A recent case handled by the Beijing Internet Court (BIC) involved a dispute over an online service contract in which a merchant, after being penalized by an e-commerce platform for operating a dropshipping business and engaging in pricing violations, submitted fabricated invoices and forged transaction documents in an attempt to evade judicial scrutiny and mislead the court. The court not only dismissed the merchant's claims but also imposed a judicial sanction for fabricating evidence and obstructing judicial proceedings.

Case Background

The plaintiff, a trading company, operated a store on an e-commerce platform run by the defendant.

The plaintiff alleged that the defendant had, without its consent, imposed a penalty and deducted liquidated damages from its store account on the grounds of “price violation – excessively inflated pricing” pursuant to standard-form platform rules. The plaintiff requested that the court revoke the penalty decision and order the return of the deducted funds.

The plaintiff claimed that the products at issue had been sourced through legitimate channels and reasonably priced, and submitted 70 electronic invoices, purchase and sales contracts, delivery agreements, price-control notices, and other supporting materials as evidence.

During the court proceedings, the defendant challenged the authenticity of the invoices submitted by the plaintiff. Upon further inquiry by the court, the plaintiff admitted that the invoices had been obtained through the services of paid third-parties and did not correspond to actual business transactions. The purchase and sales contracts, delivery agreements, price-control notices, and other supporting documents had likewise been commissioned and prepared solely for use in complaints and litigation.

The court further found that the plaintiff operated under a dropshipping model without maintaining any inventory or purchasing the products in advance. Instead, it procured products from other online platforms only after receiving orders from consumers.

Evidence showed that Chen, the legal representative of the plaintiff company, had contacted an appeal agent and a person offering invoice-issuing services online. Paying 966 yuan ($142.7), Chen instructed such providers to issue 70 invoices unrelated to the company's actual business activities, with a total stated value exceeding 15,000 yuan, and to prepare various transaction documents and supporting materials.

Court Findings

The penalty imposed by the platform was supported by facts and platform rules

Pursuant to the Civil Code of the People's Republic of China, lawfully established contracts are protected by law, and civil parties shall follow the principle of good faith in conducting civil activities and performing contractual obligations.

In this case, the defendant platform submitted valid platform service agreements and pricing management rules, which clearly set forth the criteria for identifying excessively inflated pricing and the corresponding disciplinary measures. Price comparison records provided by the platform showed that the plaintiff had listed multiple products at prices significantly higher than the platform's benchmark prices. The platform had also issued prior warnings regarding abnormal pricing, yet the plaintiff failed to make the necessary rectification.

The court therefore held that the penalty imposed by the platform was supported by both factual evidence and applicable platform rules. Accordingly, the plaintiff's request to revoke the penalty and recover the deducted funds lacked both factual and legal grounds and was dismissed.

Plaintiff sanctioned for fabricating evidence and obstructing judicial proceedings

The court emphasized that civil litigation must be conducted in accordance with the principle of good faith. Parties are prohibited from interfering with judicial proceedings through false or deceptive conduct.

Under the Civil Procedure Law of the People's Republic of China, where a participant in litigation fabricates or destroys important evidence and thereby obstructs the court's handling of a case, the court may impose a fine or detention depending on the seriousness of the circumstances. Where the conduct constitutes a criminal offense, criminal liability shall be pursued in accordance with the law. The court may also impose judicial sanctions on the principal person in charge of the entity concerned and other directly responsible persons.

In this case, the plaintiff knowingly operated a dropshipping business without actual inventory or genuine purchase transactions, yet deliberately procured false invoices and fabricated transaction documents in an attempt to conceal its business practices and avoid judicial scrutiny regarding product sourcing and pricing. Such conduct significantly increased the court's burden in verifying evidence and determining the facts of the case.

By attempting to obtain an improper litigation advantage through fabricated evidence and to mislead the court's fact-finding process, the plaintiff seriously violated the principles of honesty and credibility, and interfered with the normal conduct of the judicial proceedings, which therefore constituted fabrication of evidence. Taking into account the nature of the misconduct, its impact on the proceedings, and the plaintiff's subsequent admission of wrongdoing and expression of remorse, the court imposed an appropriate judicial sanction in accordance with the law.

Judgment

The BIC dismissed all claims brought by the plaintiff company.

The court further found that the plaintiff had fabricated evidence and obstructed judicial proceedings, and imposed a fine of 20,000 yuan on Chen, the company's legal representative.

Judge's Remarks

E-commerce platforms are entitled to regulate merchants and address violations in accordance with platform agreements and rules in order to maintain a fair, orderly, and trustworthy online marketplace. Merchants operating on e-commerce platforms should adhere to the principle of good faith, establish reasonable pricing practices, and conduct business in a lawful and compliant manner.

This case serves as a reminder that attempts to conceal violations through fabricated evidence not only undermine judicial integrity but may also result in additional legal consequences. Rather than avoiding liability, dishonest litigation conduct may lead to both an adverse judgment but also a court-imposed fine.