Source: Key points of case judgment from "Gazette of the PRC Supreme People's Court" Volume 2022
Case judgment opinions summary:
The exercise of the right of set-off shall not prejudice the legitimate rights and interests of the third party. When the creditor is the subject of multiple enforcement cases at the same time and has no actual property to pay off the debts of others, and the debtor claims to offset the creditor's rights with the enforcement creditor's rights enjoyed by the transferee applying for enforcement, the people's court shall review the acquisition of the active creditor's rights to prevent the active creditor's rights from obtaining preferential repayment in disguised form, thus damaging the interests of other creditors. The execution creditor's rights assigned by the debtor should still be realized by participating in the distribution in the execution case of the creditor as the person to be executed, so as to prevent malicious set-off and maintain the private law order of fair repayment of the creditor's rights.