Administrative Procedure Law Amended

The Administrative Procedure Law of the People’s Republic of China 2014 (Administrative Procedure Law, also known as the Administrative Litigation Law (行政訴訟法)) is China’s framework for the judicial review of administrative decisions. Although at the time of China’s accession to the World Trade Organisation ("WTO") related legislation was amended so that the Administrative Procedure Law would comply with the judicial review requirements in China’s WTO Accession Protocol, the Administrative Procedure Law is not well known and foreign businesses in China would rarely make use of it.

The Administrative Procedure Law was amended on 1 November 2014, but the amendments will not become effective until 1 May 2015 to give the courts and government officials an opportunity to adapt to its new provisions. The unamended law is referred to below as the 1989 Administrative Procedure Law.

Businesses rarely challenged government decisions in court under the 1989 Administrative Procedure Law. This is partly because the scope of acts that give rise to a challenge was limited under the 1989 Administrative Procedure Law – the failure to issue a license, for example, was stated as a grounds for challenge but other decisions relating to the permit were not. Potential litigants may also have been discouraged by the fact that the law conferred jurisdiction on the local courts in the same administrative division as the government department involved.

The principal implications of the amendments are:

  • New provisions concerning jurisdiction permit the establishment of regional courts that will have jurisdiction over administrative cases in several regions. Once such courts have been established, litigants may be able to bring cases with courts that are perceived as less closely linked to the local administrations whose decisions they are reviewing.
  • More categories of government decision are open to review. These include:
    • improper decisions concerning government concession agreements;
    • failure to comply with real property expropriation and compensation agreements;
    • challenges to administrative determinations concerning ownership of rights to natural resources; and
    • decisions related to administrative permits in general (in addition to the refusal to grant the permit in the first place; a general right to challenge a “failure to respond” to an application for a permit has also been clarified to mean a failure to reply within any applicable statutory time limit).
  • The possibility of challenging administrative monopolies.
  • Giving the courts some basis to challenge normative documents by directing courts not to use those documents if they do not comply with the law and authorising them to provide government departments with suggestions for dealing with the issue.

Chen Luming, Partner at Jun He in Shanghai, points out that when they come into force, the 2014 amendments will create new causes of action upon which citizens and corporates can sue the government, and provide claimants with certain procedural safeguards. However, Chen notes that the amendments do not answer the larger questions: “Is a court truly independent and free from government interference, and free to look only to the law when deciding cases?”, and “Does China have a supreme Constitution which is the only bible for administrative judges, or may they be forced to listen to other voices?”