject to specific legal conditions. Main considerations include:

  • Mutual agreement: Early liquidation typically requires mutual consent. If the contract provides for early termination, the parties must comply with such provisions.
  • Legal grounds: Early termination is permitted under circumstances such as completion of the contract, mutual agreement, or force majeure.

IV. Advisory services and assistance with liquidation procedures for international cooperation agreements 

The above information provides clarification regarding the liquidation of international cooperation agreements, as provided by NPLaw to readers. Should you require further assistance or clarification regarding the relevant procedures, please contact NPLaw using the following details: