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Economic dispute resolution by administrative organs and courts in China : from a transparency perspective Liu, Yanyan 2004

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ECONOMIC DISPUTE RESOLUTION B Y ADMINISTRATIVE ORGANS A N D COURTS IN CHINA —From A T R A N S P A R E N C Y P E R S P E C T I V E b y Y A N Y A N L I U L L . B . , C h i n a Y o u t h U n i v e r s i t y F o r P o l i t i c a l S c i e n c e s , 1 9 9 8 L L . M . , R e n m i n U n i v e r s i t y o f C h i n a , 2 0 0 1 P o s t g r a d u a t e D i p l o m a i n C o m m o n L a w , U n i v e r s i t y o f H o n g K o n g , 2 0 0 2 A T H E S I S S U B M I T T E D I N P A R T I A L F U L F I L L M E N T O F T H E R E Q U I R E M E N T S F O R T H E D E G R E E O F M A S T E R O F L A W S i n T H E F A C U L T Y O F G R A D U A T E S T U D I E S ( F A C U L T Y O F L A W ) W e a c c e p t t h i s t h e s i s a s c o n f o r m i n g to t h e r e q u i r e d s t a n d a r d T H E U N I V E R S I T Y O F B R I T I S H C O U M B I A A P R I L 2 0 0 4 © Y a n y a n L i u , 2 0 0 4 Library Authorization In presenting this thesis in partial fulfillment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Y/WY4V L i u 08104-1'»to>f Name of Author (please print) Date (dd/mm/yyyy) Title of Thesis: J^COKo^ Vii put*. RtoJuJZtft. Department of / CW(J The University of British Columbia Vancouver, BC Canada ABSTRACT The increasingly dynamic interplay between national legal construction and normative international practice is shaping China's ongoing legal reforms. Transparency, a concept which has become so widespread that it has reached an exalted status in the arena of multilateral trade, now goes well beyond international trade circles and has become a buzzword in China since its accession to the WTO. In entering the WTO, China is taking on many very significant obligations. Certainly one of the most challenging is the obligation of greater transparency. To varying degrees, the core definition of transparency, though not yet widely enforced due to the friction between it and some of China's cultural components, has gone to many aspects of China's current legal reforms. Accordingly, China's compliance with the WTO must extend beyond general principles and performance in government regulations generally, to include compliance with WTO norms on dispute resolution. Dispute resolution is essential to the process of empowering economic actors to seek enforcement of substantive norms of law and the government regulations. This thesis therefore singles out transparency with respect to business-related dispute resolution, trying to look into how China's transparency obligation improves its rule of law in the dimension of economic dispute resolution. Notably, all possibilities of economic dispute resolution include negotiation, mediation, arbitration and litigation. However, those involving the exercise of the power and resulting in binding force on the parties merit special attention in current China as a series of obligations under the WTO impose on it and one of them is transparency which is supposed to run through all dispute resolution mechanisms involving the state power. Hence, this thesis, from a transparency perspective, focuses on economic disputes resolved by administrative organs and judicial bodies. It concludes with a discussion of institutional and cultural approaches that might prove useful in seeking greater transparency in economic dispute resolution by administrative organs and judicial bodies. ii TABEL OF CONTENTS A b s t r a c t i i T a b l e o f C o n t e n t s h i T a b l e o f C a s e s v T a b l e o f S t a t u t e s v i L i s t o f A b b r e v i a t i o n s v i i A c k n o w l e d g e m e n t v i i i C h a p t e r I I n t r o d u c t i o n 1 C h a p t e r I I P r i n c i p l e o f T r a n s p a r e n c y a n d E c o n o m i c D i s p u t e R e s o l u t i o n 5 2 .1 T r a n s p a r e n c y u n d e r t h e W T O a n d C h i n a ' s C o m m i t m e n t s 5 2 . 2 I m p l i c a t i o n s o f T r a n s p a r e n c y C o m m i t m e n t s f o r C h i n a 9 2 . 2 . 1 G o i n g b e y o n d L e g a l R e g i m e 9 2 . 2 . 2 G o i n g b e y o n d F o r e i g n T r a d e R e g i m e 11 2 . 3 I n t e r p r e t a t i o n o f " T r a n s p a r e n c y " 1 5 2 . 4 C o n s t i t u e n t s o f T r a n s p a r e n t E c o n o m i c D i s p u t e R e s o l u t i o n 2 1 2 . 4 . 1 T r a n s p a r e n t A p p l i c a b l e L e g i s l a t i o n 2 1 2 . 4 . 2 P r o c e d u r a l F a i r n e s s 2 8 2 . 4 . 3 I n d e p e n d e n c e o f D i s p u t e R e s o l v i n g I n t u i t i o n s 3 2 C h a p t e r I I I E c o n o m i c D i s p u t e R e s o l u t i o n b y A d m i n i s t r a t i v e O r g a n s 3 4 3 .1 I n t r o d u c t i o n 3 4 3 . 2 C o m m e r c i a l a d m i n i s t r a t i v e d i s p u t e s : A d m i n i s t r a t i v e r e c o n s i d e r a t i o n 4 4 3 .2 .1 T r a n s p a r e n t a p p l i c a b l e l e g i s l a t i o n 4 5 ( a ) A p p l i c a b l e l e g i s l a t i o n 4 5 ( b ) P u b l i c a c c e s s i b i l i t y 4 7 ( c ) C e r t a i n t y , u n i f o r m i t y , c o n s i s t e n c y a n d s t a b i l i t y . . . . 5 1 3 . 2 . 2 P r o c e d u r a l f a i r n e s s 5 4 (a ) A p p l i c a n t - f r i e n d l y P r o c e d u r e s 5 5 ( b ) I m p l i c a t i o n s f o r t h e f u t u r e 5 8 ( i ) R e c o n s i d e r a t i o n o n d o c u m e n t s , h e a r i n g a n d c r o s s - e x a m i n a t i o n 5 8 ( i i ) C h a l l e n g e S y s t e m 6 1 ( i i i ) R i g h t t o L o o k u p C a s e M a t e r i a l s . 6 2 3 . 2 . 3 I n d e p e n d e n c e o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r g a n s 6 2 3.3 Commercial Disputes: Administrative Adjudication 67 3.3.1 Transparent Applicable Legislation 70 3.3.2 Procedural Fairness 71 3.3.3 Independence.... 77 Chapter IV Economic Dispute Resolution by Courts 79 4.1 Introduction 79 4.2 Transparent applicable legislation 80 4.2.1 Public accessibility 86 4.2.2 Uniformity, consistency, certainty and stability 86 4.3 Procedural fairness 89 4.3.1 Openness system 89 4.3.2 Recent progress 92 4.3.3 Problems to be resolved 96 4.3.3.1 Common issues 96 Adjudicatory Committee 97 Second Instance 98 Trial Supervision 99 Instruction-request system 100 Political-legal Committee 101 Pronouncement of judgment 102 Open written judgement 102 Written Judgement 103 4.3.3.2 Specific issues 104 Administrative litigation 104 Commercial litigation 108 4.4 Judicial independence 112 Chapter V Closing commentary Transparency: an institutional and cultural discourse in China 119 Bibliography 127 Appendix: Chinese Cases Cited 141 iv TABLE OF CASES F e n g x i a n g T r a d e L t d . , S h a n g h a i v . S a l t A d m i n i s t r a t i v e B u r e a u , S h a n g h a i 4 9 J i n M a n K e E l e c t r i c L t d . v. S t a t e R e v e n u e o f S h e n z h e n 4 9 , 8 3 K l o p f e r v . N o r t h C a r o l i n a , 3 8 6 U . S . 2 1 3 , 2 2 3 - 2 4 3 7 M r . C h u a n l i n T u v . I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u , Q i n g h u a i D i s t r i c t , N a n j i n g , J i a n d s u P r o v i n c e 8 5 M r . L i a n g r e n S u n v A d m i n i s t r a t i v e C o m m i s s i o n o f H i g h T e c h n o l o g y D e v e l o p m e n t A r e a s , P e o p l e ' s G o v e r n m e n t o f C h o n g q i n 8 4 M r . W a n g E n w u v . P e o p l e ' s G o v e r n m e n t . H e p i n g D i s t r i c t , T i a n j i n 5 8 S h i t o n g C o m m u n i c a t i o n E q u i p m e n t L t d . o f G u a n g z h o u v . P e o p l e ' s G o v e r n m e n t o f G u a n g z h o u 5 7 V TABLE OF STATUTES G e n e r a l A g r e e m e n t o n T a r r i f s a n d T r a d e 1 9 9 4 6 - 7 , 9 , 1 5 G e n e r a l A g r e e m e n t o n T r a d e i n S e r v i c e s 6 - 7 A g r e e m e n t o n T r a d e - r e l a t e d A s p e c t s o f I n t e l l e c t u a l P r o p e r t y R i g h t s 6 , 9 , 1 0 2 A g r e e m e n t o n T r a d e - r e l a t e d I n v e s t m e n t M e a s u r e s 1 6 A d m i n i s t r a t i v e L i t i g a t i o n L a w o f t h e P R C 8 2 , 8 4 , 8 7 , 9 0 A d m i n i s t r a t i v e P e n a l t y L a w o f t h e P R C 5 9 , 7 4 A d m i n i s t r a t i v e R e c o n s i d e r a t i o n L a w o f t h e P R C . . . 4 0 - 4 1 , 4 5 , 5 1 , 5 4 - 5 8 , 6 0 - 6 3 , 7 8 , 8 0 A d m i n i s t r a t i v e R e c o n s i d e r a t i o n R e g u l a t i o n s 4 5 , 4 1 A r b i t r a t i o n L a w o f t h e P R C 13 C i v i l L i t i g a t i o n L a w o f t h e P R C 8 1 , 8 9 - 9 0 C o m m e r c i a l I n s t r u m e n t L a w o f t h e P R C I l l C o n t r a c t L a w o f t h e P R C I l l C o n s t i t u t i o n o f t h e P R C 3 8 , 1 1 4 D e t a i l e d R u l e s f o r A d m i n i s t r a t i v e R e c o n s i d e r a t i o n P r o c e d u r e s o f N a n j i n g 4 6 , 6 1 F i s h e r y L a w o f t h e P R C 6 9 G e n e r a l P r i n c i p l e s o f C i v i l L a w o f t h e P R C I l l L a n d A d m i n i s t r a t i o n L a w o f P R C 6 9 L a w o f P R C o n C h i n e s e a n d F o r e i g n C o n t r a c t u a l C o o p e r a t i v e E n t e r p r i s e 5 3 L a w o f t h e P R C o n C h i n e s e a n d F o r e i g n E q u i t y J o i n t V e n t u r e s 5 3 L a w o f P R C o n F o r e i g n - c a p i t a l E n t e r p r i s e s 4 9 , 5 3 L e g i s l a t i o n L a w o f t h e P e o p l e ' s R e p u b l i c o f C h i n a 4 8 , 8 4 - 8 5 M e a s u r e s o f C h i n a I n s u r a n c e R e g u l a t o r y C o m m i s s i o n f o r A d m i n i s t r a t i v e C o n s i d e r a t i o n s 4 9 M e a s u r e s o f t h e C u s t o m s o f t h e P R C f o r I m p l e m e n t a t i o n o f A d m i n i s t r a t i v e R e c o n s i d e r a t i o n L a w 6 0 - 6 2 M e a s u r e s o n E l e c t i n g C h i e f J u s t i c e o f t h e P e o p l e ' s C o u r t 9 5 R e g u l a t i o n s o n H a n d l i n g C a s e s I n v o l v i n g F o r e i g n E l e m e n t s 8 1 R e p o r t o f t h e W o r k i n g P a r t y o n t h e A c c e s s i o n o f C h i n a 8 7 , 121 R u l e s o n R e f o r m i n g t h e M o d e l o f C i v i l a n d E c o n o m i c T r i a l 1 0 8 - 1 0 9 R u l e s o n E v i d e n c e o f a d m i n i s t r a t i v e L i t i g a t i o n 1 0 9 T h e S u p r e m e C o u r t o f t h e P R C : R e g u l a t i o n s o n H e a r i n g A d m i n i s t r a t i v e C a s e s I n R e l a t i o n to I n t e r n a t i o n a l T r a d e 8 7 - 8 8 v i LIST OF ABBREVIATIONS A L L : A d m i n i s t r a t i v e L i t i g a t i o n L a w o f t h e P R C A R L : A d m i n i s t r a t i v e R e c o n s i d e r a t i o n L a w o f t h e P R C C C P : C h i n e s e C o m m u n i s t P a r t y C P L : C i v i l P r o c e d u r e L a w o f t h e P R C G A T T : G e n e r a l A g r e e m e n t o n T a r r i f s a n d T r a d e 1 9 9 4 G A T S : G e n e r a l A g r e e m e n t o n T r a d e i n S e r v i c e s N P C : N a t i o n a l P e o p l e ' s C o n g r e s s o f t h e P R C P R C : P e o p l e ' s R e p u b l i c o f C h i n a T R I P S : A g r e e m e n t o n T r a d e - r e l a t e d A s p e c t s o f I n t e l l e c t u a l P r o p e r t y R i g h t s T R I M S : A g r e e m e n t o n T r a d e - r e l a t e d I n v e s t m e n t M e a s u r e s W T O : W o r d T r a d e O r g a n i z a t i o n vii ACKNOWLEDGEMENTS I o w e m y s u p e r v i s o r , P r o f e s s o r P i t m a n . B . P o t t e r a g r e a t d e a l . I t i s b e c a u s e o f h i m , I a t t e n d e d U B C . I t i s b e c a u s e o f h i m , t h i s t h e s i s e v e n t u a l l y c a m e i n t o b e i n g . W h e n I f i r s t a r r i v e d a t U B C , I w a s p r e p a r i n g f o r a v e r y d i f f e r e n t t h e s i s t o p i c . D u e to P r o f e s s o r P o t t e r , I w a s a b l e t o p a r t i c i p a t e i n a r e s e a r c h p r o j e c t t i t l e d A s i a P a c i f i c P r o g r a m o n C r o s s - c u l t u r a l a n d C o m p a r a t i v e R e s e a r c h o n D i s p u t e R e s o l u t i o n d u r i n g t h e s u m m e r o f 2 0 0 3 a s a r e s e a r c h a s s i s t a n t r e s p o n s i b l e f o r W T O - t r a n s p a r e n c y i s s u e s i n C h i n a . I t w a s t h e r e t h a t t h i s t h e s i s t o p i c w a s f i r s t c o n c e i v e d a n d e x p l o r e d ; i t w a s t h e r e I w a s i n s p i r e d a l o t b y w e e k l y c o n v e r s a t i o n s a m o n g a l l t h e p a r t i c i p a t o r s o f t h e p r o j e c t . T h e r e f o r e , I a m d e e p l y i n d e b t e d t o P r o f e s s o r P o t t e r f o r h i s c o n s t a n t h e l p , a d v i c e a n d e n c o u r a g e m e n t d u r i n g m y g r a d u a t e s t u d i e s a t U B C a n d s e e i n g t h i s t h e s i s t h r o u g h to i t s c o m p l e t i o n . M y g r a t e f u l t h a n k s a r e a l s o d u e to P r o f e s s o r L j i l j a n a B i u k o v i c . H e r p e n e t r a t i n g a n d p r o f o u n d v i e w s i n t h e W T O - r e l a t e d a r e a s g r e a t l y o p e n m y e y e s to C h i n a ' s P o s t - W T O i s s u e s . I a m f o r t u n a t e t o h a v e h e r a s m y s e c o n d r e a d e r . H e r t h o u g h t f u l a n d v a l u a b l e c o m m e n t s o n m y t h e s i s p r o v i d e m e w i t h i n v a l u a b l e i n s i g h t s w h i c h w e r e a n e s s e n t i a l c o m p o n e n t t o m a k e m y w o r k m o r e i n t e l l e c t u a l l y e n l i g h t e n i n g . T h e y e a r i n w h i c h t h i s t h e s i s w a s w r i t t e n w a s b o t h w o n d e r f u l a n d c h a l l e n g i n g . I t h a n k m y b e s t f r i e n d , R i c h a r d R o s e c k y , f o r h i s g r e a t h e l p t o p r o d u c e a m o r e r e a d a b l e t h e s i s ; m y g o o d f r i e n d s , A l e x , A m y , H e n r y a n d H e l e n , a n d m y c o l l e a g u e s i n L L M 0 2 s e m i n a r g r o u p , w h o m a d e m y t i m e s p e n t a t U B C m o r e e n j o y a b l e a n d r e w a r d i n g a s w e l l . A t t i m e s o f s e l f d o u b t , I c o u l d a l w a y s g a i n d r i v i n g f o r c e to m o v e f o r w a r d f r o m m y p a r e n t s a n d s i s t e r . T h e i r w e e k l y p h o n e c a l l s a n d u n f a i l i n g s u p p o r t a n d e n c o u r a g e m e n t w e r e v i t a l i n c o m p l e t i n g m y t h e s i s . T h i s w o r k i s d e d i c a t e d t o t h e m . viii [I]instrumental freedoms contribute, directly or indirectly, to the overall freedom people have to live the way they would like to live... Transparency guarantees can be an important category of instrumental freedom. These guarantees have a clear instrumental role in preventing corruption, financial irresponsibility and underhand dealings. 1 Chapter I Introduction T h e w o r l d i n w h i c h w e a r e l i v i n g i s r a p i d l y s h r i n k i n g i n t e r m s o f t h e i n c r e a s i n g i n t e r c o n n e c t e d n e s s a n d i n t e r d e p e n d e n c e i n e c o n o m i c l i f e a m o n g d i f f e r e n t n a t i o n a l e c o n o m i e s . I n r e s p o n s e to t h i s f u n d a m e n t a l c h a n g e , m o r e a n d m o r e n a t i o n - s t a t e s h a v e a d o p t e d i n t e r n a t i o n a l l y r e c o g n i z e d a n d i n s t i t u t i o n a l i z e d p r i n c i p l e s a n d p r a c t i c e s i n c o n d u c t i n g t h e i r e c o n o m i c a c t i v i t i e s . 2 T o d a y s u c h s t a t e s i n c l u d e a g r o w i n g n u m b e r o f d e v e l o p i n g c o u n t r i e s w h i c h f i n d i t n e c e s s a r y t o p l a y b y t h e r u l e s f o r m u l a t e d b y t h e l e a d i n g i n d u s t r i a l i z e d c o u n t r i e s a n d m a n i f e s t e d i n t h e l e g a l f r a m e w o r k o f m a j o r i n t e r n a t i o n a l e c o n o m i c o r g a n i z a t i o n s i n o r d e r t o f u l l y p a r t i c i p a t e i n i n t e r n a t i o n a l e c o n o m i c e x c h a n g e s . 3 A l t h o u g h i t i s c o n t r o v e r s i a l a b o u t w h e t h e r t h e a d o p t i o n o f 1 Amartya Sen, Development as Freedom (Oxford University Press, 1999), pp. 38, 40. 2 See Thomas Yunlong Man, "National Legal Restructuring in Accordance with International Norms: GATT/WTO and China's Foreign Trade Reform", 4 Ind. J. Global Leg. Stud. p. All. 3 In this sense, these countries have strengthened the tendency toward the globalization of law, although there is no universally accepted definition of the concept "globalization" of law. For some efforts to delineate important aspects of this concept, especially its connection with and i n t e r n a t i o n a l l y r e c o g n i z e d n o r m s i s m o s t l y e x t e r n a l l y d r i v e n o r i n t e r n a l l y d r i v e n , 4 i t h a s b e e n n o t e d t h a t i n C h i n a , t h e d y n a m i c i n t e r p l a y b e t w e e n n a t i o n a l l e g a l c o n s t r u c t i o n a n d n o r m a t i v e i n t e r n a t i o n a l p r a c t i c e i s s h a p i n g C h i n a ' s o n g o i n g l e g a l r e f o r m s . 5 S u c h i n t e r p l a y h a s b e e n i n c r e a s i n g l y o b v i o u s s i n c e C h i n a ' s e n t r y i n t o t h e W T O b e c a u s e f r o m t h e m o n , C h i n a h a s s t a r t e d f o r m a l l y (zhengshi) t o i n t e g r a t e i t s e l f i n t o t h e w o r l d c a p i t a l i s t e c o n o m i c a n d p o l i t i c a l s y s t e m , t h e b a s i c c h a r a c t e r i s t i c s o f w h i c h a r e m a r k e t e c o n o m i c s a n d d e m o c r a t i c p o l i t i c s . 6 T r a n s p a r e n c y , a c o n c e p t w h i c h h a s b e c o m e s o w i d e s p r e a d t h a t i t h a s r e a c h e d a n e x a l t e d s t a t u s i n t h e a r e n a o f m u l t i l a t e r a l t r a d e , n o w g o e s w e l l b e y o n d t h e i n t e r n a t i o n a l t r a d e c i r c l e s 7 a n d i n C h i n a h a s b e c o m e a b u z z w o r d i n t h e l e g a l r e g i m e s i n c e i t s a c c e s s i o n t o t h e W T O . I n e n t e r i n g t h e W T O , C h i n a i s t a k i n g o n m a n y v e r y s i g n i f i c a n t o b l i g a t i o n s . C e r t a i n l y distinctions from "internationalization", see Peter Dicken, Global Shift, The Internationalization of Economic Activity (USA : Sage Publications, 1992, 2nd ed.), pp. 1-5. 4 One view is that the main driver of change in the Chinese legal system will be internal developments in China, not foreign legal assistance programs, see Donald C. Clarke, "China's Legal System and the WTO: Prospects for Compliance", 2 Wash. U. Global Stud. L. Rev. 97, (Winter 2003); others hold that China's entry into the WTO has provided a much-needed outside impetus for it to adopt certain universally accepted principles such as transparency and judicial review, as discussed by Chris X. Lin, "A Quite Revolution: An Overview of China's Judicial Reform", 4 Asian-Pac. L. & Pol'y J. 9 (June 2003); more discussion of various concerns about internationalization is available at David Kennedy, "Receiving the International", 10 Conn. J. Int'l L. 1. 5 See Nanfang Zhoumo {Southern Weekend), 25 Oct 2001, p.6. 6 Joseph Fewsmith, The Political and Social Implications of China's Accession to the WTO, The China Quarterly, Vol. 167 (September 2001), p. 584. 7 See William Satire, "On Language; Transparency, Totally", N.Y. TIMES, 4 Jan. 1998, Sec. 6, pp.4. 2 o n e o f t h e m o s t c h a l l e n g i n g i s t h e o b l i g a t i o n o f g r e a t e r t r a n s p a r e n c y . A l t h o u g h l i b e r a l n o r m s o f t r a n s p a r e n c y a n d u n i f o r m a p p l i c a t i o n o f l a w a n d r e g u l a t i o n a r e n o t w i d e l y a c c e p t e d o r e n f o r c e d i n C h i n a 9 d u e to t h e f r i c t i o n b e t w e e n i t a n d C h i n a ' s c u l t u r a l c o m p o n e n t s , t h e c o r e c o n c e p t o f t r a n s p a r e n c y , t o v a r y i n g d e g r e e s , h a s g o n e t o m a n y a s p e c t s o f C h i n a ' s c u r r e n t l e g a l r e f o r m s . 1 0 A c c o r d i n g l y , C h i n a ' s c o m p l i a n c e w i t h t h e W T O m u s t e x t e n d b e y o n d g e n e r a l p r i n c i p l e s a n d p e r f o r m a n c e i n g o v e r n m e n t r e g u l a t i o n s g e n e r a l l y , t o i n c l u d e c o m p l i a n c e w i t h W T O n o r m s o n d i s p u t e r e s o l u t i o n . 11 D i s p u t e r e s o l u t i o n i s e s s e n t i a l t o t h e p r o c e s s o f e m p o w e r i n g e c o n o m i c a c t o r s t o s e e k e n f o r c e m e n t o f s u b s t a n t i v e n o r m s o f l a w a n d t h e g o v e r n m e n t r e g u l a t i o n s . T h i s t h e s i s s i n g l e s o u t t r a n s p a r e n c y w i t h r e s p e c t t o e c o n o m i c d i s p u t e r e s o l u t i o n , t r y i n g t o l o o k i n t o h o w C h i n a ' s t r a n s p a r e n c y o b l i g a t i o n s i m p r o v e i t s r u l e o f l a w i n t h e d i m e n s i o n o f s Chief among these new obligations are: (i) a general requirement that businesses from other WTO member states be treated in the same fashion as Chinese businesses; (ii) an end to dual pricing policies that discriminate against imports and in favor of exports; (iii) the elimination of restrictions on the rights of foreign enterprises to freely import, export, and trade throughout China within three years of China's accession to the WTO; (iv) a promise not to use price controls to protect domestic industries from foreign competition (except in the case of pharmaceutical products); (v) an elimination or relaxation of many state trading monopolies within three years of accession; and (vi) an agreement to comply with the WTO's Agreement on Trade-Related Intellectual Property Rights. See "WTO Members Agree on China's Accession; Compromise Reached on Insurance Clause," 18 International Trade Reporter, pp.1460-1462 (20 September 2001) 9 See generally, S, Lubman, "Introduction: The Future of Chinese Law", The China Quarterly, No. 141 (1995), p. 1-21. 1 0 See Long Yingxia, "Dui Zhongguo 'Rushi' hou Zengqiang Toumingdu de Falv Fenxi" (Legal Analysis of Strengthening Transparency since China's Accession to the WTO), NanFang Jingji [Southern Economy), No. 3 (2002). 1 1 See generally, Pitman B. Potter, "Evolution of Law in Contemporary China", in Ostry, et. al, China and the long march to global trade (Routledge, 2002), pp. 138-140. 3 e c o n o m i c d i s p u t e r e s o l u t i o n . T o d a y , t h e g e n e r a l m e c h a n i s m s o f e c o n o m i c d i s p u t e r e s o l u t i o n i n C h i n a a r e a r b i t r a t i o n , m e d i a t i o n , a n d l i t i g a t i o n . D e p e n d i n g o n t h e n a t u r e o f a d i s p u t e , t h e p a r t i e s m a y r e s o r t t o o n e , t w o , o r e v e n a l l o f t h e s e a v e n u e s . I n d e e d , t h e s a m e i n s t i t u t i o n m a y t r y t o r e s o l v e a d i s p u t e t h r o u g h m o r e t h a n o n e o f t h e s e m o d e s . F o r i n s t a n c e , i n c a s e s o f c o m m e r c i a l d i s p u t e s , a r b i t r a t i o n i s t h e m o s t p o p u l a r m e c h a n i s m , e v e n t h o u g h a r b i t r a t o r s o f t e n c o n d u c t m e d i a t i o n p r i o r t o a r b i t r a t i o n . S i m i l a r l y , t o c h a l l e n g e c e r t a i n t y p e s o f a d m i n i s t r a t i v e a c t i o n s , c i t i z e n s m a y e i t h e r r e s o r t t o a d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r file a l a w s u i t i n c o u r t . H o w e v e r , t h o s e m e c h a n i s m s i n v o l v i n g t h e e x e r c i s e o f t h e s t a t e p o w e r f r o m t h e b e g i n n i n g t o t h e e n d ' a n d r e s u l t i n g i n b i n d i n g f o r c e o n t h e p a r t i e s m e r i t s p e c i a l a t t e n t i o n i n c u r r e n t C h i n a a s a s e r i e s o f o b l i g a t i o n s u n d e r t h e W T O i m p o s e o n C h i n a , a n d o n e o f t h e m i s t r a n s p a r e n c y w h i c h i s a c o n c e p t g o i n g t o t h e h e a r t o f a c o u n t r y ' s l e g a l i n f r a s t r u c t u r e , a n d m o r e p r e c i s e l y t o t h e n a t u r e a n d e n f o r c e m e n t o f i t s a d m i n i s t r a t i v e r e g i m e . J u d i c i a l b o d i e s a r e t h e d i s p u t e r e s o l v e r s m o s t f a m i l i a r t o u s . A s f o r t h e a d m i n i s t r a t i v e o r g a n s , a l t h o u g h t h e y a r e n o t u s u a l l y i n c l u d e d i n t h e c o m m o n d i s p u t e r e s o l v i n g i n s t i t u t i o n s , t h e i r r o l e i n r e s o l v i n g d i s p u t e s c a n n o t b e o v e r l o o k e d . It i s t h r o u g h a n e x e r c i s e o f b o t h a d m i n i s t r a t i v e a n d a d j u d i c a t o r y p o w e r t h a t a d m i n i s t r a t i v e o r g a n s g e t t h e d i s p u t e s r e s o l v e d . B e i n g i n s t i t u t i o n a l l y a n d c u l t u r a l l y r e l a t e d t o a g r e a t e x t e n t , t h i s p a r t i c u l a r i t y b r i n g s m a n y t r a n s p a r e n c y i s s u e s s i n c e C h i n a ' s e n t r y t o t h e W T O T h e r e f o r e , t h i s t h e s i s , b e s i d e s a s t u d y o n a d m i n i s t r a t i v e l i t i g a t i o n a n d c o m m e r c i a l 1 2 See O s t r y , S . (1998) " C h i n a and the W T O : T h e T r a n s p a r e n c y I s s u e , " S p r i n g 3 UCLA Journal of International Law and Foreign Affairs 1. 4 litigation, also focuses on economic disputes resolved by China's administrative organs through administrative reconsideration and administrative adjudication. It is aimed to figure out how far China has to go to achieve transparency-enhanced economic dispute resolution by administrative organs and judicial bodies in China's cultural context. This thesis proceeds as follows. After the introduction, Chapter II of the thesis deals with transparency and dispute resolution, discussing China's transparency obligations and how they fit into a broader thinking of economic dispute resolution, and identifying the elements of transparent economic dispute resolution. Chapter III explores how China's administrative organs resolve the economic disputes including commercial administrative disputes and non-administrative commercial disputes from the transparency perspective. Chapter VI views how the concept of transparency works in the setting of China's court adjudication, i.e., administrative litigation and commercial litigation, by which the courthouses get the economic disputes resolved. Finally, the thesis concludes by considering the role of institutional and cultural factors in seeking greater transparency in economic dispute resolution. Chapter II Transparency and Economic Dispute Resolution 2.1 Transparency under the WTO and China's Commitments December 11, 2001 marked the date of China's entry into the WTO and 5 C h i n a ' s i n t e g r a t i o n i n t o t h e w o r l d e c o n o m y . T h e i m p l i c a t i o n s o f t h i s e v e n t m a y b e a s f a r - r e a c h i n g a n d d r a m a t i c f o r C h i n a a n d t h e r e s t o f t h e w o r l d a s C h i n a ' s a d o p t i o n o f t h e O p e n D o o r P o l i c y i n 1 9 7 8 . I n o r d e r t o g a i n a W T O m e m b e r s h i p , C h i n a h a s to u n d e r t a k e m a n y v e r y s i g n i f i c a n t o b l i g a t i o n s . T r a n s p a r e n c y i s o n e o f t h e m o s t c h a l l e n g i n g o n e . W h i l e C h i n a ' s a c c e s s i o n t o t h e W T O i s o f t e n p o r t r a y e d a s a m a t t e r o f e c o n o m i c s a n d c o m m e r c e , i t i s a t r o o t a f u n d a m e n t a l c h a l l e n g e o f p o l i t i c s , g o v e r n a n c e , i n s t i t u t i o n s a n d c u l t u r e . T h e G A T T / W T O p r i n c i p l e s o f t r a n s p a r e n c y d e r i v e b r o a d l y f r o m l i b e r a l p r i n c i p l e s o f g o v e r n m e n t a c c o u n t a b i l i t y . 1 3 A c c o r d i n g l y , C h i n a ' s a d a p t a t i o n t o t h i s i d e a l i s n o t o n l y a t t h e l e g a l l e v e l , b u t a l s o a t i n s t i t u t i o n a l l e v e l a n d c o u l d g o d e e p i n t o t h e p o l i t i c a l r e g i m e a n d c u l t u r a l s e t t i n g . 1 4 T r a n s p a r e n c y i s c o n s i d e r e d a s o n e o f t h e b a s i c r u l e s g o v e r n i n g t h e p o s t w a r t r a d i n g s y s t e m a s e m b o d i e d i n t h e G e n e r a l A g r e e m e n t o n T a r i f f s a n d T r a d e ( G A T T ) a n d n o w t h e W o r l d T r a d e O r g a n i z a t i o n ( W T O ) . 1 5 O n s e v e r a l o c c a s i o n , t h e W T O a g r e e m e n t s r e f e r , b o t h e x p l i c i t l y a n d i m p l i c i t l y , t o t r a n s p a r e n c y a s o n e o f k e y p r i n c i p l e s o f t h e m u l t i l a t e r a l t r a d i n g s y s t e m , a l b e i t i n a l i m i t e d , t e c h n i c a l s e n s e . 1 6 T r a n s p a r e n c y o b l i g a t i o n s a r e d i r e c t e d a g a i n s t M e m b e r s a n d a i m f o r i m p r o v e d c l a r i t y a n d a c c e s s i b i l i t y o f d o m e s t i c t r a d e r e g i m e s a n d m e a s u r e s . G r e a t e r t r a n s p a r e n c y i n t u r n , i n c r e a s e s r u l e a d h e r e n c e a n d r e n d e r s t h e m u l t i l a t e r a l t r a d i n g s y s t e m m o r e p r e d i c t a b l e 1 3 See Pitman B, Potter, "Globalization and Economic Regulations in China: Selective Adaptation of Globalize Norms and Practices", Washington University Global Studies Law Review 1 (2003), p.l 19-150. More discussion about transparency in institutional sense is conducted at Chapter V. 1 5 See Ostry, S. Supra Note 12. 1 6 See GATT Article 10, GATS Article 6 and TRIPs Article 63. 6 t o s t a t e s a n d b u s i n e s s a c t o r s . U n d e r t h e W T O f r a m e w o r k , t h e t r a n s p a r e n c y c o m m i t m e n t s o f e a c h m e m b e r c o u n t r y a r e p r e s c r i b e d b y t h e A r t i c l e 1 0 o f G A T T , A r t i c l e 6 o f G e n e r a l A g r e e m e n t s o n T r a d e i n S e r v i c e s ( G A T S ) a n d A r t i c l e 6 3 o f A g r e e m e n t o n T r a d e - r e l a t e d A s p e c t s o f I n t e l l e c t u a l P r o p e r t y R i g h t s ( T R I P s ) . T a k e t h e G A T T a s a n e x a m p l e , A r t i c l e 1 0 ( 1 ) o f t h e G A T T r e q u i r e s p u b l i c a t i o n o f t r a d e r e g u l a t i o n s , w h i l e A r t i c l e 1 0 ( 2 ) r e q u i r e s p u b l i c a t i o n o f g e n e r a l m e a s u r e s a f f e c t i n g a n a d v a n c e i n i m p o r t d u t i e s , r e s t r i c t i o n s , o r p a y m e n t s b e f o r e e n f o r c e m e n t . 1 7 I n a d d i t i o n t o i m p o s i n g s t a t e o b l i g a t i o n s t o d i s s e m i n a t e t h e c o n t e n t o f r u l e s , t h e s e p r o v i s i o n s m a y a l s o p e r m i t t h e s u b j e c t s o f r e g u l a t i o n o p p o r t u n i t i e s t o c o n s u l t w i t h g o v e r n m e n t a u t h o r i t i e s t o l e a r n a b o u t l a w s a n d p r a c t i c e s . 1 8 A r t i c l e 1 0 ( 3 ) r e q u i r e s s t a t e s t o a d m i n i s t e r t r a d e l a w s a n d r e g u l a t i o n s i n a u n i f o r m , i m p a r t i a l , a n d r e a s o n a b l e m a n n e r , a n d t o e s t a b l i s h i n d e p e n d e n t j u d i c i a l , a r b i t r a l , o r a d m i n i s t r a t i v e t r i b u n a l s o r p r o c e d u r e s f o r p r o m p t r e v i e w a n d c o r r e c t i o n o f a d m i n i s t r a t i v e a c t i o n t ha t f a i l s t o c o n f o r m to t h e s e c r i t e r i a . 1 9 T h e t r a n s p a r e n c y a n d e n f o r c e m e n t p r o v i s i o n s o f t h e G A T T A r t i c l e 1 0 p r o v i d e t h e f r a m e w o r k f o r i m p l e m e n t i n g t h e s u b s t a n t i v e n o r m s o f t h e W T O . F o r i n t h e a b s e n c e o f t r a n s p a r e n c y a b o u t t h e c o n t e n t a n d a p p l i c a t i o n o f t r a d e r e g u l a t i o n s , t r a d i n g p a r t n e r s a n d t h e i r b u s i n e s s c o n s t i t u e n c i e s c a n n o t k n o w w h e t h e r o r n o t t h e c e n t r a l G A T T 1 7 For text see The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Agreements 424 (World Trade Organization ed., 1999). 1 8 See John H. Jackson, World Trade and the Law of GATT 463 (1969). 1 9 For text see The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Agreements 424 (World Trade Organization ed., 1999). 7 p r i n c i p l e s o f t r a d e l i b e r a l i z a t i o n a r e b e i n g g r a n t e d o r d e n i e d . T h e s u b s t a n t i v e a n d o p e r a t i o n a l n o r m s c o m p l e m e n t e a c h o t h e r a n d s e t t h e t o n e f o r t h e G A T T ' s r e g u l a t o r y c u l t u r e . 2 0 C h i n a w i l l n e e d t o m a k e s u b s t a n t i a l c h a n g e s i n t h i s r e s p e c t t o c o n f o r m t o t h e r e l e v a n t r e q u i r e m e n t s o f W T O m e m b e r s h i p . 2 1 A m o n g C h i n a ' s W T O c o m m i t m e n t s , t h e f o l l o w i n g i s t h o s e w i t h r e s p e c t t o t h e t r a n s p a r e n c y : A s p a r t o f i t s W T O c o m m i t m e n t s , C h i n a a g r e e d t o e n f o r c e o n l y " t h o s e l a w s , r e g u l a t i o n s , a n d o t h e r m e a s u r e s p e r t a i n i n g t o o r a f f e c t i n g t r a d e i n g o o d s , s e r v i c e s , T R I P s o r t h e c o n t r o l o f f o r e i g n e x c h a n g e t h a t a r e p u b l i s h e d a n d r e a d i l y a v a i l a b l e t o o t h e r W T O m e m b e r s . " I t a l s o a g r e e d t o e s t a b l i s h a n o f f i c i a l j o u r n a l p u b l i s h i n g a l l t r a d e - r e l a t e d l a w s a n d r e g u l a t i o n s , a n d t o e s t a b l i s h a n i n q u i r y p o i n t w h e r e W T O - r e l a t e d i n f o r m a t i o n c o u l d b e o b t a i n e d . F u r t h e r m o r e , i t h a s c o m m i t t e d i t s e l f t o a d m i n i s t e r i n g a l l l a w s a n d r e g u l a t i o n s i n a u n i f o r m , i m p a r t i a l , a n d r e a s o n a b l e m a n n e r . F i n a l l y , C h i n a a g r e e d t o " m a k e a v a i l a b l e t o W T O m e m b e r s , u p o n r e q u e s t , a l l l a w s , r e g u l a t i o n s a n d o t h e r m e a s u r e s p e r t a i n i n g to o r a f f e c t i n g t r a d e i n g o o d s , s e r v i c e s , T R I P s o r t h e c o n t r o l o f f o r e i g n e x c h a n g e 22 b e f o r e s u c h m e a s u r e s a r e i m p l e m e n t e d o r e n f o r c e d . " T h e s e s u b s t a n t i a l c o m m i t m e n t s w i t h r e s p e c t t o l e g a l i s s u e s a s p a r t o f C h i n a ' s W T O a c c e s s i o n a r e a l l u See Pitman B , Potter, supra note 13, p. 119-150. 2 1 See Deng Juan & Wang Qihong, "More should be done on foreign investment law", Zhongguo Jingji Shidai (China Economic Times), 4 November 2000, p. 2. 2 2 Protocol on the Accession of the People's Republic of China (WT/L/432), Article 2 (C). 8 steps economic actors at home and abroad applaud. 2.2 Implications of Transparency Commitments for China 2.2.1 Going beyond Legal Regime As globalization has brought on more frequent and intimate interaction among states and societies, more and more nations, to a varying degree, domestically legalize internationally recognized norms through the process of selective adaptation. 2 4 This process starts consciously in terms of the active efforts of a nation to integrate itself into the global market. This process, at the same time, embodies a society's acceptance to some external norms but resistance to others, which may occur unconsciously. The selective process more depends on the specific circumstances in a specific context, in connection to long-developed social and cultural habits. In this sense, China's past pursuit to entry to the W T O reflects its eagerness to be a player of world economy and on the other hand, will be a paradigm to the world of how a Some specific examples are: (i) The substantive laws and procedures designed to protect patents, copyrights and trademarks under the TRIPS agreement must be accessible to the governments and enterprises of other Member states; (ii) If there is an action within China for the imposition of a countervailing duty, the entire process must be consistent with the GATT Agreement on Countervailing Duties and specific procedures used to compute the amount of the countervailing duty "shall be transparent and adequately explained"; (iii) Since one of the basic purposes of the GATT Agreement on Import Licensing is to ensure that the licensing procedures of member states are transparent, China's import licensing rules will have to be published, the licensing application forms will have to be as clear and simple as practicable, and the whole procedure will have to be consistent with China's overall obligations under the WTO agreements. From these examples, it is apparent that the obligation of transparency is intended to assure that the concessions agreed to by China are in fact available to enterprises of the other member states. Transparency also is one of the principal devices used to monitor China's adherence to the terms of the WTO agreements. 2 4 For more discussion of selective adaptation, see generally, Pitman B, Potter, supra note 13, p. 119-150. 9 c o u n t r y , a s a n c i e n t a s C h i n a w i t h s o m a n y p o l i t i c a l , e c o n o m i c a n d c u l t u r a l c a r r y - o v e r s o f t h e p a s t , a s s i m i l a t e s w e s t e r n l i b e r a l n o r m s u n d e r t h e W T O f r a m e w o r k . A m i d s t a l l o f p a i n l e s s a n d p a i n f u l n a t i o n a l i z a t i o n o f i n t e r n a t i o n a l i z e d r u l e s , t r a n s p a r e n c y - o r i e n t e d r e f o r m s h a v e b r o u g h t m u c h a t t e n t i o n a t h o m e a n d a b r o a d a s i t i s a n o t i o n g o i n g b e y o n d t h e h e a r t o f C h i n a ' s l e g a l r e g i m e a n d t o u c h i n g u p o n t h e C h i n a ' s c u l t u r a l l y - r o o t e d i n s t i t u t i o n a l s e t u p a n d s o c i e t a l c o n t e x t . I n t h e a d m i n i s t r a t i v e r e g i m e , t h e n o t o r i o u s i n t e r n a l r e g u l a t i o n s c a n b e e x p l a i n e d b y t h e b l u r r y l i n e s e p a r a t i n g t h e a d m i n i s t r a t i o n f r o m t h e p o l i t i c a l p o w e r , t h e g o v e r n m e n t f r o m t h e C C P . F o r i n s t a n c e , m a n y i m p o r t a n t d e c i s i o n s a r e j o i n t l y i s s u e d b y t h e C C P C e n t r a l C o m m i t t e e a n d t h e S t a t e C o u n c i l , P R C ' s c e n t r a l g o v e r n m e n t . N u m e r o u s r e g u l a t i o n s a n d c i r c u l a t i o n s c o n c e r n i n g s t a t e - l e a d i n g c a d r e s o r f u n c t i o n a r i e s a r e d r a f t e d b o t h b y t h e C C P O r g a n i z a t i o n D e p a r t m e n t a n d t h e M i n i s t r y o f P e r s o n n e l . A r e t h e s e n o r m s p o l i t i c a l o r a d m i n i s t r a t i v e o n e s ? A l s o , t h e i s s u e o f j u d i c i a l i n d e p e n d e n c e , a n a v o i d a b l e t o p i c w h e n i t c o m e s t o t h e t r a n s p a r e n c y , u l t i m a t e l y d e p e n d s o n c h a n g e s 25 i n t h e p o l i t i c a l s y s t e m . T h e l a w i n C h i n a , w h e t h e r i m p e r i a l o r c o m m u n i s t , w a s a f l e x i b l e t o o l , n o t a n a b s o l u t e , i n d e p e n d e n t s t a n d a r d . L a w s w e r e a n d a r e e m b e d d e d i n , a n d o f t e n s u b s e r v i e n t t o , s o c i e t a l n o r m s a n d v a l u e s a n d t h e r u l i n g e l i t e . H e n c e , C h i n a ' s t r a n s p a r e n c y i s s u e s a r e 25 see Jean-Pierre Cabestan, "Administrative Law-Making in the People's Republic of China", in Eduard B. Vermeer and Ingrid d' Hooghe (eds.), China's Legal Reforms and Their Political Limits (Curzon Press, 2002), pp. 32. 10 n o t j u s t l e g a l o r e v e n p o l i t i c a l b u t c o u l d f i r m l y r o o t i n C h i n e s e c u l t u r a l a n d s o c i e t a l v a l u e s , w h i c h r e q u i r e a n i n s i g h t i n t o s o m e o f t h e v a l u e s a n d p r a c t i c e s t h a t s t r u c t u r e C h i n e s e s o c i e t y i t s e l f . A v e r y o b v i o u s e x a m p l e i s t h e g a p b e t w e e n l a w i n s t a t u e s a n d l a w i n p r a c t i c e . I n t h e r e c e n t y e a r s , C h i n a ' s e f f o r t f u l l e g i s l a t i v e a c t i v i t i e s h a v e n o t b r o u g h t s a t i s f a c t o r y e f f e c t s i n p r a c t i c e . T o a g r e a t e x t e n t , i t i s b e c a u s e p r a c t i c a l s i g n i f i c a n c e o f t h e r e v i s i o n s w i l l d e p e n d o n t h e i r a d o p t i o n b y t h e l a w e n f o r c e m e n t a g e n t s , l a w y e r s , a n d e v e n c o m m o n p e o p l e , s o m e t h i n g t h a t r e q u i r e s a n a t t i t u d i n a l c h a n g e a n d m u c h c u l t u r a l l y - r o o t e d . 2 6 B y p l a c i n g t h e t r a n s p a r e n c y i s s u e s i n t h e C h i n e s e c u l t u r a l c o n t e x t , i t w i l l b e c o m e c o n s i d e r a b l y e a s i e r t o g a u g e t h e c h a n g e s t ha t h a v e t a k e n p l a c e i n t h i s f i e l d a n d f i g u r e o u t t h e d i s t a n c e f o r C h i n a t o g o . S i n c e t h e c h a n g e s i n t h e C h i n e s e p o l i t i c a l s y s t e m o r i n C h i n e s e s o c i e t y a r e s o m e t i m e s m i s i n t e r p r e t e d f r o m a W e s t e r n c u l t u r a l p e r s p e c t i v e , t h i s c u l t u r a l a p p r o a c h i s n e e d e d a s i t r e c o g n i z e s t h e w a y C h i n e s e a c t a n d t h i n k a m o n g s t t h e m s e l v e s . 2 7 ( M o r e d i s c u s s i o n o f c u l t u r a l a p p r o a c h h a s b e e n d o n e i n C h a p t e r V ) 2.2.2 Go beyond Foreign Trade Regime C h i n a ' s t r a n s p a r e n c y o b l i g a t i o n s u n d e r t h e W T O m o s t l y f o c u s o n t h e f o r e i g n t r a d e a r e n a . B u t i n o r d e r t o f u l f i l l t h o s e o b l i g a t i o n s , m o r e c o m p r e h e n s i v e r e f o r m s 2 6 see Geor Hintzen, "To Have One's Cake and Eat It? Human Rights in Chinese Culture", in Eduard B. Vermeer and Ingrid d' Hooghe (eds.), China's Legal Reforms and Their Political Limits, (Curzon Press, 2002), pp. 50. 11 with an expanded range of trade area are desirable. As a Chinese officer said, entry to the WTO is to shake the whole legal system of China. 2 8 In principle, all domestic laws and legal regulations must be in keeping with the WTO rules. All laws and regulations that conflict with WTO rules must be changed. 2 9 Although it still remains to be seen to what extent those reforms can be implemented in the real life due to various reasons especially China's culturally-rooted bureaucratic traditions, to say the least, China has got an external engine pushing it forward on the way to be a well-behaved WTO Member. And this external engine, combining with China's increasing awareness of developing an orderly domestic market economy and of the critical need for adaptation to international legal standards if China is to truly integrate itself into the world economy, has come to be an internalized one. As a part of the engine, the ideal of transparency has driven China's response extending the trade circles to many other areas. Dispute resolution is certainly one of areas which should be and has indeed been affected for the sake of realizing the WTO commitments and for China's own sake. China now enjoys an extremely energetic economic growth. With the marked growth in the economy, economic disputes occur more frequently and there is a growing need to resolve them. Among the available dispute resolution alternatives to litigation and administrative judicature, arbitration is the most important and is the preferred 28 Nanfang Zhoumo (Southern Weekend), 25 O c t . 2 0 0 1 . p.6. 2 9 A m o n g o f t h e m l i k e the C h i n e s e gove rnmen t a n n o u n c e d as ea r l y as M a y 2 0 0 2 that m o r e than 2 ,300 l a w s a n d regu la t ions h a d been a m e n d e d to c o m p l y w i t h W T O ru les , a n d 830 l a w s h a v e b e e n a b o l i s h e d s i nce C h i n a j o i n e d the W T O . See ibid. 12 methods of dispute resolution in the commercial sector. The last few decades in particular have seen the importance and influence of arbitration grow to such an extent that they have had a significant effect on economic life in China. 3 0 Increased share of China's economic dispute resolution market gained by arbitration impels us to think about why other dispute resolving mechanisms are much less welcomed. One of the reasons, inter alia, lies in that greater transparency can be obtained from arbitral proceedings. 3 1 Meanwhile, not all economic disputes can be resolved through arbitration in China. Commercial administrative disputes shall be handled either through administrative reconsideration or litigation; a part of commercial disputes, pursuant to law, shall be settled by administrative adjudication or by judicial proceedings. 3 2 Some economic disputes, if involving social interests, may be excluded from arbitration, such as the internal disputes arising within agricultural collective economic organizations. 3 3 3 U See Wang Shengchang, Resolving Disputes in the PRC (Asia: Sweet & Maxwell Ltd., 1996), pp.5. 3 1 The main advantages of arbitration are flexibility, finality and enforceability and confidentiality. One thing deserves to be mentioned is that, although greater transparency in arbitration has been recognized, it does not mean that China's arbitration is satisfactory enough. It also leaves quite a lot to be desired if compared with the elements of transparency discussed in the following text of this thesis. For an example, as for the applicable legislative law, there lacks clear guidance of why to apply the law of one country but not the law of others; for independence, the establishment of arbitration commission is still tainted with strong administrative influence. But, these issues are beyond the discussion of this thesis. 3 2 See the discussions in Chapter III & IV. 3 3 Zhonghua Renmin Gongheguo Zhongcai fa (Arbitration Law of the People's Republic of China), Article 77, in The Laws of the People's Republic of China (1995), compiled by the Legislative Affairs Commission of the Standing Commission of the National People's Congress of the People's Republic of China (Beijing: Law Press of China, 1996), vol. 7. 13 T h e a b o v e m e n t i o n e d e c o n o m i c d i s p u t e s , e s p e c i a l l y t h o s e c o m m e r c i a l a d m i n i s t r a t i v e d i s p u t e s , w h i c h a r b i t r a t i o n c o m m i s s i o n s a r e n o t q u a l i f i e d t o r e s o l v e , e n t a i l a c l o s e l o o k . A s i t i s w e l l k n o w n , m a r k e t e c o n o m y m a y b e c h a r a c t e r i z e d a s r u l e o f l a w e c o n o m y . W i t h i n t h e i n c r e a s i n g l y c o m p r e h e n s i v e l e g a l s y s t e m g o v e r n i n g t h e m a r k e t , i n e v i t a b l y , t h e r e a r e a v a r i e t y o f b u s i n e s s l a w a n d r e g u l a t i o n s . M a n y o f t h e m a r e e n f o r c e d b y a d m i n i s t r a t i v e a g e n c i e s a n d e m b o d y t h e i n t e r a c t i o n o f a d m i n i s t r a t i v e a u t h o r i t y a n d e c o n o m i c b e h a v i o r . D i s p u t e s e n s u e w h e n a d m i n i s t r a t i v e o r g a n s f a i l t o i m p l e m e n t t h e i r d u t i e s o r i m p r o p e r l y e x e r c i s e t h e p o w e r a n d t h e r e f o r e m a y i n f r i n g e u p o n rights a n d i n t e r e s t s o f t h e e x t e r n a l p a r t i e s s u b j e c t t o a d m i n i s t r a t i o n , i n c l u d i n g i n d i v i d u a l s , l e g a l p e r s o n s a n d o t h e r o r g a n i z a t i o n s . S u c h t y p e o f a d m i n i s t r a t i v e d i s p u t e s i n r e l a t i o n t o b u s i n e s s l a w a n d r e g u l a t i o n s ( h e r e i n a f t e r " c o m m e r c i a l a d m i n i s t r a t i v e d i s p u t e s " ) a r e n u m e r o u s i n c u r r e n t C h i n a . M e a n w h i l e , u n d e r t h e W T O Chinese legislations can be accessed by a variety of Chinese and English language sources. Chinese language sources include Zhonghua renmin gongheguo fagui huibian (Compilation of Current Laws and Regulations of the PRC) (Beijing: Law Publishers, yearly); Zhonghua renmin gongheguo xinfagui huibian (Compilation of New Laws and Regulations of the PRC) (Beijing: Legal system publishers, periodical); Zhonghua renmin gongheguo duiwai jingji fagui huibian: 1945-1985 (Compilation of Economic Laws and Regulations Pertaining to Foreign Matters) (Beijing: People's Press, 1986); Zhongguo jingji tequ kaifaqu falu fagui xuanbian (Compilation of Lawsand Regulations for China's Special Economic Zones and Open Areas) (Beijing: 1987); Renmin ribao (People's Daily); Fazhi ribao (Legal System Daily); and Guoji shang bao (Journal of International Commerce). English language sources include Laws for Foreign Business (CCH Australia Ltd.); Victor Nee (ed.), China Commercial Laws and Regulations (New York: Oceana); China Economic News; China Law and Practice; The China Business Review and East Asian Executive Reports. In this thesis, the cited Chinese laws and regulations are taken from The Laws of the People's Republic of China (Chinese-English version, compiled by the Legislative Affairs Commission of the Standing Commission of the National People's Congress of the People's Republic of China, Beijing: Law Press of China, yearly starting from 1993, Vol. 5; before 1993, Vol. 1, from 1979-1982; Vol.2 from 1983-1986, Vol. 3, from 1987-1989; Vol.4 1990-1992) 14 f r a m e w o r k , t h e d i s p u t e s t h e r e i n a r e t r a d e - r e l a t e d a n d a r i s e f r o m a d m i n i s t r a t i v e a c t i v i t i e s . O n e p a r t y t o t h e d i s p u t e s i s b u s i n e s s p a r t i c i p a t o r s a n d t h e o p p o s i t e p a r t y i s r e g u l a t o r s o f t r a d e , t h e g o v e r n m e n t o r r e l e v a n t a d m i n i s t r a t i v e o r g a n s . H o w t o r e s o l v e t h e s e d i s p u t e s b y a d m i n i s t r a t i v e o r g a n s a n d j u d i c i a l b o d i e s , d u e to n u m e r o u s C h i n e s e c u l t u r a l n u i s a n c e s e n c o u n t e r e d i n p o t e n t i a l p r o c e e d i n g s , i s d e f i n i t e l y a b i g c o n c e r n o f i n t e r n a t i o n a l c o m m u n i t y w h i c h i s s c r u t i n i z i n g h o w C h i n a l i v e s u p t o i t s W T O c o m m i t m e n t s , t h e c o n c e r n o f f o r e i g n i n v e s t o r s w h o a r e p a y i n g c l o s e a t t e n t i o n t o C h i n a ' s l e g a l e n v i r o n m e n t i n c l u d i n g d i s p u t e r e s o l u t i o n a n d r e m e d i e s , a n d a l s o , t h e c o n c e r n o f d o m e s t i c b u s i n e s s m e n w h o a r e a w a k e n e d to r e a l i z e t h e i m p o r t a n c e to s e e k l e g a l p r o t e c t i o n a g a i n s t m a l a d m i n i s t r a t i o n . 2.3 Interpretation of "Transparency" T h e p r i n c i p l e s o f t r a n s p a r e n c y w e r e f i r s t l y b r o u g h t f o r w a r d t o t h e i n t e r n a t i o n a l c o m m u n i t y b y t h e G A T T . 3 4 S i n c e t h e n , s u b s e q u e n t l e g a l d o c u m e n t s c o n t i n u o u s l y s t r e n g t h e n e d t h e s e p r i n c i p l e s . A f t e r t h e U r u g u a y R o u n d , t r a n s p a r e n c y o b l i g a t i o n s u n d e r t h e G A T T h a v e b e e n i n c l u d e d i n t o v a r i o u s m u l t i l a t e r a l t r a d e a g r e e m e n t s a n d a r e a p p l i c a b l e t o a l l a r e a s o f i n t e r n a t i o n a l t r a d e . H o w e v e r , t h e a r t i c l e s c o n c e r n i n g t h e t r a n s p a r e n c y u n d e r t h e a b o v e a g r e e m e n t s r e v e a l t h a t t h e r e q u i r e m e n t s o f t r a n s p a r e n c y , a s se t o u t p r e v i o u s l y , a r e a l l p r o c e d u r a l . W h a t i s t r a n s p a r e n c y , i . e . , i t s c o n n o t a t i o n a n d v a l u e s , i s s c a n t f r o m t h e W T O a g r e e m e n t s . T h i s c a n b e e x p l a i n e d b y t h e f a c t t ha t a n u n d e r s t a n d i n g o f t r a n s p a r e n c y i s r e l a t e d t o t h e s p e c i f i c c u l t u r a l c o n t e x t s a n d 3 4 GATT, Article X: Publication and Administration of Trade Regulations. 15 c o n s e q u e n t l y t h e r e m i g h t b e d i f f e r e n t c o m p r e h e n s i o n o f t h e u n d e r l y i n g n o r m s o f t h i s c o n c e p t a m o n g t h e W T O M e m b e r s . T o s e e k c o m m o n p o i n t s w h i l e r e s e r v i n g d i f f e r e n c e s , p r o c e d u r a l d e s i g n i s a r e l a t i v e l y e f f e c t i v e w a y . It i s m o r e v i s i b l e , c a l c u l a b l e , a n d c o m p a r a b l e a n d i s a b l e t o a v o i d p o s s i b l e d i v e r g e n c e a r i s i n g f r o m p o l i t i c a l , e c o n o m i c , l e g a l , c u l t u r a l a n d i d e o l o g i c a l d i f f e r e n c e s . A s a m a t t e r o f f a c t , t h a t t r a n s p a r e n c y i s n o t a p u r e l y f r e e t r a d e i s s u e b u t r e l a t e d t o t h e M e m b e r s ' l e g a l a n d p o l i t i c a l s y s t e m i s a c k n o w l e d g e d b y t h e W T O f r a m e w o r k i t s e l f . U n d e r t h e T R I M s , i t m e n t i o n s t h a t t h e i m p l e m e n t a t i o n o f d o m e s t i c t r a n s p a r e n c y m u s t b e o n t h e v o l u n t a r y b a s i s a n d t a k e d o m e s t i c l e g a l a n d p o l i t i c a l s y s t e m i n t o a c c o u n t , 3 5 a n d T R I M s i s n o t i n t e n d e d t o s e r v e a s a b a s i s f o r t h e e n f o r c e m e n t o f s p e c i f i c o b l i g a t i o n s u n d e r t h e A g r e e m e n t s o r f o r d i s p u t e s e t t l e m e n t p r o c e d u r e s , o r t o i m p o s e n e w p o l i c y c o m m i t m e n t s o n M e m b e r s . 3 6 A l t h o u g h t r a n s p a r e n c y i s o n e o f p i l l a r s o f t h e W T O r e g i m e , i t i s a l s o n o t e d t h a t w h a t i s m i s s i n g f r o m t h e l e g a l f r a m e w o r k o f t h e W T O A g r e e m e n t a n d i t s a n n e x i s a n e x t e r n a l d i m e n s i o n o f t r a n s p a r e n c y . I n i t s r e l a t i o n s w i t h c i v i l s o c i e t y , t h e W T O m a y h a v e m a d e f a c t u a l p r o g r e s s t o w a r d s t r a n s p a r e n c y , b u t l e g a l m a n i f e s t a t i o n s o f W T O o b l i g a t i o n s t o g i v e p u b l i c a c c o u n t s o f i t s a c t i v i t i e s a r e s c a n t . T h e r e f o r e , t h e W T O p r i n c i p l e s o f t r a n s p a r e n c y a r e e m b o d i e d a s a s e r i e s o f b a s i c 3 5 TRIMs B. "Domestic transparency". 3 6 TRIMs A. "Objectives". 16 p r o c e d u r a l c r i t e r i a . T h e s e p r o t e c t i v e m e a s u r e s per se d o n o t c o n s t i t u t e a v a l u e j u d g m e n t o n p r o t e c t i v e o b j e c t s . I n o r d e r t o l e a r n c o n n o t a t i o n a n d c o n t e n t s o f t r a n s p a r e n c y , g o i n g t h r o u g h t h e p r e s e n t s t i p u l a t i o n s u n d e r t h e W T O f r a m e w o r k m a y n o t b e e n o u g h . F o r t h e p u r p o s e o f t h e d i s c u s s i o n i n t h i s t h e s i s , f u r t h e r c l a r i f i c a t i o n o f r e q u i r e m e n t s o f t r a n s p a r e n c y i s t o b e s o u g h t a f t e r . B y a r e v i e w o f d i f f e r e n t e x p r e s s i o n o f t r a n s p a r e n c y , t h e t h e s i s h o p e s t o f i n d o u t h o w t h i s c o n c e p t u s e d b y t h e i n t e r n a t i o n a l i n v e s t m e n t p o l i c y c o m m u n i t y f i t s i n t o b r o a d e r t h i n k i n g o n e c o n o m i c d i s p u t e r e s o l u t i o n . Views: • Political science dictionary ( B r e w e r ' s P o l i t i c s ) : " o p e n n e s s t o t h e p u b l i c g a z e " ( i n F l o r i n i ( 1 9 9 9 ) ) 3 7 • Business consultancy, " t h e e x i s t e n c e o f c l e a r , a c c u r a t e , f o r m a l , e a s i l y d i s c e r n i b l e a n d w i d e l y a c c e p t e d p r a c t i c e s " ( P r i c e W a t e r h o u s e C o o p e r s 2 0 0 1 ) . 3 8 • OECD Public Management. " T h e t e r m ' t r a n s p a r e n c y ' m e a n s d i f f e r e n t t h i n g s t o d i f f e r e n t g r o u p s [ o f r e g u l a t o r s ] . C o n c e p t s r a n g e f r o m s i m p l e n o t i f i c a t i o n t o t h e 5 1 Florini, A. (1999), "Does the invisible hand need a transparent glove? The politics of transparency". Paper prepared for the Annual World Bank Conference on Development Economics, Washington DC, 28-30 April. Available at www.worldbank.org/research. (accessed date: 10 Oct 2003) 3 8 PriceWaterhouseCoopers, The Opacity Index, January 2001, available at www.opacityindex.com. (accessed date: 12 Oct 2003) 17 p u b l i c t h a t r e g u l a t o r y d e c i s i o n s h a v e b e e n t a k e n t o c o n t r o l s o n a d m i n i s t r a t i v e d i s c r e t i o n a n d c o r r u p t i o n , b e t t e r o r g a n i z a t i o n o f t h e l e g a l s y s t e m t h r o u g h c o d i f i c a t i o n a n d c e n t r a l r e g i s t r a t i o n , t h e u s e o f p u b l i c c o n s u l t a t i o n a n d r e g u l a t o r y i m p a c t a n a l y s i s a n d a c t i v e l y p a r t i c i p a t o r y a p p r o a c h e s t o d e c i s i o n s m a k i n g . " O E C D ( 2 0 0 2 a ) 3 9 • International Monetary Fund.... [ b ] e i n g o p e n t o t h e p u b l i c a b o u t t h e s t r u c t u r e a n d f u n c t i o n s o f g o v e r n m e n t , f i s c a l p o l i c y i n t e n t i o n s , p u b l i c s e c t o r a c c o u n t s a n d f i s c a l p r o j e c t i o n s " I M F ( 1 9 9 8 ) . 4 0 • Draft Multilateral Agreement on Investment: " E a c h C o n t r a c t i n g P a r t y s h a l l p r o m p t l y p u b l i s h , o r o t h e r w i s e m a k e p u b l i c l y a v a i l a b l e , i t s l a w s , r e g u l a t i o n s , p r o c e d u r e s a n d a d m i n i s t r a t i v e r u l e s a n d j u d i c i a l d e c i s i o n s o f g e n e r a l a p p l i c a t i o n a s w e l l a s i n t e r n a t i o n a l a g r e e m e n t s w h i c h m a y a f f e c t t h e o p e r a t i o n o f t h e A g r e e m e n t . W h e r e a C o n t r a c t i n g P a r t y e s t a b l i s h e s p o l i c i e s w h i c h a r e n o t e x p r e s s e d i n l a w s o r r e g u l a t i o n s o r b y o t h e r m e a n s l i s t e d i n t h i s p a r a g r a p h b u t w h i c h m a y a f f e c t t h e o p e r a t i o n o f t h e A g r e e m e n t , t h a t C o n t r a c t i n g p a r t y s h a l l p r o m p t l y p u b l i s h t h e m o r o t h e r w i s e m a k e t h e m p u b l i c l y a v a i l a b l e . " 4 1 OECD (2002a) Regulatory Policies in OECD Countries: From Intervention to Regulatory Governance. 4 0 International Monetary Fund (1998), Code of Good Practices on Fiscal Transparency — Declaration on Principles. 4 1 April 1998 draft text, www.oecd.org/daf/mai/. 18 • APEC Leaders' Statement to Implement APEC Transparency Standards (October 2002): T r a n s p a r e n c y " i s a b a s i c p r i n c i p l e u n d e r l y i n g t r a d e l i b e r a l i z a t i o n a n d f a c i l i t a t i o n , w h e r e r e m o v a l o f b a r r i e r s t o t r a d e i s i n l a r g e p a r t o n l y m e a n i n g f u l t o t h e e x t e n t t h a t t h e m e m b e r s o f t h e p u b l i c k n o w w h a t l a w s , r e g u l a t i o n s , p r o c e d u r e s a n d a d m i n i s t r a t i v e r u l i n g a f f e c t t h e i r i n t e r e s t s , c a n p a r t i c i p a t e i n t h e i r d e v e l o p m e n t . . . a n d c a n r e q u e s t r e v i e w o f t h e i r a p p l i c a t i o n u n d e r d o m e s t i c l a w . . . I n m o n e t a r y a n d f i s c a l p o l i c i e s , [ t r a n s p a r e n c y ] e n s u r e s t h e a c c o u n t a b i l i t y a n d i n t e g r i t y o f c e n t r a l b a n k s a n d f i n a n c i a l a g e n c i e s a n d p r o v i d e s t h e p u b l i c w i t h n e e d e d e c o n o m i c , f i n a n c i a l a n d c a p i t a l m a r k e t s d a t a . • Monetary policy practitioners: " T h e c o m m u n i c a t i o n o f p o l i c y m a k e r s ' i n t e n t i o n s w i t h a v i e w t o e n h a n c i n g t h e i r c r e d i b i l i t y " . ( F r i e d m a n 2 0 0 2 ) ; 4 2 " T h e c o m m u n i c a t i o n o f p o l i c y m a k e r s ' i n t e n t i o n s " ( K i n g 2 0 0 0 ) . World Trade Organization. E n s u r i n g " t r a n s p a r e n c y " i n i n t e r n a t i o n a l c o m m e r c i a l t r e a t i e s t y p i c a l l y i n v o l v e s t h r e e c o r e r e q u i r e m e n t s : (1) t o m a k e i n f o r m a t i o n o n r e l e v a n t l a w s , r e g u l a t i o n s a n d o t h e r p o l i c i e s p u b l i c l y a v a i l a b l e . ( 2 ) t o n o t i f y i n t e r e s t e d p a r t i e s o f r e l e v a n t l a w s a n d r e g u l a t i o n s a n d c h a n g e s t o t h e m ; a n d ( 3 ) t o e n s u r e t h a t l a w s a n d r e g u l a t i o n s a r e a d m i n i s t e r e d i n a u n i f o r m , i m p a r t i a l a n d r e a s o n a b l e m a n n e r . W T O ( 2 0 0 2 ) . Friedman Benjamin, "The use and the meaning of words in central banking: inflation targeting, credibility and transparency", N B E R Working Paper 8972 (2002). 19 D e s p i t e d i f f e r e n c e s i n e x p r e s s i o n a n d n u a n c e d d i f f e r e n c e s i n c o n n o t a t i o n , t h e c o r e m e a n i n g o f t r a n s p a r e n c y i s r e v e a l e d f r o m t h e a b o v e s t a t e m e n t s . T h e f o l l o w i n g p e r s p e c t i v e i s a g o o d s u m m a r i z a t i o n o f t h e c o r e m e a n i n g . A t a c o n f e r e n c e i n W a s h i n g t o n i n M a r c h 1 9 9 8 , 4 3 J o n a t h o n F r i e d s e t o u t t h e b a s i c p r o p o s i t i o n s o f t r a n s p a r e n c y p a r t i c u l a r l y s u c c i n c t l y . H e a s s e r t e d t h a t t h e r e a r e t h r e e f a c e t s o f t r a n s p a r e n c y , w h i c h a r e : i . t h e l a w s a n d r e g u l a t i o n s g o v e r n i n g t r a d e a r e p u b l i c l y a v a i l a b l e ; i i . t h e r e i s p r o c e d u r a l f a i r n e s s , t h a t i s , t h a t t h e p r o c e s s o f a d m i n i s t r a t i v e d e c i s i o n m a k i n g i s p r i n c i p l e d , c o m p a r a t i v e l y s t a b l e , a n d t h e b a s i s f o r m a k i n g a d e c i s i o n c a n b e k n o w n ; i i i . t h e r e i s a n i n d e p e n d e n t a n d i m p a r t i a l s y s t e m f o r r e v i e w o f a d m i n i s t r a t i v e d e c i s i o n m a k i n g . T h i s p e r s p e c t i v e w a s a d o p t e d b y a l e g a l s c h o l a r , S a r a h B i d d u l p h . S h e b a s e d o n t h e s e t h r e e a s p e c t s o f t r a n s p a r e n c y t o e x a m i n e t h e w a y s i n w h i c h a n d t h e e x t e n t t o w h i c h t h e y a r e r e f l e c t e d i n t h e C h i n e s e l e g a l s y s t e m . 4 4 ^ China/WTO Accession Washington Meeting, sponsored by the University of Toronto Centre for International Studies and the Institute for International Relations and Foreign Policy, UCLA 5-6 (March 1998) See Sarah Biddulph, "China's Accession to the WTO: Legal System Transparency and Administrative System", Ostry, et. al, China and the long march to global trade, (Routledge, 2002), pp. 155-187. 20 2.4 Constituents of Transparent Economic Dispute Resolution J o n a t h o n ' s p r o p o s i t i o n s c o n c e r n i n g " t r a n s p a r e n c y " a r e c o m p a t i b l e w i t h t h e p u r p o s e o f t h i s t h e s i s t o o . T o e x p l o r e e c o n o m i c d i s p u t e r e s o l u t i o n i n C h i n a f r o m a t r a n s p a r e n c y p e r s p e c t i v e , r e l e v a n t r e q u i r e m e n t s u n d e r t h e W T O a r e t h e f u n d a m e n t a l s . I n t e r m s o f e c o n o m i c d i s p u t e r e s o l u t i o n to b e d i s c u s s e d i n t h i s t h e s i s , i . e . , a p r o c e s s i n v o l v i n g s u b s t a n t i v e , p r o c e d u r a l a s w e l l a s i n s t i t u t i o n a l i s s u e s , m o r e s p e c i f i c d e s c r i p t i o n o f e f f o r t s C h i n a i s s u p p o s e d t o m a k e w o u l d b e d e s i r a b l e . T h e r e f o r e , t a k i n g J o n a t h o n ' s p r o p o s i t i o n s , t h i s t h e s i s c l a r i f i e s t h e f o l l o w i n g i n t e r p r e t a t i o n o f t r a n s p a r e n c y a s t h e b a s i s o f d i s c u s s i o n . i . T r a n s p a r e n t a p p l i c a b l e l e g i s l a t i o n i i . P r o c e d u r a l f a i r n e s s i i i . I n d e p e n d e n c e o f D i s p u t e R e s o l v i n g I n s t i t u t i o n s 2.4.1 Transparent Applicable Legislation A n u n d e r s t a n d i n g o f t h e l a w i s a f u n d a m e n t a l p r e m i s e b y w h i c h a c o m p a n y , a n e n t e r p r i s e o r a n i n d i v i d u a l g u a r a n t e e s t h a t i t s b u s i n e s s o p e r a t i o n s a r e w i t h i n t h e l a w . T h e y a r e e n t i t l e d t o k n o w w h a t c o m m e r c i a l a c t i v i t i e s a r e l e g a l , w h i c h a r e v i e w e d w i t h l e g a l t o l e r a n c e a n d w h i c h a c t i v i t i e s a r e b a n n e d . M u c h l i k e a s o c c e r g a m e , w h e n o n e d o e s n o t u n d e r s t a n d t h e r u l e s , n o a m o u n t o f d i s c u s s i o n a b o u t h o w t o o b e y t h e s e r u l e s c a n g e t y o u c l o s e r t o k n o w i n g h o w to w i n t h e g a m e . (a) Publication: publicly accessible P u b l i c a t i o n o f l a w i n c l u d e s t h e p u b l i c l y a c c e s s i b l e p r o c e d u r e s f o r d r a f t i n g , p a s s i n g a n d p r o m u l g a t i n g l a w s . T h e r e g u l a t o r y d r a f t i n g m o d e l u n d e r t h e W T O i s d e r i v e d f r o m a c o r o l l a r y i n t h e U S A d m i n i s t r a t i v e P r o c e d u r e A c t s . 5 5 3 . I t i s p r e m i s e d o n t h e e x i s t e n c e o f a l e g i s l a t i o n a n d r u l e - m a k i n g p r o c e d u r e w h i c h i n c o r p o r a t e s a c o n s u l t a t i o n p h a s e o r s o m e o t h e r f o r m a l s y s t e m o f s c r u t i n y b e f o r e t h e l a w o r r u l e c a n v a l i d l y b e p a s s e d . N o w t h e r e q u i r e m e n t o f c o n s u l t a t i o n w i t h t h e i n t e r e s t e d p a r t i e s i s w i d e l y u s e d . It r e f l e c t s a g r o w i n g r e c o g n i t i o n t h a t e f f e c t i v e r u l e s c a n n o t r e l y s o l e l y o n c o m m a n d a n d c o n t r o l — t h e i n d i v i d u a l s a n d o r g a n i z a t i o n s c o v e r e d b y r u l e s n e e d t o b e r e c r u i t e d a s p a r t n e r s i n t h e i r i m p l e m e n t a t i o n . C o n s u l t a t i o n i s t h e f i r s t p h a s e o f t h i s r e c r u i t m e n t p r o c e s s . I t c a n a l s o g e n e r a t e i n f o r m a t i o n a n d i d e a s t h a t w o u l d n o t o t h e r w i s e b e a v a i l a b l e t o p u b l i c o f f i c i a l s . C o n s u l t a t i o n m e c h a n i s m s a r e b e c o m i n g m o r e s t a n d a r d i z e d a n d s y s t e m a t i c . T h i s e n h a n c e s e f f e c t i v e a c c e s s b y i m p r o v i n g p r e d i c t a b i l i t y a n d o u t s i d e a w a r e n e s s o f c o n s u l t a t i o n o p p o r t u n i t i e s . N o w , t h e r e i s a t r e n d t o w a r d a d a p t i n g f o r m s o f c o n s u l t a t i o n t o t h e s t a g e i n t h e r e g u l a t o r y p r o c e s s . C o n s u l t a t i o n t e n d s t o s t a r t e a r l i e r i n t h e p o l i c y m a k i n g p r o c e s s , i s c o n d u c t e d i n s e v e r a l s t a g e s a n d e m p l o y s d i f f e r e n t m e c h a n i s m s a t d i f f e r e n t t i m e s . O p e n n e s s o f t h e p r o c e d u r e s b y w h i c h t h e l a w i s p a s s e d s t r e n g t h e n s t h e d e g r e e o f t r a n s p a r e n c y o f t h e l a w a p p l i c a t i o n . T o d a y , n o t o n l y t h e l e g i s l a t i v e b o d i e s b u t a l s o a d m i n i s t r a t i v e o r g a n s a r e e n t i t l e d to l e g i s l a t i v e p o w e r . B o t h o f t h e m a r e g o v e r n e d b y 22 c l e a r s t i p u l a t i o n s o f p a s s a g e o f l a w , w h i c h a r e s u p p o s e d t o b e k n o w a b l e to t h e p u b l i c . B e i n g a w a r e o f w h e n , w h e r e a n d h o w a s p e c i f i c l a w o r r e g u l a t i o n i s p a s s e d , a n d t h a t t h e e n a c t i n g a u t h o r i t y e x e r c i s e s i t s p o w e r i n l a w m a k i n g intra vires, c o n t r i b u t e s t o c o m p l i a n c e o f l a w ; o n t h e c o n t r a r y , n o n - p u b l i c p a s s a g e o f l a w o n l y e n d s i n p e o p l e ' s u n w i l l i n g n e s s t o o b e y t h e l a w . T o m a k e t h e l a w s a n d r e g u l a t i o n s a p p l i e d b y t h e d i s p u t e r e s o l v i n g i n s t i t u t i o n s k n o w a b l e t o t h e d i s p u t a n t s , i t i s r e q u i r e d t o p u b l i s h t h e m o n c e e n a c t e d a n d m a k e t h e m p u b l i c l y a c c e s s i b l e . P r o p e r l e g a l p r o c e d u r e s m u s t b e f o l l o w e d i n p r o m u l g a t i n g a n y l a w o r r e g u l a t i o n . P u b l i c a c c e s s t o b u s i n e s s l a w s , r e g u l a t i o n s a n d n o r m s , t o g e t h e r w i t h a c c u r a c y a n d t i m e l i n e s s o f s u c h i n f o r m a t i o n , i s t h e t h r e a d t h a t l i n k s a l l c o n c e p t s o f t r a n s p a r e n c y i n d i s p u t e r e s o l u t i o n . I t c a n b e t h o u g h t o f a s t h e i n n e r k e r n e l f r o m w h i c h a l l o t h e r c o n c e p t s a n d p r a c t i c e s g r o w . It i s s o f u n d a m e n t a l a s t o b e a l m o s t i n s e p a r a b l e f r o m l e g i s l a t i v e a n d r e g u l a t o r y f u n c t i o n s , c o m p l i a n c e w i t h a n d e n f o r c e m e n t o f l e g i s l a t i o n . P u b l i c a c c e s s t o l a w r e f e r s t o c o d i f i c a t i o n o f l a w , p u b l i c a t i o n o f r e g i s t e r s o f l a w , l i n k i n g e n f o r c e a b i l i t y t o a v a i l a b i l i t y o n t h e r e g i s t e r a n d a c c e s s l i k e v i a I n t e r n e t . 4 5 T h e a d o p t i o n o f c e n t r a l i z e d r e g i s t e r s o f l a w s a n d r e g u l a t i o n s w i l l a l s o e n h a n c e a c c e s s i b i l i t y . 4 6 ^ F o r an e x a m p l e , three quarters o f O E C D count r ies n o w m a k e mos t o r a l l p r i m a r y l e g i s l a t i o n a v a i l a b l e v i a the Internet . 4 5 E i g h t e e n coun t r i es o f O E C D stated i n end-2000 that they p u b l i s h e d a c o n s o l i d a t e d reg is ter o f a l l subord ina te regu la t ions cu r ren t l y i n fo rce and n i n e o f these p r o v i d e d that en fo rceab i l i t y 23 O t h e r f a c t o r s a r e a l s o r e l e v a n t w h e n t r y i n g t o r e n d e r l a w a n d p u b l i c p o l i c y m o r e 47 t r a n s p a r e n t : Regulation complexity and choice of audiences. P o l i c i e s a r e o f t e n c o m p l e x a n d i n f o r m a t i o n a b o u t i t h a s t o b e c o n d e n s e d , s i m p l i f i e d a n d p u t i n t o c o n t e x t i n o r d e r t o m a k e i t c o m p r e h e n s i b l e . I n s o m e a r e a s , h o w e v e r , t h e p o l i c i e s t o b e d e s c r i b e d a r e i n h e r e n t l y c o m p l e x a n d i n v o l v e s p e c i a l i z e d e x p e r t i s e . A p o l i c y t h a t i s u n d e r s t a n d a b l e a n d t r a n s p a r e n t t o a n a u d i e n c e o f s p e c i a l i s t s , m a y n o t b e t o o t h e r a u d i e n c e s . S o p l a i n l a n g u a g e d r a f t i n g i s c a l l e d f o r . Codification and the transparency of administration and enforcement. B u s i n e s s a c t i v i t i e s i n f l u e n c e d b y l a w s a n d r e g u l a t i o n s a r e v e r y c o m p l e x . F o r e x a m p l e , p r u d e n t i a l r e g u l a t i o n i n b a n k i n g i s r e q u i r e d t o a c c o u n t f o r f i n a n c i a l i n s t i t u t i o n s ' a c t i v i t i e s i n n u m e r o u s m a r k e t s a n d g e o g r a p h i c a l l o c a t i o n s . C o m p l e x i t y m e a n s t h a t p o l i c y m a k e r s m u s t m a k e c h o i c e s a b o u t h o w t h e y f r a m e l a w a n d r e g u l a t i o n s h o u l d t h e y se t f o r t h b r o a d p r i n c i p l e s a n d l e t b u s i n e s s e s d e c i d e w h a t t h e s e p r i n c i p l e s m e a n f o r t h e i r b e h a v i o r o r s h o u l d t h e y o p t f o r m o r e d e t a i l e d d e s c r i p t i o n s o f l e g a l a n d i l l e g a l b e h a v i o r s ? T h e s e c h o i c e s i n f l u e n c e a p p r o a c h e s t o t r a n s p a r e n c y . I f l e g i s l a t i v e r e q u i r e m e n t s a r e f r a m e d a s b r o a d p r i n c i p l e s , l e g a l c o d e s w i l l t e n d t o b e s h o r t a n d depended on inclusion in the register. Many countries now also commit to publication of future regulatory plans. 4 7 See generally, Organization for Economic Co-operation and Development, Directorate For Financial, Fiscal and Enterprise Affairs & Committee on International Investment and Multinational Enterprises, "Public Sector Transparency and International Investment Policy", DAFFE/IME 2002 (16)/FINAL, approved and declassified by the CIME at its meeting on 9-11 April 2003, International Investment Perspectives (2003 Issue), also available at OECD website. 24 e a s i l y u n d e r s t a n d a b l e . Y e t , i n t h i s c a s e , a p p r o a c h e s t o a d m i n i s t r a t i o n a n d e n f o r c e m e n t d e t e r m i n e m u c h o f a l a w ' s s u b s t a n c e . F o r t h i s r e a s o n , i t i s i m p o r t a n t t h a t a d m i n i s t r a t i o n a n d e n f o r c e m e n t a l s o b e t r a n s p a r e n t . Insiders versus outsiders. S i n c e t r a n s p a r e n c y i n v o l v e s n a t i o n a l i n s t i t u t i o n s , w a y s o f c o m m u n i c a t i n g a n d e v e n l a n g u a g e s , " i n s i d e r s " p e o p l e w h o a r e n a t i v e t o a p a r t i c u l a r l e g a l e n v i r o n m e n t m i g h t b e m o r e c o m f o r t a b l e w i t h n a t i o n a l t r a n s p a r e n c y a r r a n g e m e n t s t h a n " o u t s i d e r s " . T h i s c o n s i d e r a t i o n i s o f p a r t i c u l a r i n t e r e s t t o t h e i n v e s t m e n t p o l i c y c o m m u n i t y , s i n c e i t i m p l i e s t ha t , i n o r d e r f o r t h e p r i n c i p l e o f n o n - d i s c r i m i n a t i o n t o a p p l y i n m a t t e r s o f t r a n s p a r e n c y , g o v e r n m e n t s m a y h a v e t o m a k e s p e c i a l e f f o r t s t o c o m m u n i c a t e e f f e c t i v e l y w i t h " o u t s i d e r s " i n c l u d i n g i n t e r n a t i o n a l i n v e s t o r s . Y e t , t h e p u b l i c a t i o n o f l a w i s n o t i d e n t i c a l t o h a v i n g t o o l s t o b e a b l e t o d e t e r m i n e t h e s u b s t a n t i v e c o n t e n t o f t h e r e g u l a t o r y r e g i m e i n a p a r t i c u l a r a r e a . R e g u l a t o r y u n i f o r m i t y , c o n s i s t e n c y , s t a b i l i t y a n d c e r t a i n t y a r e a l s o i n d i s p e n s a b l e f o r t r a n s p a r e n t a p p l i c a b l e l a w . (b) Regulatory Certainty, Uniformity, Consistency and Stability T h e W e s t e r n d o c t r i n e r e q u i r e s t h a t a l l l a w s s h o u l d b e s u f f i c i e n t l y o p e n , c l e a r , a n d r e l a t i v e l y s t a b l e t h a t p e o p l e w i l l b e a b l e a n d w i l l i n g t o b e g u i d e d b y t h e m . R e g u l a t o r y c e r t a i n t y , u n i f o r m i t y , c o n s i s t e n c y a n d s t a b i l i t y m a k e c a l c u l a b i l i t y a n d p r e d i c t a b i l i t y o f l a w p o s s i b l e . T h e y a r e w h a t m o d e r n c a p i t a l e n t e r p r i s e s m o s t l y r e l y 4 8 See N a n p i n g L i u , Judicial Interpretation in China ( A s i a : S w e e t & M a x w e l l , 1997) , p p . 2 0 4 . 25 o n . T h a t i s , l a w a n d a d m i n i s t r a t i v e s y s t e m a r e r u n b y a s e r i e s o f r a t i o n a l a n d p r e d i c t a b l e m e t h o d s a n d p e o p l e c a n a t l e a s t m a k e p r e d i c t i o n i n p r i n c i p l e a c c o r d i n g t o t h e g e n e r a l n o r m s . 4 9 M o d e r n c a p i t a l i s m , f o r t h e s a k e o f e x i s t e n c e , e n t a i l s a k i n d o f m e c h a n i c a l l y c a l c u l a b l e l a w . J u s t l i k e p u t t i n g a c o i n o n t h e t o p o f a " v e n d i n g m a c h i n e " , a n e x p e c t a n t c o n c l u s i o n c a n b e o b t a i n e d t h r o u g h t h e r u l e s e n a c t e d b e f o r e h a n d . J u d i c i a r y a n d a d m i n i s t r a t i o n w h o s e f u n c t i o n s c a n b e r a t i o n a l l y a n t i c i p a t e d b a s e d o n f i x e d a n d g e n e r a l r u l e s a r e h i g h l y d e s i r a b l e . 5 0 I n s t i t u t i o n a l c a l c u l a b i l i t y i s e v e n m o r e i m p o r t a n t w i t h t h e i n c r e a s i n g l y g r o w i n g i n t e r n a t i o n a l i n t e r a c t i o n . P e o p l e c o m i n g f r o m d i f f e r e n t c o u n t r i e s a n d a r e a s h a v e d i f f e r e n t c u l t u r a l b a c k g r o u n d , l e g a l t h i n k i n g a n d p o l i t i c a l i d e a s . T r a d e a n d b u s i n e s s , i n a s e n s e , a r e g e t t i n g i n s e c u r e d u e t o t h e p o t e n t i a l u n p r e d i c t a b i l i t y a n d u n c e r t a i n t y o f c o m m e r c i a l t r a n s a c t i o n g o v e r n e d n o t o n l y b y t h e k n o w a b l e i n t e r n a t i o n a l l y - r e c o g n i z e d n o r m s b u t a l s o b y t h e d i v e r s e d o m e s t i c l a w s w h i c h a r e m o r e c u l t u r a l l y s p e c i f i c t h a n t h e f o r m e r . " I n t e r n a t i o n a l i n s t i t u t i o n a l b r i d g i n g c o s t " , 5 1 t h e r e f o r e , s t r o n g l y c a l l s f o r d o m e s t i c t r a n s p a r e n c y i n l a w s a n d r u l e s . P u b l i c a c c e s s i b i l i t y t o l a w i s j u s t t h e b a s i c r e q u i r e m e n t t o e m b o d y t h e t r a n s p a r e n c y i n t h e a p p l i c a b l e l e g i s l a t i o n . E v e n i f t h e l a w s a n d r e g u l a t i o n s g o v e r n i n g b u s i n e s s a c t i v i t i e s a r e a c c e s s i b l e t o t h e e c o n o m i c a c t o r s , b u s i n e s s r i s k s w o u l d b e s t i l l t h e r e b o t h o f e c o n o m i c d i s p u t e s a v o i d a n c e a n d 4 9 See Max Weber, Economy and Society: An Outline of Interpretative Sociology (Guenther Roth and Claus Mittich eds.) ( Berkeley: University of California Press, 1978), pp. 1394. 5 0 See Max Weber, Economy and Society (transplanted by Ling Rongyuan) (Beijing: The Commercial Press, 1997), Part. II, pp. 738. 5 1 See Wolfgang Kasper & Manfred E.Streit, Institutional Economics: Social Order and Public Policy (translated by Han Chaohua) (Beijing: The Commercial Press, 1997), pp. 738. 26 r e s o l u t i o n w o u l d b e d i f f i c u l t i f t h e n o r m s t h e m s e l v e s a r e a m b i g u o u s a n d l a c k u n i f o r m i t y , c o n s i s t e n c y , s t a b i l i t y . T h e d e g r e e o f t r a n s p a r e n c y i n t h e t r a d e p o l i c i e s a n d l e g a l s y s t e m h a s b e c o m e a n i m p o r t a n t f a c t o r c o n s i d e r e d b y b u s i n e s s a n d t r a d e d e c i s i o n m a k e r s i n i n t e r n a t i o n a l t r a d e a r e n a . A d m i t t e d l y , d u e to e v e r - c h a n g i n g s o c i e t a l s i t u a t i o n s to w h i c h t h e l a w a p p l i e s , i t i s i m p o s s i b l e t o m a k e l a w c o n s t a n t l y a d a p t a b l e t o t h e r e g u l a t o r y e n v i r o n m e n t . A s t a t u t e , i n a s e n s e , s t a r t s t o l a g b e h i n d t h e s o c i e t a l d e v e l o p m e n t r i g h t a f t e r i t h a s b e e n e n a c t e d . H o w e v e r , m a x i m i z e d p r e d i c t a b i l i t y o f l e g a l e f f e c t i s s t i l l p o s s i b l e i f a m b i g u o u s l a n g u a g e i s a v o i d e d i n l a w m a k i n g , a t t e n t i o n i s p a i d t o h a r m o n i z a t i o n b e t w e e n l e g i s l a t i o n s , a n d l e g a l n o r m s e s p e c i a l l y u n d e r l y i n g o n e s a r e c o m p a r a t i v e l y s t a b l e . 5 2 I n a d d i t i o n , i n c r e a s i n g u s e o f l e g i s l a t i v e c o d i f i c a t i o n a n d r e s t a t e m e n t o f l a w s a n d r e g u l a t i o n s i s a b l e t o e n h a n c e c l a r i t y a n d i d e n t i f y a n d e l i m i n a t e i n c o n s i s t e n c y . 5 3 C o n f l i c t s o f l a w a r e a b i g h i n d r a n c e to t h e a p p l i c a t i o n o f l a w a n d w o r s e n t h e p u r s u i t o f t r a n s p a r e n c y w h e n c l e a r g u i d a n c e a b o u t h o w t o h a n d l e t h e c o n f l i c t s i s s c a n t . T o d a y , t h e r e a l i t y i s t h a t d i f f e r e n t d e p a r t m e n t s h a v e t h e i r l e g i s l a t i v e a u t h o r i t y , s o d o c e n t r a l g o v e r n m e n t a n d l o c a l g o v e r n m e n t s . I n a n y p a r t i c u l a r j u r i s d i c t i o n , t h e r e a r e l a w - m a k i n g , r u l e - m a k i n g a n d m a y b e o t h e r f o r m s o f l e g a l n o r m s w i t h b i n d i n g f o r c e . G i v e n t h e s e , l a w c o n f l i c t s c a n n o t b e p e r f e c t l y a v o i d e d . I n c a s e s u c h l e g i s l a t i v e c o n f l i c t s o c c u r b e t w e e n r e l e v a n t l a w s a n d r e g u l a t i o n s , h o w t o a p p l y t h e l a w s o a s to g e t t h e d i s p u t e s r e s o l v e d s h o u l d b e c l e a r l y s t i p u l a t e d . 5 2 See S a r a h B i d d u l p h , sup ra note 4 4 , p p . 165 . 5 3 S e e sup ra no te 4 7 . 27 R e g u l a t o r y u n i f o r m i t y , c o n s i s t e n c y a n d s t a b i l i t y c a n c o u n t e r a c t u n c e r t a i n t y t o t h e u t m o s t e x t e n t a n d t h u s s h o u l d b e i n c l u d e d i n t o t h e c o n n o t a t i o n o f t h e t r a n s p a r e n c y p r i n c i p l e s . A c c o r d i n g t o t h e a b o v e , t h e f i r s t a s p e c t o f t r a n s p a r e n c y i n v o l v e s b o t h b e i n g a b l e t o k n o w w h a t t h e l a w i s a n d t h a t i t w i l l b e e n f o r c e d a c c o r d i n g t o i t s t e r m s . R e l a t e d i d e a s a r e t h a t t h e d r a f t i n g p r o c e s s i s o p e n a n d t h a t o n l y t h o s e l a w s t h a t a r e k n o w n w i l l b e e n f o r c e d . 5 4 T h e p r i n c i p l e s o f r u l e o f l a w w h i c h u n d e r p i n a w e s t e r n u n d e r s t a n d i n g o f t h e c o n c e p t o f r u l e o f l a w a n d t r a n s p a r e n c y a r e t h a t l e g a l r u l e s a n d p r i n c i p l e s a r e c l e a r a n d k n o w a b l e , t h e y a r e e n f o r c e d a c c o r d i n g t o t h e i r t e r m s a n d t h a t t h e y a r e f a i r l y s t a b l e . 2.4.2 Procedural fairness A s m e n t i o n e d a t t h e b e g i n n i n g o f t h e t h e s i s , t r a n s p a r e n c y h a s s i g n i f i c a n t i n s t r u m e n t a l v a l u e . T h e t h r e a d t h e r e i n i s f a i r n e s s , s u b s t a n t i v e a s w e l l a s p r o c e d u r a l f a i r n e s s . S u b s t a n t i v e f a i r n e s s i s h a r d l y a c c u r a t e l y m e a s u r a b l e . N o w a d a y s , i t i s i n c r e a s i n g l y d i f f i c u l t t o p o i n t o u t w h a t i s r i g h t i n t h e s u b s t a n t i v e s e n s e . 5 5 I t i s b e c a u s e s u b s t a n t i v e l a w , i n h e r e n t l y , h a s l i m i t a t i o n s a n d o b s c u r i t y , n o m a t t e r w h a t l e g i s l a t i v e 5 4 See Sarah Biddulph, supra note 44, pp. 158. 5 5 See Song Bing, et. al, Chengxu, Zhengyi yu Xiandaihua (Procedures, Justice and Modernization) (Beijing: China University of Political Science and Law Press,1998), pp. 374. 28 t e c h n i q u e s a r e e m p l o y e d . B r o a d a n d a b s t r u s e p r e s c r i p t i o n a n d t h e l o o p h o l e s e x i s t e n t i n s u b s t a n t i v e l a w s p r o v i d e d i s p u t e r e s o l u t i o n d e c i s i o n m a k e r s w i t h d i s c r e t i o n . A l s o , d i s p u t e r e s o l u t i o n i n i t s e l f i s a p r o c e s s l a u n c h e d a n d o p e r a t e d b y m a n a n d i n e v i t a b l y i n v o l v e s s u b j e c t i v e f a c t o r s a n d a p p r a i s a l c r i t e r i a . D u e to d i f f e r e n t v i e w s t o w a r d r i g h t s a n d w r o n g s o f d i f f e r e n t p e o p l e c o m i n g f r o m d i f f e r e n t c u l t u r a l b a c k g r o u n d s , i t i s h a r d l y s u r p r i s i n g t o f i n d o u t t h a t t h e r e m a y b e n o u n i f o r m o p i n i o n s o n t h e e v e n t u a l r e s o l u t i o n . F u r t h e r , s u b s t a n t i v e f a i r n e s s i s n o t g u a r a n t e e d i n a n o t h e r s e n s e . A s i t i s p r e m i s e d o n c o r r e c t d e t e r m i n a t i o n o f f a c t s w h i l e t h e h a p p e n i n g o f t h e c a s e s i s f o r e g o n e a n d c o l l e c t i o n o f e v i d e n c e i s l i m i t e d t o t i m e a n d s p a c e , r e s o l u t i o n i s m o r e o r l e s s t a i n t e d w i t h a m b i g u i t y . 5 6 T h e r e f o r e , t h e v a l u e a n d s i g n i f i c a n c e o f p r o c e d u r a l f a i r n e s s a r e p r o m i n e n t . B y p r o v i d i n g a s y m b o l i c a p p e a r a n c e o f l e g a l i t y , d i s p u t e r e s o l u t i o n p r o c e d u r e s c a n d e f l e c t a t t e n t i o n f r o m t h e h a r s h o r u n f a i r s u b s t a n c e . 5 7 D i s p u t e r e s o l u t i o n w i t h f a i r a n d t r a n s p a r e n t p r o c e d u r e s r e m e d i e s t h e d e f i c i e n c i e s o f s u b s t a n t i v e l a w . B e i n g a w a r e o f h o w t h e d i s p u t e s g e t r e s o l v e d , d i s p u t a n t s , e v e n w i t h d i f f e r e n t c u l t u r a l c o n c e p t s , a r e i n c l i n e d t o a c c e p t t h e d e c i s i o n s w h i c h a p p e a r m o r e p e r s u a s i v e t o t h e m a n d t h u s s p a r k s f e w e r c o m p l a i n t s . T h e p r o c e s s o f d i s p u t e r e s o l u t i o n s h o u l d b e p r i n c i p l e d a n d c o m p a r a t i v e l y s t a b l e . F u r t h e r , a n o p e n s y s t e m r u n s t h r o u g h t h e w h o l e d i s p u t e r e s o l u t i o n p r o c e s s . T h a t i s , t h e p r o c e s s i s o p e n b o t h t o t h e p u b l i c a n d t h e p a r t i e s w h o s e a c c e s s t o n e c e s s a r y 5 6 See He Jiahong, "Sifa Gongzheng Lun" (On Judicial Fairness), Zhongguo Faxue (China's Law Science), No. 2 (1999) 5 7 See Prosser. T, "Pove and Their Predecessors" 4 BJLS 39, 1977. verty, Ideology and Legality: Supplementary Benefit Appeal Tribunals 29 i n f o r m a t i o n i s c l e a r l y a n d a d e q u a t e l y g u a r a n t e e d b y l a w . (a ) O p e n n e s s t o t h e p u b l i c T h e p u b l i c i s e n t i t l e d t o a c c e s s t h e d i s p u t e r e s o l u t i o n i n f o r m a t i o n : f o r e x a m p l e , c o u r t t r i a l o r a d m i n i s t r a t i v e j u d i c a t u r e p r o c e s s . K e e p i n g t h e r e s o l u t i o n p r o c e s s o p e n t o t h e p u b l i c u n l e s s o t h e r w i s e p r o v i d e d b y l a w i s a b u i l t - i n r e q u i r e m e n t o f t r a n s p a r e n c y . 58 D i s p u t e r e s o l u t i o n c o n c e r n s t h e r i g h t s a n d i n t e r e s t s o f p e o p l e . P r o p e r p u b l i c e x p o s u r e i s n e c e s s a r y t o p r e v e n t a b u s i v e e x e r c i s e o f s t a t e p o w e r i n t h i s r e s p e c t . A s u p e r v i s o r y r o l e p l a y e d b y t h e p u b l i c p r o m o t e s l e g a l i z a t i o n o f e v e r y s t e p o f d i s p u t e r e s o l u t i o n . A t t h e s a m e t i m e , c o n v e n i e n t a c c e s s t o t h e i n f o r m a t i o n o f d i s p u t e r e s o l u t i o n p r o c e e d i n g s e d u c a t e s t h e p u b l i c o n t h e o p e r a t i o n o f l a w a n d l e g a l e f f e c t o f t h e i r s i m i l a r b e h a v i o r a n d t h u s e n h a n c e s t h e p r e d i c t a b i l i t y o f l a w s . O p e n n e s s t o t h e p u b l i c u s u a l l y r e q u i r e s t ha t t h e p u b l i c b e l e g a l l y a l l o w e d t o a u d i t t h e d i s p u t e r e s o l u t i o n . N o b u r d e n s o m e r e s t r i c t i o n s h o u l d b e i m p o s e d o n t h e p e o p l e w h o w a n t t o s i t i n t h e d i s p u t e r e s o l u t i o n h e a r i n g e x c e p t f o r n e c e s s a r y a n d r e a s o n a b l e p r o c e d u r e s u n d e r t h e l a w . N e w s m e d i a i s a l l o w e d t o r e p o r t w h a t e v e r c a s e s s u p p o s e t h e y a r e r e s p o n s i b l e f o r t h e r e p o r t . 5 9 Exceptions include arbitration which does not require open hearing, judicial trial and administrative adjudication, if they are concerning state, business or private secrets. 5 9 Also see Warren E. Burger, "The Interdependence of Judicial and Journalistic Independence." 63 Georgetown Law Journal (1975), p.1195: in an address to the American Society of Newspaper Editors, Chief Justice Burger suggests that the independence of the judiciary and journalists are interdependent. Journalists depend upon the courts to protect and 30 ( b ) O p e n n e s s to t h e d i s p u t a n t s I f t h e o p e n n e s s to t h e p u b l i c i s i n a f o r m a l s e n s e , o p e n n e s s t o t h e d i s p u t a n t s m e a n s m o r e l i k e i n a s u b s t a n t i v e s e n s e . F o r t h e a d m i n i s t r a t i v e j u d i c a t u r e w h i c h i s m o r e l i k e l y t h a n j u d i c i a l p r o c e e d i n g s t o b e h e l d i n c l o s e d s e s s i o n d u e to i t s e a s i e r c o n n e c t i o n to s ta te s e c r e t , b u s i n e s s s e c r e c y o r p r i v a t e s e c r e t , o p e n n e s s o f d i s p u t e r e s o l u t i o n t o t h e d i s p u t a n t s a p p e a r s e s p e c i a l l y i m p o r t a n t . O p e n n e s s to t h e d i s p u t a n t s r e f e r s t o t h e i d e a t h a t t h e d i s p u t a n t s a r e e n t i t l e d to a c c e s s t h e i n f o r m a t i o n o f t h e w h o l e p r o c e s s , b e i n f o r m e d o f t h e i r d u e r i g h t s , a n d e x e r c i s e t h e s e r i g h t s . I n f o r m a t i o n o f t h e d i s p u t e r e s o l u t i o n i n c l u d e s t i m e , p l a c e , c o m p o s i t i o n o f d e c i s i o n m a k e r s a n d r e l e v a n t c a s e d o c u m e n t s l i k e t h e r e s p o n s e o f t h e o t h e r p a r t y t o t h e d i s p u t e , e v i d e n c e , e t c . A s e r i e s o f p r o c e d u r a l r i g h t s i n c l u d i n g t h e r i g h t t o c h a l l e n g e , t h e r i g h t t o m a k e a s t a t e m e n t , d e b a t e a n d c r o s s - e x a m i n a t i o n a n d t h e r i g h t t o a p p e a l s h o u l d b e n o t i f i e d t o t h e d i s p u t a n t s i n a t i m e l y m a n n e r . F a i l u r e t o s a t i s f y a n y o f a b o v e r e q u i r e m e n t s e n d s i n d e f e c t i v e d i s p u t e r e s o l u t i o n a n d e n t i t l e s t h e d i s p u t a n t s o f t h e r i g h t t o c h a l l e n g e t h e d e c i s i o n . O n e i d e a t h a t d e s e r v e s to b e s i n g l e d o u t h e r e f o r t h e p u r p o s e o f t h e d i s c u s s i o n i n t h e f o l l o w i n g t e x t i s t h a t t h e r e a s o n s o f d e c i s i o n - m a k i n g s h a l l b e g i v e n . P r o c e d u r a l f a i r n e s s f o r m s a k e y e l e m e n t o f m a n y W e s t e r n l e g a l s y s t e m s . T h e r e q u i r e m e n t t h a t r e a s o n s f o r a d e c i s i o n b e g i v e n t o t h e a f f e c t e d p e r s o n i s s e e n a s b e i n g " a n e s s e n t i a l en fo r ce the i r p ress f r e e d o m s ; c o n v e r s e l y , the cour ts d e p e n d o n the ac t i ons o f a f ree p ress i n e x p o s i n g and c o m b a t i n g assaul ts o n the j u d i c i a r y that w o u l d l i m i t i ts i n d e p e n d e n c e . 31 c o m p o n e n t o f f a i r p r o c e d u r e " . 6 U T h e d i s p u t a n t s e x p e c t t o k n o w t h e a p p l i c a b l e l e g i s l a t i o n s o f t h e i r b e h a v i o r . T h e y s u r e l y e x p e c t t o k n o w t h e s p e c i f i c g o v e r n i n g l a w w h o s e a p p l i c a t i o n e n d s i n t h e s e t t l e m e n t o f t h e i r d i s p u t e s , a n d t h e r e a s o n s o f a p p l i c a t i o n . T h e y a r e t h e e l e m e n t s c o n t r i b u t i n g t o t h e p e r s u a s i v e n e s s o f a w r i t t e n d e c i s i o n o r j u d g e m e n t . P e r s u a s i v e d i s p u t e r e s o l u t i o n t h e n i s r e l a t i v e l y e a s i e r t o b e e n f o r c e d b y t h e p a r t i e s . I t i s m o r e i l l u s t r a t i v e t o t h e p e o p l e a b o u t p o s s i b l e l e g a l s i g n i f i c a n c e o f t h e i r b e h a v i o r . A c o n v i n c i n g r u l i n g o r j u d g e m e n t i s n o l e s s t h a n a l a w t e x t b o o k a n d d u e to i t s c l o s e r e l a t i o n t o t h e r e a l i t y , e v e n m o r e i n s t r u c t i v e a n d e n l i g h t e n i n g t o t h e p u b l i c . I n s u m , a l t h o u g h i n d i f f e r e n t s o c i a l c o n t e x t s , c u l t u r a l n u i s a n c e s m a y r e s u l t i n d i f f e r e n t u n d e r s t a n d i n g o f w h a t p r o c e d u r e s a r e a c c e p t a b l e a n d e v e n p r o d u c e d i f f e r e n t e f f e c t s i n p r a c t i c e , i t i s u n d e n i a b l e t h a t r e a s o n a b l e a n d s t a b l e p r o c e d u r e s g o v e r n i n g t h e w h o l e p r o c e s s o f d i s p u t e r e s o l u t i o n t o b e s t r i c t l y a b i d e d b y i s t h e k e y t o p r e v e n t t h e a r b i t r a r i n e s s o f d e c i s i o n m a k e r s a n d a b u s e o f p o w e r . 2.4.3 Independence of Dispute Resolving Institutions I n d e p e n d e n c e o f d i s p u t e r e s o l v i n g i n s t i t u t i o n s r e q u i r e s t h a t d e c i s i o n m a k e r s o b e y n o t h i n g b u t l a w . S p e c i f i c a l l y s p e a k i n g , t h e d i s p u t e r e s o l v i n g i n s t i t u t i o n s a s a w h o l e s h o u l d b e e x t e r n a l l y i n d e p e n d e n t f r o m a n y p u b l i c b o d i e s , o r g a n i z a t i o n s , o r 6 0 See Richardson, G., "The Study to Give Reasons: Potential and Practice," Public Law 437 reproduced in Allars, M., Australian Administrative Law Cases and Materials, (Sydney: Butterworths, 1997[1986]), pp. 212-213. 32 i n d i v i d u a l s . T h e s p e c i f i c d i s p u t e r e s o l v e r s s h o u l d b e i n d e p e n d e n t l y r e s p o n s i b l e f o r r e s o l v i n g s p e c i f i c d i s p u t e s , w i t h o u t i n t e r n a l l y i n s t i t u t i o n a l i z e d i n t e r f e r e n c e , l i k e s o - c a l l e d g u i d a n c e f r o m h i g h e r o f f i c e r s o r h i g h e r l e v e l c o u r t . F o r a n i n s t a n c e , w h e n a d m i n i s t r a t i v e o r g a n s a c t a s d i s p u t e r e s o l v i n g i n s t i t u t i o n s , t h e y s h o u l d b e t h e i n d e p e n d e n t a d j u d i c a t i v e b o d i e s , n o t p a r t o f t h e i n t e r n a l c o m p l a i n t s m e c h a n i s m s o f g o v e r n m e n t d e p a r t m e n t s a n d o t h e r p u b l i c b o d i e s . 6 1 B e s i d e s , i m p a r t i a l i t y o f d i s p u t e r e s o l v i n g i n s t i t u t i o n s i n h e r e n t l y r e q u i r e s t h a t d i s p u t e r e s o l v e r s b e a l s o i n d e p e n d e n t f r o m t h e d i s p u t a n t s t h e m s e l v e s , n o t f a v o r i n g e i t h e r p a r t y . T h i s i s e s p e c i a l l y i m p o r t a n t w h e n o n e p a r t y t o t h e d i s p u t e i s g o v e r n m e n t a l o r g a n i z a t i o n s w i t h s t a t e p o w e r . K e e p i n g i n d e p e n d e n c e u n d e r s u c h c i r c u m s t a n c e i s a c h a l l e n g e f o r d i s p u t e r e s o l v i n g i n s t i t u t i o n s , t h e a d m i n i s t r a t i v e o r g a n s a n d t h e c o u r t s a s w e l l . I n d e p e n d e n c e o f d i s p u t e r e s o l v i n g i n s t i t u t i o n s i s a l e g a l i s s u e i n t h e s e n s e t ha t i t r e q u i r e s a l e g a l g u a r a n t e e . H o w e v e r , t h e k i n d o f l e g a l g u a r a n t e e t h a t i s a v a i l a b l e t o e n s u r e t h e i n d e p e n d e n c e a n d t o w h a t e x t e n t t h e g u a r a n t e e c a n f u n c t i o n w e l l , i s m o r e a n i n s t i t u t i o n a l i s s u e t h a n a l e g a l i s s u e d u e to i t s c l o s e r e l a t i o n t o a n a t i o n ' s p o l i t i c a l r e g i m e a n d c u l t u r a l c o m p o n e n t s . S e p a r a t i o n o f p o w e r a i m s f o r t h i s , o f f e r i n g p r o t e c t i o n f r o m t h e t y r a n n y o f a s i n g l e h i g h l y p o w e r f u l b r a n c h . A s r e g a r d s t o t h e s y s t e m , l i k e c o m m u n i s m i n C h i n a w h e r e a s s e m b l y g o v e r n m e n t c a l l e d t h e 6 1 See Andrew Le Sueur, Javan Herberg & Rosalind English, Principles of Public Law, (Cavendish, 1999), pp. 192-196. See J. Clifford Wallace, "Independence of the Judiciary: Independence from What and Why", 58 N.Y.U. Ann. Surv. Am. L., (2001), p.241; also see M. Vile, Constitutionalism and the Separation of Powers (1967); W. Gwyn, The Separation of Powers, Tul. Stud, in Pol. Sci. vol. 9, (1965) 33 c o m b i n a t i o n o f t h e l e g i s l a t u r e a n d e x e c u t i v e i s e x e r c i s e d , t h e j u d i c i a r y c a n n o t b e i n d e p e n d e n t f r o m t h e N a t i o n a l P e o p l e ' s C o n g r e s s . 6 3 T h e r e i s , t h u s , o n l y s e p a r a t i o n o f f u n c t i o n s a m o n g l e g i s l a t i v e o r g a n i z a t i o n s , a d m i n i s t r a t i v e o r g a n s a n d j u d i c i a l b o d i e s . T h e w a y to k e e p i n d e p e n d e n c e o f d i s p u t e r e s o l v i n g i n s t i t u t i o n s i n v i t e s m u c h c o n t r o v e r s y . Chapter III Economic Dispute Resolution by Administrative Organs 3.1 Introduction General I n t h e e a r l y t w e n t i e t h c e n t u r y , t h e r a p i d e x p a n s i o n o f a d m i n i s t r a t i v e p o w e r i n w e s t e r n c o u n t r i e s p o s e d c h a l l e n g e s f o r t h e t h e o r y o f " p a s s i v e a d m i n i s t r a t i o n " . T h e e r a , d e s c r i b e d b y W a d e t ha t e x c e p t t h e p o s t o f f i c e a n d p o l i c e m e n , a n E n g l i s h m a n w i t h l a w a b i d i n g c o n s c i o u s n e s s m a y s p e n d h i s w h o l e l i f e w i t h o u t r e a l i z i n g t h e e x i s t e n c e o f t h e g o v e r n m e n t , w a s o v e r . 6 4 T h e e m e r g e n c e o f a m o n o p o l i z e d e c o n o m y a n d w e l f a r e s t a t e r e q u i r e s t h a t t h e g o v e r n m e n t a c t i v e l y i n v o l v e s i t s e l f i n t o t h e e c o n o m y a n d China's combination of legislature and execution is deeply rooted in Communist ideology held by Karl Marx and Lenin. See Mark, Civil War in France 73 (New York: International Publishers, 1932); See V.I. Lenin, State and Evolution (chap. 3, section 2-3). 6 4 See generally, H.W.R.Wade, Administrative Law (Oxford, 1989), pp.4-10; see A.V.Diecy, Law of the Constitution, (Oxford, 1885), pp. 198. 3 4 s o c i e t y m a n a g e m e n t . H e n c e , t h e t h e o r y o f " a c t i v e a d m i n i s t r a t i o n " d e v e l o p s . A c c o r d i n g l y , a d m i n i s t r a t i o n b y l a w i s n o t l i m i t e d t o t h e p a r l i a m e n t ' s l e g i s l a t i o n b u t e x t e n d s t o t h e r u l e m a k i n g a n d n o r m a t i v e - d o c u m e n t s m a k i n g b y g o v e r n m e n t a n d a d m i n i s t r a t i v e d e p a r t m e n t s . A n d , t h e g o v e r n m e n t i s n o t l i m i t e d t o a d m i n i s t r a t i v e e n f o r c e m e n t o f l a w a n d a d m i n i s t r a t i v e l e g i s l a t i v e p o w e r . I t i s a l s o e n t i t l e d t o a d m i n i s t r a t i v e j u d i c a t u r e p o w e r , b y w h i c h t h e a d m i n i s t r a t i v e a g e n c y c a n r e s o l v e t h e d i s p u t e s o c c u r r i n g b e t w e e n t h e p r i v a t e p a r t i e s a n d t h e a d m i n i s t r a t i v e o r g a n s a n d d i s p u t e s b e t w e e n t h e p r i v a t e p a r t i e s . I t i s n o t e d t h a t i n m a n y c o u n t r i e s a n d a r e a s , a d m i n i s t r a t i v e o r g a n s p l a y a n i m p o r t a n t r o l e i n d i s p u t e r e s o l u t i o n . 6 6 F o r a n e x a m p l e , i n t h e U K , u n d e r m a n y A c t s o f P a r l i a m e n t , t r i b u n a l s h a v e b e e n s e t u p to h e a r a p p e a l s a g a i n s t t h e d e t e r m i n a t i o n s o f p u b l i c b o d i e s . T r i b u n a l s d w a r f t h e o m b u d s m e n a n d j u d i c i a l r e v i e w i n t e r m s o f t h e n u m b e r o f c o m p l a i n t s t h e y d e a l w i t h e a c h y e a r . 6 7 T h e t e n d e n c y t o d a y i s t o b e l i e v e t h a t g o i n g t o c o u r t s h o u l d b e a l a s t r e s o r t ; l i t i g a t i o n i s s e e n a s e x p e n s i v e , l o n g w i n d e d a n d , m o r e o f t e n t h a n n o t , u n n e c e s s a r y . A s a U S See generally, Jiang Mingan, "Administrative State and Control and Transformation of Administrative Power" (Xingzheng Guojia yu Xingzhengquan de Kongzhi yu Zhuanhua), in Fazhi Ribao {Legal Daily), 13 Feb. 2000, p.3. 6 6 Some countries and areas as follows: in the US, many administrative tribunals established within some administrative departments are specialized in dealing with the disputes in the relevant areas; in Canada, there exist a large number of administrative tribunals or agencies with specialized jurisdiction, like hearing human rights complaints, disputes between employers and unions, etc; in France, administrative courts are professionally responsible for handling administrative disputes and in nature they are not judicial bodies but still belong to the administrative system; in Taiwan, how to play the role of administrative organs in resolving disputes has invited much attention. 6 7 See Andrew Le Sueur et al, supra note 61, pp. 192-196. 35 r e p o r t o f t h e N a t i o n a l C o m m i s s i o n o n L a w O b s e r v a n c e a n d E n f o r c e m e n t ( W i c k e r s h a m C o m m i s s i o n ) m e n t i o n e d , " i n n i n e t e e n t h - c e n t u r y A m e r i c a w e s o u g h t t o m a k e t h e c o u r t s d o t h e b u l k o f w h a t t o - d a y w e h a v e b e e n l e a r n i n g t o d o t h r o u g h a d m i n i s t r a t i o n ; i n p a r t i c u l a r w e c a s t u p o n c o u r t s a h e a v y b u r d e n o f w h a t i s m o r e a p p r o p r i a t e l y a d m i n i s t r a t i v e w o r k " . 6 8 S u c c e s s i v e g o v e r n m e n t s h a v e , t h e r e f o r e , e n c o u r a g e d t h e p r o l i f e r a t i o n o f a l t e r n a t i v e m e t h o d s o f d e a l i n g w i t h d i s p u t e s . P u b l i c a u t h o r i t i e s h a v e b e e n e x h o r t e d t o e s t a b l i s h t h e i r o w n i n t e r n a l p r o c e d u r e s f o r d e a l i n g w i t h c o m p l a i n t s . 6 9 T h e s e p r o c e d u r e s r a n g e f r o m r e c o r d i n g c o m p l a i n t s v i a t e l e p h o n e ' h o t l i n e ' t o m o r e e l a b o r a t e r e v i e w s b y t h e p u b l i c b o d y i t s e l f o f w h a t a l l e g e d l y w e n t w r o n g . T h e s h i f t t o i n f o r m a l d i s p u t e r e s o l u t i o n h a s , i n l a r g e p a r t , b e e n m o t i v a t e d b y t h e d e s i r e t o r e d u c e p u b l i c s p e n d i n g f o r t r i b u n a l h e a r i n g s a n d l i t i g a t i o n i n c o u r t i s 70 e x p e n s i v e . T h e m o d e r n s o c i e t y p r o v i d e s a n e v e n w i d e r s p a c e f o r t h e d e v e l o p m e n t o f a d m i n i s t r a t i v e j u d i c a t u r e . O n o n e h a n d , i n c r e a s i n g l y c o m p l i c a t e d k n o w l e d g e i n c l u d e d i n d i s p u t e s m a k e s t h e c o u r t s ' a b i l i t y u n e q u a l t o t h e i r a m b i t i o n t o g e t t h e d i s p u t e r e s o l v e d ; a t t h e s a m e t i m e , t h e c o u r t s ' b u r d e n i s l e s s e n e d t o a g r e a t e x t e n t w i t h w i d e a p p l i c a t i o n o f a d m i n i s t r a t i v e j u d i c a t u r e . O n t h e o t h e r h a n d , l e s s c o m p l e x p r o c e d u r e s o f a d m i n i s t r a t i v e j u d i c a t u r e t h a n j u d i c i a l p r o c e e d i n g s b r i n g t h e d i s p u t a n t s h i g h e r 6 8 National Comm'n on Law Observance and Enforcement, Report No. 8, at 14 (1931). 6 9 For an example, in the UK, under the Citizen's Charter initiative, internal procedures have been established by public authorities for dealing with complaints. See Andrew Le Sueur et al, supra note 61, pp. 192-196. 7 0 See Andrew Le Sueur et al, supra note 61, pp. 194. 36 e f f i c i e n c y , w h i c h s o u n d s q u i t e i m p o r t a n t n o w a d a y s w h e n " j u s t i c e d e l a y e d i s j u s t i c e 71 d e n i e d " i s v e r y m u c h e m p h a s i z e d . A s d e s c r i b e d i n a U K ' s r e p o r t o n t h e f u t u r e o f t r i b u n a l a d j u d i c a t i o n i n t h e 1 9 5 0 s , t r i b u n a l s w e r e b e t t e r f o r r e s o l v i n g s o m e d i s p u t e s t h a n c o u r t s . P e o p l e w i t h s p e c i a l i s t k n o w l e d g e c o u l d b e a p p o i n t e d t o s i t o n t h e m ; f o r i n s t a n c e , d o c t o r s o n t r i b u n a l s h e a r i n g c o m p l a i n t s a g a i n s t r e f u s a l o f w e l f a r e b e n e f i t f o r d i s a b l e m e n t . T r i b u n a l h e a r i n g s c o u l d a l s o b e c o n d u c t e d w i t h l e s s f o r m a l i t y t h a n l i t i g a t i o n i n c o u r t , a n d b e s o s p e e d i e r a n d l e s s c o s t l y . 7 2 I n s o f a r a s t h e a i m o f i n t e r n a l c o m p l a i n t s p r o c e d u r e s i s t o p r o v i d e c h e a p a n d q u i c k r e s o l u t i o n o f d i s p u t e s , t h e y a r e g o o d t h i n g s . T h e r e i s , h o w e v e r , a l s o a d a r k e r s i d e . I n r e c e n t y e a r s , i t h a s b e e n w i t n e s s e d a t r e n d t o c o m p r o m i s e a n d d o w n g r a d e p r o c e d u r e s i n a w a y w h i c h m a y e n d a n g e r t h e p r o p e r a p p l i c a t i o n o f t h e p r i n c i p l e s o f o p e n n e s s , f a i r n e s s a n d i m p a r t i a l i t y w h i c h s h o u l d u n d e r p i n t r i b u n a l s y s t e m i n g e n e r a l . 7 3 I n f o r m a l g r i e v a n c e h a n d l i n g t a k e s p l a c e b e h i n d c l o s e d d o o r s ; a n d i f p u b l i c a u t h o r i t i e s a r e n o t c a l l e d t o a c c o u n t i n p u b l i c , t h e w i d e r p u b l i c i n t e r e s t t h a t j u s t i c e i s n o t o n l y d o n e b u t s e e n t o b e d o n e i s c o m p r o m i s e d . 7 4 A l s o a s t h e a b o v e r e p o r t p o i n t e d o u t , a d m i n i s t r a t i v e i n s t i t u t i o n s f o r d i s p u t e r e s o l u t i o n s h o u l d b e v i e w e d a s i n d e p e n d e n t a d j u d i c a t i v e b o d i e s , n o t p a r t o f t h e i n t e r n a l c o m p l a i n t s m e c h a n i s m s o f g o v e r n m e n t 71 Klopfer v. North Carolina, 386 U.S. 213, 223-24 (1967) (referring to Sir Edward Coke's belief "that the delay in trial, by itself, would be an improper denial of justice"). 7 2 Report of the Committee on Administrative Tribunals and Enquiries, Cmnd 218 (London: HMS0.1957) 7 3 Annual Report 1989-1990, HC 64, p.l. 7 4 See Mulcahy, L and Allsop, J, "A Wolf in Sheep's Clothing? Shifts towards Informal Resolution of Complaints in the NHS", in Leyland, P and Woods. T (eds.), Administrative Law Facing the Future (London: Blackstone, 1997). 37 d e p a r t m e n t s a n d o t h e r p u b l i c b o d i e s . O p e n n e s s , f a i r n e s s a n d i m p a r t i a l i t y s h o u l d i n f o r m t h e d e s i g n a n d p r a c t i c e s o f a d m i n i s t r a t i v e o r g a n s i n c h a r g e o f d i s p u t e r e s o l u t i o n . T h u s , s o f a r a s a p p r o p r i a t e , s u c h a d m i n i s t r a t i v e o r g a n s s h o u l d u s e p r o c e d u r e s s i m i l a r t o t h o s e o f c o u r t s ; h e a r i n g s s h o u l d b e i n p u b l i c ; a p p l i c a n t s s h o u l d h a v e t h e r i g h t t o b e l e g a l l y r e p r e s e n t e d ; t r i b u n a l s s h o u l d g i v e f o r m a l r e a s o n s f o r t h e i r a d j u d i c a t i o n s ; a n d t h e r e s h o u l d b e a n a p p e a l f r o m t h e f i n d i n g s o f t h e s e d i s p u t e r e s o l v i n g i n s t i t u t i o n s t o t h e c o u r t . 7 5 China C h i n a ' s c o n t e x t i s c u l t u r a l l y u n i q u e . C h i n a i s a n a d m i n i s t r a t i o n - d o m i n a t e d c o u n t r y a l l t h r o u g h t h e a g e s . I n t h e p a s t , t h e r e w a s n o s e p a r a t i o n b e t w e e n g o v e r n m e n t a n d j u d i c i a r y i n d i s p u t e r e s o l u t i o n . G o v e r n m e n t w a s c a l l e d t h e p a r e n t s o f p e o p l e (Fit mu guan) a n d w a s r e s p o n s i b l e f o r h a n d l i n g a n y d i s p u t e s . N o w a d a y s , a l t h o u g h a d m i n i s t r a t i v e e f f e c t s s t i l l p e n e t r a t e i n t o j u d i c i a l a d j u d i c a t i o n p r a c t i c a l l y , t h e r e i s a t l e a s t a d i v i s i o n o f f u n c t i o n s b e t w e e n a d m i n i s t r a t i v e o r g a n s a n d j u d i c i a l b o d i e s u n d e r t h e p r e s e n t C o n s t i t u t i o n . 7 6 A m o n g a v a r i e t y o f a d m i n i s t r a t i v e f u n c t i o n s , o n e i s d i s p u t e r e s o l u t i o n . S u c h a d m i n i s t r a t i v e a c t i v i t i e s a r e t i t l e d a s a d m i n i s t r a t i v e j u d i c a t u r e . A s a C h i n e s e s c h o l a r d e s c r i b e s , a d m i n i s t r a t i v e l e g i s l a t i o n , a d m i n i s t r a t i v e e n f o r c e m e n t o f l a w a n d a d m i n i s t r a t i v e j u d i c a t u r e c o n s t i t u t e t h r e e k i n d s o f a d m i n i s t r a t i v e a c t i v i t i e s u n d e r 7 5 See S u p r a N o t e 7 2 . 7 6 See C o n s t i t u t i o n o f the P R C ( 1 9 8 2 , 1993) 38 C h i n a ' s a d m i n i s t r a t i o n f r a m e w o r k . A d m i n i s t r a t i v e j u d i c a t u r e , t o g e t h e r w i t h c o u r t a d j u d i c a t i o n a n d n o n g o v e r n m e n t a l a r b i t r a t i o n , c o m p o s e s t h e w h o l e a d j u d i c a t o r y s y s t e m o f c u r r e n t C h i n a . 7 7 C h i n a ' s u n i q u e c u l t u r a l c o n t e x t a n d i n s t i t u t i o n a l s e t t i n g , h o w e v e r , s h a p e t h e a d m i n i s t r a t i v e j u d i c a t u r e f r a m e w o r k w i t h m a n y s o - c a l l e d C h i n e s e c h a r a c t e r i s t i c s , e n c o u r a g i n g o n e s a s w e l l a s d i s c o u r a g i n g o n e s . A s d e f i n e d p r e v i o u s l y , e c o n o m i c d i s p u t e s a r e c a t e g o r i z e d i n t o a d m i n i s t r a t i v e d i s p u t e s w i t h r e s p e c t t o b u s i n e s s l a w a n d r e g u l a t i o n s , i . e . , c o m m e r c i a l a d m i n i s t r a t i v e d i s p u t e s a n d c o m m e r c i a l d i s p u t e s . T h e s e t w o k i n d s o f d i s p u t e s c a n b e s e t t l e d b y r e s o r t i n g t o a d m i n i s t r a t i v e a g e n c i e s p u r s u a n t t o l a w . F o r c o m m e r c i a l d i s p u t e s b e t w e e n p r i v a t e p a r t i e s , t h e y m a y b e r e s o l v e d t h r o u g h a d m i n i s t r a t i v e m e d i a t i o n , a d m i n i s t r a t i v e a r b i t r a t i o n o r a d m i n i s t r a t i v e a d j u d i c a t i o n ; f o r d i s p u t e s b e t w e e n a d m i n i s t r a t i v e a g e n c i e s a n d t h e p a r t i e s s u b j e c t t o a d m i n i s t r a t i o n , t h e y m a y b e s e t t l e d t h r o u g h a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . T h e r e f o r e , a d m i n i s t r a t i v e j u d i c a t u r e i s c o m p o s e d o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n w h i c h i s a i m e d t o r e s o l v e a d m i n i s t r a t i v e d i s p u t e s , a n d a d m i n i s t r a t i v e m e d i a t i o n , a d m i n i s t r a t i v e a r b i t r a t i o n a n d a d m i n i s t r a t i v e a d j u d i c a t i o n , w h i c h a r e r e s p o n s i b l e f o r c i v i l a n d c o m m e r c i a l d i s p u t e s . 7 8 A s i t i s e a s y t o g e t c o n f u s e d b y t h e a b o v e c o n c e p t s , a c l a r i f i c a t i o n i s n e c e s s a r y . 7 7 See Wen Zhengbang, Xue Zuomin & Wang Bing, "Shichang Jingji yu Xingzheng Sifa Zhidu de Jianshe yu Gaige" (Market Economy and Establishment and Reforms of Administrative Adjudication System), Xiandai Faxue (Modern Law Science), No. 4 (1996) 7 8 See Zhang Shaohua, "Woguo Xingzheng Sifa Lilun zhi Pipan yu Chonggou" (Critique and Reconstruction of China's Administrative Adjudication Theory), Xingzheng Faxue Yanjiu (Study on Science of Administrative Law), No.3 (1999) 39 A d m i n i s t r a t i v e m e d i a t i o n (Xindzheng Tiaojie) m e a n s a d m i n i s t r a t i v e o r g a n s , a c c o r d i n g to t h e a g r e e m e n t o f d i s p u t a n t s o n b o t h s i d e s , a c t a s m e d i a t o r s o r i n t e r m e d i a r i e s , i n s t e a d o f e m p l o y i n g a d m i n i s t r a t i v e p o w e r , t o r e s o l v e t h e d i s p u t e s . T h e a g r e e d m e d i a t i o n a g r e e m e n t h a s n e i t h e r b i n d i n g f o r c e n o r e x e c u t i v e f o r c e . E x e c u t i o n i s o n t h e v o l u n t a r y b a s i s . I f m e d i a t i o n f a i l s , o r o n e p a r t y r e f u s e s t o a c c e p t t h e m e d i a t i o n d e c i s i o n , h e o r s h e m a y a p p l y f o r a r b i t r a t i o n o r b r i n g a c i v i l l i t i g a t i o n . 8 0 I n t h i s s e n s e , e x c e p t f o r m o r e a u t h o r i t y o f t h e m e d i a t o r s , t h e r e i s n o b i g d i f f e r e n c e b e t w e e n a d m i n i s t r a t i v e m e d i a t i o n a n d n o n - g o v e r n m e n t a l m e d i a t i o n . S i n c e a d m i n i s t r a t i v e m e d i a t i o n i s m a d e a t t h e r e q u e s t o f t h e p a r t i e s o n b o t h s i d e s a n d e n f o r c e m e n t o f m e d i a t i o n i s s t i l l u p t o b o t h p a r t i e s , t h e r e a r e a c c o r d i n g l y n o m a n y p r o c e d u r a l c o n c e r n s o n d i s p u t e r e s o v l e r s . T h i s i s t h u s n o t t h e f o c u s o f t h i s t h e s i s . A d m i n i s t r a t i v e a r b i t r a t i o n (Xingzheng Zhongcai) r e f e r s t o t h a t t h e a d m i n i s t r a t i v e a g e n c i e s , b y w a y o f m e d i a t i o n o r a d j u d i c a t i o n , s e t t l e c e r t a i n d i s p u t e s o c c u r r i n g b e t w e e n c e r t a i n e q u a l p a r t i e s . S i n c e t h e Arbitration Law of the PRC c a m e i n t o e f f e c t i n 1 9 9 5 , a d m i n i s t r a t i v e a r b i t r a t i o n h a s f a d e d f r o m c i v i l a n d c o m m e r c i a l d i s p u t e See Luo Haocai (ed.), Administrative Jurisprudence (Beijing: China University of Political Science and Law Press, 1989), pp. 202. 8 0 Zhonghua Renmin Gongheguo Xingzheng Fuyi fa (Administrative Reconsideration Law of the People's Republic of China, hereinafter "ARL"), passed on 29 April 1999 and effective on 1 Oct 1999, Article 8, 81 See Luo Haocai ed. supra note 79, pp. 197. More discussion about administrative arbitration is available at Ying Songnia (ed.), "Science of Administrative Acts" (Beijing: People's Press, 1993), pp. 787. 40 r e s o l u t i o n e x c e p t f o r l a b o r d i s p u t e s . A l t h o u g h a d m i n i s t r a t i v e a r b i t r a t i o n f o r l a b o r d i s p u t e s w a s r e m a i n e d , l a b o r d i s p u t e a r b i t r a t i o n c o m m i t t e e s a c t a s i n t e r m e d i a r y i n s t e a d o f t h e s u b j e c t o f a d m i n i s t r a t i o n . S u c h a c t i v i t i e s a r e n o t f e a t u r e d a s a d m i n i s t r a t i o n . I n c a s e t h e i n t e r e s t e d p a r t y r e f u s e s t o a c c e p t t h e a r b i t r a l a w a r d , h e o r s h e c a n n o t b r i n g a d m i n i s t r a t i v e l i t i g a t i o n b u t c i v i l l i t i g a t i o n . A s l a b o r d i s p u t e s a r e n o t w i t h i n t h e s c o p e o f e c o n o m i c d i s p u t e s t o b e d i s c u s s e d i n t h i s t h e s i s , a d m i n i s t r a t i v e a r b i t r a t i o n w i l l n o t b e t r e a t e d e i t h e r . T h e m e a n i n g o f a d m i n i s t r a t i v e a d j u d i c a t i o n (Xingzheng Caijue) i s q u i t e o b s c u r e i n c u r r e n t C h i n a . T h e r e a r e a t l e a s t t h r e e k i n d s o f d i f f e r e n t u n d e r s t a n d i n g o f t h i s c o n c e p t : t h e n a r r o w , w i d e r , a n d w i d e s t u n d e r s t a n d i n g . I n t h e n a r r o w e s t s e n s e , i t i s o n l y c i v i l a n d c o m m e r c i a l d i s p u t e s t ha t a r e r e s o l v e d t h r o u g h a d m i n i s t r a t i v e a d j u d i c a t i o n . 8 4 I n This is also evidenced by the legislative changes between original Administrative Reconsideration Regulations (enacted in 1990 and revised in 1994 by State Council) and ARL (1999). When it comes to what administrative acts are excluded from administrative reconsideration, Article 10 of Administrative Reconsideration Regulations clearly states administrative arbitration cannot be submitted for reconsideration. Article 8 of ARL expressly mentions if the parties are not happy with administrative mediation and other determinations, they may apply for arbitration or bring the litigation to the courts. The change implies that except for the labor disputes, civil and commercial disputes are not more resolved by administrative arbitration. 8 3 See Zhang Shangzu, et al, Zouchu Digu de Zhong Xingzheng Faxue (China's Administrative Jurisprudence Stepping out of Low Tide Development) (Beijing: China University of Political Science and Law Press, 1991), pp. 285-286. 8 4 See Ying Songnian, Xingzheng Faxue Jiaocheng (Administrative Jurisprudence) (Beijing: China University of Political Science and Law Press, 1988), pp.362; see Zhang Shuyi, et. al, Xingzheng Faxue Xinlun (On Administrative Jurisprudence) (Beijing: Current Affairs Press, 1991), pp.174; see Wang Yujun, "Lun Xingzheng Caijue de Qisu Tujin yu Shenli"(On Ways to Sue Administrative Adjudicaiton and the Trials), Remin Sifa (People's Judiciary), No. 10 (1994); see Ji Ya, "Guanyu Bufu Xingzheng Caijue de Fuyi yu Susong Wenti" (On Administrative Reconsideration of and Litigation Against Administrative Adjudication), Xingzheng Faxue Yanjiu 41 t h e w i d e r s e n s e , a d m i n i s t r a t i v e a d j u d i c a t i o n i s r e s p o n s i b l e f o r b o t h c i v i l a n d c o m m e r c i a l d i s p u t e s a n d a d m i n i s t r a t i v e d i s p u t e s . 8 5 I n t h e w i d e s t s e n s e , i m p o s i n g a d m i n i s t r a t i v e s a n c t i o n a n d r e m e d i e s i s a l s o i n c l u d e d i n t h e s c o p e o f a d m i n i s t r a t i v e a d j u d i c a t i o n . 8 6 G i v e n t h e n o n - u n i f o r m a n d c o m p l e x u s a g e o f t h i s c o n c e p t , t h i s t h e s i s a t t e m p t s t o s e e k a w o r k a b l e d e f i n i t i o n o f a d m i n i s t r a t i v e a d j u d i c a t i o n f o r t h e p u r p o s e o f t h i s t h e s i s b y e x p l o r i n g i t s c h a r a c t e r i s t i c s a s f o l l o w s : F i r s t , b y c o n t r a s t t o a b s t r a c t a d m i n i s t r a t i v e a c t , a d m i n i s t r a t i v e a d j u d i c a t i o n b e l o n g s t o s p e c i f i c a d m i n i s t r a t i v e a c t . I t a l s o m a k e s i t d i f f e r e n t f r o m a d m i n i s t r a t i v e m e d i a t i o n w h i c h i n n a t u r e i s n o n - a d m i n i s t r a t i v e b e h a v i o r a n d h a s n o b i n d i n g f o r c e . S e c o n d , a d m i n i s t r a t i v e a d j u d i c a t i o n i s a k i n d o f s p e c i a l a d m i n i s t r a t i v e a c t . U n l i k e t h e b i p a r t i t e a d m i n i s t r a t i v e r e l a t i o n s h i p e s t a b l i s h e d b e c a u s e t h e a d m i n i s t r a t i v e a g e n c i e s u n i l a t e r a l l y t a k e i n i t i a t i v e i n e x e r c i s i n g a d m i n i s t r a t i o n ( f o r a n e x a m p l e a d m i n i s t r a t i v e p e n a l t i e s ) , a d m i n i s t r a t i v e a d j u d i c a t i o n b u i l d s u p t r i p a r t i t e r e l a t i o n s h i p s i m i l a r t o a (Studies on Administrative Jurisprudence), No. 1 (1996); See Wang Lianchang et. al, Xingzheng Faxue (Science of Administrative Law) (Beijing: China University of Political Science and Law Press,1994), pp. 285; see Luo Haocai et. al, Xingzheng Faxue (Science of Administrative Law) (Beijing University Press, 1996), pp. 249. 8 5 See Long Qiang, "Chuyi Xingzheng Caijue Xingwei", Faxue and Shijian (Science of Law and Practice), No. 6 (1992); see Hu Jianmiao et. al, Xingzheng fa Jiaocheng (Administrative Jurisprudence) (Hangzhou: Hangzhou University Press, 1990), pp. 203. 86 See Ma Huaide, "On Administrative Adjudication" (Xingzheng quan Bianxi), Faxue Yanjiu (Studies on Law of Science), No. 6 (1990) 42 j u d i c i a l t r i a l . A d m i n i s t r a t i v e a g e n c i e s i n v o l v i n g d i s p u t e r e s o l u t i o n a r e c o m p a r a t i v e l y i n d e p e n d e n t f r o m t h e p a r t i e s t o t h e d i s p u t e s . T h i r d , t h e d i s p u t e s t h a t a r e r e s o l v e d t h r o u g h a d m i n i s t r a t i v e a d j u d i c a t i o n a r e l i m i t e d t o c i v i l a n d c o m m e r c i a l d i s p u t e s i n r e l a t i o n t o a d m i n i s t r a t i o n . P u r e l y c i v i l a n d c o m m e r c i a l d i s p u t e s a n d p u r e l y a d m i n i s t r a t i v e d i s p u t e s a r e n o t i n c l u d e d . F o u r t h , a d m i n i s t r a t i v e a d j u d i c a t i o n i s c o n d u c t e d b y t h e e x e r c i s e o f a d m i n i s t r a t i v e p o w e r a n d t h u s h a s d e t e r m i n a t i v e f o r c e , b i n d i n g f o r c e a n d e x e c u t i v e f o r c e , w h i c h a r e l a c k e d b y a d m i n i s t r a t i v e m e d i a t i o n . T h e r e f o r e , a d m i n i s t r a t i v e a d j u d i c a t i o n h e r e i n c a n b e d e f i n e d a s a k i n d o f s p e c i f i c a d m i n i s t r a t i v e a c t i v i t i e s t h r o u g h w h i c h a d m i n i s t r a t i v e o r g a n i z a t i o n s , b y l a w o r b a s e d o n a p p l i c a t i o n s o f t h e p a r t i e s , r e s o l v e c i v i l a n d c o m m e r c i a l d i s p u t e s i n r e l a t i o n t o a d m i n i s t r a t i o n . S u c h u n d e r s t a n d i n g i s t h e b a s i s f o r o u r d i s c u s s i o n . T h e m e a n i n g o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n (Xingzheng Fuyi) i s f a i r l y c l e a r . I t i s a s y s t e m t h r o u g h w h i c h a d m i n i s t r a t i v e d i s p u t e s b e t w e e n t h e p a r t y s u b j e c t t o a d m i n i s t r a t i o n a n d a d m i n i s t r a t i v e a g e n c i e s a r e r e s o l v e d w i t h i n t h e i n t e r i o r a d m i n i s t r a t i v e a g e n c i e s . 8 7 U n l i k e t h e a b o v e t h r e e w a y s , i t i s r e s p o n s i b l e f o r d e a l i n g w i t h t h e a d m i n i s t r a t i v e d i s p u t e s c a u s e d b y a d m i n i s t r a t i v e a c t s . P u r e c i v i l o r 87 See Luo Haocai (ed.), supra note 79, pp. 191. 43 c o m m e r c i a l d i s p u t e s a r e e x c l u d e d . I n t h e e v e n t t h a t t h e i n t e r e s t e d p a r t y r e f u s e s t o a c c e p t t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n d e c i s i o n , h e o r s h e m a y b r i n g a d m i n i s t r a t i v e l i t i g a t i o n . 3.2 Commercial Administrative Disputes: Administrative Reconsideration 8 8 I n s o c i a l e c o n o m i c l i f e , e c o n o m i c a c t o r s h a v e t o d e a l w i t h d i f f e r e n t a d m i n i s t r a t i v e a g e n c i e s i n m a n y a r e a s s u c h a s a p p l y i n g f o r b u s i n e s s l i c e n s e s , f o r v a r i o u s k i n d s o f r e g i s t r a t i o n l i k e c h a n g i n g a n d e n d i n g b u s i n e s s , r e p o r t i n g t a x , a n d u n d e r t a k i n g i m p o r t o r e x p o r t a n d s o o n . A p p l i c a t i o n f o r a p e r m i t m a y n o t b e i s s u e d ; r e g i s t r a t i o n m a y b e r e f u s e d ; a d m i n i s t r a t i v e p e n a l t i e s m a y b e i m p o s e d . A l l s u c h a d m i n i s t r a t i v e d e c i s i o n s m a y l e a d t o c o m p l a i n t s , w h i c h m a y b e h e a r d w i t h i n t h e i n t e r i o r a d m i n i s t r a t i v e o r g a n i z a t i o n s a p a r t f r o m t h e c o u r t s . W h e n t h e d i s p u t e s i n t h i s c a t e g o r y a r e b r o u g h t t o a d m i n i s t r a t i v e o r g a n i z a t i o n s f o r r e v i e w , i t i s w h a t w e c a l l e d a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . A c c o r d i n g t o Administrative Reconsideration Law of the PRC ( h e r e i n a f t e r " A R L " ) , t h e p a r t y c o n c e r n e d m a y s u b m i t t h e r e v i e w a p p l i c a t i o n t o t h e p e o p l e ' s g o v e r n m e n t a t t h e c o r r e s p o n d i n g l e v e l t o t h e a d m i n i s t r a t i v e a g e n c y a t i s s u e o r t h e a d m i n i s t r a t i v e 8 8 In China, although there is a debate as to whether the nature of administrative reconsideration is self-supervision or dispute resolution and remedy. This thesis thinks both of them are the characteristics of administrative reconsideration, whose ultimate aim is to secure the rights of the external parties to the administration by supervising the exercise of administrative power. More discussion about the nature of administrative reconsideration can be found in Zhang Chunsheng & Tong Weidong, "Woguo Xingzheng Fuyi Zhidu de Fazhan he Wanshan" (Improvement and Development of China's Administrative Reconsideration System), China's Science of Law (Zhongguo Faxue), No. 4 (1999) 44 d e p a r t m e n t i n c h a r g e a t t h e n e x t h i g h e r l e v e l . I f a d m i n i s t r a t i v e a c t a t i s s u e i s d o n e b y s o m e c e r t a i n a d m i n i s t r a t i v e o r g a n i z a t i o n s , t h e a d m i n i s t r a t i v e d e p a r t m e n t i n c h a r g e a t t h e n e x t h i g h e r l e v e l i s t h e r e v i e w o r g a n i z a t i o n . 8 9 N o m a t t e r w h i c h s p e c i f i c o r g a n i s r e s p o n s i b l e f o r r e c o n s i d e r i n g t h e a p p l i c a t i o n , a p p l i c a b l e l e g i s l a t i o n , p r o c e d u r e s a n d i n d e p e n d e n c e o f t h e r e c o n s i d e r a t i o n o r g a n s s h a l l b e a t l e a s t i n c o m p l i a n c e w i t h t h e c o n c e p t o f t r a n s p a r e n c y s p e l l e d o u t a s a b o v e . 3.2.1 Transparent Applicable Legislation W h a t r e v i e w o r g a n s r e l y o n t o r e c o n s i d e r t h e a d m i n i s t r a t i v e d e c i s i o n s l e a d i n g t o a d m i n i s t r a t i v e d i s p u t e s i s a b i g c o n c e r n . W h a t i s t h e l e g i s l a t i o n a p p l i e d b y a d m i n i s t r a t i v e r e v i e w o r g a n s ? A r e t h e y k n o w a b l e a n d a c c e s s i b l e t o t h e p a r t i e s s u b j e c t t o a d m i n i s t r a t i o n ? A r e t h e y u n i f o r m , c o n s i s t e n t a n d s t a b l e i n n a t u r e ? (a) Applicable Legislation It i s i n t e r e s t i n g t o s e e t h e l e g i s l a t i v e c h a n g e s i n t h i s r e g a r d b e t w e e n t h e p r e v i o u s Administrative Reconsideration Regulations 9 0 a n d t h e A R L . A r t i c l e 4 1 o f t h e f o r m e r s t a t e s t h a t t h e a d m i n i s t r a t i v e r e v i e w o r g a n s r e c o n s i d e r t h e c a s e s a c c o r d i n g s y ARL, Article 12: in the event that the applicant is not satisfied with the specific administrative acts conducted by administrative departments under local governments above the county level, the applicant may choose to apply to People's Government at the corresponding level or the administrative department in charge at the next higher level for review. In the event of administrative acts conducted by custom, finance, state revenue, foreign exchange administrative departments where vertical leadership is exercised, as well as state security organizations, the applicant shall apply to the administrative department in charge at the next higher level for review. 9 0 Zhonghua Renmin Gongheguo Xingzheng Fuyi fa (Administrative Reconsideration Regulations of the P.R.C), promulgated on 24 Dec 1990 and revised on 9 Oct 1994. It now has been replaced by ARL (1999) 45 t o l a w , a d m i n i s t r a t i v e r e g u l a t i o n s , l o c a l r e g u l a t i o n s , r u l e s a s w e l l as d e c i s i o n s a n d o r d e r s w i t h u n i v e r s a l b i n d i n g f o r c e m a d e b y a d m i n i s t r a t i v e o r g a n i z a t i o n s o f h i g h e r l e v e l s . T h e A R L a v o i d s s t i p u l a t i n g t h e a p p l i c a b l e l e g i s l a t i o n . 9 1 H o w e v e r , a p p l i c a t i o n o f l a w i s u n a v o i d a b l e i n p r a c t i c e . I n h a n d l i n g e a c h c a s e , t h e r e v i e w o r g a n s h a v e t o w o r k o u t t h i s p r o b l e m . A s i t i s k n o w n , t h e l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d l o c a l r e g u l a t i o n s w i l l b e a p p l i e d w i t h o u t q u e s t i o n . T h e k e y i s s u e h e r e i s t h e a p p l i c a b i l i t y o f r u l e s (Gui zhang) a n d n o r m a t i v e d o c u m e n t s (Guifanxing wenjiari) t o a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . D u e t o t h e f a c t t h a t t h e r u l e s a r e u s u a l l y m a d e b y t h e a d m i n i s t r a t i v e d e p a r t m e n t s h i g h e r t h a n t h e r e v i e w o r g a n s o r e v e n b y t h e r e v i e w o r g a n s t h e m s e l v e s , i t i s i m p o s s i b l e t h a t t h e r u l e s w i l l n o t b e a p p l i e d , o r a p p l i e d c o n d i t i o n a l l y o r a p p l i e d a f t e r t h e i r l e g a l i t y h a s b e e n c o n f i r m e d . T h e r e f o r e , t h e r u l e s w i l l b e a p p l i e d u n c o n d i t i o n a l l y . 92 L e g a l v a l i d i t y o f n o r m a t i v e d o c u m e n t s i s l o w e r t h a n t h a t o f t h e l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d r u l e s . N o m a t t e w h e t h e r n o r m a t i v e d o c u m e n t s f a l l w i t h i n t h e 9 1 However, application of law by review organs has been specified in local regulations. For instance, in Jiangsu Province, under the Detailed Rules for Administrative Reconsideration Procedures of Nanjing, (Nanjingshi Xingzheng Fuyi Ban'an Chengxu Shishi Xize), Ning Fu Fa [2003] No. 15, effective on 1 July 2 0 0 3 , article 27 states that officers in charge of administrative reconsideration make a thorough review on appropriateness and lawfulness of the specific administrative action according to law, regulations, rules and normative documents as well as relevant state policies. 9 2 In China, it is noted that rules are applied by court in hearing administrative cases as references, (see the discussion in Chapter IV) 46 c o n s t i t u t i o n a l l y r e c o g n i z e d c a t e g o r y o f l a w o r n o t , 9 3 p r a c t i c a l l y , t h e s e d o c u m e n t s a r e b i n d i n g o n o f f i c i a l s i n t h e s y s t e m w i t h i n w h i c h t h e y w e r e f o r m u l a t e d a n d t o w h o m t h e y a r e d i r e c t e d . T h e y a r e p r i m a r i l y w i t h i n t h e h i e r a r c h y o f a p a r t i c u l a r s t a t e o r g a n o r d e p a r t m e n t a s a m e a n s o f g i v i n g i n s t r u c t i o n s to l o c a l o f f i c i a l s o n t h e c o n t e n t a n d m a n n e r o f p e r f o r m i n g t h e i r f u n c t i o n s . T h e y a f f e c t r i g h t s a n d d u t i e s o f a c t o r s e x t e r n a l t o t h e a d m i n i s t r a t i v e s y s t e m to t h e e x t e n t t h a t t h e y d e f i n e t h e w a y s i n w h i c h t h e s a t e a g e n c i e s c a r r y o u t t h e i r w o r k a n d i m p l e m e n t l a w . C o n c e r n s a b o u t b o t h t h e p u b l i c a v a i l a b i l i t y o f l a w a n d c h a n g e a b i l i t y o f l e g a l r u l e s a r e o f t e n d i r e c t e d a t t h i s c a t e g o r y o f d o c u m e n t s . 9 4 S i n c e t h e y a r e u t i l i z e d t r e m e n d o u s l y b y a d m i n i s t r a t i v e o r g a n s , i t i s u n i m a g i n a b l e t h a t t h e r e v i e w o r g a n s w o u l d d i s r e g a r d t h i s r e a l i t y a n d r e f u s e t o a p p l y t h e m . O t h e r w i s e t h e w h o l e a d m i n i s t r a t i v e s y s t e m m a y n o t b e a b l e t o r u n p r o p e r l y . G i v e n t h e c h a o s a n d c o m p l e x i t y o f t h e s e n o n - l a w d o c u m e n t s , r e c o n s i d e r a t i o n o r g a n i z a t i o n s m a y t a k e t h e m c o n d i t i o n a l l y o r a s r e f e r e n c e s . I t m e a n s a p p l i c a t i o n o f t h e m i s u n a v o i d a b l e , a l t h o u g h h o w t o a p p l y a n d t o w h a t e x t e n t t h e y c a n b e a p p l i e d i s u n c e r t a i n . (b) Public Accessibility A s f o r l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d r u l e s , w h i c h a r e d e f i n e d a s n o r m a t i v e l y f o r m u l a t e d r u l e s u n d e r t h e C o n s t i t u t i o n o f t h e P R C , p u b l i c a t i o n i s 9 3 For a narrow view, see Zhou Wangsheng, Lifa Xue (The Study of Legislation) (Peking University Press, 1988), pp. 263-264; for a more inclusive definition of the types of document that constitute law, see Ying Songnian et. al, Xingzheng Xingweifa: Zhongguo Xingzheng Fazhi Jianshe Lilun yu Sijian (Administration Action of Law: Theory and Practice of the Construction of China's Administrative Legal System) (Beijing: People's Press, 1993), pp. 93. 9 4 See Sarah Biddulph, supra note 44, pp. 161. 47 r e g a r d e d a s a p a r t o f l e g i s l a t i v e p r o c e s s a n d a p r e r e q u i s i t e t o g o i n t o e f f e c t a c c o r d i n g to Legislation Law of the PRC. 95 Legislation Law of the PRC a l s o s t i p u l a t e s t h e f o r m s o f m a k i n g p u b l i c a t i o n a n d t h e s t a n d a r d t e x t . S o t h e p u b l i c a t i o n o f l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d r u l e s h a s b e e n g u a r a n t e e d b y l a w . W i t h r e s p e c t t o t h e d o c u m e n t s o f a d m i n i s t r a t i v e n o r m s , p u b l i c a t i o n i s a q u i t e c o m p l i c a t e d i s s u e i n C h i n a . A c c o r d i n g t o t h e C o n s t i t u t i o n a n d r e l e v a n t o r g a n i c l a w , b e s i d e s a d m i n i s t r a t i v e r e g u l a t i o n s a n d r u l e s , a d m i n i s t r a t i v e o r g a n i z a t i o n s a r e a l s o e n t i t l e d t o i s s u e a d m i n i s t r a t i v e d e c i s i o n s , d e c r e e s a n d g u i d a n c e w i t h u n i v e r s a l b i n d i n g f o r c e . T h e s e d o c u m e n t s a r e g r o u p e d t o g e t h e r u n d e r t h e h e a d i n g " n o r m a t i v e d o c u m e n t s " . H o w e v e r , Legislation Law of the PRC d o e s n o t d e a l w i t h t h e n o r m a t i v e d o c u m e n t s . T h e r e f o r e , t h e p u b l i c a t i o n o f t h e s e d o c u m e n t s i s o n l y b y w a y o f g e n e r a l a d m i n i s t r a t i v e p r o c e d u r e s . T h e o p e n n e s s t o t h e p u b i c i s n o t r e q u i r e d b y l a w b u t d e c i d e d b y c h i e f a d m i n i s t r a t i v e o f f i c e r s , d e p e n d i n g o n a c t u a l n e e d s . 9 6 T h i s c o n s t i t u t e s a t h r e a t a g a i n s t t h e i d e a l o f t r a n s p a r e n c y u n d e r t h e W T O . A m o n g t h e s e d o c u m e n t s o f a d m i n i s t r a t i v e n o r m s , t h e r e a r e n o r m a t i v e d o c u m e n t s w h i c h h a v e b e e n i s s u e d i n t e r n a l l y . T h e y a r e c a l l e d i n t e r n a l g u i d e l i n e s o r r e d l e t t e r ("Neibu Guiding", "Hongtou Wenjian"). T h i s c a t e g o r y o f d o c u m e n t s c o n c e r n s f i n a n c e , 9 5 Legislation Law of the PRC, passed on 15 March 2000 and came into effect on 1 July 2000. 9 6 See Tan Shigui & Wang Lin, "WTO zhong de Sifa Guize yu Woguo Sifa Gaige" (Judicial Rules under the WTO and Judicial Reforms of China), Hainan Daxue Xuebao Renwen Shehui Kexueban {Humanities & Social Sciences Journal of Hainan University), Vol. 20, No. 1 (March 2002); see Yu An, "WTO Xieding de Guonei Shishi Wenti" (Issues on Domestic Implementation of WTO Rules), Zhongguo Faxue (China's Science of Law), No. 3 (2000) 4 8 t a x , i n d u s t r y a n d c o m m e r c e , c r e d i t , m a t e r i a l , i m p o r t a n d e x p o r t , e t c . U n p u b l i c i z e d i n t e r n a l g u i d e l i n e s f o r a t i m e , c o n t i n u e d t o d e t e r m i n e t h e u l t i m a t e m e a n i n g o f p u b l i s h e d r e g u l a t i o n s . P r o b l e m s w i t h t r a n s p a r e n c y o f s u c h d o c u m e n t s h a v e b e e n t h e b a n e o f f o r e i g n i n v e s t o r s f o r y e a r s . B e f o r e a n d a r o u n d C h i n a ' s a c c e s s i o n t o t h e W T O , t h e s u b j e c t m e n t i o n e d a n d c r i t i c i z e d m o s t i n t h e a r t i c l e s o r w o r k s w r i t t e n b y f o r e i g n l e g a l s c h o l a r s i s a b o u t C h i n a ' s n o n - t r a n s p a r e n t l e g a l s y s t e m , e s p e c i a l l y t h e i n t e r n a l d o c u m e n t s . 9 8 I n t h e Fengxians Trade Ltd., t h e a d m i n i s t r a t i v e o r g a n m a i n t a i n e d t h e a d m i n i s t r a t i v e d e c i s i o n a t i s s u e p a r t l y b e c a u s e i t r e l i e d o n a n i n t e r n a l r e g u l a t i o n w h i c h w a s n o t o p e n t o t h e p u b l i c . 9 9 I n t h e Jin Man Ke Electric Ltd., t h e d e f e n d a n t , w h i c h w a s a p p l i e d t o b y t h e a p p l i c a n t f o r a d m i n i s t r a t i v e r e c o n s i d e r a t i o n o f t h e a d m i n i s t r a t i v e p e n a l t i e s d e c i s i o n i m p o s e d o n t h e a p p l i c a n t , c o n f i r m e d t h e d e c i s i o n a t i s s u e a l s o b a s e d o n t h e i n t e r n a l d o c u m e n t s . 1 0 0 S o , a l b e i t n o t e x p r e s s l y b y l a w , t h e r e v i e w o r g a n s r e f e r t o t h e s e d o c u m e n t s p r a c t i c a l l y , i t m e a n s i t m a y b e v e r y d i f f i c u l t f o r t h e e x t e r n a l p a r t i e s t o k n o w t h e s t r e n g t h o f t h e i r a p p l i c a t i o n s f o r r e c o n s i d e r a t i o n w i t h o u t o b t a i n i n g a c c e s s t o t h e p o t e n t i a l a p p l i c a b l e l e g i s l a t i o n . y / See Chen bin, "Shi Lun Waishang Touzi de Falv Tongyixing yu Toumingdu Wenti" (On Uniformity and Transparency of China's Foreign-capital Law), in Guangxi Shehui Kexue (Guangxi Social Sciences), Vol. 87, No. 3 (2002) 9 8 For scholars' complaints, see J. Burns & S. Rosen, General Introduction, in J.Burns & Rosen eds., Policy Conflicts in Post-Mao China 15 (1986); for complaints from members of the business community about "internal documents", see M. Moser, "Foreign Investment in China: The Legal Framework", in M. Moser (ed.), Foreign Trade, Investment, and The Law in the People's Republic of China (1987), p. 90, 96, 102. 9 9 See Appendix: Fengxiang Trade Ltd.. Shanghai v Salt Administrative Bureau, Shanghai (2002). 1 0 0 See Appendix : Jin Man Ke Electric Ltd. v State Revenue of Shenzhen (1997) 49 A l t h o u g h i t i s i m p o s s i b l e t o a b o l i s h t h e w e l l - e n t r e n c h e d m e c h a n i s m f o r t h e i n t e r n a l m a n a g e m e n t o f d e c i s i o n m a k i n g o v e r n i g h t , h o p e i s i n d e e d o n t h e h o r i z o n . I t i s e n c o u r a g i n g t o n o t e t h a t s o m e l o c a l g o v e r n m e n t s h a v e a d o p t e d s p e c i f i c m e a s u r e s t o s c a l e d o w n t h e u s e o f i n t e r n a l r e g u l a t i o n s . F o r i n s t a n c e , t h e S h a n g h a i m u n i c i p a l g o v e r n m e n t h a s d e c i d e d t o i s s u e " S h a n g h a i M u n i c i p a l P u b l i c A n n o u n c e m e n t s " t o t h e p u b l i c o n a c o m p l i m e n t a r y b a s i s v i a a p a p e r p u b l i c a t i o n a n d o n a w e b s i t e . T h i s p e r i o d i c a l u s e d t o b e r e s t r i c t e d t o i n t e r n a l c i r c u l a t i o n w i t h i n g o v e r n m e n t o f f i c e r s . 1 0 1 I n G u a n g d o n g P r o v i n c e , o n S e p t . 14, 2 0 0 0 , S h e n z h e n h a s d i s c l o s e d a l l r e g u l a t i o n s a n d p o l i c i e s u p f o r r e v i e w b y m u n i c i p a l g o v e r n m e n t a n d l e g a l a u t h o r i t i e s b e f o r e b e i n g i s s u e d . S h e n z h e n w i l l p h a s e o u t a l l o u t d a t e d — r e d l e t t e r — g o v e r n m e n t a l p o l i c i e s f r o m w i d e r c i r c u l a t i o n . T h e l i s t o f r e d l e t t e r d o c u m e n t s w i l l b e p u b l i s h e d o n s c h e d u l e a n d i n a t i m e l y f a s h i o n . T o e n h a n c e t r a n s p a r e n c y , a f t e r t h e r e d l e t t e r d o c u m e n t s a r e a n n u l l e d , a l l t h e r e m a i n i n g r e g u l a t i o n s w i l l b e p u b l i s h e d i n a g o v e r n m e n t p e r i o d i c a l . 1 0 2 O n 1 J a n u a r y 2 0 0 3 , t h e Regulations on Openness of Governmental Information of Guangzhou c a m e i n t o e f f e c t . I t i s t h e f i r s t l o c a l r e g u l a t i o n i n C h i n a a b o u t s e e k i n g t r a n s p a r e n c y i n g o v e r n m e n t a l a d m i n i s t r a t i o n . S o m e o f f i c e r s e v e n s t a t e d w i t h m o r e o p t i m i s t i c t o n e t h a t t h e p r i n c i p l e h a d b e e n c h a n g i n g f r o m d o i n g t h i n g s " a c c o r d i n g t o s u p e r i o r o r d e r s " t o " a c c o r d i n g t o t h e l a w " . 1 0 3 M o r e i m p o r t a n t l y , t h e A R L e n l a r g e s t h e s c o p e o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n , 1 0 1 See Zhongguo Qingnianbao (China Youth Daily), 5 December 2000, p.la. 1 0 2 See Beijing Qingnianbao (Beijing Youth Daily), on 22 September 2000, p. 36. 1 0 3 See Nanfang Zhoumo (Southern Weekend), 25 Oct. 2001, p. 6. 50 w h i c h n o w i n c l u d e s t h e a b s t r a c t a d m i n i s t r a t i v e a c t i o n . 1 0 4 I t m e a n s t h a t t h e r e d l e t t e r r e l i e d o n b y t h e a d m i n i s t r a t i v e a g e n c i e s c a n b e c h a l l e n g e d b y t h e e x t e r n a l p a r t i e s t o t h e a d m i n i s t r a t i o n . I n a s e n s e , t h e r e i s n o w a s u p e r v i s o r y m e c h a n i s m a t t h e h a n d s o f c o m m o n p e o p l e t o m a k e i n t e r n a l g u i d e l i n e s a n d r e d l e t t e r i n c o m p l i a n c e w i t h t h e l a w . (c) Certainty, uniformity, consistency and stability P u b l i c a c c e s s i b i l i t y o f a p p l i c a b l e l e g i s l a t i o n , h o w e v e r , i s o n l y o n e s i d e o f t h e i s s u e . C e r t a i n t y , u n i f o r m i t y , c o n s i s t e n c y a n d s t a b i l i t y o f l e g i s l a t i o n a r e a l s o r e q u i r e d b y t h e t r a n s p a r e n c y p r i n c i p l e . E m p h a s i s o f t h i s i s e s p e c i a l l y i m p o r t a n t f o r C h i n a , a c o u n t r y w i t h m u l t i - l a y e r e d l a w m a k i n g s y s t e m . A s a f o r e i g n s c h o l a r o b s e r v e s , 1 0 5 i n C h i n a , t h e q u e s t i o n a b o u t k n o w i n g w h a t t h e l a w i s a n d h o w i t w i l l b e e n f o r c e d i n v o l v e s m o r e t h a n m e r e l y t h e p r e s e n c e o r a b s e n c e o f m e c h a n i s m f o r p u b l i c a t i o n a n d c o n s u l t a t i o n . C r i t i c i s m s o f t h e C h i n e s e s y s t e m o f r u l e m a k i n g a r e n o t o n l y o f t h e f a i l u r e t o p u b l i s h a l l r e l e v a n t r u l e s a n d r e g u l a t i o n s b u t a l s o t h a t p u b l i c a t i o n o f c e n t r a l l e v e l l a w s a n d r u l e s d o e s n o t g i v e b u s i n e s s p e o p l e a n a c c u r a t e u n d e r s t a n d i n g o f t h e c o n t e n t o f t h e l e g a l r e g i m e w i t h w h i c h t h e y a r e o b l i g e d t o c o m p l y . S o m e u n c e r t a i n t y a b o u t w h a t t h e l a w i s i n p r a c t i c e s t e m s f r o m t h e s y s t e m i t s e l f r a t h e r t h a n s i m p l y f r o m a f a i l u r e t o p u b l i s h d o c u m e n t s . T h e l a n g u a g e a n d p h r a s i n g o f C h i n e s e l e g i s l a t i o n a n d r u l e s c r e a t e w i d e s c o p e f o r a d m i n i s t r a t i v e d i s c r e t i o n i n i n t e r p r e t a t i o n b e c a u s e a m a j o r g o a l o f C h i n e s e l e g i s l a t i v e 1 0 4 A R L , A r t i c l e 7. 1 0 5 See S a r a h B i d d u l p h , sup ra no te 4 4 , p p . 1 5 8 - 1 5 9 . 51 d r a f t i n g i s " f l e x i b i l i t y . " A s a r e s u l t , a t a l l l e v e l s C h i n e s e l e g i s l a t i o n i s i n t e n t i o n a l l y d r a f t e d i n " b r o a d , i n d e t e r m i n a t e l a n g u a g e , " w h i c h w i l l a l l o w a d m i n i s t r a t o r s t o v a r y t h e s p e c i f i c m e a n i n g o f l e g i s l a t i v e l a n g u a g e w i t h c i r c u m s t a n c e s . 1 0 6 S t a n d a r d d r a f t i n g t e c h n i q u e s i n c l u d e t h e u s e o f g e n e r a l p r i n c i p l e s , u n d e f i n e d t e r m s , b r o a d l y w o r d e d d i s c r e t i o n , o m i s s i o n s , a n d g e n e r a l c a t c h - a l l p h r a s e s . 1 0 7 A s l e g a l e x p e r t s o b s e r v e d , t h e p r o b l e m o f s e c u r i n g r e l i a b l e i n f o r m a t i o n h a s c r e a t e d 108 s e v e r e p r o b l e m s f o r e f f e c t i v e r e s o l u t i o n o f c o m m e r c i a l d i s p u t e s w i t h i n C h i n a . T h e p r o b l e m i s m u c h r e l a t e d w i t h C h i n a ' s h i e r a r c h i c a l l y o r g a n i z e d a n d m u l t i - t i e r e d l e g a l s y s t e m . I n C h i n a , t h e N a t i o n a l P e o p l e ' s C o n g r e s s c r e a t e s l a w s , t h e S t a t e C o u n c i l i s s u e s g u i d e l i n e s a n d r u l e s a n d e v e r y m i n i s t r y o r c o m m i s s i o n h a s i t s o w n r e g u l a t i o n s , n o t t o m e n t i o n r e g u l a t i o n s a n d r u l e s i s s u e d b y l o c a l g o v e r n m e n t s . T h e s e l a w s , r u l e s a n d r e g u l a t i o n s a r e p r o l i f i c , b o t h i n n u m b e r a n d c o n t e n t . P l u s , t h e r e a r e a l o t o f i m p l e m e n t i n g r e g u l a t i o n s , r u l e s , m e a s u r e s a n d i n s o m e s i t u a t i o n s , i n t e r p r e t a t i o n s m a d e b y t h e r e l e v a n t a d m i n i s t r a t i v e o r g a n s o r b y t h e S u p r e m e P e o p l e ' s C o u r t , w h i c h a r e p a r t i c u l a r i z a t i o n o f l e g i s l a t i o n a n d a r e i n d i s p e n s a b l e t o i m p l e m e n t t h e g e n e r a l t e r m s o f l a w s . I t i s , q u i t e n a t u r a l l y , n o t p o s s i b l e f o r a n y g i v e n e n t e r p r i s e t o k n o w I U b See Perry Keller, "Sources of Order in Chinese Law", 42 Am. J. Comp. L. 711, 734 (1994); Anthony Dicks, "Compartmentalized Law and Judicial Restraint: An Inductive View of Some Jurisdictional Barriers to Reform", in Stanley Lubman (ed.), China's Legal Reforms (1996), p.82, 99-103. See Stanley B. Lubman, Bird in a Cage: Chinese Law Reform After Twenty Years, 20 Nw. J. Int'lL. &Bus. (2000) 1 0 8 See Pitman B. Potter, riding the Tiger: Legitimacy and Legal Culture in Post-Mao China, The China Quarterly (June 1994); Mattew Bersani, The Enforcement of Foreign Arbitral Awards in China, 10 J, INT'L ARB. 47 (1993); Donald C, Clarke, Dispute Resolution in China, 5 J, ChineseL, 245 (1991). 52 e v e r y t h i n g a b o u t e v e r y l a w , r e g u l a t i o n a n d r u l e i n d e t a i l , e s p e c i a l l y u n d e r t h e c i r c u m s t a n c e t h a t a n a l l - a r o u n d i n f o r m a t i o n s y s t e m i s f a r f r o m b e i n g b u i l t u p i n C h i n a . O n t h e o t h e r h a n d , s u c h w i d e r a n g e o f s o u r c e s o f l a w i s n o t s e l f - h a r m o n i z e d . T a k e f o r e i g n - i n v e s t m e n t l a w a s a n e x a m p l e , t i m e l i m i t f o r e x a m i n a t i o n a n d a p p r o v a l i s r e s p e c t i v e l y 9 0 d a y s u n d e r t h e Law of PRC on Foreign-capital Enterprises, 1 0 9 t h r e e m o n t h s u n d e r t h e Law of the PRC on Chinese and Foreign Equity Joint Ventures, 110 a n d 4 5 d a y s u n d e r t h e Law of PRC on Chinese and Foreign Contractual Cooperative Enterprise. 1 1 1 B e s i d e s , a s f o r t h e s c o p e o f i n v e s t m e n t a n d n a t i o n a l i z a t i o n , t h e s t i p u l a t i o n s u n d e r t h e a b o v e l a w s a r e n o t h a r m o n i z e d . I n C h i n a , i t i s a s s u m e d t h a t p o l i c i e s w o u l d b e a p p l i e d e x p e r i m e n t a l l y w i t h P a r t y d e c i s i o n s d e t e r m i n i n g l o c a l v a r i a t i o n s . B e c a u s e o f l a c k o f e x p e r i e n c e a n d p o s s i b l e c o n s e n s u s a m o n g t h e r e l e v a n t d e p a r t m e n t s , i n t h e e a r l y 1 9 8 0 s m a n y l a w s a n d r u l e s w e r e d e s i g n a t e d " t e n t a t i v e " , " i n t e r i m " , " c o n t e m p o r a r y " o r " f o r t r i a l i m p l e m e n t a t i o n " . M a n y o f t h e m r e m a i n e d i n f o r c e u n c h a n g e d f o r m u c h l o n g e r t h a n o r i g i n a l l y i n t e n d e d . 112 S u c h t e n t a t i v e n e s s f u r t h e r l e a d s t o l e g a l u n c e r t a i n t y . T h e c o n t i n u e d r e l i a n c e o f C h i n e s e d e c i s i o n m a k e r s o n p o l i c y d i r e c t i v e s a n d m a k e s h i f t r e g u l a t i o n s t o i n t r o d u c e r e f o r m s c l e a r l y c o m p r o m i s e s a n y m o v e m e n t t o w a r d s a l e g i s l a t i v e m o d e l i n w h i c h t h e l u y Law of PRC on Foreign-capital Enterprises, effective on 31 Oct 2000, Article 6. 1 1 0 Law of the PRC on Chinese and Foreign Equity Joint Ventures, effective on 15 March 2001, Article 3 1 1 1 Law of PRC on Chinese and Foreign Contractual Cooperative Enterprise, effective on 31 Oct 2001,Article 5. 1 1 2 See Sarah Biddulph, supra note 44, pp. 165. 53 f o r m a l s o u r c e s o f l a w p r o v i d e a c o h e r e n t f o u n d a t i o n f o r i n t e r p r e t a t i o n a n d d o c t r i n a l e l a b o r a t i o n . 1 1 3 T h e s e p r o b l e m s s u g g e s t t h a t t h e m a k i n g a n d i n t e r p r e t a t i o n o f l a w s i n C h i n a i s m a r k e d b y d i s o r d e r a n d p o t e n t i a l f o r a r b i t r a r i n e s s . L a w m a k e r s e x e r c i s e p o w e r t o i n t e r p r e t r u l e s o f t h e i r o w n m a k i n g , w h i c h a r e c o u c h e d i n i n d e t e r m i n a t e l a n g u a g e . N o w o n d e r o n e w r i t e r c o n c l u d e s t h a t t h e d i s p a r a t e m a s s o f l a w s a n d r e g u l a t i o n s w h i c h m a k e s u p t h e f o r m a l w r i t t e n s o u r c e s o f C h i n e s e l a w d o e s n o t p o s s e s s s u f f i c i e n t u n i t y t o b e r e g a r d e d a s a c o h e r e n t b o d y o f l a w . I n t h e i r d i s a r r a y , t h e s o u r c e s o f C h i n e s e l a w s e e m b a r e l y c a p a b l e o f p r o v i d i n g t h e b a s i c p o i n t o f r e f e r e n c e w h i c h a l l c o m p l e x s y s t e m s o f , - 1 1 4 l a w r e q u i r e . 3.2.2 Procedural Fairness A d m i n i s t r a t i v e r e c o n s i d e r a t i o n i s r e g u l a t e d b y Administrative Reconsideration Law of the PRC ( A R L ) , w h i c h w a s p a s s e d o n 2 9 A p r i l 1 9 9 9 . I t r e p l a c e s t h e Administrative Reconsideration Regulations w h i c h c a m e i n t o e f f e c t f r o m 1 J a n u a r y 1 9 9 1 . T h e A R L e s t a b l i s h e s t h e p r i n c i p l e s o f c o n d u c t i n g a d m i n i s t r a t i v e r e c o n s i d e r a t i o n : l a w f u l n e s s , j u s t n e s s , o p e n n e s s , t i m e l i n e s s a n d c o n v e n i e n c e t o t h e a p p l i c a n t s . 1 1 5 T h e 1 1 3 See Perry Keller, "Sources of Order in Chinese Law", 42 Am. J. Comp. L. 711, 734 (1994), p.731; also see Lubman, supra note 106. 1 1 4 See Perry Keller, ibid, p.711; also see Lubman, supra note 107. 1 1 5 ARL, Article 4. 54 f o l l o w i n g i s a n e x a m i n a t i o n o f t o w h a t e x t e n t t h e A R L e m b o d i e s t h e s e p r i n c i p l e s a n d i s t r a n s p a r e n c y - o r i e n t e d . (a) Applicant-friendly Procedures C o m p a r e d w i t h t h e p r e v i o u s Administrative Regulation, t h e p r o c e d u r e s p r o v i d e d b y t h e A R L a r e m o r e a p p l i c a n t - f r i e n d l y . A s f o r j u r i s d i c t i o n , i n p r i n c i p l e , t h e a p p l i c a n t i s e n t i t l e d t o c h o o s e t h e r e v i e w o r g a n b e t w e e n t h e P e o p l e ' s g o v e r n m e n t a t t h e s a m e l e v e l a s t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r a n d t h e h i g h e r l e v e l a d m i n i s t r a t i v e d e p a r t m e n t . 1 1 6 T h a t t h e a p p l i c a n t m a y d e c i d e w h i c h o r g a n t o a p p l y f o r t h e r e v i e w , m a y c o n t r i b u t e t o c o u n t e r a c t i n g l o c a l i s m a n d p r o f e s s i o n a l i s m t o a c e r t a i n d e g r e e . M o r e o v e r , i n t h e e v e n t t h a t t h e a p p l i c a n t i s n o t s u r e a b o u t t h e r e v i e w o r g a n , h e m a y s u b m i t t h e a p p l i c a t i o n t o t h e P e o p l e ' s g o v e r n m e n t a t t h e c o u n t y l e v e l i n t h e s a m e r e g i o n w h e r e t h e s p e c i f i c a d m i n i s t r a t i v e a c t i o n a t i s s u e o c c u r s . T h e P e o p l e ' s g o v e r n m e n t a t t h e c o u n t y l e v e l i s r e s p o n s i b l e t o t r a n s m i t t h e a p p l i c a t i o n t o t h e r e l e v a n t a d m i n i s t r a t i v e o r g a n . 1 1 7 A s r e g a r d s t h e f o r m o f a p p l i c a t i o n , t h e a p p l i c a n t m a y e i t h e r a p p l y i n w r i t i n g o r o r a l l y . I n t h e e v e n t o f o r a l a p p l i c a t i o n , t h e r e v i e w o r g a n s h a l l , o n t h e s p o t , w r i t e d o w n t h e b a s i c s i t u a t i o n s o f t h e a p p l i c a n t , t h e c l a i m s , t h e f a c t s , t h e r e a s o n s a n d t h e t i m e . 1 1 8 1 1 6 ARL, Article 12. This article also provides exceptions. In respect of decisions at issue made inter alia by customs, finance departments, taxation authorities, foreign exchange control authorities and state securities agencies, the ARL excludes the jurisdiction of review organs established in local government. 1 1 7 ARL, Article 18. 1 1 8 ARL, Article 11. 55 I n c o n t r a s t t o t h e p r e v i o u s A d m i n i s t r a t i v e R e g u l a t i o n s w h i c h p r o v i d e s t h e a p p l i c a n t s h a l l a p p l y f o r r e v i e w w i t h i n 15 d a y s , t h e A R L e x t e n d s t h e p e r i o d t o 6 0 d a y s , a s o f t h e d a t e w h e n t h e a p p l i c a n t k n o w s t h e a d m i n i s t r a t i v e a c t i o n a t i s s u e . 1 1 9 A l o n g e r p e r i o d i s m o r e a d v a n t a g e o u s f o r t h e a p p l i c a n t s t o s e e k f o r r e m e d i e s t h r o u g h t h e r e c o n s i d e r a t i o n m e c h a n i s m . I n t h e m e a n t i m e , u n l i k e b e f o r e , t h e A R L c l e a r l y s t a t e s t h a t t h e a p p l i c a t i o n f o r a d m i n i s t r a t i v e r e v i e w i s f r e e o f c h a r g e . T h e e x p e n s e s a r e c o v e r e d b y t h e a d m i n i s t r a t i v e o u t l a y w h i c h s h a l l b e g u a r a n t e e d b y t h e f i n a n c e d e p a r t m e n t s a t t h e c o r r e s p o n d i n g l e v e l . 1 2 0 I t i s a l s o e n c o u r a g i n g t o s e e t h e A R L s p e c i f i e s t h e l e g a l r e s p o n s i b i l i t i e s o f t h e r e v i e w o r g a n i n a m u c h m o r e d e t a i l e d m a n n e r , 1 2 1 w h i c h a r e f o r c e f u l l e g a l w e a p o n s t o d r i v e t h e r e v i e w o r g a n s to d o t h e w o r k p r o p e r l y a c c o r d i n g to l a w . T h e r i g h t t o s u e e n t i t l e d b y t h e a g g r i e v e d p a r t i e s h a s b e e n f o r t i f i e d u n d e r t h e A R L . U n l i k e t h e p a s t , i t e x i s t s b e y o n d t h e s i t u a t i o n t h a t t h e a p p l i c a n t r e f u s e s t o a c c e p t t h e r e v i e w d e c i s i o n . I n t h e e v e n t t h a t t h e l a w o r r e g u l a t i o n s r e q u i r e t h e p r e p o s i t i o n o f r e c o n s i d e r a t i o n p r i o r t o a n a d m i n i s t r a t i v e s u i t a n d t h e r e v i e w o r g a n d i s m i s s e s t h e a p p l i c a t i o n o r f a i l s t o g i v e a r e v i e w w i t h i n t h e t i m e l i m i t , t h e a p p l i c a n t n o w i s e n t i t l e d 1 1 9 A R L , Article 9. 1 2 0 A R L , Article 3 9 . 1 2 1 A R L , Article 3 4 - 3 9 . 56 t o i n i t i a l i z e a n a d m i n i s t r a t i v e l i t i g a t i o n w i t h i n 15 d a y s f r o m t h e d a t e w h e n h e r e c e i v e s t h e d i s m i s s a l n o t i c e o f a p p l i c a t i o n o r f r o m t h e e x p i r y d a t e o f r e c o n s i d e r a t i o n . 1 2 2 P r o c e d u r a l r e q u i r e m e n t s a r e s t r e n g t h e n e d u n d e r t h e A R L , s o i s g r e a t e r o p e n n e s s . T h e A R L r e q u i r e s t h a t t h e r e a s o n s f o r d e c i s i o n s a t i s s u e m a d e b y t h e a d m i n i s t r a t i v e a g e n c y b e g i v e n . A p p l i c a b l e l e g i s l a t i o n , e v i d e n c e a n d o t h e r m a t e r i a l s s h a l l b e s h o w n a n d c a n b e l o o k e d u p b y t h e a g g r i e v e d p a r t y a n d a t h i r d p a r t y . 1 2 3 I n t h e c a s e o f Shitong Communication Equipment Ltd ( 1 9 9 9 ) , t h e G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u a c c e p t e d t h e c o m p l a i n t b r o u g h t b y t h r e e p r i v a t e p a r t i e s w h o a r g u e d t h a t t h e t h i r d p a r t y ' s a p p l i c a t i o n f o r c h a n g i n g t h e r e g i s t r a t i o n o f l e g a l p e r s o n a n d s t o c k r i g h t s w a s p r o b l e m a t i c b e c a u s e t h e s u p p o r t i v e m a t e r i a l s w e r e f o r g e d . A d e c i s i o n f o r t h e c o m p l a i n a n t s w a s m a d e b u t w a s l a t e r q u a s h e d b y t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r g a n w h i c h s e t o u t c o n v i n c i n g a n d q u i t e d e t a i l e d r e a s o n s . 1 2 4 I f t h e a d m i n i s t r a t i v e a g e n c y f a i l s t o s h o w t h e e v i d e n c e , t h e a p p l i c a b l e l e g i s l a t i o n a n d o t h e r r e l e v a n t m a t e r i a l s o n w h i c h t h e d e c i s i o n a t i s s u e b a s e s , i t i s d e e m e d t h a t t h e a d m i n i s t r a t i v e a c t i o n a t i s s u e l a c k s e v i d e n c e a n d l e g i s l a t i v e a u t h o r i t i e s a n d t h u s s h a l l b e q u a s h e d . 1 2 5 I n Mr. Wang Enwu ( 1 9 9 7 ) , t h e a d m i n i s t r a t i v e a g e n c y f a i l e d t o p r o v i d e t h e r e l e v a n t l e g i s l a t i v e a u t h o r i t i e s , t h e a p p l i c a b l e l a w , b e f o r e t h e f i r s t i n s t a n c e c o u r t t r i a l e n d e d . E v e n i f i t d i d p r o d u c e t h e a p p l i c a b l e l a w t o t h e c o u r t o f a p p e a l , i t w a s f o u n d t ha t t h i s a p p l i c a b l e l a w c o u l d n o t b e a d o p t e d a n d t h e 1 2 2 ARL, Article 19. 1 2 3 ARL, Article 23. 1 2 4 See Appendix: Shitong Communication Equipment Ltd. of Guangzhou v People's Government of Guangzhou (1999) 1 2 5 ARL, Article 28 (4). 57 d e c i s i o n a t i s s u e m a d e b y t h e a d m i n i s t r a t i v e a g e n c y l a c k e d n e c e s s a r y l e g i s l a t i v e s u p p o r t . 1 2 6 I n t e r m s o f e n f o r c e m e n t o f t h e r e c o n s i d e r a t i o n d e c i s i o n s , t h e A R L p r o v i d e s t h a t i n t h e e v e n t t h a t t h e a d m i n i s t r a t i v e a g e n c y f a i l s t o i m p l e m e n t t h e r e v i e w d e c i s i o n o r d e l a y t h e i m p l e m e n t a t i o n w i t h o u t d u e r e a s o n s , t h e r e v i e w o r g a n o r t h e h i g h e r l e v e l a d m i n i s t r a t i v e d e p a r t m e n t s h a l l o r d e r i t t o f u l f i l l t h e d u t i e s w i t h i n t h e r e q u i r e d p e r i o d . O t h e r w i s e , t h e d i r e c t l y r e s p o n s i b l e e x e c u t i v e a n d o t h e r p e r s o n n e l i n c h a r g e m a y b e s u b j e c t t o d i s c i p l i n a r y s a n c t i o n . (b) Implications for the future A d m i t t e d l y , m u c h p r o g r e s s h a s b e e n m a d e b y t h e A R L . Y e t i t d o e s h a v e s o m e d i s t a n c e t o g o t o m a k e p r o c e d u r e s m o r e t r a n s p a r e n t a n d f a i r . (i) Reconsideration on documents, hearing and cross-examination T h e A R L p r o v i d e s t h a t r e c o n s i d e r a t i o n i s t o t a k e p l a c e b a s e d o n t h e d o c u m e n t s u n l e s s o t h e r w i s e r e q u e s t e d b y t h e a p p l i c a n t o r t h e r e c o n s i d e r a t i o n a g e n c y c o n s i d e r s i t n e c e s s a r y i n w h i c h c a s e a n i n v e s t i g a t i o n m a y b e c a r r i e d o u t a n d t h e o p i n i o n s o f t h e a p p l i c a n t , t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r a n d a t h i r d p a r t y m a y b e t a k e n . 1 2 9 See A p p e n d i x : Mr. Wans Enwu v People's Government. Heping District, Tianjin ( 1 9 9 7 ) . A R L , A r t i c l e 3 2 . A R L , A r t i c l e 3 7 . A R L , A r t i c l e 2 2 . 58 I n p r i n c i p l e , r e c o n s i d e r a t i o n i s c o n d u c t e d o n d o c u m e n t s . I t i s i n a c l o s e d s e s s i o n a n d t h u s n o n - t r a n s p a r e n t . W i t h o u t p a r t i c i p a t i o n o f t h e p a r t i e s , i t i s e a s y f o r t h e r e v i e w o f f i c e r s t o b e s u b j e c t i v e a n d b i a s e d . A l t h o u g h t h e a p p l i c a n t i s e n t i t l e d t o a p p l y f o r t h e o p i n i o n s t o b e h e a r d , i t i s n o t e d t ha t t h e r e v i e w a g e n c y may, n o t ought to, h e a r t h e o p i n i o n s . I t i m p l i e s t h a t t h e r e v i e w o r g a n r e t a i n s t h e right t o r e f u s e t h e a p p l i c a n t ' s r e q u e s t . B e s i d e s , t h e p r o v i s i o n o n l y s a y s t h e r e v i e w o r g a n m a y t a k e t h e o p i n i o n s . B u t h o w t o t a k e t h e o p i n i o n s i s u n k n o w n . A l s o , t h e r e v i e w a g e n c y i t s e l f m a y f i n d i t n e c e s s a r y t o h e a r t h e o p i n i o n s o f t h e p a r t i e s c o n c e r n e d ; b u t t h e A R L f a i l s t o s a y u n d e r w h i c h k i n d o f c i r c u m s t a n c e t h e r e v i e w a g e n c y m a y t h i n k i t n e c e s s a r y t o d o s o . I n t h i s s e n s e , t h i s p r o v i s i o n i s t o o r o u g h a n d i s i m p r a c t i c a b l e . 1 3 0 I n c o n t r a s t t o t h e g e n e r a l t e r m s o f t h e A R L , l o c a l r e g u l a t i o n s i n t h i s r e g a r d a p p e a r m o r e p a r t i c u l a r i z e d . S i n c e t h e A R L w e n t t o e f f e c t , m a n y l o c a l r e g u l a t i o n s c o n c e r n i n g h o w to h a n d l e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n c a s e s h a v e b e e n i s s u e d . S o m e e v e n g o f u r t h e r t h a n t h e A R L i n t e r m s o f f a i r n e s s a n d g r e a t e r t r a n s p a r e n c y i n t h e r e v i e w p r o c e s s . F o r i n s t a n c e , u n d e r t h e Measures of the Customs of the PRC for Implementation of Administrative Reconsideration Law ( e f f e c t i v e o n 1 O c t 1999), i t s e t s o u t f i v e k i n d s o f s i t u a t i o n s u n d e r w h i c h t h e o p i n i o n s m a y b e h e a r d b y t h e r e v i e w o r g a n . T h e y i n c l u d e : t h e a p p l i c a n t a p p l i e s t o b e h e a r d a n d t h e r e v i e w o r g a n c o n s e n t s ; t h e d i s p u t e o v e r t h e f a c t s b e t w e e n t h e a p p l i c a n t a n d t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r 1 3 0 China started to legalize the hearing system in Administrative Penalty Law of the PRC (promulgated on 17 March 1996), under which, the model of hearing procedure has subsequently been adopted in other legislation, such as the Pricing Law of the PRC which was passed in 1997. 59 i s s e r i o u s ; t h e a p p l i c a n t a p p l i e s t o b e h e a r d a n d t h e r e v i e w o r g a n c o n s e n t s ; t h e a p p l i c a n t d i s s e n t s t h e l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d a d m i n i s t r a t i v e n o r m s a p p l i c a b l e t o t h e a d m i n i s t r a t i v e a c t a t i s s u e ; t h e c a s e i s s i g n i f i c a n t , c o m p l e x , d i f f i c u l t o r t h e o b j e c t o f d i s p u t e i s h i g h l y v a l u a b l e a n d t h e r e v i e w o r g a n c o n s i d e r s i t n e c e s s a r y . 131 C r o s s - e x a m i n a t i o n a n d d e b a t e a r e p r o c e d u r a l l y i m p o r t a n t f o r r e s o l v i n g d i s p u t e s . B u t u n d e r t h e A R L , t h e r e a r e n o s u c h s t i p u l a t i o n s t o e n t i t l e t h e a p p l i c a n t w i t h t h e s e rights. A g a i n , t h e l o c a l r e g u l a t i o n s a r e m o r e d e v e l o p e d . T h e y s t i p u l a t e m o r e d e t a i l e d r e v i e w p r o c e d u r e s , w h i c h a r e m o r e e a s i l y t o b e i m p l e m e n t e d . T a k e J i a n g s u p r o v i n c e a s a n e x a m p l e , i t s c a p i t a l c i t y , N a n j i n g , p a s s e d Detailed Rules for Administrative Reconsideration Procedures ( e f f e c t i v e o n 1 O c t . 1 9 9 9 ) , w h i c h p r o v i d e s t h a t a d m i n i s t r a t i v e r e c o n s i d e r a t i o n i s t o t a k e p l a c e o n t h e d o c u m e n t s i n p r i n c i p l e ; b u t i f t h e c a s e i s t o o c o m p l e x a n d t o o i m p o r t a n t , t h e a p p l i c a n t a n d t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r m a y a p p l y f o r f a c e t o f a c e c r o s s - e x a m i n a t i o n , a n d t h e o f f i c e r s i n c h a r g e , s u b j e c t t o t h e c o n s e n t o f t h e c h i e f a n d t h e d i r e c t o r o f r e c o n s i d e r a t i o n o r g a n , '"" Measures of the Customs of the PRC for Implementation of Administrative Reconsideration Law, effective on 1 Oct 1999, article 25 states: administrative reconsideration is to take place on the documents. But under any of below circumstances, the review organ may collect opinions from the applicant, the administrative decision maker and the third party: (1) the applicant applies for being heard and the review organ consents (2) the dispute over the facts between the applicant and the administrative decision maker is serious (3) the applicant dissents the law, administrative regulations and administrative norms applicable for the administrative action at issue (4) the case is significant, complex, difficult or the object of dispute is highly valuable. The review organ considers it necessary. 60 m a y h o l d a d m i n i s t r a t i v e r e c o n s i d e r a t i o n h e a r i n g . ' 3 2 S i m i l a r p r o v i s i o n i s a l s o f o u n d u n d e r t h e Measures of the Customs of the PRC for Implementation of Administrative Reconsideration Law w h e r e d e t a i l e d p r o c e d u r e s o f h o l d i n g a h e a r i n g a r e a l s o 133 p r o v i d e d . (ii) Challenge System T h e r e i s a n o t h e r d r a w b a c k o f c u r r e n t A R L a s r e g a r d s t h e r e v i e w p r o c e s s . T h e r e i s l a c k o f s t i p u l a t i o n o f h o w t o o r g a n i z e t h e r e v i e w a g e n c y . I f t h e p a r t y c o n c e r n e d t h i n k s t h a t t h e o f f i c e r s i n c h a r g e o f t h e r e v i e w h a v e i n t e r e s t e d r e l a t i o n s h i p w i t h t h e c a s e , w h e t h e r o r n o t a c h a l l e n g e c a n b e s u b m i t t e d i s n o t p r o v i d e d u n d e r t h e A R L . T h e l i m i t a t i o n s , h o w e v e r , a r e r e m e d i e d b y s o m e r u l e s o f a d m i n i s t r a t i v e m i n i s t r i e s a n d c o m m i s s i o n s . T h e Measures of China Insurance Regulatory Commission for Administrative Considerations ( e f f e c t i v e o n 5 J u l y 2 0 0 1 ) , f o r a n e x a m p l e , c l e a r l y p r e s c r i b e s t h e c h a l l e n g e s y s t e m . 1 3 4 T h e Measures of the Customs Detailed Rules for Administrative Reconsideration Procedures of Nanjing, (Nanjingshi Xingzheng Fuyi Ban'an Chengxu Shishi Xize), Ning Fu Fa [2003] No. 15, effective on 1 July 2003, Article 45 reads: administrative reconsideration is to take place on the documents in principle. However, as for complex and big cases, at the request by the applicant and the administrative decision maker application for face to face cross-examination, officers in charge, subject to the consent of the chief and the director of review organ, may hold administrative reconsideration hearing. 1 3 3 Measures of the Customs of the PRC for Implementation of Administrative Reconsideration Law, Article 26, 27. 1 3 4 Measures of China Insurance Regulatory Commission for Administrative Considerations, passed and effective on 5 July 2001, Article 24 states: the applicant, the third party or the administrative decision maker, who considers that the staff members or the officers in charge of the review have interested relationship with the case or other relationship which may affect the justness of review, shall be entitled to apply for challenge. The staff members and the officers think they have interested relationship with the case shall withdraw voluntarily. The challenge to 61 of the PRC for Implementation of Administrative Reconsideration Law a l s o d e s i g n s t h e s a m e c h a l l e n g e s y s t e m . 1 3 5 (iii) Right to Look up Case Materials T h e A R L p r o v i d e s t h a t t h e a p p l i c a n t a n d t h e t h i r d p a r t y m a y l o o k u p t h e w r i t t e n r e s p o n s e m a d e b y t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r , a n d t h e e v i d e n c e , t h e l e g i s l a t i o n a n d o t h e r r e l e v a n t m a t e r i a l s a p p l i e d b y t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r . T h e r e v i e w o r g a n c a n n o t r e f u s e u n l e s s t h e m a t e r i a l s c o n t a i n s t a t e s e c r e t s , b u s i n e s s s e c r e t s o r i n d i v i d u a l p r i v a c y . 1 3 6 H o w e v e r , h o w a b o u t t h e l e g a l p r o x y a n d a u t h o r i z e d 137 p r o x y , s i n c e t h e y a r e a l s o e n t i t l e d t o a p p l y f o r a d m i n i s t r a t i v e r e c o n s i d e r a t i o n ? A l s o , w h a t i s t h e m e a n i n g o f " l o o k u p " ? I n p r a c t i c e , w h e n t h e a g g r i e v e d p a r t i e s a p p l y f o r a d m i n i s t r a t i v e r e v i e w , t h e y a r e n o t a l l o w e d t o p h o t o c o p y t h e r e s p o n s e a n d e v i d e n c e p r o v i d e d b y t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r s . I t i s a l l e g e d t h a t n o c o p y i n g 138 b u t o n l y r e a d i n g a n d w r i t i n g d o w n i s p e r m i t t e d . 3.2.3 Independence of administrative reconsideration organs T h e r e v i e w o r g a n s , a c c o r d i n g t o t h e A R L , a r e t h e P e o p l e ' s g o v e r n m e n t a t t h e s a m e l e v e l a s t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r a n d t h e h i g h e r l e v e l staff members of review is decided by the chief officer for review. The challenge to the chief officer for review is decided by the principle of review organ. 1 3 5 Measures of the Customs of the PRC for Implementation of Administrative Reconsideration Law, Article 31. 1 3 6 ARL, Article 23. 1 3 7 ARL, Article 10. 1 3 8 See Beijing Chenbao (Beijing Morning), 30 Nov. 2001 (Real Estate Weekly). 62 a d m i n i s t r a t i v e d e p a r t m e n t . ' J y B u t i n r e s p e c t o f d e c i s i o n s a t i s s u e m a d e inter alia b y c u s t o m s , f i n a n c e d e p a r t m e n t s , t a x a t i o n a u t h o r i t i e s , f o r e i g n e x c h a n g e c o n t r o l a u t h o r i t i e s a n d s t a t e s e c u r i t i e s a g e n c i e s , t h e A R L e x c l u d e s t h e j u r i s d i c t i o n o f r e v i e w o r g a n s e s t a b l i s h e d i n l o c a l g o v e r n m e n t . 1 4 0 T h e D r a f t P r o t o c o l c u r r e n t l y d e m a n d s t h a t t r i b u n a l s f o r o v e r s i g h t o f a d m i n i s t r a t i v e d e c i s i o n m a k i n g b e i n d e p e n d e n t o f t h e d e c i s i o n m a k e r . A d m i n i s t r a t i v e r e c o n s i d e r a t i o n i s a n i m p o r t a n t a n d w i d e l y u s e d w a y to r e v i e w d i s p u t e d a d m i n i s t r a t i v e d e c i s i o n s i n C h i n a . A c c o r d i n g l y , t h e r e v i e w o r g a n s a r e r e q u i r e d t o b e i n d e p e n d e n t f r o m t h e a d m i n i s t r a t i v e a g e n c y w h o s e d e c i s i o n s l e a d t o t h e a g g r i e v e d p a r t i e s ' c o m p l a i n t s . T h e A R L i s c l a i m e d t o h a v e e s t a b l i s h e d a n i n d e p e n d e n t a d m i n i s t r a t i v e r e c o n s i d e r a t i o n m e c h a n i s m i n C h i n a w h i c h i s n o t m e r e l y d e s i g n e d t o i n s t i t u t i o n a l l y a c c o m p a n y t h e a d m i n i s t r a t i v e l i t i g a t i o n s y s t e m . 1 4 1 H o w e v e r , i t m a y n o t b e e x a c t l y t h e r e a l i t y . U n d e r t h e A R L , P e o p l e ' s g o v e r n m e n t a t t h e s a m e l e v e l a n d h i g h e r l e v e l a d m i n i s t r a t i v e o r g a n s a r e t h e r e v i e w o r g a n s b u t i t i s s i l e n t a s t o h o w t o o r g a n i z e t h e 1 3 9 In China, generally, it is administrative departments that are entitled to make administrative reconsideration. But in reality, there are some government-sponsored institutions directly affiliated to the State Council, like China Securities Regulatory Commission (CSRC) and China Insurance Regulatory Commission (CIRC). Although they are not administrative departments in nature, they are granted with administrative power and functions. Administrative reconsideration is one of functions they are entitled to exercise. 1 4 0 ARL, Article 12. See Yu An, "Several Basic Questions about China's Administrative Reconsideration Law," Fazhi Ribao (Legal Daily), 6 May 1999, p.7. 63 c o n c r e t e r e v i e w i n s t i t u t i o n . I n p r a c t i c e , a s f o r t h e r e v i e w i n s t i t u t i o n s o f P e o p l e ' s G o v e r n m e n t , t h e r e a r e u s u a l l y f o u r k i n d s o f s i t u a t i o n s : f i r s t , se t u p a d m i n i s t r a t i v e r e c o n s i d e r a t i o n d i v i s i o n ( s e c t i o n ) , w h i c h i s s u b s t i t u t e d b y t h e O f f i c e o f L e g a l i t y A f f a i r s o f G o v e r n m e n t ; s e c o n d , se t u p i m p e r m a n e n t a d m i n i s t r a t i v e r e c o n s i d e r a t i o n c o m m i s s i o n u n d e r t h e G o v e r n m e n t a n d i t s w o r k i n g b o d y i s w i t h i n t h e O f f i c e o f L e g a l i t y A f f a i r s o f G o v e r n m e n t ; t h i r d , se t u p a d m i n i s t r a t i v e r e c o n s i d e r a t i o n d i v i s i o n ( s e c t i o n ) w i t h i n t h e w o r k i n g b o d i e s o f t h e G o v e r n m e n t ; f o u r t h , s e t u p a d m i n i s t r a t i v e r e c o n s i d e r a t i o n d i v i s i o n ( s e c t i o n ) w i t h i n t h e O f f i c e o f L e g a l i t y A f f a i r s o f G o v e r n m e n t . T h e f o u r t h k i n d i s t h e m o s t c o m m o n o n e . A s f o r t h e r e v i e w i n s t i t u t i o n s o f d e p a r t m e n t , t h e f o r m s a r e g e n e r a l l y t h r e e k i n d s : f i r s t , se t u p a d m i n i s t r a t i v e r e c o n s i d e r a t i o n d i v i s i o n ( s e c t i o n ) w i t h i n t h e O f f i c e o f L e g a l i t y A f f a i r s o f d e p a r t m e n t ; s e c o n d , se t u p i m p e r m a n e n t a d m i n i s t r a t i v e r e c o n s i d e r a t i o n c o m m i s s i o n , w h o s e w o r k i n g b o d y i s u n d e r t h e O f f i c e o f L e g a l i t y A f f a i r s o f d e p a r t m e n t ; t h i r d , se t u p p e r m a n e n t a d m i n i s t r a t i v e r e c o n s i d e r a t i o n c o m m i s s i o n , w h o s e d i r e c t o r i s t h e p r i n c i p l e o f d e p a r t m e n t ( e . g . , t h e t r a d e m a r k r e v i e w b o a r d a n d t h e p a t e n t r e v i e w b o a r d ) . 1 4 2 T h e i n d e p e n d e n c e o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n , t h e r e f o r e , d e p e n d s o n t h e i n d e p e n d e n c e o f t h e r e v i e w o r g a n a n d t h e r e v i e w i n s t i t u t i o n . 1 4 2 See He Jun, "Xingzheng Fuyi: Zhengzai Weisuo de Zhidu" (Administrative Reconsideration: A Depauperate System), Jingji Guancha bao (The Economic Observer), 13 Oct. 2003. 64 I t c a n b e s e e n f r o m t h e a b o v e m o d e l s o f e s t a b l i s h i n g t h e r e v i e w i n s t i t u t i o n s t h a t , i n e s s e n c e , t h e r e v i e w i n s t i t u t i o n i s o n e o f w o r k i n g b o d i e s o f P e o p l e ' s G o v e r n m e n t s a t v a r i o u s l e v e l s a n d o f d i f f e r e n t d e p a r t m e n t s . I t s h o u l d , s u b j e c t t o t h e a u t h o r i z a t i o n o f t h e c h i e f a d m i n i s t r a t i v e o f f i c e r , h a n d l e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n w i t h i n t h e l e g a l c o m p e t e n c e o f t h e r e v i e w o r g a n . W h e n t h e r e v i e w i n s t i t u t i o n m a k e s t h e d e c i s i o n s c o n c e r n i n g t h e r i g h t s a n d o b l i g a t i o n s o f t h e r e v i e w o r g a n , l i k e d i s m i s s a l o f t h e a p p l i c a t i o n , d e c i s i o n s o f r e v i e w , c o n s e n t f r o m t h e p r i n c i p l e o f r e v i e w o r g a n s h o u l d b e o b t a i n e d . T h e r e v i e w i n s t i t u t i o n i s e n t i t l e d t o m a k e t h e d e c i s i o n s c o n c e r n i n g t h e p r o c e d u r a l i s s u e s i n s t e a d o f t h e s u b s t a n t i v e i s s u e s , l i k e a c c e p t i n g t h e a p p l i c a t i o n a n d c o n d u c t i n g t h e i n v e s t i g a t i o n , a n d a d v a n c e t h e p r e l i m i n a r y o p i n i o n s o n t h e c a s e . T h e r e v i e w i n s t i t u t i o n , f r o m a n y r e s p e c t , h a s n o d e c i s i v e p o w e r a n d i s n o t a n i n d e p e n d e n t b o d y b u t a b o d y t a k i n g o r d e r s f r o m t h e c h i e f a d m i n i s t r a t i v e p r i n c i p l e o f t h e r e v i e w 143 o r g a n . A s r e g a r d s t h e r e v i e w o r g a n , i t s e e m s r e l a t i v e l y i n d e p e n d e n t , c o m p a r e d w i t h t h e r e v i e w i n s t i t u t i o n . H o w e v e r , g o v e r n m e n t s a r e a f f e c t e d b y n o t o r i o u s l o c a l i s m . T h e y c a n n o t r e m o v e t h e t e n d e n c y t o p r o t e c t l o c a l i n t e r e s t s w h e n r e v i e w i n g t h e c a s e s . T h e h i g h e r l e v e l a d m i n i s t r a t i v e d e p a r t m e n t s a r e i n t h e s i m i l a r v e i n o r e v e n w o r s e t o t h e e x t e n t t h a t t h e y a r e t h e d e p a r t m e n t s i n c h a r g e o f t h e a d m i n i s t r a t i v e d e c i s i o n m a k e r a n d t h u s b y t h e m s e l v e s n o n - i n d e p e n d e n t . W h a t ' s m o r e , t h e a d m i n i s t r a t i v e d e c i s i o n a t 1 4 3 See Ying Songnian & Yuan Hongshu, "Zouxiang Zhengfu Fazhi" (Taking to Rule of Government) (Beijing: Chinese Law Press, 2001), pp. 299. 65 i s s u e i s u s u a l l y m a d e a c c o r d i n g to t h e n o r m a t i v e d o c u m e n t s e n a c t e d b y t h e h i g h e r l e v e l a d m i n i s t r a t i v e d e p a r t m e n t s . T h e y a r e t h e j u d g e s o f t h e m s e l v e s , u n a v o i d a b l y t a k i n g i n t o a c c o u n t t h e d e p a r t m e n t a l i n t e r e s t s . T h u s , a d m i n i s t r a t i v e r e c o n s i d e r a t i o n c o n d u c t e d b y b o t h k i n d s o f r e v i e w o r g a n s i s t o s e e k a b a l a n c e a n d c o m p r o m i s e b e t w e e n g o v e r n m e n t o r d e p a r t m e n t a n d t h e a p p l i c a n t s . 1 4 4 I t i s h a r d l y h o p e f u l t h a t t h e r e v i e w o r g a n s m a y m a k e t h e r e v i e w d e c i s i o n s i n t h e i n t e r e s t o f t r a n s p a r e n c y , f a i r n e s s a n d j u s t n e s s . L a c k o f i n d e p e n d e n c e l e a d s to p e o p l e ' s l a c k o f c o n f i d e n c e i n a d m i n i s t r a t i v e r e c o n s i d e r a t i o n a n d h a s b e c o m e a b i g h i n d r a n c e f o r p e o p l e t o s e e k r e m e d i e s t h r o u g h t h i s m e c h a n i s m . 1 4 5 I t i s r e p o r t e d t h a t t h e n u m b e r o f c a s e s o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n w e r e i n c r e a s e d a f t e r t h e Administrative Reconsideration Law t o o k e f f e c t i v e i n 1999. I n 2001, t h e n u m b e r o f c a s e s w a s o v e r 80,000 w h i c h w a s t h e h i s t o r i c a l p e a k p o i n t . S i n c e t h e n , t h e n u m b e r h a s b e e n g o i n g d o w n a n d w a s e v e n d e c l i n i n g i n s o m e a r e a s a n d d e p a r t m e n t s . 1 4 6 T h e f a c t t h a t a n a p p a r e n t l y i n d e p e n d e n t t h i r d p a r t y c a n b e c a l l e d u p o n t o c o r r e c t m i s t a k e s a n d r e m e d y a b u s e s o f p o w e r h e l p s to l e g i t i m a t e g o v e r n m e n t a c t i o n b y r e a s s u r i n g c i t i z e n s . 1 4 7 T h e b o d y to a c c e p t t h e a p p l i c a t i o n f o r a d m i n i s t r a t i v e r e v i e w 144 Fazhi Ribao {Legal Daily), 2 6 Sep t 2 0 0 3 . 1 4 5 See Jingji Guancha bao (The Economic Observer), 13 O c t , 2 0 0 3 . 146 Fazhi Ribao (Legal Daily), 2 5 Sep t 2 0 0 3 , p. 9 1 4 7 S e e A n d r e w L e Sueur , J a v a n H e r b e r g & R o s a l i n d E n g l i s h , Principles of Public Law, ( C a v e n d i s h , 1999) 66 o f a n a d m i n i s t r a t i v e d i s p u t e s h o u l d b e n e u t r a l a n d i n d e p e n d e n t . O t h e r w i s e , i t w o u l d b e v e r y d i f f i c u l t to b r i n g t h e i n s t i t u t i o n a l f u n c t i o n s o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n m e c h a n i s m i n t o p l a y . F o r t u n a t e l y , t h e s i g n i f i c a n c e o f e s t a b l i s h i n g t h e c o m p a r a t i v e l y i n d e p e n d e n t r e v i e w i n s t i t u t i o n s w i t h o u t t h e i n t e r f e r e n c e o f l o c a l i s m a n d d e p a r t m e n t a l p r o t e c t i o n i s m h a s b e e n i n c r e a s i n g l y a c k n o w l e d g e d i n m o d e r n C h i n a . 1 4 8 B u t g i v e n c o n t a g i o u s b u r e a u c r a t i c p o l i t i c s i n C h i n a ' s c o n t e x t , t h e e s s e n c e o f t h e i s s u e s i s m o r e i n s t i t u t i o n a l a n d c u l t u r a l r a t h e r t h a n j u s t f u n c t i o n a l o r l e g a l . 1 4 9 A c c o r d i n g l y , i t i s e x p e c t e d t h a t t h e c o r r e s p o n d i n g i m p r o v e m e n t s h a l l n o t b e l i m i t e d t o t h e l e g a l r e g i m e b u t e x t e n d to i n s t i t u t i o n a l s e t u p a n d c u l t u r a l s e t t i n g . ( F o r d e t a i l e d d i s c u s s i o n , s e e c h a p t e r V ) 3.3 Commercial Disputes: Administrative Adjudication A d m i n i s t r a t i v e a d j u d i c a t i o n h a s b e e n l o n g s t a n d i n g i n w e s t e r n c o u n t r i e s w h e r e d e s p i t e o f t h e i m p l e m e n t a t i o n o f c h e c k a n d b a l a n c e s y s t e m s , a d m i n i s t r a t i v e a g e n c i e s a r e e n t i t l e d t o e x e r c i s e a d j u d i c a t i v e f u n c t i o n s a n d r e s o l v e c e r t a i n d i s p u t e s , l i k e t h e a d m i n i s t r a t i v e t r i b u n a l s i n t h e U K a n d C a n a d a , t h e a d m i n i s t r a t i v e c o u r t s i n F r a n c e , s o m e a d m i n i s t r a t i v e a g e n c i e s i n t h e U S , e t c . I t i s n o t o n l y b e c a u s e e x t r e m e l y c l e a r s e p a r a t i o n o f p o w e r s a m o n g l e g i s l a t i o n , a d m i n i s t r a t i o n a n d j u d i c i a r y i s n o t p o s s i b l e , b u t a l s o b e c a u s e o f t h e a c t u a l n e e d s o f s o c i e t y d e v e l o p m e n t . I n t h e l a s t c e n t u r y , w i t h t h e r a p i d d e v e l o p m e n t o f i n d u s t r i a l i z a t i o n a n d u r b a n i z a t i o n , a v a r i e t y o f p r o b l e m s , 1 4 8 see " P o s t - W T O C h i n a : A d j u s t m e n t , R e f o r m s a n d E n h a n c e m e n t o f C o m p e t i t i v e S t r e n g t h — R e p o r t o n H i g h L e v e l F o r u m o f 2 0 0 0 o n C h i n a ' s d e v e l o p m e n t " , Takungpao ( H K ) , 2 A p r i l 2 0 0 2 1 4 9 S e e the C h a p t e r V . 6 7 l i k e e c o n o m i c c r i s i s , u n e m p l o y m e n t , e n v i r o n m e n t , i n s u r a n c e , e t c , c h a n g e d t h e g o v e r n m e n t ' s r o l e f r o m " n i g h t w a t c h m a n " t o " w e l f a r e c o u n t r y " . M a n y n e w a d m i n i s t r a t i v e a g e n c i e s w e r e e s t a b l i s h e d , c o n c o m i t a n t w i t h n u m e r o u s e c o n o m i c r e g u l a t i o n s e m e r g i n g . I n t h e c o u r s e o f a c t i v e p a r t i c i p a t i o n a n d m a c r o c o n t r o l b y a d m i n i s t r a t i v e d e p a r t m e n t s , d i s p u t e s e n s u e . B u t t h e s p e c i a l t y a n d t e c h n o l o g y i n v o l v e d i n t h e s e d i s p u t e s a r e b e y o n d t h e c a p a b i l i t y o f j u d i c i a l b o d i e s . U n d e r t h i s c i r c u m s t a n c e , i t i s t h u s n o t a s u r p r i s e t o s e e t ha t a d m i n i s t r a t i v e a g e n c i e s o b t a i n t h e p o w e r t o r e s o l v e s o m e d i s p u t e s , n o m a t t e r h o w i t s o u n d s c o n t r a d i c t o r y t o t h e d o c t r i n e o f s e p a r a t i o n o f p o w e r s . 1 5 0 B y c o n t r a s t t o t h e w e s t e r n c o u n t r i e s , a d m i n i s t r a t i v e a d j u d i c a t i o n h a s a n c i e n t r o o t s i n C h i n a . I n h i s t o r y t h e r e w a s n o s e p a r a t i o n b e t w e e n a d m i n i s t r a t i o n a n d j u d i c i a r y . T h e g o v e r n m e n t w a s r e s p o n s i b l e f o r d i s p u t e r e s o l u t i o n . S u c h t r a d i t i o n s t i l l i n f l u e n c e s t h e c u r r e n t C h i n a . S o m e p e o p l e e s p e c i a l l y i n t h e r u r a l a r e a s m a y t u r n t o t h e p e o p l e ' s g o v e r n m e n t w h e n d i s p u t e s o c c u r i n s t e a d o f s u i n g a t t h e c o u r t . T o s o m e e x t e n t , t h a t a d m i n i s t r a t i v e a g e n c i e s a r e g r a n t e d w i t h t h e p o w e r t o r e s o l v e s o m e d i s p u t e s i s i n c o m p l i a n c e w i t h p e o p l e ' s l o n g - f o r m e d h a b i t . B e s i d e s , C h i n a d o e s n o t a d o p t t h e s y s t e m o f c h e c k a n d b a l a n c e , w h i c h a l s o m a k e s a d m i n i s t r a t i v e a d j u d i c a t i o n m o r e 1 5 0 See Bernard Schwartz, Administrative Law ( Little Brown Inc., 1976), pp. 6-16. The author further points out that due to the needs of modem complex society, administrative organs are expected to have legislative and adjudicative power. In order to effectively manage economy, traditional doctrine of separation of powers shall be abandoned. Some even suggested that the doctrine of separation of powers is no longer a viable principle of government. See, Kinnane, "Some Observations on Separation of Powers", 38 A.BA.J. 19 (1952); J. Landis, The Administrative Process (1938), cited in A. Vanderbilt, The Doctrine of Separation of Powers and Its Present Day Significance 3, 5, 6 (1953). 68 e a s i l y a c c e p t a b l e t o C h i n a ' s s o c i a l m a t r i x . A s a n a l y z e d a b o v e , a c c o r d i n g t o l a w , a d m i n i s t r a t i v e a g e n c i e s a r e e n t i t l e d t o r e s o l v e c i v i l a n d c o m m e r c i a l d i s p u t e s . S t a t e a d m i n i s t r a t i v e o r g a n s , e x p r e s s l y a u t h o r i z e d b y l a w , a d j u d i c a t e a d m i n i s t r a t i o n - r e l a t e d c i v i l a n d c o m m e r c i a l d i s p u t e s o c c u r r i n g b e t w e e n t w o e q u a l p r i v a t e p a r t i e s . C u r r e n t C h i n e s e l a w a u t h o r i z e s a d m i n i s t r a t i v e o r g a n s w i t h t h e p o w e r o f a d m i n i s t r a t i v e a d j u d i c a t i o n t h r o u g h t h e f o l l o w i n g t h r e e w a y s : f i r s t , l e g a l r e s p o n s i b i l i t i e s o f a d m i n i s t r a t i v e o r g a n s . It m e a n s t h e a d m i n i s t r a t i v e o r g a n s , i n h a n d l i n g t h e a d m i n i s t r a t i v e a f f a i r s , m u s t r e s o l v e t h e d i s p u t e s b e t w e e n t h e e q u a l p a r t i e s . F o r e x a m p l e , a r t i c l e 2 7 o f Law of PRC on Fishery, I M a r t i c l e 1 3 o f 152 Law of PRC on Land Administration; s e c o n d , o p t i o n s o f t h e c o n c e r n e d p a r t i e s . I t m e a n s t ha t t h e c o n c e r n e d p a r t i e s a r e e n t i t l e d t o c h o o s e b e t w e e n t h e a d m i n i s t r a t i v e o r g a n s a n d t h e c o u r t s t o g e t t h e d i s p u t e s r e s o l v e d , l i k e Law of PRC on Pharmaceutical Administration, Law of Water Pollution Prevention; t h i r d , s e l f - d e t e r m i n a t i o n o f a d m i n i s t r a t i v e o r g a n s , w h i c h m e a n s l a w o n l y s t i p u l a t e s t h a t t h e a d m i n i s t r a t i v e o r g a n s m a y r e s o l v e t h e d i s p u t e s a n d t h e r e i s n o o t h e r r e s t r i c t i o n s . S o , t h e a d m i n i s t r a t i v e o r g a n s m a y t a k e a n i n i t i a t i v e i n r e s o l v i n g t h e d i s p u t e s , o r d o i t a t t h e r e q u e s t o f t h e c o n c e r n e d p a r t i e s , o r m a y j u s t l e t t h e c o n c e r n e d p a r t i e s a p p l y t o t h e 1 5 1 Fishery Law of the PRC, Article 27 reads, in the event of fishing by stealth, robbing others of fishery products, destroying others' water body and facilities, the fishery administration department or its supervisory organ is entitled to order that the losses be compensated and the fine be imposed. 1 5 2 Land Administration Law of PRC, Article 13 reads, as for the disputes concerning land ownership and land-use right, the parties concerned may make a negotiated settlement; if negotiation fails, the disputes are resolved by the People's Government. 69 c o u r t . L i k e Trademark Law of the PRC, Patent Law of the PRC, Law of PRC on Land Administration; Law of PRC on Grasslands, Law of PRC on Maritime Environmental Protection. U n l i k e a d m i n i s t r a t i v e m e d i a t i o n , a g r e e m e n t b e t w e e n t w o p a r t i e s i s n o t t h e n e c e s s a r y c o n d i t i o n t o s ta r t u p a d j u d i c a t i o n . I t m a y b e l a u n c h e d b y j u s t o n e o f t w o p a r t i e s t o t h e d i s p u t e . A l t h o u g h l i k e m e d i a t i o n , t h e a d j u d i c a t i o n d e t e r m i n a t i o n i s n o t f i n a l , i t d o e s h a v e b i n d i n g f o r c e a n d e x e c u t i v e f o r c e i f t h e u n h a p p y p a r t y f a i l s t o a p p l y f o r a r b i t r a t i o n o r s u e w i t h i n a c e r t a i n p e r i o d . I n t h i s s e n s e , i t i s s a i d t h a t a d m i n i s t r a t i v e a d j u d i c a t i o n a f f e c t s a n d c h a n g e s t h e r i g h t s a n d o b l i g a t i o n s o f t h e p a r t i e s . F o r t h i s r e a s o n , h o w a d m i n i s t r a t i v e o r g a n s r e s o l v e t h e d i s p u t e s i s o f i m p o r t a n c e . H o w e v e r , e v e n i f a d m i n i s t r a t i v e a d j u d i c a t i o n , a s a c o m m o n m e a n s t o r e s o l v e d i s p u t e s , i s w i d e l y n e e d e d a n d u n i v e r s a l l y a p p l i e d i n C h i n a , i t i s m o s t p o o r l y r e g u l a t e d , 1 5 3 e s p e c i a l l y b y c o n t r a s t t o t h e r e q u i r e m e n t s o f t r a n s p a r e n c y . 3.3.1 Transparent Applicable Legislation I t i s q u i t e a s t o n i s h i n g t o f i n d t h a t t h e r e a r e n o s t i p u l a t i o n s a b o u t t h e l e g a l a u t h o r i t i e s u p o n w h i c h t h e a d m i n i s t r a t i v e a g e n c y m a y r e l y t o r e s o l v e t h e c o m m e r c i a l d i s p u t e s b e t w e e n t w o p r i v a t e p a r t i e s . T h e r e l e v a n t l a w a n d r e g u l a t i o n s u s u a l l y r e a d l i k e " a p p l y f o r a d m i n i s t r a t i v e a g e n c y t o h a n d l e t h e d i s p u t e s " w i t h o u t m e n t i o n i n g o f 1 5 3 See W e n Z h e n g b a n g et c l . , sup r a no te 7 7 . 70 a p p l i c a t i o n o f l a w . 1 5 4 T h e l e g a l b a s i s u t i l i z e d t o r e s o l v e t h e d i s p u t e s i s u n k n o w a b l e . T h e p a r t i e s c o n c e r n e d m a y h a v e n o i d e a o f t h e s t r e n g t h o f t h e c a s e . H o w e v e r , s i n c e i t i s a i m e d to r e s o l v e t h e d i s p u t e s , t h e a p p l i c a t i o n o f l a w i s a l w a y s u n a v o i d a b l e . E v e n i f t h e r e a r e n o c l e a r p r o v i s i o n s a b o u t w h a t t o a p p l y a n d h o w , i t c a n b e i m a g i n e d w h a t k i n d o f l e g a l a u t h o r i t i e s w i l l b e a p p l i e d u s u a l l y b y t h e d e c i s i o n m a k e r s . L a w , r e g u l a t i o n s , a d m i n i s t r a t i v e r u l e s , n o r m a t i v e d o c u m e n t s , 1 5 5 e v e n t h e s p i r i t s o f o f f i c i a l a d m i n i s t r a t i v e n o t i c e s 1 5 6 m a y a l l b e t h e p o s s i b l e a p p l i c a b l e l e g i s l a t i o n . W h e t h e r t h e y s a t i s f y t h e r e q u i r e m e n t s o f t r a n s p a r e n c y i s q u e s t i o n a b l e . F u r t h e r m o r e , t h e p a r t i e s c o n c e r n e d a r e e n t i t l e d t o k n o w t h e a p p l i c a b l e l e g i s l a t i o n w h e n t h e d e c i s i o n i s m a d e . Y e t , t h e r e i s n o l e g a l o b l i g a t i o n i m p o s e d o n t h e d e c i s i o n m a k e r s t o p r o d u c e t h e l e g a l a u t h o r i t i e s o n t h e w r i t t e n d e c i s i o n s . T h a t i s , t h e r e a s o n s f o r t h e d e c i s i o n m a y n o t b e g i v e n . 3.3.2 Procedural Fairness I n c o n t r a s t t o t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n w h i c h h a s b e e n p r o c e d u r a l l y r e g u l a t e d i n a n i m p r o v e d w a y u n d e r t h e A R L , a d m i n i s t r a t i v e a d j u d i c a t i o n l a g s f a r b e h i n d i n t h i s r e g a r d . E v e n t h e c i r c u m s t a n c e s i n w h i c h t h e a d m i n i s t r a t i v e o r g a n s a r e 1 5 4 See above quoted legislations, Supra note 151-152. 1 5 5 See Wen Zhengbang et cl., supra note 77. 1 5 6 See Shanxi Wanbao (Shanxi Province Evening), 16 Sept. 2003. 71 i n v o l v e d i n r e s o l v i n g t h e c i v i l a n d c o m m e r c i a l d i s p u t e s a r e s p o r a d i c a l l y se t o u t i n l a w , s e p a r a t e l a w a n d r e g u l a t i o n s , n o t m e n t i o n i n g t h a t t h e r e i s s p e c i a l l e g i s l a t i o n a d d r e s s i n g t h e k i n d o f p r o c e d u r e s t h a t s h a l l b e f o l l o w e d i n a d m i n i s t r a t i v e a d j u d i c a t i o n . I t i s e x p e c t e d t h a t t h e r e w i l l b e a s e r i e s o f p r o c e d u r e s a v a i l a b l e i n o r d e r f o r t h e p a r t i e s t o b r i n g t h e i r a p p l i c a t i o n s , f o r t h e a d m i n i s t r a t i v e o r g a n s t o a d j u d i c a t e t h e a p p l i c a t i o n s , e t c . H o w e v e r , i t i s n o t e d t h a t t h e r e a r e b a s i c a l l y n o l e g a l p r o v i s i o n s a s t o h o w t o b r i n g t h e c l a i m s , h e a r t h e d i s p u t e s , a n d h o w t o m a k e t h e w r i t t e n d e c i s i o n s o r r u l i n g s a n d h o w t h e y c o m e i n t o e f f e c t a n d a r e e n f o r c e d . A s t o h o w t o p r o d u c e e v i d e n c e , d i s t r i b u t e t h e b u r d e n o f e v i d e n c e , t h e p r e s c r i p t i o n i s e v e n l e s s . 1 5 7 W i t h o u t l e g a l r e s t r i c t i o n s , a w i d e s c o p e o f d i s c r e t i o n h a s b e e n r e m a i n e d w i t h a d m i n i s t r a t i v e o f f i c i a l s , w h i c h e n d s i n a b u s i v e n e s s o f a d m i n i s t r a t i v e p o w e r a n d n o n - t r a n s p a r e n t o p e r a t i o n . T a k e a r t i c l e 5 3 o f T r a d e m a r k L a w o f t h e P R C 1 5 8 a s a n e x a m p l e , i t s t a t e s : In the event that disputes arise from infringement upon right to the exclusive use of a trademark under article 52, the parties concerned may have compromise settlement; if the parties are not willing to do so or compromise settlement fails, registrant of trademark or interested persons may sue at the court or apply to the Industrial and Commercial Administrative Bureau for settlement. If 1 5 7 See Lin Zhong, Zhongguo Shangshi Zhengduan Jiejue (Commercial Dispute Resolution in China), Law Publishers (1998), Beijing, pp. 185. 1 5 8 Trademark Law of the PRC, passed on 27 Oct. 2002 and came into effect on 1 Dec 2001. 72 Industrial and Commercial Administrative Bureau for settlement finds that infringing act is constituted, it is entitled to give the orders the act shall stop, infringing articles and tools used to produce infringing articles and forge registered trademark symbol shall be confiscated and destroyed and fine be inflicted. If the party concerned refused to accept the decision, it may sue according to the Administrative Litigation Law of the PRC within 15 days as of receipt of the notice. If the party concerned neither sues nor implements the decision, Industrial and Commercial Administrative Bureau may apply to the court for compulsory enforcement. T h e p r o v i s i o n s a y s u n d e r w h i c h c i r c u m s t a n c e t h e p a r t y m a y a p p l y t o t h e a d m i n i s t r a t i v e o r g a n f o r d i s p u t e s e t t l e m e n t . T h e r e i s n o t h i n g a b o u t h o w t o a p p l y , h o w t h e a p p l i c a t i o n w i l l b e p r o c e s s e d o r h o w t h e d e c i s i o n w i l l b e m a d e . E x a c t l y t h e s a m e p r o v i s i o n e x i s t s i n Patent Law a r t i c l e 53. S i m i l a r p r o v i s i o n s c a n a l s o b e f o u n d i n m a n y o t h e r e c o n o m i c l a w s a n d r e g u l a t i o n s . I t i s s a i d t h a t a d m i n i s t r a t i v e a d j u d i c a t i o n a d o p t s g e n e r a l a d m i n i s t r a t i v e p r o c e d u r e s . 1 5 9 I t i s a l s o s a i d t h a t s o m e j u d i c i a l p r o c e d u r e s a r e a p p l i e d b y a d m i n i s t r a t i v e a g e n c i e s w h e n h a n d l i n g t h e d i s p u t e s . 1 6 0 W h a t e v e r i t i s , l a c k o f e x p r e s s r u l e s u n d e r t h e l a w o n l y e n d s i n t h e g r e a t d i s c r e t i o n o f a d m i n i s t r a t i v e a g e n c i e s i n r e a l i t y . 1 5 9 See Ying Songnian, "Xingzheng Xingweifa" (Law of Administrative Acts) (Beijing: People's Press, 1991), pp. 673, 680. 1 6 0 See Wen Zhengbang et cl., supra note 77. 73 A d m i n i s t r a t i v e a d j u d i c a t i o n h a s t h e f e a t u r e s o f b o t h a d m i n i s t r a t i o n a n d j u d i c a t u r e . I t i s u n d e r s t a n d a b l e t h a t i t i s u n n e c e s s a r y t o e x e r t t h e s a m e c o m p l i c a t e d p r o c e d u r e s a s t h e l i t i g a t i o n o n t h e a d m i n i s t r a t i v e a d j u d i c a t i o n . O t h e r w i s e i t m a y l o s e t h e e f f i c i e n c y o f g e t t i n g t h e d i s p u t e s r e s o l v e d , w h i c h i s e x a c t l y i t s s t r e n g t h a s a d i s p u t e r e s o l u t i o n m e c h a n i s m . T h e p r i n c i p l e o f s i m p l i c i t y a n d c o n v e n i e n c e i s s u p p o s e d t o r u n t h r o u g h t h e w h o l e p r o c e s s o f a d m i n i s t r a t i v e a d j u d i c a t i o n . H o w e v e r , i t i s , a f t e r a l l , a m e c h a n i s m o f d i s p u t e r e s o l u t i o n w h i c h w i l l i n f l u e n c e t h e r i g h t s a n d o b l i g a t i o n s o f t h e c o n c e r n e d p a r t i e s . T h i s m e a n s t h a t t h e p r o c e d u r e s s h o u l d n o t b e j u s t t h e g e n e r a l a d m i n i s t r a t i v e p r o c e d u r e s b u t s h o u l d b e m o r e r i g o r o u s t h a n tha t . A b a l a n c e s h o u l d b e m a d e b e t w e e n t h e e f f i c i e n c y a n d f a i r n e s s b y w o r k i n g o u t c e r t a i n p r o c e d u r e s . A s p r e v i o u s l y s u g g e s t e d , a d m i n i s t r a t i v e r e c o n s i d e r a t i o n h a s b e e n s u b j e c t t o a s e r i e s o f p r o c e d u r e s . I t i s t h u s s u g g e s t e d t h a t r e f e r e n c e t o t h e s e p r o c e d u r e s s h o u l d b e m a d e w h e n a d m i n i s t r a t i v e a d j u d i c a t i o n i s c o n d u c t e d . E s p e c i a l l y , i t i s n o t e d t h a t i m p r o v e m e n t o f a d m i n i s t r a t i v e p r o c e d u r e s h a s g o n e e v e n f u r t h e r u n d e r t h e Administrative Penalty Law. 1 6 1 I t i s t h e first t i m e f o r C h i n a t o s y s t e m a t i c a l l y s e t o u t t h e a d m i n i s t r a t i v e p r o c e d u r a l r u l e s i n a n a t i o n a l l a w , i . e . , t h e Administrative Penalty Law. I t c h a n g e s t h e t r a d i t i o n t h a t a d m i n i s t r a t i v e p r o c e d u r e s a r e m o s t l y e n a c t e d t o r e s t r i c t t h e e x t e r n a l p a r t i e s t o t h e a d m i n i s t r a t i o n a n d s e n d s a s i g n a l t h a t p r o c e d u r a l r e s t r i c t i o n i s o n b o t h a d m i n i s t r a t i v e a g e n c i e s a n d t h e p a r t i e s s u b j e c t t o a d m i n i s t r a t i o n . 1 6 1 Administrative Penalty Law of the PRC, passed on 17 March 1996 and being effective as of 1 Oct 1996. 74 W h e n i t c o m e s to s p e c i f i c p r o c e d u r e s , t h i s l a w a b s o r b s a d v a n c e d e x p e r i e n c e f r o m o t h e r c o u n t r i e s i n c l u d i n g t h e s p i r i t o f d u e p r o c e s s . T h a t i s , b e f o r e t h e a d m i n i s t r a t i v e o r g a n m a k e s t h e p e n a l t y d e c i s i o n , i t s h a l l i n f o r m t h e p a r t i e s c o n c e r n e d o f t h e f a c t s , t h e r e a s o n , t h e l e g a l a u t h o r i t i e s , a n d t h e r i g h t s t h e y e n j o y . I n t h e Shitons Communication Equipment Ltd ( 1 9 9 9 ) , t h e a d m i n i s t r a t i v e p e n a l t y d e c i s i o n w a s p r o b l e m a t i c a n d w a s q u a s h e d b y t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r g a n i n t h e f i r s t a s w e l l a s s e c o n d i n s t a n c e c o u r t . O n e o f t h e i m p o r t a n t r e a s o n s w a s t h e a d m i n i s t r a t i v e o r g a n , t h e G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u f a i l e d t o t e l l t h e p a r t y c o n c e r n e d o f t h e f a c t , t h e r e a s o n s a n d t h e r i g h t s t h e y w e r e e n t i t l e d b e f o r e t h e p e n a l t y d e c i s i o n w a s m a d e . I n a d d i t i o n , t h e p a r t i e s c o n c e r n e d a l s o e n j o y t h e r i g h t s t o m a k e s t a t e m e n t a n d a r g u e . I t i s t h e o b l i g a t i o n o f a d m i n i s t r a t i v e o r g a n t o h e a r t h e p a r t i e s ' o p i n i o n s a n d c a n n o t a g g r a v a t e t h e s a n c t i o n s i m p l y b e c a u s e o f t h e p a r t i e s ' a r g u m e n t . T h e m o s t s t r i k i n g t h i n g i s t h a t f o r t h e first t i m e t h e h e a r i n g s y s t e m i s i n t r o d u c e d i n t o t h e a d m i n i s t r a t i v e p r o c e d u r e s . T h e c h a l l e n g e s y s t e m i s e x p r e s s l y p r e s c r i b e d . S t r i c t t i m e l i m i t f o r m a k i n g t h e a d m i n i s t r a t i v e p e n a l t i e s h a s b e e n p r o v i d e d . I f t h e a d m i n i s t r a t i v e a g e n c y f a i l s t o d i s c o v e r t h e i l l e g a l a c t s w i t h i n t w o y e a r s o f t h e i r h a p p e n i n g , n o a d m i n i s t r a t i v e p e n a l t i e s c a n b e i m p o s e d . H o w to p r e s e r v e e v i d e n c e i n a d v a n c e a n d t h e m e t h o d s to c o n d u c t t h e o n - t h e - s p o t fine a r e p r o v i d e d i n d e t a i l . E s p e c i a l l y , i t c l e a r l y s e t s o u t t h e l e g a l l i a b i l i t i e s o f a d m i n i s t r a t i v e o r g a n s i n c a s e t h e y f a i l t o f o l l o w t h e p r o c e d u r e s a n d p a r t i c u l a r l y s t r e s s e s t h a t i f t h e a d m i n i s t r a t i v e p e n a l t y i s i n v a l i d i n t h e e v e n t t h a t t h e r e i s a l a c k o f l e g a l a u t h o r i t i e s , o r p r o p e r p r o c e d u r e s a r e n o t c o m p l i e d w i t h . T h e s p i r i t s o f d u e p r o c e s s e m b o d i e d u n d e r t h e Administrative 75 Penalty Law s h o u l d b e e x t e n d e d to o t h e r a d m i n i s t r a t i v e a c t s , o n e o f w h i c h i s e x p r e s s e d a b o v e , i . e . , a d m i n i s t r a t i v e a d j u d i c a t i o n . I t i s t h u s s u g g e s t e d t ha t t h e p r o c e d u r e s t h e r e i n s h o u l d b e i n t e g r a t e d i n t o t h e a d m i n i s t r a t i v e a d j u d i c a t i o n . A c c o r d i n g to t h e a b o v e a n a l y s i s , t o g e t h e r w i t h t h e r e q u i r e m e n t s o f t r a n s p a r e n c y m e n t i o n e d p r e v i o u s l y , i t i s a l s o s u g g e s t e d t h a t t h e o p e n n e s s p r i n c i p l e b e i m p l e m e n t e d w i t h t h e f o l l o w i n g m e a s u r e s . T h e c o n c e r n e d p a r t i e s s h o u l d b e i n f o r m e d o f t h e c o n t e n t s o f t h e a d m i n i s t r a t i v e a d j u d i c a t i o n p r o c e d u r e s ; t h e l e g a l a u t h o r i t i e s a n d f a c t u a l b a s i s o f d i s p u t e r e s o l u t i o n , t h e r i g h t s a n d t h e w a y s t o e x e r c i s e t h e r i g h t s i n c a s e t h a t t h e d e c i s i o n i s n o t a c c e p t a b l e . B e f o r e t h e d e c i s i o n i s m a d e , t h e c o n c e r n e d p a r t i e s s h o u l d b e a l l o w e d t o g i v e o p i n i o n s , m a k e s t a t e m e n t s a n d d o c r o s s - e x a m i n a t i o n . T h e c h a l l e n g e s y s t e m s h o u l d b e i n t r o d u c e d a n d e v i d e n c e r u l e s s h o u l d b e i m p r o v e d . T h e r e a l i t y t ha t a d m i n i s t r a t i v e a g e n c i e s a r e m o r e a n d m o r e i n v o l v e d i n d i s p u t e r e s o l u t i o n c a l l s f o r a s y s t e m a t i c s e r i e s o f p r o c e d u r e s . H o p e f u l l y , t h e u n i f o r m L a w o f A d m i n i s t r a t i v e P r o c e d u r e s w h o s e e n a c t m e n t i s u n d e r t h e w a y 1 6 2 w i l l a d d r e s s t h e p r o c e d u r e s o f a d m i n i s t r a t i v e a d j u d i c a t i o n . 1 6 2 More discussions about uniform Law of Administrative Procedures are available in Yang Yin , "Xingzheng Chengxu Lifa yu WTO Guize" (Legislating Administrative Procedures and the WTO Rules), Journal of China University of Political Science and Law, Vol. 20, No. 1( Feb. 2002); Yang Haikun & Liu Yanglin, "Guanyu Zhongguo Xingzheng Chengxu Fadianhua de Taolun" (Discussion of Codification of Chinese Administrative Procedures), Jiangsu Gongan Zhuanke Xueyuan Xuebao {Journal of Jiangsu Public Security College), Vol . 16 No.2 ( Mar. 2002); and Yang Haikun & Huang Xuexian, Zhongguo Xingzheng Chengxu Fadianhua - cong Bijiao fa Jiaodu Yanjiu (Codification of Chinese Administrative Procedures - From Comparative Perspective) (Beijing: Chinese Law Press, 1999). 76 3.3.3 Independence I n m o d e r n C h i n a , t h e r e a r e n o s p e c i a l a d m i n i s t r a t i v e o r g a n s i n c h a r g e o f d i s p u t e r e s o l u t i o n w i t h i n t h e w h o l e a d m i n i s t r a t i v e s y s t e m ; t h e r e i s n o s p e c i a l i n s t i t u t i o n o r p e r s o n n e l r e s p o n s i b l e f o r d i s p u t e r e s o l u t i o n w i t h i n a s p e c i f i c a d m i n i s t r a t i v e o r g a n e i t h e r . F o r a l o n g p e r i o d , t h e r e h a s b e e n n o i n s t i t u t i o n a l s e p a r a t i o n b e t w e e n t h e g e n e r a l a d m i n i s t r a t i v e a c t s a n d a d m i n i s t r a t i v e a d j u d i c a t i o n . T h e i n d e p e n d e n t a d m i n i s t r a t i v e o r g a n i z a t i o n s r e s p o n s i b l e f o r d i s p u t e r e s o l u t i o n h a v e n o t y e t b e e n u n i v e r s a l l y e s t a b l i s h e d . S o f a r , t h e s i m i l a r a d j u d i c a t o r y s y s t e m s o n l y e x i s t i n t h e d e p a r t m e n t s o f t r a d e m a r k a n d p a t e n t w h e r e t h e t r a d e m a r k r e v i e w b o a r d a n d t h e p a t e n t r e v i e w b o a r d h a v e b e e n se t u p . A p a r t f r o m t h e s e , m o s t o f c i v i l a n d c o m m e r c i a l d i s p u t e s a r e d i r e c t l y r e s o l v e d b y t h e a d m i n i s t r a t i v e o r g a n s . C a n t h e y b e n e u t r a l a n d i n d e p e n d e n t w h e n h a n d l i n g t h e d i s p u t e s b e t w e e n t h e e q u a l p r i v a t e p a r t n e r s ? It i s s a i d t h a t t h e a d m i n i s t r a t i v e o r g a n s a c t a s i n t e r m e d i a r i e s i n s t e a d o f t h e s u b j e c t o f a d m i n i s t r a t i o n i n h a n d l i n g t h e c i v i l a n d c o m m e r c i a l d i s p u t e s . I t i s t r u e t h a t t h e a d m i n i s t r a t i v e o r g a n i s r e l a t i v e l y d e t a c h e d s i n c e t h e d i s p u t e o c c u r s b e t w e e n t w o o t h e r p r i v a t e p a r t i e s . I t a c t s a s t h e d i s p u t e r e s o l u t i o n d e c i s i o n m a k e r e i t h e r a t t h e r e q u e s t o f t h e p a r t i e s o r o n i t s o w n i n i t i a t i v e . H o w e v e r , m o r e o r l e s s , l o c a l p r o t e c t i o n i s m o r d e p a r t m e n t a l p r o t e c t i o n i s m p e n e t r a t e s i n t o t h e p r o c e s s . I t i s b e c a u s e t h e r e a r e n o a d e q u a t e p r o c e d u r a l r e s t r i c t i o n s i m p o s e d o n t h e a d m i n i s t r a t i v e o r g a n o r a n y 77 i n s t i t u t i o n a l g u a r a n t e e o f i t s i n d e p e n d e n c e . A d m i n i s t r a t i v e s u b o r d i n a t i o n a n d i n s t i t u t i o n a l b u r e a u c r a c y s h o u l d b e o v e r c o m e i n o r d e r t o r e a l i z e t h e i n d e p e n d e n c e o f t h e d e c i s i o n m a k e r s . I n s t i t u t i o n a l s e t u p i s p i v o t a l t o a c h i e v e t h i s g o a l . W e k n o w i n t h e U K , t h e r e a r e a d m i n i s t r a t i v e t r i b u n a l s , a n d i n F r a n c e , t h e r e a r e a d m i n i s t r a t i v e c o u r t s , a n d i n t h e U S , t h e r e a r e i n d e p e n d e n t a d m i n i s t r a t i v e i n s t i t u t i o n s . T h e s e i n s t i t u t i o n s a r e n o t a d m i n i s t r a t i v e l y s u b o r d i n a t e t o a n y s p e c i f i c a d m i n i s t r a t i v e d e p a r t m e n t . A s t h e d i s p u t e r e s o l u t i o n d e c i s i o n m a k e r s , t h e y a r e v e r y p r o f e s s i o n a l , s p e c i a l , a n d m o s t i m p o r t a n t l y , i n d e p e n d e n t t o t h e u t m o s t e x t e n t . I n t h i s r e g a r d , C h i n a s t i l l h a s s o m e d i s t a n c e t o g o . * D e c i s i o n s m a d e b y a d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r g a n s c a n b e c h a l l e n g e d a t c o u r t b y b r i n g i n g a d m i n i s t r a t i v e l i t i g a t i o n . 1 6 3 D e c i s i o n s m a d e t h r o u g h a d m i n i s t r a t i v e a d j u d i c a t i o n a r e n o t s u b j e c t t o t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . T h e u n h a p p y p a r t y m a y a p p l y f o r a r b i t r a t i o n a n d b r i n g l i t i g a t i o n a t c o u r t . 1 6 4 T h e s a m e q u e s t i o n a r i s e s a b o u t t h e i n d e p e n d e n c e o f j u d i c i a l b o d i e s . T h i s i s t o b e d i s c u s s e d i n t h e n e x t c h a p t e r . 1 6 3 ARL, Article 16. 1 ARL, Article 8. However, the ARL does not specify which kind of litigation (administrative litigation or civil and commercial litigation) shall be brought in the event that the disputants refuse to accept the administrative adjudication decision. This invites lots of controversy in academic realm. The practice is not consistent in this regard. But mostly it is through civil and commercial litigation that judicial remedies can be claimed. Hopefully relevant law or judicial practice will come out in the future to address this problem. See Yang Shiming, "Qiantan Xingzheng Jujian jiqi Sifa Jiuji" (On Administrative Adjudication and Judicial Remedies Thereof), Fujian Faxue (Law Science ofFujian Province),,Vol. 73, No. 1( 2003) 78 Chapter IV Economic Dispute Resolution by Courts 4.1 Introduction P a r t i e s t o c o m m e r c i a l d i s p u t e s h a v e a t l e a s t t h r e e c o n c e r n s a b o u t t h e p r o c e s s t h r o u g h w h i c h t h e i r d i s p u t e s w i l l b e r e s o l v e d : f a i r n e s s , s p e e d , a n d c o s t o f t h e p r o c e e d i n g s . I n t h e o r y , a p r o c e e d i n g m a y b e c o n d u c t e d i n a m a n n e r t h a t t h e p a r t i e s r e g a r d a s f a i r , a n d i t m a y p r o c e e d e x p e d i t i o u s l y a t m i n i m u m e x p e n s e . I n r e a l i t y , h o w e v e r , t h e p r o b l e m i s o n e o f b a l a n c i n g t h e e m p h a s i s t o b e g i v e n t o e a c h o f t h e f a c t o r s . T o o m u c h e m p h a s i s o n f a i r n e s s m a y r e s u l t i n c o n s i d e r a b l e d e l a y a n d c o s t ; l i k e w i s e , t o o m u c h e m p h a s i s o n s p e e d a n d l o w c o s t m a y i m p a i r t h e f a i r n e s s o f t h e p r o c e e d i n g . 1 6 5 C o u r t a d j u d i c a t i o n i s o n e m e c h a n i s m a m o n g a v a r i e t y o f p r o c e s s e s u s e d f o r s e t t l i n g d i s p u t e s . A l t h o u g h l i t i g a t i o n t y p i c a l l y i s t i m e c o n s u m i n g , f r e q u e n t l y d i l a t o r y a n d n e a r l y a l w a y s e x p e n s i v e , t h i s m e c h a n i s m d o e s h a v e a r e p u t a t i o n o f f a i r n e s s , i m p a r t i a l i t y a n d i n d e p e n d e n c e . A f t e r a l l , f o r t h e j u d i c i a l s y s t e m , e x p e d i t i o u s r e s o l u t i o n o f d i s p u t e s a n d i n e x p e n s i v e r e s o l u t i o n o f d i s p u t e s a r e n o t n e c e s s a r i l y v i e w e d a s i n d e p e n d e n t v a l u e s t h a t c o m p e t e w i t h t h e v a l u e o f f a i r n e s s . T h e y a r e i m p o r t a n t p r i m a r i l y t o t h e e x t e n t t h a t t h e y p r o m o t e t h e p r i m a r y g o a l o f f a i r n e s s . See Robert Force & Anthony J. Mavronicolas, "Two Models of Maritime Dispute Resolution: Litigation and Arbitration", 65 Tul. L. Rev. p. 1461. 79 L i t i g a t i o n , a s a d i s p u t e r e s o l v i n g m e c h a n i s m , h a s g o n e t h r o u g h s e v e r a l h u n d r e d y e a r s i n w e s t e r n c o u n t r i e s . B u t i n C h i n a , i t s t a r t e d j u s t s e v e r a l d e c a d e s a g o . P r e v i o u s l y , t h e r e w a s n o j u d i c i a l l i t i g a t i o n b u t f e u d a l a d j u d i c a t i o n t o s o l v e a l l d i s p u t e s . S h o r t e r p e r i o d o f d e v e l o p m e n t o f l i t i g a t i o n , m o r e o r l e s s f e u d a l c h a r a c t e r i s t i c s r e m a i n e d , a n d c u r r e n t C h i n a ' s p o l i t i c a l r e g i m e h a v e r e s u l t e d i n m a n y p r o b l e m s w i t h C h i n a ' s j u d i c i a l l i t i g a t i o n s y s t e m . E s p e c i a l l y s i n c e C h i n a ' s e n t r y to t h e W T O , e v e n m o r e c h a l l e n g e s h a v e b e e n r a i s e d f o r C h i n a ' s l i t i g a t i o n s y s t e m w h i c h i s s u p p o s e d t o b e i n k e e p i n g w i t h W T O r u l e s a c c o r d i n g t o t h e c o m m i t m e n t s C h i n a h a s m a d e . T h i s c h a p t e r e x a m i n e s t h e e x t e n t C h i n a ' s j u d i c i a l p r o c e e d i n g s o f e c o n o m i c d i s p u t e s s a t i s f i e s t h e r e q u i r e m e n t s o f t r a n s p a r e n c y s e t o u t a t t h e b e g i n n i n g o f t h e t h e s i s . N o t a b l y , i n C h i n a , m o s t o f e c o n o m i c d i s p u t e s c a n b e r e s o l v e d b y t h e c o u r t s . A f e w o f t h e m h a s b e e n e x c l u d e d f r o m l i t i g a t i o n a c c o r d i n g t o t h e Administrative Reconsideration Law a n d w i l l b e f i n a l l y d e c i d e d b y t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n 4.2 Transparent applicable legislation T h e c o u r t , i n h a n d l i n g t h e c a s e s , s h a l l b e b a s e d o n t r a n s p a r e n t a p p l i c a b l e l e g i s l a t i o n , w h i c h , a c c o r d i n g t o t h e p r e v i o u s a n a l y s i s , s h a l l b e p u b l i c l y a c c e s s i b l e , '""ARL, Article 14 provides that in the event that the party refuses to accept the administrative reconsideration decision and applies to the State Council for adjudication, the adjudication by the State Council is final; also article 30 of the ARL provides that the administrative reconsideration, made by the provincial and municipal people's government and the government of autonomous region, confirming the ownership and right to use of land, mineral resources, water, forestry, mountain, grassland, wilderness, sands and sea area is final. 80 c e r t a i n , u n i f o r m , c o n s i s t e n t a n d s t a b l e . I n C h i n a , c o m m e r c i a l s u i t s u t i l i z e t h e c i v i l l i t i g a t i o n p r o c e d u r e s . T h e a p p l i c a b l e l e g i s l a t i o n u n d e r Civil Litigation Law of the PRC161 ( h e r e i n a f t e r " C L L " ) i s " l a w " . 1 6 8 O b v i o u s l y , t h e " l a w " h e r e d o e s n o t o n l y r e f e r t o t h e l a w e n a c t e d b y t h e N a t i o n a l P e o p l e ' s C o n g r e s s a n d i t s S t a n d i n g C o m m i t t e e . I n p r a c t i c e , n u m e r o u s r e g u l a t i o n s a n d j u d i c i a l i n t e r p r e t a t i o n a r e a p p l i e d b y t h e c o u r t s . S o " l a w " u n d e r t h e C L L s h a l l b e u n d e r s t o o d i n t h i s t h e s i s i n a w i d e s e n s e . A c c o r d i n g l y , t h e i s s u e s o f t r a n s p a r e n c y a r e r e l a t e d t o a l l l e g i s l a t i o n w h i c h m i g h t b e t h e l e g i s l a t i v e a u t h o r i t i e s o f t h e c o u r t s . C h a l l e n g e s m o s t l y d e r i v e f r o m u n s y s t e m a t i c r e g u l a t i o n s a n d n u m e r o u s j u d i c i a l i n t e r p r e t a t i o n . F o r a n e x a m p l e , a c c o r d i n g t o t w o j u d g e s o f B e i j i n g , Regulations on Handling Cases Involving Foreign Elements 1 6 9 w h i c h i s o f t e n t i m e s a p p l i e d i n j u d i c i a l p r a c t i c e , h a s s o m e c o n f i d e n t i a l c h a r a c t e r i s t i c s a n d c a n o n l y u s e d a s a n 170 i n t e r n a l d o c u m e n t . Civil Litigation Law of the PRC (hereinafter "CLL"), passed and went into effect on 9 April, 1991. 1 6 8 CLL, Article 7 reads that the People's court, in hearing the cases, shall be based on the facts and according to the law. 1 6 9 Regulations on Handling Cases Involving Foreign Elements, enacted by the Ministry of Foreign Affairs, the Supreme People's Court of PRC, the Supreme People's Procuratorate, the Ministry of Public Security of the PRC, the Ministry of State Security of the PRC and the Ministry of Justice on 20 June 1995. 1 7 0 See Li Dayuan & Gu Shaoyong, "Shewai Minshi Falv Guanxi Shiyong Lifa Yanjiu" (A Study on Civil Legal Relation Involving Foreign Elements), Falv Kexue Zhazhi {Law Science Magazine), Vol. 24, No. 3 (2004). 81 T h e A d m i n i s t r a t i v e L i t i g a t i o n L a w o f t h e P R C 1 7 1 ( h e r e i n a f t e r " A L L " ) i s m o r e s p e c i f i c t h a n t h e C L L i n t e r m s o f a p p l i c a t i o n o f l a w b u t a c t u a l l y m o r e c o m p l i c a t e d . T h e A L L e x p r e s s l y s p e c i f i e s t ha t t h e c o u r t s s h a l l t a k e t h e l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d l o c a l r e g u l a t i o n s a s t h e c r i t e r i a a n d t a k e t h e r u l e s a s r e f e r e n c e s . 1 7 2 C i v i l L a w o f t h e P R C , a g r e a t n u m b e r o f s e p a r a t e l a w s a n d r e g u l a t i o n s f o r m t h e a p p l i c a b l e l e g i s l a t i o n o f c o m m e r c i a l l i t i g a t i o n . I t i s t h e c o u r t t h a t i s r e s p o n s i b l e f o r a p p l i c a t i o n o f l a w w h e n t h e d i s p u t e i n v i t e s t h e l i t i g a t i o n . B u t , i n t h e e v e n t o f c o m m e r c i a l a d m i n i s t r a t i v e d i s p u t e s , t h e s i t u a t i o n i s d i f f e r e n t . B y c o n t r a s t , t h e a p p l i c a t i o n o f a d m i n i s t r a t i v e l a w i s t h e m a t t e r o f b o t h c o u r t s a n d a d m i n i s t r a t i v e o r g a n s , a n d t h e a p p l i c a t i o n b y t h e l a t t e r p r e c e d e s t h e f o r m e r . T h i s d e v o l v e s i n t o a q u e s t i o n , i . e . , w h i c h c r i t e r i a s h o u l d t h e c o u r t s a d o p t t o e x a m i n e t h e a d m i n i s t r a t i v e a c t s . I s i t t h e l e g a l a u t h o r i t i e s a l r e a d y a p p l i e d b y t h e a d m i n i s t r a t i v e o r g a n s o r t h e l e g a l a u t h o r i t i e s d e t e r m i n e d b y t h e c o u r t s t h e m s e l v e s ? T h i s p r o b l e m i s f u r t h e r r e f l e c t e d b y 1 7 1 Administrative Litigation Law of the PRC (hereinafter "ALL"), passed on 4 April 1989 and put into force on 1 Oct 1990. 1 7 2 ALL, Article 52 reads, in handling administrative cases, the people's courts shall take the law, administrative rules and regulations and local regulations as the criteria. Local regulations shall be applicable to administrative cases within the corresponding administrative areas. In handling administrative cases of a national autonomous area, the people's courts shall also take the regulations on autonomy and separate regulations of the national autonomous area as the criteria; Article 53 provides that in handling administrative cases, the people's courts shall take, as references, rules formulated and announced by ministries or commissions under the State Council in accordance with the law and administrative regulations and regulations, decisions or orders of the State Council and rules formulated and announced, in accordance with the law and administrative regulations and regulations of the State Council, by the people's governments of provinces, autonomous regions and municipalities directly under the Central Government, of the cities where the people's governments of provinces and autonomous regions are located, and of the larger cities approved as such by the State Council. 82 d i f f e r e n t s t i p u l a t i o n s o f t h e A R L a n d t h e A L L . T h e y a d o p t d i f f e r e n t a t t i t u d e t o w a r d s t h e n o r m a t i v e d o c u m e n t s b e t w e e n a d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r g a n s a n d t h e c o u r t s . T h e n o r m a t i v e d o c u m e n t s , w h i c h , a s p r e v i o u s l y a n a l y z e d , a r e v i r t u a l l y u s e d b y t h e a d m i n i s t r a t i v e r e v i e w o r g a n s e v e n i f t h e y a r e i n t e r n a l l y c i r c u l a t e d , a r e n o t a p p l i c a b l e i n t h e a d m i n i s t r a t i v e l i t i g a t i o n . T h i s i s r e f l e c t e d b y Jin Man Ke Electric Ltd. ( 1 9 9 7 ) , w h e r e t h e c o u r t p o i n t e d o u t t ha t t h e l a w a d o p t e d b y t h e a d m i n i s t r a t i v e 173 r e c o n s i d e r a t i o n o r g a n i s a n i n t e r n a l d o c u m e n t a n d s h a l l n o t b e a p p l i e d . E x c l u d i n g t h e a p p l i c a t i o n o f n o r m a t i v e d o c u m e n t s i s a g o o d i n d i c a t i o n a n d f a v o r e d b y t h e i d e a l o f t r a n s p a r e n c y . B u t , i t a l s o m e a n s t h a t a s a m e a d m i n i s t r a t i v e a c t m a y b e l e g a l i z e d b y a n a d m i n i s t r a t i v e r e v i e w o r g a n b u t o u t l a w e d b y t h e c o u r t , a s i n Jin Man Ke Electric Ltd. ( 1 9 9 7 ) N e v e r t h e l e s s , l e g a l v a l i d i t y o f n o r m a t i v e d o c u m e n t s i s n o t q u i t e c e r t a i n . A s s o m e o f n o r m a t i v e d o c u m e n t s h a v e b e e n a p p r o v e d b y t h e S t a t e C o u n c i l , i t i s n o d o u b t t h a t t h e y a r e t o b e a p p l i e d i n j u d i c i a l p r a c t i c e . F o r t h e r e s t o f t h e m , t h e y a r e a r g u a b l y a p p l i e d , c o n c o m i t a n t w i t h m u c h c o n t r o v e r s y . 1 7 4 N o t a b l y , i n h a n d l i n g a d m i n i s t r a t i v e s u i t s , t h e r u l e s a r e t a k e n b y t h e c o u r t s " a s r e f e r e n c e " . T h e e s s e n t i a l m e a n i n g i s t ha t c o u r t s a r e n o t o b l i g a t e d t o a p p l y t h e r u l e s . A s t h e r e a r e n o l e g a l c r i t e r i a a b o u t h o w t o t a k e r u l e s a s r e f e r e n c e , u n d e r w h i c h 1 7 3 See A p p e n d i x : Jin Man Ke Electric Ltd. v State Revenue of Shenzhen ( 1 9 9 7 ) . 1 7 4 T h e no rma t i ve documen ts w i l l be regarded as l a w f u l l eg i s l a t i on i f the f o l l o w i n g c o n d i t i o n s are sa t i s f ied : firstly, the enactment au thor i t y mus t exe rc i se i ts p o w e r i n m a k i n g regu la t i on intra vires; a n y regu la t ions m a d e ultra vires sha l l be u n l a w f u l ; s e c o n d l y , p r o p e r lega l p rocedu res m u s t be f o l l o w e d i n the p r o m u l g a t i o n o f a ny regu la t ions ; th i rd ly , the substance o f any regu la t ions mus t not con t rad ic t the C o n s t i t u t i o n , na t i ona l l a w s o r admin i s t ra t i ve regu la t ions . See L i n F e n g , Administrative Law - Procedures and Remedies in China, ( H o n g K o n g • L o n d o n : S w e e t & M a x w e l l , 1996) , p p . 2 6 0 . 83 c i r c u m s t a n c e s t h e r u l e s a r e a p p l i e d a n d h o w to a p p l y i s t h e d i s c r e t i o n o f t h e c o u r t s . 1 75 I n Mr. Sun Liangren, a l t h o u g h t h e a d m i n i s t r a t i v e a g e n c y h a d t o r e m a k e t h e d e c i s i o n f o r i t f a i l e d t o s h o w t h e a p p l i c a b l e l a w , t h e c o u r t d i d c o n f i r m i t s o p i n i o n s o n t h e p l a i n t i f f ' s b e h a v i o r b y t a k i n g a n o r m a t i v e d o c u m e n t . 1 7 6 H o w e v e r , s u c h u n c e r t a i n t y o f a p p l i c a t i o n g r e a t l y m i t i g a t e s t h e p r e d i c t a b i l i t y o f l a w . P e o p l e d o n o t k n o w c l e a r l y w h e t h e r t h e i r b u s i n e s s a c t i v i t i e s a r e l e g a l o r n o t , n o r d o t h e y k n o w t h e s t r e n g t h o f t h e i r b u s i n e s s s u i t s a t c o u r t . I t i s m u c h e a s i e r t o e n c o u n t e r l e g i s l a t i v e c o n f l i c t s i n t h e c o u r s e o f a d m i n i s t r a t i v e t r i a l t h a n c i v i l a n d c o m m e r c i a l l i t i g a t i o n . I t i s b e c a u s e l e g i s l a t i v e c o n f l i c t s u s u a l l y o c c u r b e t w e e n l o c a l r e g u l a t i o n s a n d n a t i o n a l l a w , a d m i n i s t r a t i v e r u l e s , a n d n o r m a t i v e d o c u m e n t s a m o n g t h e m i n i s t r i e s a n d c o m m i s s i o n s . 1 7 7 I n Mr. Chuanlin Tu ( 1 9 9 6 ) , ' ° The term "take as reference" has been subject to different interpretation. Three different views exist in China. One view holds that "take as reference" means that the courts shall apply other applicable legislation as any review of the other applicable legislation by the people's courts shall contradict article 12.2 of the ALL, which provides that no abstract administrative acts shall be reviewable; the second view maintains that the term does not mean direct application. Instead, the people's courts should only take into account the spirit of regulations, but not the regulations themselves because the ALL does not provide that they may be applicable legislation and the quality of regulations is not that good. The third view takes the middle road by suggesting that the term actually means conditional application of regulation injudicial review. That is to say that the people's courts shall examine regulations first to see whether they are applicable. It is a sort of selective application which gives the court the discretion in this aspect. The third approach is supported by the judiciary. See Luo Haocai, 1993, pp. 464-469. 1 7 6 See Appendix: Mr. Liangren Sun v Administrative Commission of High Technology Development Areas. People's Government of Chongqin (2001) 1 7 7 Just before Legislation Law of the PRC passed, disputes concerning managerial competence occurred between Agriculture Administrative Department and State Supply & Marketing Department. The former based on Regulations on Pesticide Management enacted by State Council; the latter relied on Measures for Implementing Regulations on Pesticide 84 t h e d e c i s i o n m a d e b y t h e d e f e n d i n g p a r t y , t h e a d m i n i s t r a t i v e a g e n c y w a s q u a s h e d b y t h e c o u r t b e c a u s e t h e d e f e n d i n g p a r t y w a s b a s e d o n a n a d m i n i s t r a t i v e r e g u l a t i o n 1 78 w h i c h w a s c o n f l i c t w i t h t h e l a w . T h e p r o b l e m o f l e g i s l a t i v e c o n f l i c t s h a s b e e n p a r t l y a d d r e s s e d b y t h e r e c e n t Legislation Law of the PRC.m I t p r o v i d e s f i v e 180 p r i n c i p l e s t o d e f i n e t h e l e v e l s o f v a l i d i t y o f l e g i s l a t i o n : t h e l e g i s l a t i o n a t h i g h e r l e v e l i s s u p e r i o r t o t h e l e g i s l a t i o n a t l o w l e v e l , s p e c i a l l e g i s l a t i o n i s s u p e r i o r t o g e n e r a l l e g i s l a t i o n , n e w l e g i s l a t i o n i s s u p e r i o r t o o l d l e g i s l a t i o n , l e g a l v a l i d i t y o f l e g i s l a t i o n a t t h e s a m e l e v e l i s e q u a l , a n d d o c t r i n e o f n o n r e t r o a c t i o n . B e s i d e s , i t a l s o d e s i g n a t e s w h i c h o r g a n i z a t i o n s a r e e n t i t l e d t o d e t e r m i n e t h e l a w a p p l i c a t i o n i s s u e s i n 181 c a s e t h e r e i s c o n f u s i o n a s t o d e a l i n g w i t h l e g i s l a t i v e c o n f l i c t s . T h e Legislation law d o e s c o n t r i b u t e t o w o r k i n g o u t l e g i s l a t i v e c o n f l i c t s i n p r a c t i c e . H o w e v e r , s i n c e t h e Legislation Law f a i l s t o p r e s c r i b e t h e t i m e f o r t h e o r g a n i z a t i o n w i t h a u t h o r i t y t o g i v e a n i n t e r p r e t a t i o n , i t m e a n s t h a t t h e i n t e r p r e t a t i o n m a y n o t b e i s s u e d o r i s s u e d i n a c o n s i d e r a b l e w h i l e . T h e s u s p e n s i o n o f l i t i g a t i o n m a y t h u s f a l l i n t o g r e a t u n c e r t a i n t y . Management enacted according to the relevant provisions of this regulation. See Beijing Wanbao (Beijing Evening), 22 March 2000. 1 7 8 See Appendix: Mr. Chuanlin Tu v Industrial and Commercial Administrative Bureau. Oinghuai District, Nanjing, Jiandsu Province (1996). 1 7 9 Legislation Law of the PRC provides the extent of legislative competence of various legislative organizations, Articles 7-11. 1 8 0 As for the legislative conflicts between the legislation with different level of validity, Article 79 of Legislation Law of the PRC says the validity of law is higher than administrative regulations, local regulations and rules, and, the validity of administrative regulations is higher than local regulations and rules. Article 80 states that the validity of local regulations is higher than the rules made by the governments at the same and lower lever, and, validity of rules made by the People's Governments of provinces and autonomous regions is higher than the rules made by the People's Governments of the bigger cities within the same administrative region. As for the legislative conflicts between the legislation with same level of validity, article 82, 85 and 86 set out how to deal with them. 1 8 1 Legislation Law of the PRC, Articles 85-86. 85 E i t h e r t i m e o r m o n e y w o u l d b e w h a t t h e i n t e r e s t e d p a r t i e s c a n n o t a f f o r d . 1 8 2 B y t h i s t o k e n , t h i s t h e s i s s u g g e s t s t h a t a c l e a r t i m e l i m i t f o r i s s u i n g i n t e r p r e t a t i o n b e r e g u l a t e d . A n d , a s f o r t h e l e g i s l a t i v e c o n f l i c t s b e t w e e n t h e r e g u l a t i o n s o r r u l e s ( n o t c o n c e r n i n g t h e l a w ) , t h e c o u r t s h o u l d h a v e d e c i s i v e p o w e r to c h o o s e t h e a p p l i c a b l e l e g i s l a t i o n . F o r t h e r e g u l a t i o n s o r r u l e s w h i c h h a v e n o t b e e n a p p l i e d , t h e c o u r t s m a y i s s u e t h e j u d i c i a l s u g g e s t i o n t o t h e r e l e v a n t a d m i n i s t r a t i v e o r g a n s . 4.2.1 Public accessibility L i k e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n , t h e l a w a n d r e g u l a t i o n s a r e u s u a l l y p u b l i c l y a c c e s s i b l e . T h e c o n c e r n i s a l s o o n t h e o p e n n e s s o f t h e i n t e r n a l g u i d e l i n e s a n d t h e w i d e l y - u s e d n u m e r o u s j u d i c i a l i n t e r p r e t a t i o n . S e e t h e p r e v i o u s d i s c u s s i o n . 4.2.2 Uniformity, consistency, certainty and stability B e s i d e s t h e a n a l y s i s c o n d u c t e d i n t h e p r e v i o u s p a r a g r a p h s ( u n d e r t h e h e a d i n g o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n ) , h e r e t h e a u t h o r e m p h a s i z e s l a w a p p l i c a t i o n i s s u e s i n r e l a t i o n t o t h e a d m i n i s t r a t i v e a n d c o m m e r c i a l l i t i g a t i o n i n v o l v i n g f o r e i g n e l e m e n t s . I t c o n c e r n s t h e i s s u e o f h o w to a p p l y t h e i n t e r n a t i o n a l r u l e s i n t h e d o m e s t i c c o u r t s . T h i s i s s u e i s e s p e c i a l l y i m p o r t a n t g i v e n C h i n a ' s e n t r y i n t o t h e W T O . T h e W T O a g r e e m e n t s h o u l d b e i m p l e m e n t e d b y C h i n a i n a n e f f e c t i v e a n d u n i f o r m 1 8 2 See Liu Xin, "Lun Baituo Xingzheng Susong de Kunjing" (On Stepping out of Dilemma of Administrative Litigation), Xingzheng Faxue Yanjiu (Studies of Administrative Jurisprudence), No.4 (1999) 86 m a n n e r b y r e v i s i n g i t s e x i s t i n g d o m e s t i c l a w s a n d e n a c t i n g n e w o n e s f u l l y i n c o m p l i a n c e w i t h t h e W T O a g r e e m e n t . I t m e a n s t ha t t h e W T O r u l e s s h o u l d n o t b e d i r e c t l y a p p l i e d b y t h e d o m e s t i c c o u r t s . T h e y a r e , t h e r e f o r e , i n d i r e c t l y a p p l i e d a f t e r t h e y a r e t r a n s f o r m e d i n t o t h e d o m e s t i c l a w . O n t h e o n e h a n d , t h e i n d i v i d u a l s a n d e n t e r p r i s e s c a n n o t r e l y o n t h e W T O r u l e s t o s u e a n d p l e a a t C h i n a ' s c o u r t s . O n t h e o t h e r h a n d , t h e W T O r u l e s c a n n o t b e a p p l i e d i n t h e t r i a l a n d q u o t e d i n t h e j u d g e m e n t s . T h i s h a s b e e n r e f l e c t e d b y t h e n e w j u d i c i a l i n t e r p r e t a t i o n , The Supreme Court of the PRC: Regulations on Hearing Administrative Cases In Relation to International Trade ( 2 0 0 2 ) 1 8 4 . T h a t i s , t h e P e o p l e ' s C o u r t , i n h a n d l i n g t h e a d m i n i s t r a t i v e c a s e s r e l a t e d w i t h i n t e r n a t i o n a l t r a d e , t a k e t h e l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d l o c a l 185 r e g u l a t i o n s , a n d t a k e t h e r u l e s a s r e f e r e n c e . T h i s i s j u s t l i k e t h e p r o v i s i o n s u n d e r E i t h e r f o r d i r e c t a p p l i c a t i o n o r f o r t r a n s f o r m e d a p p l i c a t i o n , u l t i m a t e l y , t h e r e s u l t i s d o m e s t i c a d h e r e n c e t o i n t e r n a t i o n a l t r e a t i e s . A p p l i c a t i o n o f d o m e s t i c l a w t h r o u g h Report of the Working Party on the Accession of China (WT/ACC/CHN/49), Article 67. 1 8 4 The Supreme Court of the PRC: Regulations on Hearing Administrative Cases In Relation to International Trade, passed on 27 August 2002 and being effective on 1 Oct. 2002. 185 This is reflected by Article 7-8 of The Supreme Court of the PRC: Regulations on Hearing Administrative Cases In Relation to International Trade. It is provided as follows, when the People's court shall handle the administrative cases involving international trade according to law, administrative regulations, local regulations enacted intra vires, and referring to the normative documents enacted by the ministries and commissions under the State Council pursuant to law and administrative regulations, decisions and decrees made by the State Council, and also referring to normative documents enacted by the people's government of provinces, autonomous region, municipal cities directly under the central government, the cities where provincial government and government of autonomous region are located, according do law, administrative regulations and local regulations. 1 8 6 ALL, Article 53. 87 i n t e r p r e t a t i o n s o as t o c o n f o r m to t h e i n t e r n a t i o n a l t r e a t i e s i s c o m m o n p r a c t i c e i n i n t e r n a t i o n a l c o m m u n i t y . T h i s h a s b e e n a b s o r b e d b y C h i n a . T h e a b o v e m e n t i o n e d j u d i c i a l i n t e r p r e t a t i o n p r o v i d e s t h a t i n t h e e v e n t t h a t t h e r e a r e t w o o r m o r e k i n d s o f i n t e r p r e t a t i o n o f a p p l i c a b l e l a w a n d a d m i n i s t r a t i v e r e g u l a t i o n s , t h e i n t e r p r e t a t i o n i n c o m p l i a n c e w i t h t h e W T O r u l e s s h a l l b e a d o p t e d . S o , C h i n a ' s c o u r t s t r y t o a v o i d t h e c o n f l i c t s o f d o m e s t i c l a w a n d W T O r u l e s t h r o u g h i n t e r p r e t a t i o n a n d a p p l i c a t i o n o f 1 87 l a w . H o w e v e r , s o m e p r o b l e m s r e m a i n . W h a t w o u l d p r e v a i l i f t h e r e i s n o i n t e r p r e t a t i o n i n k e e p i n g w i t h t h e W T O r u l e s a t a l l ? H o w s h o u l d o n e d e a l w i t h t h e c o n f l i c t s b e t w e e n t h e W T O r u l e s a n d C h i n a ' s l a w , a d m i n i s t r a t i v e r e g u l a t i o n s , l o c a l r e g u l a t i o n s a n d r u l e s ? D u e t o t h e l o w l e v e l o f l e g a l v a l i d i t y o f r u l e s , i t i s u n d e r s t a n d a b l e t h a t t h e c o u r t s w i l l n o t t a k e t h e m a s r e f e r e n c e i n t h e e v e n t c o n f l i c t s a r i s e . A s t o l a w , a d m i n i s t r a t i v e r e g u l a t i o n s a n d l o c a l r e g u l a t i o n s w h i c h h a v e c o n f l i c t s w i t h t h e W T O , t h e r e i s n o c l e a r a n s w e r a s t o w h e t h e r t h e y c a n b e t h e l e g a l a u t h o r i t i e s o f t h e c o u r t s . I t i s s u g g e s t e d t h a t c o u r t s s h o u l d s e n d t o t h e l e g i s l a t o r t h e j u d i c i a l s u g g e s t i o n s t h a t t h e l a w o r r e g u l a t i o n s i n c o n f l i c t w i t h t h e W T O r u l e s b e r e v i s e d . A f t e r t h e r e v i s i o n , t h e y m a y b e a p p l i e d b y t h e c o u r t s . 1 8 8 T h i s s u g g e s t i o n m a k e s s e n s e i n t h e l o n g r u n . I n t h e s h o r t r u n , i . e . , f o r t h e c a s e a t i s s u e , t h e m a n n e r t o a p p l y l a w t o g e t t h e d i s p u t e s e t t l e d i s s t i l l u n k n o w n . 1 8 7 The Supreme Court of the PRC: Regulations on Hearing Administrative Cases In Relation to International Trade, Article 9 provides that when the people's courts handle the administrative cases in relation to international trade and the applicable law and regulations involve two or more than two kinds of interpretation, the interpretation in compliance with the international treaties China participates into shall be adopted, unless China has made reservation. 1 8 8 See Xia Jinlai & Ye Bifeng, "Dui WTO Tizhi xia Guoji Maoyi Xingzheng Susong de Sikao" (On Administrative Litigation In Relation to the International Trade under the WTO), Faxue Pinglun {Law Review), Vol. 119, No. 3 (2003) 88 C o m m e r c i a l l i t i g a t i o n s e e m s c l e a r e r t h a n a d m i n i s t r a t i v e l i t i g a t i o n w i t h r e s p e c t t o h o w t o d e a l w i t h c o n f l i c t s b e t w e e n t h e i n t e r n a t i o n a l t r e a t i e s a n d d o m e s t i c l a w . U n d e r t h i s c i r c u m s t a n c e , t h e i n t e r n a t i o n a l t r e a t i e s p r e v a i l p u r s u a n t t o t h e C L L (Civil Litigation Law) u n l e s s C h i n a h a s m a d e r e s e r v a t i o n . 1 8 9 4.3 Procedural fairness 4.3.1 Openness System P r o c e d u r a l f a i r n e s s r e l i e s o n t h e o p e n n e s s s y s t e m r u n n i n g t h r o u g h t h e w h o l e o f l i t i g a t i o n . A s s p e c i f i e d p r e v i o u s l y , t h e o p e n n e s s s y s t e m e n t a i l s o p e n n e s s t o t h e p a r t i e s a n d t o t h e p u b l i c , a n d a l s o i n c l u d e s a s e r i e s o f l e g a l p r o t e c t i v e m e a s u r e s t o g u a r a n t e e t h e r e a l i z a t i o n o f o p e n n e s s . T h e o p e n n e s s s y s t e m o f t r i a l r e q u i r e s t h a t t h e t r i a l s h o u l d b e o p e n b o t h t o t h e p u b l i c a n d t h e p a r t i e s . O p e n n e s s t o t h e p u b l i c m e a n s t h e c o u r t s h o u l d a n n o u n c e t h e n a m e o f t h e p a r t i e s , c a u s e o f a c t i o n , t i m e a n d p l a c e o f t r i a l b e f o r e t h e t r i a l i s h e l d . D u r i n g t h e c o u r s e o f t h e c o u r t t r i a l , p e o p l e s h o u l d b e a l l o w e d t o a u d i t a n d m e d i a s h o u l d b e p e r m i t t e d t o m a k e r e p o r t a n d g a t h e r n e w s u n l e s s o t h e r w i s e p r o v i d e d b y l a w . F u r t h e r m o r e , t h e j u d g e m e n t s s h o u l d b e p r o n o u n c e d p u b l i c l y . CLL, Article 238 reads, the international treaties or conventions which China concludes or accedes to shall supersede national laws in cases of conflict between them, except those provisions on which China has made reservations. 89 F o r b o t h a d m i n i s t r a t i v e l i t i g a t i o n a n d c o m m e r c i a l l i t i g a t i o n , o p e n t r i a l i s e x p r e s s l y p r o v i d e d b y l a w . 1 9 0 B u t i n j u d i c i a l p r a c t i c e , t h e r e h a s b e e n a m i s u n d e r s t a n d i n g t h a t o p e n n e s s t o t h e p u b l i c i s t h e s a m e a s a n o p e n t r i a l . O p e n n e s s to t h e p u b l i c a n d s o c i e t y i s s u r e l y n e c e s s a r y . It i s a k i n d o f e x t e r n a l s u p e r v i s i o n o v e r t r i a l a c t i v i t i e s a n d c a n b e c o n d u c i v e t o p r e v e n t i n g t h e j u d g e s f r o m a b u s i n g t h e i r p o w e r . B u t i t i s a l s o a d m i t t e d t h a t t h e r o l e o f o p e n n e s s a t t h i s l e v e l i s l i m i t e d b e c a u s e n e i t h e r t h e p u b l i c n o r t h e m e d i a r e a l l y p a r t i c i p a t e s i n t o t h e l i t i g a t i o n a n d t h u s c a n o n l y e x e r t i n d i r e c t i n f l u e n c e o n t h e t r i a l . I t i s q u i t e u n d e r s t a n d a b l e t h a t t h e y m a y l a c k e n o u g h d r i v i n g f o r c e t o s u p e r v i s e t h e t r i a l s i n c e t h e y a r e n o t t h e i n t e r e s t e d p a r t i e s . A l s o , t h e i r i n v o l v e m e n t i s o n l y l i m i t e d t o t h e c o u r t t r i a l . A s f o r p r e - t r i a l a n d p o s t - t r i a l p r o c e e d i n g s , t h e y a r e n o t m u c h i n v o l v e d a n d m a y n o t b e v e r y h e l p f u l i n t e r m s o f s u p e r v i s i o n . A l l t h e s e i n d i c a t e t h e i n a d e q u a c y o f o p e n n e s s to t h e p u b l i c a n d t h e s i g n i f i c a n c e o f o p e n n e s s t o t h e p a r t i e s , w h i c h w e c a l l h e r e t h e s u b s t a n t i v e o p e n n e s s . O p e n t r i a l s y s t e m s , a t a d e e p l e v e l , e n t a i l a s e r i e s o f l i t i g i o u s r i g h t s e n t i t l e d a n d e x e r c i s e d b y t h e p a r t i e s s o a s to a s s u r e t h e p r o c e d u r a l f a i r n e s s a n d g u a r d a g a i n s t a b u s i v e d i s c r e t i o n o f j u d g e s . T h e p a r t i e s e n j o y t h e r i g h t s t o l e a r n t h e t r u t h a n d t o p a r t i c i p a t e i n t o t h e l i t i g a t i o n to t h e u t m o s t e x t e n t . It m e a n s t h a t b o t h o f t h e j u d i c i a l p r o c e e d i n g s a n d c a s e d o c u m e n t s s h o u l d b e o p e n to t h e p a r t i e s . M o r e s p e c i f i c a l l y , f i r s t , t h e right t o l e a r n t h e p r o c e d u r e s s h o u l d b e s a f e g u a r d e d . T h e 1 9 0 A L L , A r t i c l e 6 a n d C L L , A r t i c l e 10. 90 w h o l e j u d i c i a l p r o c e e d i n g s , i n c l u d i n g t h e e x t r a j u d i c i a l i n v e s t i g a t i o n t r i a l a n d p r e p a r a t i o n f o r t h e t r i a l , s h o u l d b e o p e n t o t h e p a r t i e s . T h a t i s , t h e p a r t i e s a r e e n t i t l e d t o p a r t i c i p a t e i n t o a n d b e p r e s e n t at t h e w h o l e p r o c e s s o f t h e l i t i g a t i o n e x c e p t f o r t h e j u d g e s ' p r i v a t e s i t t i n g . T o p r e v e n t t h e c o u r t f r o m m a k i n g s e c r e t o r i l l e g a l i n v e s t i g a t i o n s , t h e c o u r t s h o u l d n o t e x e r c i s e p o w e r t o d o i n v e s t i g a t i o n u n l e s s a t t h e r e q u e s t o f t h e p a r t i e s . T h e p a r t i e s a r e a l s o e n t i t l e d t o l e a r n t h e f a c t u a l b a s i s a n d l e g a l a u t h o r i t i e s o f t h e j u d g e m e n t s . I n t h e e v e n t t h a t t h e a p p l i c a t i o n f o r a c t i o n i s r e f u s e d , t h e r e a s o n s a n d t h e a p p l i c a b l e l a w s h o u l d b e g i v e n t o o . T h e r i g h t t o l e a r n t h e t r u t h , o f c o u r s e , i n c l u d e s t h e r i g h t t o b e i n f o r m e d o f t h e l i t i g i o u s r i g h t s . T h e c o u r t s a r e o b l i g a t e d t o c o r r e c t l y i n f o r m t h e l i t i g a n t s o f t h e i r l i t i g i o u s r i g h t s l i k e t h e rights t o a b d i c a t e , a l t e r a n d i n c r e a s e c l a i m s i n l i t i g a t i o n ; t h e d e f e n d a n t s ' right t o d e f e n s e , 1 9 1 t h e p a r t i e s ' rights to a u t h o r i z e t h e r e p r e s e n t a t i v e to a t t e n d t h e p r o c e e d i n g s , t o a p p l y f o r t h e c h a l l e n g e , t o i n q u i r e t h e w i t n e s s e s , a p p r a i s e r s a n d o n - s i t e e x a m i n e r s s u b j e c t t o t h e a p p r o v a l o f t h e j u d g e s a n d to d e b a t e i n l i t i g a t i o n ; t o l o o k u p a n d c o p y t h e c a s e f i l e s ( u n l e s s i n v o l v i n g t h e s t a t e s e c r e c y a n d p e r s o n a l p r i v a c y ) ; t h e r i g h t t o a p p e a l , e t c . S e c o n d , p r e t r i a l p r o c e d u r e s s h o u l d b e o p e n t o t h e p a r t i e s . I n t h i s r e g a r d , C h i n a ' s l a w o n l y r e q u i r e s t ha t t h e c o m p o s i t i o n o f c o l l e g i a l b e n c h s h o u l d b e o p e n . F o r e x a m p l e , t h e C L L p r o v i d e s t ha t o n c e t h e m e m b e r s o f c o l l e g i a l b e n c h a r e c o n f i r m e d , t h e p a r t i e s s h o u l d b e n o t i f i e d w i t h i n t h r e e d a y s . I f t h e r e a r e l e g a l r e a s o n s , t h e p a r t i e s a r e e n t i t l e d 1 9 1 For the civil and commercial litigation, the defendant is entitled to counterclaim, but the defendant in the administrative litigation, the administrative agency, is not entitled to counterclaim; also, the parties enjoy the right to apply for mediation, which is not allowed in the administrative litigation except for the state compensation case. 91 t o c h a l l e n g e t h e m e m b e r ( s ) o f t h e c o l l e g i a l b e n c h . H o w e v e r , s o m e o t h e r i m p o r t a n t p r e t r i a l a c t i v i t i e s c o n d u c t e d b y t h e c o u r t s a r e n o t o p e n t o t h e p a r t i e s . F o r i n s t a n c e , t h e r e i s n o l e g a l g u a r a n t e e f o r t h e p a r t i e s t o l e a r n t h e e v i d e n c e c o l l e c t e d b y t h e c o u r t s p r i o r t o t h e t r i a l , o n t h e k i n d o f p r o c e d u r e s t h e c o u r t o b t a i n t h e e v i d e n c e . T h e r e f o r e , i t 192 i s d i f f i c u l t f o r t h e p a r i t i e s t o k n o w t h e l e g i t i m a c y o f t h e e v i d e n c e . T h i r d , t h e c o u r t t r i a l s h o u l d b e t o t a l l y o p e n to t h e p a r t i e s . O n t h e o n e h a n d , e i t h e r s i d e o f p a r t y s h o u l d n o t m a k e a s u r p r i s e a t t a c k o n t h e o t h e r s i d e w h e n p r o d u c i n g e v i d e n c e . O n t h e o t h e r h a n d , t h e j u d g e s h o u l d g u a r a n t e e t h e p a r t i e s ' r i g h t s t o s t a t e m e n t , d e b a t e , r e s p o n s e , c r o s s - e x a m i n a t i o n a n d t h e r i g h t t o p r o d u c e t h e c a s e d o c u m e n t s , a n d p r o v i d e t h e p a r t i e s w i t h a d e q u a t e o p p o r t u n i t i e s a n d c o n d i t i o n s t o e x e r c i s e a b o v e r i g h t s . T h e n o t e w o r t h y t h i n g h e r e i s t h a t t h e o p e n n e s s o f c o u r t t r i a l h e r e i n c l u d e s t h e o p e n n e s s o f t h e s e c o n d i n s t a n c e o f t r i a l . 4.3.2 Recent Progress E n c o u r a g i n g l y , C h i n a h a s a d o p t e d s o m e m e a s u r e s to r e a l i z e t h e o p e n n e s s o f t r i a l t o t h e p u b l i c a n d t h e p a r t i e s r e c e n t l y . O n 1 0 M a y 1 9 9 8 , t h e N o . 1 I n t e r m e d i a t e P e o p l e ' s C o u r t o f B e i j i n g t o o k t h e l e a d t h r o u g h o u t t h e c o u n t r y i n d e c l a r i n g t h a t a n y c i t i z e n a t o r a b o v e t h e a g e o f e i g h t e e n m a y a u d i t t h e c o u r t t r i a l w i t h a n e f f e c t i v e c e r t i f i c a t e . O n 11 J u l y o f t h e s a m e y e a r , t h e s a m e c o u r t h e l d a t r i a l o f i n t e l l e c t u a l 1 9 2 See W a n g F u h u a , " M i n s h i S h e n p a n G o n g k a i Z h i d u de S h u a n g c h o n g H a n y i " , ( T w o - L e v e l M e a n i n g o f O p e n n e s s S y s t e m o f C i v i l T r i a l ) , Dangdai Faxue (Modern Law Science), N o . 2 ( 1 9 9 9 ) . 92 p r o p e r t y c a s e w h i c h w a s l i v e l y b r o a d c a s t b y t h e C h i n a C e n t r a l T V t o t h e w h o l e c o u n t r y . 1 9 3 I n M a r c h 1 9 9 9 , t h e S u p r e m e P e o p l e ' s C o u r t p r o m u l g a t e d Rules on Strictly Implementing the System of Open Trial. I t e x p r e s s l y p o i n t s o u t t h a t u n l e s s o t h e r w i s e p r o v i d e d b y l a w , a l l t h e c a s e s s h a l l b e h e a r d i n p u b l i c ; t h e w h o l e p r o c e s s o f t r i a l s h a l l b e o p e n a n d r e s p o n s i b l e r e p o r t b y t h e m e d i a s h a l l b e a l l o w e d . A s f o r t h e o p e n n e s s t o t h e p a r t i e s , r e c e n t m e a s u r e s i n c l u d e t h e f o l l o w i n g r e s p e c t s i n c l u d i n g t h e t r i a l s y s t e m , e v i d e n c e a n d j u d i c i a l p o w e r , e t c . T h e O p e n t r i a l s y s t e m c a l l s f o r a n i m p r o v e d l i t i g a t i o n m o d e l . O n 11 J u l y 1 9 9 8 , Rules on Reforming the Model of Civil and Economic Trial w a s e n a c t e d b y t h e S u p r e m e P e o p l e ' s C o u r t . T h e t r a d i t i o n a l ex officio p r o c e e d i n g s h a v e b e e n r e p l a c e d b y a d v e r s a r y p r o c e e d i n g s . T h e n e w w a y s o f c o u r t t r i a l , c h a r a c t e r i z e d b y o p e n e v i d e n c e - p r o d u c i n g , c r o s s - e x a m i n a t i o n , d e b a t e , a u t h e n t i c a t i o n , a d j u d i c a t i o n a n d c o u r t t r i a l a s t h e c o r e o f t h e w h o l e t r i a l h a v e b e e n c a r r i e d o u t b y t h e c o u r t s a t a l l l e v e l s . 1 9 4 T h e i n v e s t i g a t i o n a n d c o l l e c t i o n o f e v i d e n c e a r e n o m o r e u n d e r t a k e n b y t h e c o u r t s b u t m o s t l y b y t h e p a r t i e s t h e m s e l v e s . E v i d e n c e i s t h e e s s e n c e o f l i t i g a t i o n . I n D e c e m b e r 2 0 0 1 , t h e S u p r e m e C o u r t o f t h e P R C p r o m u l g a t e d Rules on Evidence of Civil Litigation, w h i c h w a s t h e f i r s t r u l e o n e v i d e n c e m a d e b y t h e j u d i c i a l o r g a n o f t h e h i g h e s t l e v e l s i n c e t h e e n a c t m e n t o f Civil 1 9 3 See Renmin Ribao {People's Daily), 16 O c t . 2 0 0 2 , p. 10. 1 9 4 S e e Renmin Ribao ( O v e r s e a s V e r s i o n - People's Daily), 14 N o v . 2 0 0 1 , p.4. 93 Litigation Law of the PRC. T h e R u l e i s v e r y s i g n i f i c a n t f o r t h e p a r t i e s p a r t i c i p a t i n g i n t o t h e l i t i g a t i o n a n d t h e j u d g e s h e a r i n g t h e c a s e s . It i n t r o d u c e s a t i m e l i m i t f o r p r o d u c i n g e v i d e n c e w h i c h m e a n s t h e e v i d e n c e a d d u c e d e x c e e d i n g t h e t i m e l i m i t c a n n o t b e h e a r d o r b e c o m e n e w e v i d e n c e to o v e r t h r o w t h e o r i g i n a l j u d g e m e n t . It s t r e n g t h e n s e v i d e n t i a l b u r d e n . T h e p a r t y w h o f a i l s t o i n d u c e e v i d e n c e m a y l o s e t h e s u i t . V e r y i m p o r t a n t l y , A r t i c l e 5 . 7 o f t h i s R u l e r e q u i r e s t h a t i n t h e e v e n t o f s i g n i f i c a n t a n d c o m p l e x c a s e s , t h e t w o p a r t i e s s h o u l d u n f o l d t h e e v i d e n c e to e a c h o t h e r p r i o r t o t h e t r i a l . I t i n d i c a t e s f o r t h e f i r s t t i m e C h i n a h a s i t s o w n e v i d e n c e e x c h a n g e s y s t e m . A l s o w i t n e s s e d i s t h e i m p r o v e m e n t o n t h e a d m i n i s t r a t i v e l i t i g a t i o n i n r e s p e c t o f e v i d e n c e . O n 2 7 J u l y 2 0 0 2 , t h e S u p r e m e C o u r t o f t h e P R C p r o m u l g a t e d Rules on Evidence of administrative Litigation, w h i c h c l e a r l y s t i p u l a t e s t h a t t h e a d m i n i s t r a t i v e a g e n c y , a s t h e d e f e n d i n g p a r t y , s h a l l p r o v i d e f a c t u a l e v i d e n c e a n d l e g a l a u t h o r i t i e s o n w h i c h t h e a d m i n i s t r a t i v e a c t a t i s s u e w a s m a d e . I n t h e e v e n t o f t h e f a i l u r e t o d o s o o r d o s o a f t e r a s t a t e d d a t e w i t h o u t r e a s o n a b l e r e a s o n s , i t i s d e e m e d t h a t t h e a d m i n i s t r a t i v e a c t a t i s s u e l a c k s e v i d e n t i a l s u p p o r t . T h e a b o v e t w o e v i d e n c e r u l e s i n d i c a t e t h e g r e a t e f f o r t s d o n e b y C h i n a to a c h i e v e p r o c e d u r a l f a i r n e s s t h r o u g h s a f e g u a r d i n g t h e c o r r e c t u s a g e o f e v i d e n c e d u r i n g t h e l i t i g a t i o n . F o r a l o n g p e r i o d , j u d i c i a l p r a c t i c e , l i k e t h e a d m i n i s t r a t i v e m o d e l , h a s f o l l o w e d t h e 94 p r a c t i c e o f e x a m i n a t i o n a n d a p p r o v a l l e v e l b y l e v e l , w h i c h m a k e s t h e c o l l e g i a l b e n c h w i t h o u t v i r t u a l p o w e r a n d w i t h w e a k e n e d f u n c t i o n s . T h e c o l l e g i a l b e n c h i s u n w o r t h y o f t h e t i t l e . O n 1 6 A u g u s t 2 0 0 0 , Measures on Electing Chief Justice of the People's Court w a s p r o m u l g a t e d b y t h e S u p r e m e C o u r t . T h e a c a d e m i c r e a l m r e g a r d s t h i s r u l e a s t h e s u p p o r t p o i n t o f t h e c o m p r e h e n s i v e r e f o r m s o f t h e c o u r t s . 1 9 5 A d o p t i n g t h e e l e c t i o n o f c h i e f j u s t i c e , t h e c o u r t s a t v a r i o u s l e v e l s r e t u r n t h e d e c i s i v e p o w e r o f t h e c a s e s t o t h e r e s p o n s i b l e j u d g e a n d c o l l e g i a l b e n c h . T h e h e a d s o f d i v i s i o n s a n d t h e p r e s i d e n t s o f t h e c o u r t s d o n o t e x a m i n e a n d a p p r o v e t h e c a s e s a n d c a n n o t p e r s o n a l l y c h a n g e t h e d e c i s i o n m a d e b y t h e c o l l e g i a l b e n c h . B o o s t e d b y t h e S u p r e m e C o u r t , a l l o f l o c a l c o u r t s s t a r t e d t o f o r m u l a t e c o n c r e t e p r o j e c t s t o e l e c t t h e i r c h i e f j u s t i c e ( e . g . , t h e p r o c e d u r e s o f r e c o m m e n d a t i o n , w r i t t e n e x a m s a n d i n t e r v i e w e t c . ) N o w , m o s t o f t h e c o u r t s h a v e f i n i s h e d t h i s r e f o r m . A s f o r t h e o p e n n e s s o f d e c i s i o n s , f o r a l o n g t i m e m a n y o b s e r v e r s i n t h e W e s t h a v e c h a l l e n g e d t h e C h i n e s e c o u r t s f o r t h e i r f a i l u r e t o p u b l i s h t h e l a w s a p p l i e d i n t h e i r a d j u d i c a t i o n . T h e y e v e n c a m e to t h e c o n c l u s i o n t h a t C h i n a w a s a s t a t e w i t h o u t l a w . 1 9 6 N o w , t h i n g s h a v e b e e n c h a n g e d . T h e S u p r e m e P e o p l e ' s C o u r t o p e n s t o t h e p u b l i c t h e f i r s t b a t c h o f f u l l - t e x t j u d g e m e n t d o c u m e n t s f r o m m a j o r c a s e s . T h e C o u r t d e c i d e s 1 9 5 See Supra note 193. 1 9 6 For a full discussion of this subject, see Hsia, "Chinese Legal Publications: An Appraisal", in Contemporary Chinese Law: Chinese Problems and Perspectives (J. Cohen ed. 1970), p.20, 68-71; also see Shao-Chuan Leng & Hungdah Chiu, Criminal Justice in Post-Mao China (1985) pp.10-20; Shao-Chuan Leng, Justice in Communist China (1967), pp. 84-87. 95 t o o p e n s e l e c t e d j u d g e m e n t d o c u m e n t s t o t h e p u b l i c i n t h e f u t u r e t o e x p e d i t e t h e i r r e f o r m a n d i m p r o v e t h e i r q u a l i t y . T h e e x p o s u r e w i l l c e r t a i n l y e n h a n c e t h e t r a n s p a r e n c y o f t r i a l s . M e a n w h i l e , t h e S u p r e m e P e o p l e ' s C o u r t w i l l r e q u i r e l o c a l c o u r t s t o o p e n f u l l - t e x t j u d g e m e n t d o c u m e n t s i n t h e f u t u r e . 1 9 7 4.3.3 Problems to be resolved D e s p i t e o f m u c h p r o g r e s s C h i n a h a s m a d e , t h i s t h e s i s a l s o i n t e n d s t o i d e n t i f y t h e p r o b l e m s t h a t s t i l l r e m a i n a n d t h e c h a l l e n g e s c o n f r o n t e d b y C h i n a o n t h e w a y t o s e e k i n g g r e a t e r t r a n s p a r e n c y i n j u d i c i a l a d j u d i c a t i o n . 4.3.3.1 Common issues C u r r e n t l y , t h e n u m b e r o f c a s e s i n w h i c h c o u r t r u l i n g s a r e o p e n l y d e f i e d i s d e c r e a s i n g , b u t c a s e s i n v o l v i n g a b u s e o f p o w e r a n d a d m i n i s t r a t i v e i n t e r v e n t i o n a r e s t i l l h i g h i n n u m b e r . 1 9 8 A s t h e p o w e r o f j u d i c i a l b o d i e s g r o w s , t h e p r o b l e m o f c o r r u p t i o n i n t h e j u d i c i a l s y s t e m i s b e c o m i n g a m o r e s e r i o u s f o c a l p o i n t f o r p u b l i c c o n c e r n . O u t m o d e d t r i a l p r o c e d u r e s s u c h a s t h e r e f u s a l t o a l l o w p r e s s c o v e r a g e o f t r i a l s , a l a c k o f t r a n s p a r e n c y i n t r i a l p r o c e d u r e s , a n d r u n n i n g q u e s t i o n s t h r o u g h o u t t h e t r i a l b y t h e j u d g e n o t o n l y i n f l u e n c e t h e f a i r n e s s o f t h e t r i a l b u t a l s o i n f l u e n c e t h e r e s p e c t a n d t r u s t o f t h o s e i n v o l v e d a n d s o c i e t y a t l a r g e t o w a r d t h e l e g a l s y s t e m . T h e q u a l i t y o f j u d g e s h a s a l s o p r o v e d t o b e a d i f f i c u l t p r o b l e m , i n f l u e n c i n g t h e f a i r n e s s o f t r i a l a n d t h e j u s t n e s s o f j u d i c i a l p r o c e e d i n g s , a n d m o r e i m p o r t a n t l y , t h e r e a r e a 197 Beijing Qingnian bao (Beijing Youth Daily), 20 June 2 0 0 0 , p. 2 c . 198 FazhiRibao (Legal Daily), 10 O c t . 2 0 0 0 , p . l . 96 n u m b e r o f s t r u c t u r a l w e a k n e s s e s . Adjudicatory Committee. T h e a d j u d i c a t o r y c o m m i t t e e s y s t e m r e f l e c t s t h e s t r o n g c o l o r s o f a d m i n i s t r a t i o n o f C h i n a ' s c o u r t s y s t e m . 1 9 9 I t i s o n e o f o b s t a c l e s t o a c t u a l i z e j u d g e s ' r e s p o n s i b i l i t y s y s t e m . T h e c o m m i t t e e i s c o m p o s e d o f p r e s i d e n t , v i c e p r e s i d e n t , t h e c h i e f j u d g e a n d h e a d s o f e a c h d i v i s i o n o f t h e c o u r t . T h o s e w i t h g r e a t t r i a l e x p e r i e n c e b u t w i t h o u t a l e a d i n g t i t l e a r e n o t e n t i t l e d t o s i t i n t h e c o m m i t t e e . T h e f u n c t i o n s o f t h e c o m m i t t e e i n c l u d e s u m m a r i z i n g t r i a l e x p e r i e n c e s , d e c i d i n g t h e c h a l l e n g e a g a i n s t p r e s i d e n t s , d e c i d i n g r e t r i a l o f c a s e s , e t c . O n e i m p o r t a n t f u n c t i o n i s t o d i s c u s s , e x a m i n e a n d a p p r o v e t h e c a s e s i n t r i a l . A c c o r d i n g t o t h e r e l e v a n t l a w , i f t h e c a s e i s s o c o m p l i c a t e d t h a t t h e c o l l e g i a l b e n c h h a s d i f f i c u l t i e s i n m a k i n g j u d g e m e n t , t h e p r e s i d e n t o f c o u r t m a y r e f e r t h e c a s e t o t h e a d j u d i c a t o r y c o m m i t t e e , w h o s e d e c i s i o n s h a l l b e e n f o r c e d b y t h e c o l l e g i a l b e n c h . A s w i t h a d m i n i s t r a t i v e l i t i g a t i o n , i f t h e c a s e c o n c e r n s w h e t h e r t h e d e f e n d a n t ' s a d m i n i s t r a t i v e a c t s h o u l d b e r e v o k e d , t h e c o l l e g i a l b e n c h i s n o t e n t i t l e d t o m a k e t h e j u d g e m e n t . T h e c a s e s h o u l d b e r e f e r r e d t o t h e a d j u d i c a t o r y c o m m i t t e e w h i c h m a k e s t h e f i n a l d e c i s i o n . H o w e v e r , i t w o u l d b e a s t o u n d i n g i f w e h a d a l o o k a t h o w a n a d j u d i c a t o r y c o m m i t t e e a c t u a l l y m a k e s t h e d e c i s i o n . I n a w o r d , i t i s a s e c r e t t r i a l l i k e a " m e e t i n g " . W h e n t o h o l d t h e " m e e t i n g " i s u n c e r t a i n . E x c e p t f o r t h e c o m m i t t e e m e m b e r s , r e p o r t e r s o f t h e c a s e , a n d t h e r e c o r d e r s , n o o n e e l s e c a n b e p r e s e n t a t t h e " m e e t i n g " . G e n e r a l l y , t h e c o m m i t t e e d o e s n o t r e v i e w t h e f i l e s o r e x a m i n e e v i d e n c e , n o t m e n t i o n t o l i s t e n t o t h e s t a t e m e n t s 1 9 9 See Zhu Chenxia, "Xingzheng Shenpan Heyiting Xianzhuang Lunxi" (On Collegial System of Administrative Trial), Zhengzhou Daxue Xuebao (Journal of Zhenzhou University), Vol. 35, No. 6, (Nov. 2002) 97 o f t h e c o n c e r n e d p a r t i e s . W h a t t h e y d o i s t o h e e d t h e c a s e r e p o r t a n d t h e n e a c h g i v e s h i s o r h e r o p i n i o n s a n d t h e f i n a l d e c i s i o n i s f o r m e d o n t h e b a s i s o f m a j o r i t y p r i n c i p l e . T h e r e f o r e , t h e r i g h t t o h a v e a p u b l i c t r i a l e n j o y e d b y t h e p a r t i e s h a s b e e n d e p r i v e d . T h e p a r t i e s t o t h e f i n a l m a y n o t e v e n k n o w t h e t r u e j u d g e s b e c a u s e t h e s i g n e r s o n t h e j u d g e m e n t m a y n o t b e t h e o n e s w h o r e a l l y g i v e t h e j u d g e m e n t . 2 0 0 T h e s y s t e m o f a d j u d i c a t o r y c o m m i t t e e c r e a t e s r o o m f o r s e c r e t o p e r a t i o n d u r i n g t h e t r i a l . I t g o e s a g a i n s t t h e c o n c e p t o f t r a n s p a r e n c y . Second Instance. F o r b o t h c i v i l a n d c o m m e r c i a l c a s e s a n d a d m i n i s t r a t i v e c a s e s o f f i r s t i n s t a n c e , p u b l i c h e a r i n g s s h o u l d b e c a r r i e d o u t a c c o r d i n g t o t h e l a w . A s f o r t h o s e c a s e s o f s e c o n d i n s t a n c e , l e g a l l y o r p r a c t i c a l l y , p u b l i c h e a r i n g s a r e t h e t h i n g t o b e e x p e c t e d . T a k e a r t i c l e 1 5 2 o f Civil Litigation Law of the PRC a s a n e x a m p l e , i t p r o v i d e s : "The People s Court shall, in the case of an appeal, institute a collegial panel for its court hearings. Subject to review of files, investigation and inquiry of the parties, after the facts are checked, the collegial panel may make a direct judgment or ruling as it thinks unnecessary to hold a court." T h i s p r o v i s i o n d o e s n o t c o n s i d e r t h e s c o p e o f c a s e s o f t h e s e c o n d i n s t a n c e w h i c h s h a l l b e h e a r d p u b l i c l y . I t , h o w e v e r , i m p l i e s t h a t i t i s t o t a l l y u p t o t h e c o l l e g i a l p a n e l o f t h e s e c o n d i n s t a n c e t o d e c i d e w h e t h e r a p u b l i c h e a r i n g i s n e e d e d . A p u b l i c h e a r i n g i s o n e 2 0 0 See W u X i a n h u a , " W T O y u Z h o n g g u o S i f a G a i g e " ( W T O & C h i n a ' s J u d i c i a l R e f o r m s ) , Guangxi Shehui Kexue {Guangxi Social Sciences), C u m u l a t i v e l y V o l . 8 7 , N o . 3 (2002 ) 9 8 o f p r o c e d u r a l r i g h t s e n j o y e d b y t h e p a r t i e s . E x e r c i s e o f t h i s r i g h t i s n o t l i m i t e d t o t h e f i r s t i n s t a n c e . T h e p a r t i e s c o n c e r n e d s h o u l d b e e n t i t l e d to r e q u i r e a p u b l i c h e a r i n g o f s e c o n d i n s t a n c e t o o . F u r t h e r m o r e , s i n c e t h e s e c o n d i n s t a n c e h a s b e e n t r i g g e r e d , i t i n d i c a t e s t h e e x i s t e n c e o f d i s p u t e s . T h u s , t h e j u d g e a t t h e s e c o n d i n s t a n c e s h o u l d h e a r t h e o p i n i o n s o f t h e p a r t i e s c o n c e r n e d a n d t h e i r d e b a t e s . O n t h e o t h e r h a n d , t h e p a r t i e s a r e a l s o e n t i t l e d to b e d i r e c t l y h e a r d b y t h e c o u r t . O n l y b y h o l d i n g a c o u r t , c a n a l l t h e r e a s o n s b e e l u c i d a t e d i n a t r a n s p a r e n t w a y . O t h e r w i s e , t h e r e m a y b e a n o p e r a t i o n u n d e r t h e c o u n t e r . I n a w o r d , i t i s t h e r i g h t o f t h e p a r t i e s t o h a v e o r n o t t o h a v e a p u b l i c h e a r i n g o f s e c o n d - i n s t a n c e c a s e . I t i s t h e p a r t i e s n o t t h e c o l l e g i a l p a n e l w h o s h o u l d d e c i d e w h e t h e r a p u b l i c h e a r i n g i s n e e d e d . Trial Supervision. C h i n a a d o p t s t h e s y s t e m w h e r e b y t h e s e c o n d i n s t a n c e i s f i n a l . B u t , i t d o e s n o t m e a n t h e f i n a l i t y o f j u d g m e n t a t t h e s e c o n d i n s t a n c e c o u r t . I n C h i n a , t h e r e i s a s y s t e m c a l l e d t r i a l s u p e r v i s i o n w h i c h i s l a u n c h e d b y t h e i n t e r e s t e d p a r t i e s , t h e P e o p l e ' s C o u r t i t s e l f a s w e l l a s t h e P e o p l e ' s P r o c u r a t o r a t e , i f a n y o f t h e m t h i n k s t h e j u d g m e n t , w h i c h h a s c o m e i n t o e f f e c t , i s w r o n g . I n a s e n s e , i t s u s p e n d s t h e v a l i d i t y o f t h e s o - c a l l e d f i n a l j u d g e m e n t . P u t t i n g a s i d e t h e q u e s t i o n o f p r o p r i e t y o f t h i s s y s t e m , o n c e t h i s p r o c e d u r e s ta r t s u p , i t i s n o t e d t h a t m o s t l y t h e c a s e s a r e t r i e d o n d o c u m e n t s . N o c o u r t s e s s i o n i s h e l d . A t m o s t , t h e c o u r t s m a k e s o m e i n v e s t i g a t i o n o r i n q u i r e o f t h e p a r t i e s . O n e b a s i c r e q u i r e m e n t t o b r i n g t h e t r i a l s u p e r v i s i o n i s t h a t n e w e v i d e n c e i s f o u n d . N o m a t t e r w h e t h e r n e w e v i d e n c e i s c o l l e c t e d b y t h e p a r t i e s o r t h e c o u r t , w i t h o u t c r o s s - e x a m i n a t i o n , a u t h e n t i c a t i o n , d e b a t e b e t w e e n t h e p a r t i e s a t t h e h e a r i n g , h o w to a d o p t s u c h e v i d e n c e j u s t d e p e n d s o n t h e j u d g e s t h e m s e l v e s . T h e 99 p r o c e s s i s n o t t r a n s p a r e n t . T h e i m p r o p r i e t y o f t h i s i s s e l f - e v i d e n t . A s t h e p a r t i e s h a v e n o o p p o r t u n i t y t o g i v e s t a t e m e n t s a t c o u r t , f a i r n e s s o f j u d g m e n t i s h a r d l y g u a r a n t e e d . Instruction-request system. I n C h i n a , t h e r e i s a s y s t e m w h i c h i s n o t c l e a r l y p r o v i d e d b y l a w b u t i s w i d e l y u s e d i n j u d i c i a l p r a c t i c e a n d h a s b e e n c o n f i r m e d b y j u d i c i a l i n t e r p r e t a t i o n . T h i s i s i n s t r u c t i o n - r e q u e s t (qingshi) s y s t e m . W h e r e a c a s e i s d i f f i c u l t , t h e c o u r t , o r a l l y o r i n w r i t t e n m a n n e r , r e f e r s t h e c a s e t o t h e h i g h e r l e v e l c o u r t f o r a n o p i n i o n i n t e r m s o f s u b s t a n t i v e o r p r o c e d u r a l i s s u e s w i t h t h e c a s e b e f o r e i t g i v e s t h e j u d g m e n t . T h e h i g h e r l e v e l c o u r t , s u b j e c t t o d i s c u s s i o n a n d r e s e a r c h , m a k e s o f f i c i a l 0^1 r e p l i e s t i t l e d Pifu. " T h i s i s a v e r y p o p u l a r m e c h a n i s m a m o n g t h e l o c a l c o u r t s . I t c a n b e e v i d e n c e d b y a b r i e f l o o k a t g a z e t t e s o f S u p r e m e P e o p l e ' s C o u r t w h e r e t h e r e a r e l o t s o f i n s t r u c t i o n - r e q u e s t s s u b m i t t e d b y l o c a l c o u r t s a n d r e p l i e s g i v e n b y t h e S u p r e m e P e o p l e ' s C o u r t . I n d e s p i t e o f a c t i v e r o l e t h i s s y s t e m m a y h a v e p l a y e d i n t h e p a s t , t h e r e a r e m a n y p r o b l e m s a s s o c i a t e d w i t h i t . I t i s n o t i n c o m p l i a n c e w i t h l e g a l p r o c e d u r e s a n d f a l l s s h o r t o f t h e r e q u i r e m e n t o f i n d e p e n d e n t t r i a l u n d e r t h e C o n s t i t u t i o n a n d l a w . I t m a k e s p u b l i c h e a r i n g p r a c t i c a l l y n u l l . B e f o r e t h e t r i a l , t h e j u d g e s h a v e a l r e a d y o b t a i n e d t h e o p i n i o n s o n t h e c a s e f r o m t h e h i g h e r l e v e l c o u r t b y r e q u e s t i n g i n s t r u c t i o n s . A l l t h e a c t i v i t i e s s u c h a s p r o d u c i n g e v i d e n c e , d e b a t i n g a n d c r o s s - e x a m i n a t i o n , a r e p o i n t l e s s , n o m a t t e r h o w r e a s o n a b l e a n d c o n v i n c i n g t h e y a r e . I t i s j u s t u n l i k e l y f o r t h e c o u r t t o g i v e u p t h e c o n c l u s i v e o p i n i o n s g i v e n b y t h e c o u r t a t h i g h e r l e v e l . C r i t i c i s m o f t h i s m e c h a n i s m a r i s e s a l s o b e c a u s e i t p r e j u d i c e s t h e r i g h t o f l i t i g a n t s t o a p p e a l a g a i n s t d e c i s i o n w i t h w h i c h t h e y a r e d i s s a t i s f i e d , a s t h e h i g h e r l e v e l 2 0 1 See S u p r a no te 198 . 100 c o u r t o f a p p e a l m a y h a v e a l r e a d y c o n s i d e r e d t h e c a s e a n d f o r m e d a n o p i n i o n b e f o r e t h e a p p e a l i s h e a r d . I t i s e v e n w o r s e w h e n o n e l o o k s a t h o w t h e c o u r t a t h i g h e r l e v e l m a k e s t h e r e p l y . G e n e r a l l y , i t d e b r i e f s t h e c a s e f r o m t h e l o w e r l e v e l c o u r t , o r r e f e r s t o w r i t t e n m a t e r i a l s . C e r t a i n l y i t d o e s n o t h e a r t h e c a s e d i r e c t l y . T h e c o r r e c t n e s s o f t h e r e p l y m a d e i n s u c h s i t u a t i o n i s t h e r e f o r e h a r d t o b e s e c u r e d . I n a w o r d , s u c h b u r e a u c r a t i c w o r k - s t y l e o f c o u r t s s t r i k e s a t t h e i d e a l o f t r a n s p a r e n c y . Political-legal Committee. C a s e s w h i c h i n v o l v e i m p o r t a n t l o c a l i s s u e s a r e o f t e n d i s c u s s e d b y t h e l o c a l C o m m u n i s t P a r t y P o l i t i c a l - l e g a l C o m m i t t e e . T h e c o m m i t t e e c o m p r i s e s r e p r e s e n t a t i v e s o f t he c o u r t , p r o c u r a t o r a t e , p u b l i c s e c u r i t y , s t a t e s e c u r i t y , j u d i c i a l b u r e a u , c i v i l a f f a i r s , n a t i o n a l i t y a n d r e l i g i o u s a f f a i r s c o m m i t t e e s a n d t h e s u p e r v i s i o n b u r e a u a t t h a t l e v e l o f t h e g o v e r n m e n t . A C h i n e s e l e g a l s c h o l a r h a s t h e f o l l o w i n g o b s e r v a t i o n : " t h e c o u r t o f t e n r e p o r t s t o t h e l o c a l p a r t y c o m m i t t e e a n d s o l i c i t s o p i n i o n s f o r s o l u t i o n ... a n d i f c o n t r a d i c t i o n s a r i s e a m o n g d i f f e r e n t j u d i c i a l o r g a n s , t h e P a r t y ' s p o l i t i c a l - l e g a l c o m m i t t e e o f t e n s t e p s f o r w a r d t o 203 c o o r d i n a t e . " A l t h o u g h t h e P o l i t i c a l - l e g a l C o m m i t t e e g e n e r a l l y r a r e l y i n v o l v e s i t s e l f i n p u r e c o m m e r c i a l m a t t e r s , i t d o e s p l a y a c t i v e r o l e i n s o m e c o m m e r c i a l a d m i n i s t r a t i v e d i s p u t e s . 2 0 2 A western perspective of China's instruction-request (qingshi) system is available at Edward J. Epstein, "Law and Legitimation in Post-Mao China", in Pitman, B. Potter ed, Domestic Law Reforms in Post-Mao China (New York: M.E. Sharpe, Inc., 1994), pp. 40. 2 0 3 See He Weifang, "Tongguo Sifa Shixian Shehui Zhengyi: Dui Zhongguo Faguan Xianzhuang de Yige Toushi" (The Realization of Social Justice Through Judicature: A Look at the Current Situation of Chinese Judges), in Xia Yong ed., Zou Xiang Quanli de Shidai: Zhongguo Gongmin Quanli Fazhan Yanjiu (Toward a Time of Rights: A Perspective of the Civil Rights Development in China) (Beijing: China University of Political Science and Law Press, 1995), pp. 209, 249. 101 Pronouncement of judgment. A c c o r d i n g t o t h e l a w , f o r a n i n s t a n c e , a r t i c l e 1 3 4 o f Civil Litigation Law of the PRC, j u d g m e n t s h a l l b e p r o n o u n c e d i n p u b l i c n o m a t t e r w h e t h e r t h e t r i a l i s p u b l i c o r n o t . P u b l i c p r o n o u n c e m e n t o f j u d g m e n t i s v e r y i m p o r t a n t t o s e c u r e t h e t r a n s p a r e n c y o f t h e j u d g m e n t a n d m a k e t h e p a r t i e s k n o w t h e i r r e l e v a n t d u e r i g h t s l i k e t h e r i g h t o f a p p e a l , t i m e l i m i t o f a p p e a l a n d c o u r t o f a p p e a l . H o w e v e r , u n l i k e w e s t e r n c o u n t r i e s , j u d g m e n t m a y n o t b e p r o n o u n c e d i n c o u r t e v e n w h e n p u b l i c h e a r i n g i s h e l d . I t i s c o m m o n to s e e j u d g m e n t c o m i n g o u t s e v e r a l d a y s l a t e r a f t e r t h e t r i a l . I t i s s a i d t h a t j u d g e s a r e c l e a r o f t h e f a c t s o f t h e c a s e a t t h e e n d o f t h e t r i a l . A f t e r a p e r i o d , i t i s l i k e l y t h a t s o m e f a c t s a n d e v i d e n c e m a y n o t b e r e c a l l e d . A l s o , t h i s p e r i o d m a y c r e a t e a n o t h e r p o s s i b i l i t y i n C h i n a , t h a t i s , s o m e k i n d o f o u t s i d e i n t e r f e r e n c e m a y c o m e i n t o p l a y a n d i n f l u e n c e s t h e i n d e p e n d e n c e o f j u d g e s t o m a k e a f a i r j u d g m e n t . Open written judgement. T r a n s p a r e n c y i n j u d i c i a l j u d g m e n t s i s h i g h l y s t r e s s e d u n d e r t h e W T O . 2 0 4 T h e W T O t r a n s p a r e n c y p r i n c i p l e s r e q u i r e t h e o p e n n e s s o f j u d i c i a l j u d g e m e n t s t o t h e p a r t i e s c o n c e r n e d a n d t o t h e p u b l i c . J u d g e m e n t s i n c l u d e n o t o n l y t h o s e m a d e b y t h e f i r s t i n s t a n c e c o u r t s a n d t h o s e m a d e b y t h e c o u r t s o f a p p e a l . I t i s a l l o f j u d g e m e n t s n o t j u s t s e l e c t e d j u d g m e n t s t h a t s h o u l d b e o p e n e d . C o n s i s t e n c y o f 2 0 4 Taking TRIPs as an example, Article 63.1 provides that laws and regulations, and final judicial decisions and administrative rulings of general application, made effective by a Member pertaining to the subject matter of the Agreement (the availability, scope, acquisition, enforcement and prevention of the abuse of intellectual property rights) shall be published, or where such publication is not practicable made publicly available, in a national language, in such a manner as to enable governments and right holders to become acquainted with them. Agreements concerning the subject matter of this Agreement which are in force between the government or a governmental agency of a Member and the government or a governmental agency of another Member shall also be published. 102 j u d g e m e n t s c a n b e i m p r o v e d b y t h e p r e s s o f p u b l i c a t i o n r e q u i r e m e n t s u n d e r t h e t r a n s p a r e n c y p r i n c i p l e . M o r e i m p o r t a n t l y , w h e t h e r M e m b e r c o u n t r i e s ' l a w a n d r e g u l a t i o n s a r e i n c o m p l i a n c e w i t h t h e W T O r u l e s c a n r e v e a l e d t h r o u g h t h e o p e n n e s s o f a l l j u d g e m e n t s . I n C h i n a , w r i t t e n j u d g m e n t s a r e n o t e a s i l y a c c e s s i b l e e x c e p t t h a t t h e s e l e c t e d j u d g m e n t s a r e p u b l i s h e d a n d s o m e c o u r t s i n b i g c i t i e s p u t s o m e j u d g m e n t s o n t h e i r w e b s i t e s . O n e r e a s o n m a y b e t h a t t h e i n f o r m a t i o n s y s t e m h a s n o t y e t s e t u p . T h e s e c o n d r e a s o n m a y b e t ha t t h e j u d g m e n t s a r e m o s t l y n o t " g o o d - l o o k i n g " e n o u g h a n d c a n n o t s t a n d u p to v a r i o u s c o m m e n t s a s t h e y a r e t o o 0^5 s i m p l e a n d l a c k a d e t a i l e d r a t i o n a l e . " S o m e j u d g m e n t s c o n c e r n i n g t h e a p p l i c a t i o n o f i n t e r n a l r e g u l a t i o n s a r e a n o t h e r p o s s i b l e r e a s o n f o r u s n o t b e i n g a b l e t o r e a c h t h e m . I t i s e v e r a r g u e d t h a t u n l i k e c o m m o n l a w c o u n t r i e s , t h e r e i s n o c a s e l a w i n C h i n a a n d j u d g m e n t s h a v e n o b i n d i n g f o r c e o n o t h e r c a s e s b u t o n l y t h e r e f e r e n c e v a l u e . H o w e v e r , i n o r d e r t o s t r e n g t h e n t h e p r e d i c t a b i l i t y o f l a w , m a k i n g w r i t t e n j u d g m e n t s o p e n t o t h e p u b l i c i s o n e o f m e a s u r e s t o r e a c h t h i s g o a l . I t h e l p s p e o p l e t o l e a r n t h e l e g a l n a t u r e o f t h e i r b e h a v i o r a n d e x p o s e s j u d i c i a l a c t i v i t i e s t o t h e p u b l i c e y e s . Sketchy Written Judgement I n w r i t t e n j u d g m e n t s , t h e a p p l i c a b l e l e g i s l a t i o n , i n c l u d i n g s u b s t a n t i v e l a w a n d p r o c e d u r a l l a w , s h o u l d b e i n d i c a t e d a s w e l l a s t h e r e a s o n s o f a p p l y i n g t h e m . I n C h i n a , t h e a p p l i c a b l e l a w a n d r e g u l a t i o n s w i l l b e g e n e r a l l y q u o t e d . A l t h o u g h i n t h e o r y , c o u r t s a r e n o t r e q u i r e d t o r e f e r t o i n t e r n a l l y 2 0 5 See Chen Hu & Dong Jinghua, "WTO Toumingdu Yuanze yu Zhongguo Xingzheng Shenpan" (WTO Transparency Principles and China's Administrative Trial), Wanxi Xuebao (Journal of Wanxi University), Vol. 18, Vol. 1 (Feb. 2002); also see Zhang Zhiming, "Sifa Caipan de Shuolingxing" (Rationale in Judicial Judgements), Renmin Fayuan bao (People's Court), 19 Oct. 2001, p. 3. 103 c i r c u l a t e d r u l e s o r t o n o r m a t i v e d o c u m e n t s . I n p r a c t i c e t h e y d o , a s t h e s e d o c u m e n t s o f t e n f o r m t h e s p e c i f i c b a s i s f o r t h e a c t i o n . T h e s e s o - c a l l e d a u t h o r i t i e s a r e u s u a l l y a p p l i e d i n c a s e o f a d m i n i s t r a t i v e s u i t s a n d u s u a l l y d o n o t a p p e a r o n t h e w r i t t e n j u d g m e n t s . F o r c i v i l a n d c o m m e r c i a l s u i t s , j u d i c i a l i n t e r p r e t a t i o n i s a l w a y s a p p l i e d b u t n o t q u o t e d b y t h e j u d g e m e n t . It i s o u t s i d e t h e l i t i g a t i o n t h a t t h e p a r t i e s c o n c e r n e d m a y l e a r n t h e g o v e r n i n g l e g i s l a t i o n . 2 0 6 B e s i d e s , t h e j u d g e m e n t l a c k s t h e c o n v i n c i n g r e a s o n i n g a b o u t a p p l i c a t i o n o f l a w . T h e p a r t i e s c o n c e r n e d h a v e t o d e t e r m i n e t h e e x a c t 0^7 r e a s o n s b y t h e m s e l v e s . " T h i s m i g h t b e e x p l a i n e d b y t h e j u d g e s ' q u a l i f i c a t i o n w h i c h i s s t i l l t o b e e n h a n c e d . B u t , o n e m o r e i m p o r t a n t r e a s o n l i e s i n C h i n a ' s j u d i c i a l s y s t e m . A s t h e h i g h e r l e v e l c o u r t i s e n t i t l e d to s u p e r v i s e t h e l o w l e v e l c o u r t a n d m a y l a u n c h t r i a l s u p e r v i s i o n p r o c e e d i n g s . A s k e t c h y j u d g e m e n t i s l e s s l i k e l y t o b e c h a l l e n g e d . 4.3.3.2 Specific issues B e s i d e s t h e c o m m o n p r o b l e m s e x i s t e n t i n j u d i c i a l a c t i o n , b o t h a d m i n i s t r a t i v e l i t i g a t i o n a n d c o m m e r c i a l l i t i g a t i o n h a v e t h e i r o w n s p e c i a l i s s u e s r a i s i n g t h e c h a l l e n g e s f o r t h e i d e a l o f t r a n s p a r e n c y . Administrative litigation O v e r t h e p a s t 10 y e a r s , a l o n g w i t h t h e d e v e l o p m e n t o f t h e s o c i a l i s t m a r k e t e c o n o m y , d e m o c r a c y a n d t h e c o n s t r u c t i o n o f n a t i o n a l l e g a l s y s t e m , a w a r e n e s s o f 2 0 6 See W a n g F u h u a , sup ra no te 192. 2 0 7 S e e W a n g F u h u a , sup ra no te 192. 104 i n d i v i d u a l rights a n d l a w c o n s c i o u s n e s s h a v e b e e n i n c r e a s i n g . M o r e o r d i n a r y p e o p l e c o n f r o n t g o v e r n m e n t o r g a n i z a t i o n s b y u s i n g t h e l a w to p r o t e c t t h e i r rights i n c o u r t . T h e i d e a o f " p r i v i l e g e " h e l d b y g o v e r n m e n t o f f i c i a l s i s u n d e r a t t a c k a n d a n a w a r e n e s s t h a t g o v e r n m e n t a d m i n i s t r a t i o n i s s u b j e c t t o t h e r u l e b y l a w i s g r o w i n g . W i t h t h e b r o a d e n i n g o f p e o p l e ' s c o n c e p t i o n s , t h e g r o w i n g p r a c t i c e o f h a n d l i n g d i s a g r e e m e n t s t h r o u g h t h e l e g a l s y s t e m a n d t h e Administration of Litigation Law, C h i n a ' s c o u r t h o u s e s h a v e p r o c e s s e d 5 0 0 , 0 0 0 c a s e s a n d a c h i e v e d r e m a r k a b l e r e s u l t s o v e r t h e 208 p a s t 1 0 y e a r s . M o r e o v e r , a d m i n i s t r a t i v e l i t i g a t i o n i s s u p p o s e d to c o n t r i b u t e m o r e to t h e a d m i n i s t r a t i v e d i s p u t e r e s o l u t i o n a f t e r t w o r e c e n t a p p l i c a b l e j u d i c i a l i n t e r p r e t a t i o n w a s i s s u e d . T h e y a r e Interpretation of the Supreme People's Court on Implementing Administrative Litigation Law of the PRC ( 1 9 9 9 ) a n d Rules of the Supreme People s Court on Administrative Litigation Evidence ( 2 0 0 2 ) . H o w e v e r , C h i n a ' s a d m i n i s t r a t i v e l i t i g a t i o n i s e s p e c i a l l y a f f e c t e d b y C h i n e s e p o l i t i c s a n d c u l t u r e . C h i n a ' s l o n g t r a d i t i o n o f f e u d a l i s m h a s c r e a t e d a n a t t i t u d e o f p r i v i l e g e f o r g o v e r n m e n t o f f i c i a l s a n d s e r v i t u d e f o r o r d i n a r y p e o p l e . T h e s e t r a d i t i o n a l i d e a s h a v e h a d a p r o f o u n d i n f l u e n c e o n C h i n e s e p e o p l e f o r g e n e r a t i o n s a n d i s n o w a y t o b e r e m o v e d o v e r n i g h t . E v e n w i t h t h e i n t r o d u c t i o n o f t h e Administration of Litigation Law, j u d i c i a l p r a c t i c e s t i l l m e e t s c h a l l e n g e s f r o m f e u d a l i d e o l o g i e s . O r d i n a r y p e o p l e a r e t o o i n t i m i d a t e d to t a k e a c t i o n a g a i n s t g o v e r n m e n t o r g a n i z a t i o n s . S o m e g o v e r n m e n t o f f i c i a l s h a v e c o n t e m p t f o r o r d i n a r y p e o p l e a n d f o r t h e j u d i c i a l s y s t e m . 2 0 8 Fazhi Ribao (Legal Daily), 10 O c t . 2000, p . l . 105 T h e y i n t i m i d a t e t h e p l a i n t i f f ; r e f u s e to a p p e a r i n c o u r t a n d i s s u e a d m i n i s t r a t i v e o r d e r s w h i c h i n t e r f e r e w i t h j u d i c i a l p r o c e d u r e s . B e c a u s e o f p r e s s u r e f r o m g o v e r n m e n t o r g a n i z a t i o n s , s o m e c o u r t s r e j e c t a p p l i c a t i o n s f o r l i t i g a t i o n a n d i n s o m e c a s e s e v e n p a s s v e r d i c t s t h e y k n o w to b e i n c o r r e c t . 2 0 9 I n s u f f i c i e n c i e s o f a d m i n i s t r a t i v e l i t i g a t i o n c a n b e f u r t h e r s e e n t h r o u g h f r o m t h e f o l l o w i n g r e s p e c t s . A l t h o u g h i t i s w h e t h e r t h e d e f e n d a n t ' s c o n c r e t e a d m i n i s t r a t i v e a c t i s l e g a l t h a t i s h e a r d , t h e c o u r t s a l w a y s c o n d u c t p r e t r i a l i n v e s t i g a t i o n o n w h e t h e r t h e p l a i n t i f f v i o l a t e s l a w o r n o t . T h e r e i s a p r e s u m p t i o n o f t h e c o u r t s t h a t i f t h e p l a i n t i f f d o e s v i o l a t e t h e l a w , t h e d e f e n d a n t ' s a d m i n i s t r a t i v e a c t i s l e g a l . S u c h m e a s u r e a c t u a l l y h e l p s t h e d e f e n d a n t a d d u c e e v i d e n c e a n d t h e r e f o r e w o r s e n s t h e a l r e a d y w e a k l i t i g i o u s s t a t u s o f t h e p l a i n t i f f . T h e p l a i n t i f f m a y h a v e l o s t t h e c a s e e v e n b e f o r e t h e c o u r t t r i a l g e t s s t a r t e d . D u e to t h e f a c t t h a t t h e d e f e n d i n g p a r t y t o t h e a d m i n i s t r a t i v e d i s p u t e s i s p e r p e t u a l l y a d m i n i s t r a t i v e a g e n c i e s , i n p r a c t i c e , w h e t h e r t h e c a s e s h o u l d b e p l a c e d o n f i l e i s a l w a y s d e t e r m i n e d b y t h e p r e s i d e n t o f t h e c o u r t w h o d e p e n d s n o t o n w h e t h e r t h e c a s e s a t i s f i e s t h e e s s e n t i a l s o f c o m p l a i n t , b u t o n w h e t h e r t h e c a s e i s c o m p l e x o r n o t , w h e t h e r a c c e p t a n c e o f t h e c a s e w i l l i n f l u e n c e t h e r e l a t i o n s h i p b e t w e e n t h e c o u r t a n d t h e d e f e n d a n t o r n o t , w i l l a f f e c t t h e i m a g e o f t h e l e a d e r s o f t h e a d m i n i s t r a t i v e a g e n c y a t i s s u e , w i l l i m p a c t t h e e x t e r n a l e n v i r o n m e n t o f t h e c o u r t o r n o t , o r p e r s o n a l p o s i t i o n a n d f u t u r e o f t h e c o u r t l e a d e r s , e t c . 2 1 0 I n t h e c o u r t t r i a l , t h e d e f e n d a n t , a c t i n g l i k e a q u a s i - j u d g e , h e a r s t h e p l a i n t i f f t o g e t h e r w i t h t h e j u d g e s . A c c o r d i n g t o t h e A L L , t h e c o u r t s h o u l d s c r u t i n i z e t h e l e g a l i t y o f d e f e n d a n t ' s a d m i n i s t r a t i v e a c t . B u t , w h e t h e r t h e p l a i n t i f f h a s i l l e g a l b e h a v i o r a l w a y s b e c o m e s t h e s u b j e c t a n d e m p h a s i s o f t h e c o u r t t r i a l . I t i s e v i d e n c e d b y t h e c o u r t ' s p r e t r i a l i n v e s t i g a t i o n , h a r m o n i z a t i o n a n d c o m m u n i c a t i o n w i t h t h e d e f e n d a n t p r i o r t o t h e t r i a l ; i n t h e c o u r s e o f t h e c o u r t t r i a l , b o t h t h e j u d g e s a n d t h e d e f e n d a n t q u e s t i o n t h e p l a i n t i f f ; t h e d e f e n d a n t i n t r o d u c e s e v i d e n c e t o p r o v e t h a t t h e p l a i n t i f f b r e a c h e s t h e l a w a n d t h e j u d g e s a l s o r e a d o u t t h e e v i d e n c e t h e y h a v e c o l l e c t e d to p r o v e t h e p l a i n t i f f h a s v i o l a t e d t h e l a w ; t h e j u d g e s a r e v e r y f r i e n d l y t o t h e d e f e n d a n t b u t s t i f f i n m a n n e r t o w a r d s t h e p l a i n t i f f . U n l i k e t h e c i v i l a n d c o m m e r c i a l l i t i g a t i o n , m e d i a t i o n i s n o t a p p l i e d b y t h e a d m i n i s t r a t i v e p r o c e e d i n g s e x c e p t f o r s t a t e c o m p e n s a t i o n . B u t , i n p r a c t i c e , t h e j u d g e s o f t e n p e r s u a d e t h e p l a i n t i f f t o w i t h d r a w t h e a c t i o n o r t h e d e f e n d a n t t o m i t i g a t e t h e p e n a l t i e s s o a s t o m a k e c o n c e s s i o n a n d t h u s a v o i d t h e t r o u b l e . I t o c c u r s w h e n t h e d e f e n d a n t ' s a d m i n i s t r a t i v e a c t i s o b v i o u s l y i l l e g a l i n o r d e r t o m a i n t a i n t h e a u t h o r i t y o f t h e a d m i n i s t r a t i v e a g e n c y . It a l s o o c c u r s w h e n t h e d e f e n d a n t ' s a d m i n i s t r a t i v e a c t i s p r o c e d u r a l l y i l l e g a l . T h e n t h e j u d g e s m a y c o n v i n c e t h e p l a i n t i f f t o w i t h d r a w t h e c a s e 2 1 0 See Na Shuyu, "Woguo Xianxing Xingzheng Shenpan Fangshi de Jibi yu Gaige" (Insufficiencies and Reforms of China's Current Administrative Trial), Xingzheng Luntan (Administrative Tribune), No. 49 (Jan. 2002) 107 b y s a y i n g t h a t e v e n i f t h e c a s e i s f o r t h e p l a i n t i f f , t h e d e f e n d a n t i s s t i l l e n t i t l e d t o r e m a k e a n a d m i n i s t r a t i v e a c t w h i c h i s n o t n e c e s s a r i l y a d v a n t a g e o u s t o t h e p l a i n t i f f . I f t h e p l a i n t i f f ' s a c t i s i l l e g a l , t h e j u d g e s m a y a s s e r t t o t h e p l a i n t i f f t h a t h e w i l l l o s e t h e c a s e a n d s u g g e s t t h e c a s e b e w i t h d r a w n . A l l o f a b o v e i n s u f f i c i e n c i e s a n d l i m i t a t i o n s o f a d m i n i s t r a t i v e l i t i g a t i o n a r i s e f r o m t h e n a t u r e o f t h e l i t i g a t i o n , w h i c h l e a d s t o u n b a l a n c e b e t w e e n t w o p a r t i e s t o t h e a d m i n i s t r a t i v e d i s p u t e s a n d t h r e a t e n s t h e i d e a l o f t r a n s p a r e n c y . E n t a n g l e d w i t h C h i n a ' s t r a d i t i o n a l l y c u l t u r a l c o m p o n e n t s w h i c h m a y r e s i s t t h e f u n c t i o n o f a d m i n i s t r a t i v e l i t i g a t i o n , t h e s e i n s u f f i c i e n c i e s a r e e v e n m o r e d i f f i c u l t t o b e o v e r c o m e . Commercial litigation U n l i k e a d m i n i s t r a t i v e l i t i g a t i o n w h e r e t h e d e f e n d a n t a s s u m e s t h e b u r d e n o f p r o o f , t h e b u r d e n o f p r o o f i n c a s e o f c o m m e r c i a l l i t i g a t i o n r e s t s o n t h e c l a i m a n t . H o w e v e r , i t i s a l s o n o t e d t h a t t h e c o u r t e n j o y s a v e r y w i d e r i g h t t o i n v e s t i g a t e a n d o b t a i n e v i d e n c e , w h i c h i s n o t c h a n g e d e v e n u n d e r t h e r e c e n t l e g i s l a t i o n , Rules on 212 Reforming the Model of Civil and Economic Trial. U n d e r t h i s r u l e , t h e c o u r t i s Rules on Reforming the Model of Civil and Economic Trial (passed on 19 June 1998 and being effective on 11 July 1998). Article 3 provides a wide scope of courts' power to collect evidence. It says, the following evidence can be collected by the People's court: (1) the evidence cannot be collected by the parties and their agents due to the objective reasons and the application for requesting the People's courts to collect evidence is submitted; (2) the inquisition shall be done by the People's courts and authentication shall be done under the authorization of the People's court; (3) the evidential materials adduced by the parties on both sides and used to prove the basic facts are contradictory, and their validity cannot be confirmed after the 108 e n t i t l e d t o o b t a i n t h e e v i d e n c e a s i t t h i n k s f i t w h e n h a n d l i n g c i v i l a n d c o m m e r c i a l 213 c a s e s . T h e c o u r t i s t h e r e f o r e g r a n t e d w i t h g r e a t d i s c r e t i o n i n c o l l e c t i n g e v i d e n c e . T h i s c r e a t e s r o o m f o r l o c a l p r o t e c t i o n i s m a s t h e c o u r t m a y t a k e i n i t i a t i v e i n o b t a i n i n g t h e e v i d e n c e i n t h e i n t e r e s t o f o n e p a r t y f o r t h e s a k e o f l o c a l i n t e r e s t i n s t e a d o f g e t t i n g e v i d e n c e p r o a n d c o n . S i n c e l o c a l i s m i s a l r e a d y t h e b i g c o n c e r n o v e r C h i n a ' s j u d i c i a l a c t i v i t i e s , s u c h l e g i s l a t i o n w o u l d o n l y w o r s e n t h e s i t u a t i o n s . A l t h o u g h t h e Rules on Reforming the Model of Civil and Economic Trial i n t r o d u c e s t h e e v i d e n c e e x c h a n g e s y s t e m f o r t h e first t i m e i n C h i n a , 2 1 4 i t c a n n o t s t a n d a c l o s e r e x a m i n a t i o n . T h e e v i d e n c e e x c h a n g e i s p r e m i s e d o n t h e f a c t t h a t t h e c a s e i s c o m p l e x a n d t h e r e i s l o t s o f e v i d e n c e ; a n d t h e r e a r e n o s t i p u l a t i o n s a s t o t h e s c o p e , t h e c o n t e n t a n d a i m t o b e a c h i e v e d t h r o u g h e v i d e n c e e x c h a n g e . T h e l i t i g a n t s ' r i g h t t o l e a r n t h e t r u t h o f t h e c a s e i s r e a l i z e d t o s o m e e x t e n t . B u t , d u e to t h e l a c k o f a u x i l i a r y s y s t e m s l i k e t h e t i m e l i m i t f o r p r o d u c i n g e v i d e n c e , t h e p a r t i e s m a y s t i l l m a k e a s u d d e n a t t a c k o n t h e o t h e r p a r t y b y i n d u c i n g n e w e v i d e n c e d u r i n g t h e c o u r t t r i a l . A l s o , t h e r u l e i s s i l e n t o n w h e t h e r t h e e v i d e n c e c o l l e c t e d b y t h e c o u r t s h o u l d b e d i s c l o s e d o r n o t p r i o r cross-examination in the court trial; (4) other evidence shall be collected by the People's court as it think fit. 2 1 3 Although the court also enjoys the right to obtain evidence when handling the administrative cases, at least under the law, the scope of such power is not so wide. Article 22 of Rules on Evidence of administrative Litigation provides two kinds of circumstances under which the court is entitled to obtain the evidence: (1) in relation to the state interests, public interests and a third party's interests; (2) procedural affairs like adding litigants, suspending the proceedings, terminate the proceedings and challenge. 2 1 4 Article 5.7 of Rules on Reforming the Model of Civil and Economic Trial says when the cases are too complicated and there is lots of evidence, the People's court may arrange the parties to exchange the evidence. 109 t o t h e t r i a l . I t i s h i g h l y d o u b t f u l t ha t t h e f u n c t i o n s o f p r e t r i a l p r e p a r a t i o n c o u l d p l a y s a t i s f a c t o r i l y . W i t h o u t e s t a b l i s h i n g t h e r u l e - b a s e d t r a n s p a r e n t p r e t r i a l p r o c e d u r e s , t h e r e f o r m e d c o u r t t r i a l i s h a r d l y a b l e t o a c h i e v e t h e o r i g i n a l a i m . I n o r d e r t o p r e v e n t t h e c o u r t f r o m f o r m i n g t h e d e c i s i o n p r i o r t o t h e t r i a l a n d e n h a n c e o p e n n e s s , d e m o c r a c y a n d e f f i c i e n c y o f t r i a l , s o m e c o u r t s s t a r t t o c a r r y o u t t h e d i r e c t t r i a l s y s t e m . I t m e a n s t h a t t h e c o u r t s d o n o t , b e f o r e t h e t r i a l , c o n t a c t w i t h t h e p a r t i e s a n d t h e i r a g e n t s , d o n o t u n d e r t a k e a n y i n v e s t i g a t i o n , i n q u i r y o r c o l l e c t e v i d e n c e o r e x a m i n e t h e e v i d e n c e o b t a i n e d b y t h e p a r t i e s . W h a t t h e j u d g e s h a v e p r i o r t o t h e t r a i l i s t h e p l a i n t i f f ' s i n d i c t m e n t a n d t h e d e f e n d a n t ' s r e s p o n s e . A l l o f o t h e r e v i d e n c e w i l l b e a d d u c e d b y t h e 215 p a r t i e s i n t h e c o u r t t r i a l . H o w e v e r , g o o d e x p e c t a t i o n s a r e n o t n e c e s s a r i l y t r a n s f o r m e d i n t o t h e r e a l i t y . W i t h o u t a n e f f e c t i v e p r e t r i a l p r o c e d u r e t h r o u g h w h i c h t h e t w o p a r t i e s d i s c l o s e r e s p e c t i v e e v i d e n c e a n d d e t e r m i n e t h e i s s u e s t o b e r e s o l v e d , i t i s d i f f i c u l t f o r t h e j u d g e s to c o m p r e h e n d t h e c a s e s t h o r o u g h l y j u s t f r o m t h e c o u r t t r i a l . T h e c r o s s - e x a m i n a t i o n a p p e a r s i n e f f e c t i v e a n d t h e t r i a l l o o k s u n f o c u s e d . O n e o f t h e r e a s o n s l i e s i n t h a t t h e o p e n n e s s to t h e p a r t i e s , e s p e c i a l l y t h e o p e n n e s s o f t h e p r e t r i a l p r o c e d u r e s , i s i n a d e q u a t e . I n c o n t r a s t t o a d m i n i s t r a t i v e l i t i g a t i o n t o w h i c h m e d i a t i o n i s n o t a p p l i c a b l e e x c e p t f o r t h e s t a t e c o m p e n s a t i o n c a s e s , m e d i a t i o n r u n s t h r o u g h t h e c o m m e r c i a l l i t i g a t i o n , f r o m 2 1 5 See Wu Mingtong, "Zhijie Kaiting yu Shenli qian de Zhunbei Zhi wo Jian" (On Direct Trial and Pre-trial), Faxue Pinglun {Law Review), Vol. 94, No. 2 (1999) 110 t h e v e r y b e g i n n i n g t i l l t h e j u d g e m e n t i s m a d e . M e d i a t i o n h a s m a n y m e r i t s t o r e s o l v e t h e d i s p u t e s . O n e o f t h e m i s t h a t i t d i s p e n s e s w i t h c o m p l i c a t e d p r o c e e d i n g s . H o w e v e r , i t d o e s n o t m e a n t h a t n o a n y p r o c e d u r e i s n e e d e d i n t h e c o u r s e o f c o u r t - a n n e x e d m e d i a t i o n . I n C h i n a , t h e c o u r t s s h o u l d d o m e d i a t i o n o n t h e v o l u n t a r y a n d l e g a l b a s i s a c c o r d i n g t o l a w . T h e r e a r e n o p r o v i s i o n s a s t o p r o c e d u r a l r e a s o n a b i l i t y . I n p r a c t i c e , t h e p r e t r i a l m e d i a t i o n a n d t h e m e d i a t i o n o u t o f c o u r t m a y b e u n d e r t a k e n b y t h e c o u r t w i t h t w o p a r t i e s r e s p e c t i v e l y . T h i s i s s o - c a l l e d b a c k - t o - b a c k m e d i a t i o n w h i c h i s n o t o p e n t o t h e o t h e r p a r t y . 2 1 6 T h e o p e n n e s s s y s t e m i s j u s t a v o i d e d b y d o i n g s u c h k i n d o f m e d i a t i o n . A s t h e m e d i a t o r s a n d t h e j u d g e s i n c h a r g e o f t h e c a s e a r e t h e s a m e , t h e r e i s p o t e n t i a l c o m p u l s o r y f o r c e b e h i n d t h e m e d i a t i o n w h i c h t h r e a t e n s t h e r e a l i z a t i o n o f t h e v o l u n t a r y p r i n c i p l e o f m e d i a t i o n a n d w o r s e n s t h e n o n - o p e n m e d i a t i o n . E v e n f o r t h e m e d i a t i o n i n c o u r t , t h e r e i s n o g u a r a n t e e t h a t t h e j u d g e s , w h o a r e t h e m e d i a t o r s a s w e l l , g i v e t h e l e g a l a u t h o r i t i e s o f m e d i a t i o n . T h e r e i s a s p e c i a l p r o b l e m s p e c i a l l y e x i s t i n g i n t h e w r i t t e n j u d g e m e n t o f c i v i l a n d c o m m e r c i a l l i t i g a t i o n i n v o l v i n g f o r e i g n e l e m e n t s . A l t h o u g h t h e r u l e s o f l e g a l c o n f l i c t a r e s t i l l d e v e l o p i n g i n C h i n a , t h e r e a r e i n d e e d s o m e o f t h e m s p o r a d i c a l l y c o n s i d e r e d u n d e r General Principles of Civil Law of the PRC,. Commercial Instrument Law, Contract Law, e t c . H o w e v e r , t h e s e r u l e s o f c o n f l i c t a r e r a r e l y a d o p t e d b y t h e c o u r t s . T h o s e c i v i l a n d c o m m e r c i a l j u d g e m e n t s i n v o l v i n g f o r e i g n e l e m e n t s r e v e a l t h a t m o s t 2 1 6 See generally, Wang Yaxin, "Minshi Susong Zhunbei Chengxu yanjiu" (On Preparatory Procedures of Civil Litigation), Zhongwai Faxue (Law Science of China and Foreign Countries), No. 2 (Feb. 2000); see Beijing Fazhibao (Beijing Legal Times), 15 Sept. 2002; Fazhi Ribao (Legal Daily), 10 Feb. 2002, p .3. I l l c o u r t s d i r e c t l y a p p l y t h e s u b s t a n t i v e l a w o f C h i n a o r o t h e r c o u n t i e s w i t h o u t b e i n g g u i d e d b y r u l e s o f c o n f l i c t . T h i s p h e n o m e n o n i n f l u e n c e s t h e r e a s o n a b l e n e s s a n d f a i r n e s s c o n v e y e d b y t h e j u d g m e n t s , a s w e l l a s t h e a u t h o r i t y o f j u d g m e n t s . 4.4 Judicial independence T h e p r i n c i p l e o f j u d i c i a l i n d e p e n d e n c e t h a t o r i g i n a t e d i n t h e w e s t w a s p u t i n t o e f f e c t w i t h t h e e s t a b l i s h m e n t o f t h e m o d e r n i d e a o f " s e p a r a t i o n o f p o w e r s . " 2 1 7 J u d i c i a l i n d e p e n d e n c e i s a p r i n c i p l e u n i v e r s a l l y a d m i t t e d a n d e n t r e n c h e d i n m o d e r n c o u n t r i e s i m p l e m e n t i n g r u l e o f l a w . 2 1 8 I f j u d i c i a l p r o c e e d i n g s c a n n o t a v o i d b e i n g i n t e r v e n e d b y a d m i n i s t r a t i v e o r g a n s o r o t h e r o r g a n i z a t i o n s o r p e o p l e i n a u t h o r i t y , a l l l e g a l i n s t i t u t i o n s c a n n o t f u l f i l l t h e i r l e g a l f u n c t i o n s , n o r c a n n e c e s s a r y a n d e x p e c t a n t s e c u r i t y a n d s t a b i l i t y b e o b t a i n e d . 2 1 9 A s a C h i n e s e s c h o l a r p o i n t s o u t , " o n e o f b a s i c c h a r a c t e r i s t i c s o f a w e s t e r n c o n s t i t u t i o n a l i s m a n d j u d i c i a l s y s t e m i s t o se t u p t i g h t a n d r i g o r o u s s u p e r v i s o r y m e c h a n i s m . . . h o w e v e r , j u d g e s , a l s o e x e r c i s i n g t h e p u b l i c p o w e r , c o n s t i t u t e t h e h a r d - w o n e x c e p t i o n . " 2 2 0 2 1 7 In Europe, the idea of "judicial independence" emerged in the England in 17th century. But the French people first created this idea; see C. L. Montesquieu, The Sprit of Law (1748). For this reason, many Chinese scholars believe that the idea of "separation of powers" comes from western countries. For detailed information, see Li Long, Xianfa Jichu Lilun (The Basic Theory of Constitution) (Beijing: Chinese Law Press, 1999), pp. 4-21; also see Parker, The Historic Basis of Administrative Law: Separation of Powers and Judicial Supremacy, 12 Rutgers L. Rev. (1958), p.449 2 1 8 See W.F. Rylaaydsam, "Judicial Independence - A Value Worth Protecting", 66 S. Cal L. Rev. (1993),p.l653. 2 1 9 See Martin H. Redish, "Federal Judicial Independence", 46 Mercer Law Review (1995), p. 707. 2 2 0 See He Weifang, Sifa de Zhidu yu Linian (Judicial System and Ideas) (Beijing: China University of Political Science and Law Press, 1998), pp.136; also see Thomas E. Plank, "The 112 J u d i c i a l i n d e p e n d e n c e i s a j u d g e ' s a b i l i t y to d e c i d e a c a s e f r e e f r o m p r e s s u r e s o r i n d u c e m e n t s . J u d i c i a l i n d e p e n d e n c e h a s a n i n s t i t u t i o n a l c h a r a c t e r , w h i c h i s b e s t s e e n i n t h e c o n s t i t u t i o n a l s e p a r a t i o n o f p o w e r s . I t h a s a n i n d i v i d u a l c h a r a c t e r , w h i c h i s p a r t i a l l y p r o t e c t e d b y t h e C o n s t i t u t i o n i n t h e p r o v i s i o n s f o r l i f e t e n u r e a n d t h e g u a r a n t e e o f n o d i m i n i s h m e n t o f s a l a r y , b u t w h i c h e x t e n d s f u r t h e r t o e n c o m p a s s t h o s e c o n d i t i o n s i n w h i c h a n d u n d e r w h i c h a j u d g e d e c i d e s t h e c a s e s . T h e s e a n c i l l a r y e l e m e n t s o f i n d i v i d u a l j u d i c i a l i n d e p e n d e n c e , i n c l u d i n g s e c u r i t y , f a c i l i t i e s , s u p p o r t , w o r k l o a d , r u l e s o f p r o c e d u r e , a n d c a s e m a n a g e m e n t , n o r m a l l y d o n o t i m p a c t u p o n j u d i c i a l i n d e p e n d e n c e b u t u n d e r e x t r e m e c i r c u m s t a n c e s m a y d o s o . J u d i c i a l i n d e p e n d e n c e i s i m p o r t a n t n o t o n l y t o t h e j u d i c i a l s y s t e m . T h e i n d e p e n d e n c e o f t h e j u d i c i a r y m u s t b e c r e d i b l e t o t h o s e b e i n g j u d g e d . T h e r e f o r e , t h e e x e r c i s e o f j u d i c i a l p o w e r r e q u i r e s i n s t i t u t i o n a l a r r a n g e m e n t s w h i c h w i l l i n s t i l l c o n f i d e n c e t h a t t h e p o w e r i s b e i n g p r o p e r l y a p p l i e d . 2 2 1 F o r C h i n a ' s j u d i c i a l r e f o r m s , s e e k i n g a n i n d e p e n d e n t j u d i c i a r y w i t h o u t s u p e r v i s i o n p e r h a p s s h o u l d b e a g o a l b e c a u s e C h i n a ' s c o u r t s a r e s u b j e c t t o t o o m u c h r e s t r i c t i o n . J u d i c i a l i n d e p e n d e n c e h a s b e e n a s l o g a n o r a m a n i f e s t o f o r a l o n g t i m e . A r t i c l e 1 2 6 o f t h e C h i n a ' s C o n s t i t u t i o n p r o v i d e s t h a t t h e P e o p l e ' s c o u r t s s h a l l , i n a c c o r d a n c e w i t h t h e l a w , e x e r c i s e j u d i c i a l p o w e r i n d e p e n d e n t l y a n d a r e n o t s u b j e c t t o i n t e r f e r e n c e b y Essential Elements of Judicial Independence and the Experience of Pre-soviet Russia, William and Mary Bill of Rights Journal, Vol. 5. (1996) See L. Ralph Mecham, "Introduction to Mecer Law Review Symposium on Federal Judicial Independence," 46 Mercer, L. Rev. (1995), p. 637, 638. 113 a d m i n i s t r a t i v e o r g a n s , p u b l i c o r g a n i z a t i o n o r i n d i v i d u a l s . 2 2 2 T h o u g h t h i s p r o v i s i o n m a r k s t h e f i r s t t i m e i n r e c e n t d e c a d e s t h a t t h e C o n s t i t u t i o n h a s u s e d s p e c i f i c l a n g u a g e to g i v e c o n c r e t e d e f i n i t i o n t o t h e c o n c e p t o f i n d e p e n d e n t a d m i n i s t r a t i o n o f j u s t i c e i n C h i n a t h r o u g h t h e c l a u s e " n o t s u b j e c t t o i n t e r f e r e n c e b y a d m i n i s t r a t i v e o r g a n s , p u b l i c 223 o r g a n i z a t i o n a n d i n d i v i d u a l s " , t h i s s p e c i f i c l a n g u a g e h a s l e f t a t l e a s t o n e p o i n t u n c l e a r : a r e t h e C h i n e s e C o m m u n i s t P a r t y a n d i t s m e m b e r s i n c l u d e d i n t h e a b o v e c a t e g o r i e s ? I f t h e a n s w e r i s n e g a t i v e , t h e p a r t y ' s l e a d i n g r o l e u p o n t h e c o u r t c a n h a r d l y b e c h a l l e n g e d t o b e u n c o n s t i t u t i o n a l u n d e r t h e C h i n e s e C o n s t i t u t i o n . 2 2 4 I n C h i n a ' s l e g a l c o n t e x t , j u d i c i a l i n d e p e n d e n c e i n c l u d e s t h e i n t e r n a l i n d e p e n d e n c e a n d e x t e r n a l i n d e p e n d e n c e . T h e f o r m e r r e f e r s t o t h e c o u r t , a s a w h o l e , i s e n t i t l e d t o i n d e p e n d e n t d e c i s i o n - m a k i n g p o w e r o n j u d i c i a l a f f a i r s s o a s to p r e v e n t o u t s i d e i n t e r v e n t i o n i n a d j u d i c a t i o n . I n t h e l i g h t o f l a w , C h i n a ' s e x t e r n a l j u d i c i a l i n d e p e n d e n c e i s i n a r e l a t i v e s e n s e . C o u r t s e x e r c i s e j u d i c i a l p o w e r i n d e p e n d e n t l y , s u b j e c t t o t h e s u p e r v i s i o n b y o r g a n i z a t i o n s o f s t a t e p o w e r , p r o c u r a t o r i a l o r g a n i z a t i o n s a n d s o c i e t y . A m o n g o f t h e m , t h e s u p e r v i s i o n b y t h e o r g a n i z a t i o n s o f s t a t e p o w e r , i . e . , t h e P e o p l e ' s C o n g r e s s , e s p e c i a l l y i n f r i n g e s u p o n t h e j u d i c i a l i n d e p e n d e n c e . W i t h o u t c l e a r c o n d i t i o n s o f a n d r e s t r i c t i o n s o n e x e r c i s i n g t h e s u p e r v i s o r y p o w e r u n d e r t h e l a w , t h e c a s e - b y - c a s e s u p e r v i s i o n m a y b e e v e n u t i l i z e d b y s o m e r e p r e s e n t a t i v e s o f t h e Constitution of the People's Republic of China (1982, amended in 1993). 2 2 3 See Fang Junyi, "The Adjudicating Bodies and Adjudicating System", in Weng Songran ed., Zhongguo Xianfa Lunwenji {A Collection of Literature on the Chinese Constitution) (1987), pp.218, 250. See Nanping Liu, Supra note 48. 114 c o n g r e s s f o r p e r s o n a l p u r p o s e s . 2 2 5 I n t e r n a l i n d e p e n d e n c e m e a n s t h e j u d g e , a s a n i n d i v i d u a l j u d g e , e x e r c i s e s t h e j u d i c i a l p o w e r i n d e p e n d e n t l y d u r i n g t h e p r o c e e d i n g s , w h i c h h a s b e e n w i d e l y r e c o g n i z e d i n t h e i n t e r n a t i o n a l c o m m u n i t y . I n C h i n a , i n d e p e n d e n c e o f t h e c o u r t h o u s e a s a w h o l e i s a d m i t t e d w h i l e i n d e p e n d e n c e o f t h e i n d i v i d u a l j u d g e s i s n o t a c c e p t a b l e . T h i s h a s l e d to m a n y p r o b l e m s i n p r a c t i c e : t h e j u d g e s h e a r i n g t h e c a s e d o n o t m a k e t h e j u d g e m e n t w h i l e t h e j u d g e m e n t m a k e r s d o n o t h e a r t h e c a s e ; t h e j u d g e s f o r m v i e w s a b o u t t h e c a s e p r i o r t o t h e t r i a l ; c o u r t s e s s i o n i s h e l d j u s t i n t h e s e n s e o f f o r m , e t c . 2 2 6 J u d i c i a l i n d e p e n d e n c e i s m o s t i m p o r t a n t i n t h o s e c a s e s w h e r e c o u r t s a r e c a l l e d u p o n to r e s o l v e d i s p u t e s b e t w e e n i n d i v i d u a l s a n d t h e s t a t e o r b e t w e e n d i f f e r e n t b r a n c h e s o f 227 g o v e r n m e n t . I n t h i s s e n s e , t h e j u d i c i a r y m u s t n o t o n l y b e i n d e p e n d e n t f r o m t h e o t h e r b r a n c h e s o f g o v e r n m e n t , b u t a l s o f r o m a n y o t h e r i n f l u e n c e s , a n d , m o s t i m p o r t a n t l y , i t m u s t a p p e a r i n d e p e n d e n t t o t h o s e w h o w o u l d b r i n g t h e i r d i s p u t e s b e f o r e i t f o r r e s o l u t i o n . J u d g e s m u s t b e i n d i v i d u a l s o f t h e g r e a t e s t i n t e g r i t y a n d w o r t h y o f t h e p e o p l e ' s g r e a t e s t c o n f i d e n c e . T h e y m u s t b e s u b j e c t t o n o i n f l u e n c e o t h e r 2 2 3 See Wang Liming, Sifa Gaige Yanjiu (Research on Judicial Reform) (Beijing: Law Publishers, 2000), pp. 462, 465-466; see Liu Hainian, Guanyu Gean Jiandu de Sikao (On Case-by-case Supervision), in Xin Chunuin & Li Lin (eds.), Yifa Zhigu yu Sifa Gaige (Rule of Law and Judicial Reforms) (Beijing: China Legal Time Press,1999), pp. 563-564; see Wang Chenguang, "Lun Fayuan Yifa Duli Xingshi Shenpanquan he Renda dui Fayuan Gean Jiandu de Chongtu jiqi Taozheng Jizhi (On the Conflicts between Courts' Judicial Independence and People's Congress's Case-by-case Supervision and Adjustive Mechanisms), Falv Kexue (Law Science), No. 1 (1998) See Su Li, Song Fa Xia Xiang (Rule of Law in Rural Areas) (Beijing: China University of Political Science and Law Press, 2000), pp. 61-87. 2 2 7 See J. Clifford Wallace, "Independence of the Judiciary: Independence from What and Why", 58 N.Y.U. Ann. Surv. Am. L. 2001, p.241. 115 t h a n t h a t o f t h e f o r c e o f t h e l a w . A j u d i c i a r y t h a t i s i n d e p e n d e n t o f t h e p o l i t i c a l b r a n c h e s b u t b e h o l d e n t o p r i v a t e i n t e r e s t s o r i n f l u e n c e s , a n d t h e r e f o r e , c o r r u p t , i s n o t t r u l y i n d e p e n d e n t . It i s s i m p l y d e p e n d e n t o n a n o t h e r , n o n - g o v e r n m e n t a l , e n t i t y . I n C h i n a , a d m i n i s t r a t i v e t r i a l e s p e c i a l l y s u f f e r s f r o m l a c k o f j u d i c i a l i n d e p e n d e n c e . T h e d e f e n d a n t i s t h e a d m i n i s t r a t i v e o r g a n w h i c h u s u a l l y e n j o y s g r e a t p o w e r a n d s o m e o f t h e m , l i k e l o c a l g o v e r n m e n t s , f i n a n c i a l l y s u p p o r t t h e c o u r t s , t h e j u d g e s h e a r i n g t h e a d m i n i s t r a t i v e c a s e s d o f a c e l o t s o f p r e s s u r e . T h e a d m i n i s t r a t i v e o r g a n b e i n g s u e d a l w a y s u t i l i z e s i t s p o w e r t o f o r c e t h e c o u r t o r t h e j u d g e s t o g i v e i n . U s i n g b o t h c o e r c i o n a n d c a j o l e r y a n d e v e n m a k i n g r e t a l i a t i o n b y t h e d e f e n d a n t , l i k e c u t t i n g d o w n t h e f i n i c a l a i d o r c h a n g i n g t h e t i t l e s o f t h e j u d g e s , i s a n o t h e r m e a n s to i n t e r v e n e i n t h e i n d e p e n d e n t t r i a l . T h a t t h e c o u r t s d o n o t h a v e a d e q u a t e j u d i c i a l a u t h o r i t i e s e x p l a i n s t h e s i t u a t i o n s o f j u d i c i a l i n d e p e n d e n c e i n C h i n a . T h e c o u r t s ' l a c k o f j u d i c i a l a u t h o r i t i e s a m o n g a d m i n i s t r a t i v e t r i a l m a y b e f u r t h e r c o m p r e h e n d e d b y a g l i m p s e a t t h e l e g a l l e v e l a n d t h e c u l t u r a l l e v e l . A t t h e l e g a l l e v e l , f i r s t l y , c u r r e n t l a w i s n o t e f f e c t i v e to m a i n t a i n t h e c o u r t o r d e r i n h e a r i n g a d m i n i s t r a t i v e c a s e s . A c c o r d i n g to t h e r e l e v a n t l i t i g a t i o n l a w a n d c r i m i n a l l a w , o n l y t h o s e w h o a s s e m b l e t o m a k e t r o u b l e , s t r i k e c o u r t o r c o m m i t a s s a u l t a n d b a t t e r y o n j u d i c i a l s t a f f a n d t h u s s e r i o u s l y d i s t u r b t h e c o u r t o r d e r w i l l b e i m p o s e d o n b y c r i m i n a l p e n a l t y . A s f o r t h e a d m i n i s t r a t i v e a g e n c y , t h e d e f e n d a n t , u s i n g 116 i m p l e m e n t a t i o n o f p u b l i c d u t i e s a s a s h i e l d , t h e c o u r t h a s n o p o w e r to s t o p o r i m p o s e c r i m i n a l l i a b i l i t y . A l s o , t h e r e a r e n o s t i p u l a t i o n s a s to h o w to d e a l w i t h t h e g e n e r a l l y 229 i l l e g a l a c t s . H e n c e , t h e c o u r t s ' a u t h o r i t i e s l a c k c o n c r e t e a n d c o m p r e h e n s i v e l e g a l p r o t e c t i o n . I t i s s u g g e s t e d t h a t t h e i d e a o f c o n t e m p t o f c o u r t s h o u l d b e i n t r o d u c e d a n d t h u s g r a n t t h e c o u r t w i t h t h e p o w e r t o m a k e t h e t e m p o r a r y c o m p u l s o r y m e a s u r e s . 2 3 0 S e c o n d l y , p r o c e d u r a l r e s t r i c t i o n s o n a d m i n i s t r a t i v e a g e n c i e s a r e s c a n t . I f t h e a d m i n i s t r a t i v e a g e n c y , a s t h e d e f e n d a n t , r e s i s t e d l i s t e n i n g t o t h e c o u r t b y a r g u i n g t h a t i t i s c a r r y i n g o u t i t s d u t i e s , c l e a r p r o c e d u r e s o n h o w t o i m p l e m e n t t h e p u b l i c d u t i e s w o u l d m a k e s u c h e x c u s e s u n w o r k a b l e . F o r t u n a t e l y , t o m a k e u n i f o r m a d m i n i s t r a t i v e p r o c e d u r a l l a w h a s b e e n r e c o g n i z e d i n c u r r e n t C h i n a , a s m e n t i o n e d p r e v i o u s l y . I f t h e r u l e s m a y b e d r a m a t i c a l l y c h a n g e d o v e r n i g h t , t h e r e a r e o t h e r d i f f i c u l t i e s t h a t w i l l t a k e a l o n g t i m e to o v e r c o m e . D i f f i c u l t i e s a r e m o r e e m b o d i e d i n t h e c u l t u r a l f o r m a t , i n c l u d i n g t h e i d e o l o g y , a t t i t u d e a n d u n d e r s t a n d i n g h e l d b y C h i n a ' s j u d i c i a l p r o f e s s i o n a l s a n d p e o p l e . A s f o r t h e c o u r t , t h e c o u r t d o e s n o t h a v e a c o r r e c t u n d e r s t a n d i n g o f t h e r e l a t i o n s h i p b e t w e e n i t a n d t h e a d m i n i s t r a t i v e a g e n c y . I n t h e p o s i t i o n o f t h e a d m i n i s t r a t i v e a g e n c y , i t a s s e r t s t h a t t h a t o n l y i f f o r t h e s a k e o f i m p l e m e n t i n g t h e p u b l i c d u t i e s , i t s h o u l d , l i k e 2 2 9 Lord Denning points out that in all places where law and order shall be maintained, the courthouses are the places most requiring the legal order. Judicial process should not be intervened or interfered. In order to maintain law and order, the judges are entitled to punish those who violate the normal judicial process. See, Lord Denning, The Due Process of Law, (Butterworths, 1980). 230 See Ma Huaide & Wang Yibai, "Tousi Zhongguo de Xingzheng Shenpan Tizhi: Wenti yu Gaige" (Examining China's Administrative Trial System: Problems and Reforms), Qiushi Xuekan (Seeking Truth), No. 3 (May 2002) 117 t h e c o u r t , n o t b e s u b j e c t t o a n y i n t e r v e n t i o n . F r o m t h e s t a n d i n g p o i n t o f t h e c o u r t , i t w i l l n o t d e n y t h e p r o p e r n e s s o f t h e a d m i n i s t r a t i v e a g e n c y w h e n i t a c t s i n o r d e r f o r e x e r c i s i n g a d m i n i s t r a t i v e p o w e r . F o r j u d i c i a l p o w e r a n d a d m i n i s t r a t i v e p o w e r , t h e c o u r t e q u a t e s t h e m . U n d e r t h e c i r c u m s t a n c e t h a t t h e c o u r t h a s n o " m o n e y " o r " s w o r d " , t h e c o u r t a p p e a r s j u s t h e l p l e s s i n c a s e t h e a d m i n i s t r a t i v e a g e n c y a c t s u n d e r t h e d i s g u i s e o f p e r f o r m i n g o f f i c i a l b u s i n e s s . J u d i c i a l p o w e r a n d a d m i n i s t r a t i v e p o w e r a r e d i f f e r e n t i n n a t u r e . T h e c o r e o f t h e f o r m e r i s " j u d g m e n t " ; t h e c o r e o f t h e l a t t e r i s " c o m p u l s i o n " . T h e y c a n n o t b e e q u a t e d q u a n t i t a t i v e l y o r q u a l i t a t i v e l y . R e c e n t c o n s t i t u t i o n a l p r i n c i p l e s e m p h a s i z e a c h e c k a n d b a l a n c e b e t w e e n t h e s e t w o . W h e n t h e r e i s c o n f l i c t , i t i s t h e j u d i c i a l p o w e r t h a t i s s u p e r i o r t o t h e a d m i n i s t r a t i v e p o w e r , n o t vise versa. 2 3 1 T h e c o u r t s ' j u d i c i a l a u t h o r i t i e s a r e i n v i o l a b l e . E v e n i f t h e a d m i n i s t r a t i v e o r g a n n e e d s t o p e r f o r m i t s d u t i e s , t h e d i g n i t y a n d a u t h o r i t i e s o f t h e c o u r t c a n n o t b e o f f e n d e d . A s f o r t h e p e o p l e , t a k e a d m i n i s t r a t i v e l i t i g a t i o n a s a n e x a m p l e , i n t h e e x t e r n a l d i m e n s i o n , m a n y C h i n e s e p e o p l e d o n o t b e l i e v e t h a t t h e c o u r t h o u s e s a r e c a p a b l e t o 232 h a n d l e a d m i n i s t r a t i v e c a s e s w i t h o u t a d e q u a t e a u t h o r i t y . I f a c o u n t r y ' s c i t i z e n s d o n o t b e l i e v e t h a t t h e j u d i c i a r y i s i n d e p e n d e n t , b u t r a t h e r p e r c e i v e i t t o b e i n f l u e n c e d b y o t h e r b r a n c h e s o f g o v e r n m e n t o r n o n - g o v e r n m e n t e n t i t i e s , t h e y w i l l n o t r e s o r t t o i t f o r d i s p u t e r e s o l u t i o n . I n s t e a d , t h e y w i l l a t t e m p t t o c i r c u m v e n t t h e l e g a l p r o c e s s a n d See Xia Yong, Zou Xiang Quanli de Shidai (Toward a Time of Rights: A Perspective of the Civil Rights Development in China) (Beijing: China University of Political Science and Law Press, 1995), pp. 62. 118 r e s o r t t o c o r r u p t i o n , b r i b e r y , a n d i n t i m i d a t i o n . C h i n a ' s j u d i c i a l b o d i e s h a v e a c q u i r e d a r e p u t a t i o n f o r b i a s e d a n d u n p r o f e s s i o n a l h a n d l i n g o f d i s p u t e s . T h e j u d i c i a r y i s n o t t o t a l l y i n d e p e n d e n t o f g o v e r n m e n t a n d e x t r a - g o v e r n m e n t c o m m i t t e e s . J u d g e s a r e t y p i c a l l y a p p o i n t e d a n d e n j o y t e n u r e o n t h e b a s i s o f p o l i t i c a l l o y a l t y r a t h e r t h a n m e r i t . F a r g r e a t e r e f f o r t s n e e d t o b e m a d e t o e s t a b l i s h a n d e n f o r c e r e a s o n a b l e r u l e s o f e v i d e n c e , r e d u c e c o r r u p t i o n , a n d p r o h i b i t ex parte c o m m u n i c a t i o n s a n d t h e i n f l u e n c e o f g o v e r n m e n t d e p a r t m e n t s i n a r b i t r a l a n d j u d i c i a l b o d i e s . T h e j u d i c i a l s y s t e m i n C h i n a t o d a y i s s t i l l c o n s i d e r e d m o r e a m e a n s t o a c h i e v e g o v e r n m e n t o b j e c t i v e s t h a n a s y s t e m o f p r o t e c t i n g t h e r i g h t s o f i n d i v i d u a l s a n d e n t e r p r i s e s , a s t h e a d m i n i s t r a t i v e g o v e r n m e n t e x e r t s u n d u e i n f l u e n c e i n a f f e c t i n g t h e o u t c o m e o f c a s e s . A s l o n g a s s u c h c o n f l i c t o f i n t e r e s t i s a l l o w e d t o p e r s i s t , t h e b e n e f i t s o f a n y l e g a l r e f o r m w i l l b e m i n i m i z e d . Part IV Closing Commentary Transparency: an institutional and cultural discourse in China C h i n a i s a h u g e , r a p i d l y e x p a n d i n g , a n d a s y e t a n u n d e r - e x p l o r e d m a r k e t . O p p o r t u n i t i e s a r e n e a r l y u n l i m i t e d . B u t a t t h e s a m e t i m e i t i s s t i l l a d e v e l o p i n g c o u n t r y w i t h a n u n d e r d e v e l o p e d i n f r a s t r u c t u r e a n d i n s t i t u t i o n s s t i l l n o t q u i t e u p t o t h e s t a n d a r d s i n t h e d e v e l o p e d c o u n t r i e s . T h i s i s e s p e c i a l l y t r u e i n t h e a r e a o f l a w , e x e m p l i f i e d b y C h i n a ' s e f f o r t s i n s e e k i n g t r a n s p a r e n c y s i n c e i t s a c c e s s i o n t o t h e 2 3 3 See J . C l i f f o r d W a l l a c e , sup r a note 2 2 7 . 119 W T O . W h i l e t h e r e i s w i d e s p r e a d a g r e e m e n t o n t h e i m p o r t a n c e o f t r a n s p a r e n c y , C h i n a ' s e x p e r i e n c e i n s e e k i n g t r a n s p a r e n c y i n e c o n o m i c d i s p u t e r e s o l u t i o n s h o w s t h a t a c t u a l l y i m p r o v i n g t r a n s p a r e n c y c a n b e d i f f i c u l t i n C h i n a . It i s b e c a u s e t r a n s p a r e n c y per se i n a b r o a d s e n s e i s c l o s e l y l i n k e d t o n a t i o n a l i n s t i t u t i o n s , c u l t u r e s a n d w a y s o f d o i n g t h i n g s . 2 3 4 C h a l l e n g e s f o r r e f o r m i n C h i n a a r e t h u s i d e n t i f i e d b e y o n d p u r e t r a n s p a r e n c y - o r i e n t a t e d r e g u l a t o r y c o n s t r u c t i o n a n d a l s o i n c l u d i n g i m p r o v i n g t h e i n s t i t u t i o n s n e e d e d to s u p p o r t t r a n s p a r e n c y , o v e r c o m i n g p o l i t i c a l o b s t a c l e s , r e d r e s s i n g i n c o n s i s t e n t l o c a l i z e d p e r f o r m a n c e a n d o b t a i n i n g a c c e s s t o t e c h n o l o g y a n d h u m a n r e s o u r c e s . O n t h e w a y to s e e k i n g g r e a t e r t r a n s p a r e n c y i n e c o n o m i c d i s p u t e r e s o l u t i o n i n C h i n a , i n s t i t u t i o n a l a r r a n g e m e n t a n d c u l t u r a l c o n s i d e r a t i o n s s h a l l n o t b e o v e r l o o k e d . T h e W T O r u l e s t e n d to f o c u s o n c o r e t r a n s p a r e n c y m e a s u r e s . T h e s e a r e t h e s t a r t i n g p o i n t s f o r o t h e r c o m m u n i c a t i o n p r o c e s s e s t h a t a r e c l o s e l y l i n k e d to n a t i o n a l i n s t i t u t i o n s w h i c h u s u a l l y e v o l v e s l o w l y a n d i n c r e m e n t a l l y . W h i l e m o v i n g f o r w a r d o n c o r e m e a s u r e s , C h i n a h a s to w o r k w i t h t h e d i s t i n c t i v e n a t i o n a l c h a r a c t e r i s t i c s o f t r a n s p a r e n c y p r a c t i c e s . C h i n a ' s r e c e n t p u r s u i t o f t r a n s p a r e n c y - e n h a n c i n g e c o n o m i c d i s p u t e r e s o l u t i o n r e v e a l s m u c h a b o u t t h e i n t e r a c t i o n o f i n s t i t u t i o n a l p r o c e s s e s a n d s o c i a l n o r m s . 2 3 4 See Xie Xiaoyao, WTO Toumingdu: Guyou Jiazhi yu Baozhang Jizhi (WTO Transparency: Inherent Value and Protective Mechanism), Falv kexue (Law Science), No.l (2003). 2 3 5 See Pitman B. Potter, "Legal Reform in China - Institutions, Culture, and Selective Adaptation" (manuscripts). 120 S t a r t i n g f r o m a b a s e n e a r z e r o i n 1 9 7 8 , C h i n a h a s a c h i e v e d i m p r e s s i v e p r o g r e s s i n s i x t e e n y e a r s i n b u i l d i n g u p a l e g a l f r a m e w o r k f o r c o n d u c t o f f o r e i g n b u s i n e s s i n C h i n a a n d i n c o n s t r u c t i n g a d o m e s t i c l e g a l o r d e r as w e l l . T h e p a c e h a s a c c e l e r a t e d i n r e c e n t y e a r s s i n c e C h i n a ' s e n t r y t o t h e W T O . H o w e v e r , w i t h o u t c a p a b l e i n s t i t u t i o n s t o p e r f o r m t h e i r a s s i g n e d t a s k s , 2 3 6 e v e n i f u n d e r a t r a n s p a r e n t l e g a l f r a m e w o r k , t r a n s p a r e n c y p r a c t i c e s a n d p e r f o r m a n c e m a y n o t b e f r u i t f u l . E n c o u r a g i n g l y , C h i n a ' s e c o n o m i c a n d l e g a l r e f o r m s h a v e s e e n s i g n i f i c a n t a t t e n t i o n p a i d t o e s t a b l i s h i n g a n d s t r e n g t h e n i n g i n s t i t u t i o n s f o r d i s p u t e r e s o l u t i o n . R e c e n t e f f o r t s t o r e o r g a n i z e t h e c i v i l c h a m b e r s o f t h e P e o p l e ' s C o u r t s a s c o u r t s o f g e n e r a l j u r i s d i c t i o n 2 3 7 r e f l e c t c o n c e r n s o v e r i n s t i t u t i o n a l c a p a c i t y . 2 3 8 E s p e c i a l l y i n r e s p o n s e t o c a l l s f o r i n s t i t u t i o n a l r e f o r m , a s e x p r e s s e d m o s t r e c e n t l y b y W T O r e q u i r e m e n t s a b o u t t r a n s p a r e n c y a n d t h e r u l e o f l a w , 2 3 9 t h e C h i n e s e g o v e r n m e n t h a s a t t e m p t e d t o t r a n s f o r m C h i n a ' s d i s p u t e r e s o l u t i o n s y s t e m . E f f o r t s t o s t r e n g t h e n t h e a b i l i t y o f t h e c o u r t s y s t e m t o p r o v i d e p r o m p t r e v i e w a n d c o r r e c t i o n o f a d m i n i s t r a t i v e a c t i o n a n d i n c r e a s e e n f o r c e m e n t o f f o r e i g n a r b i t r a l a w a r d s , m a y w e l l b e a i m e d a t a c c o m m o d a t i n g i n t e r n a t i o n a l l e g a l l i b Professor Pitman. B. Potter introduces the concept "institutional capacity" to describe capable institutions performing their assigned tasks. See generally, ibid. 2 3 7 Recently, civil chambers of the China's People's Courts are divided into five chambers: Chamber I is to deal with family and marriage law; Chamber II is to handle the ownership right, tort, unjust enrichment, negotiorum gestio, property right, personal right, etc; Chamber III and Chamber IV are responsible for the economic disputes, bankruptcy, foreign-related economic disputes; Chamber V is to deal with intellectual property cases. See "Civil case trial system reformed for WTO entry," Xinhua News Agency, 30 March 2000. 2 3 8 See Pitman B. Potter, supra note 235. 2 3 9 Report of the Working Party on Accession of China. 2001. WTO Docsonline Ref. WT/MIN(01)/31, November 10. 121 f o r m s , t h o u g h t h e i r s a t i s f a c t i o n o f a c c o m p a n y i n g l e g a l n o r m s r e m a i n s u n c e r t a i n . I t i s s a i d t ha t t h e i n c r e a s e d n u m b e r s o f c o m m e r c i a l d i s p u t e s b r o u g h t b y m a r k e t r e f o r m s h a v e c r e a t e d a c e r t a i n d e g r e e o f i n s t i t u t i o n a l c o m p e t i t i o n f o r a s h a r e o f t h e d i s p u t e r e s o l u t i o n m a r k e t . 2 4 1 A s c o u r t s a n d a r b i t r a t i o n i n s t i t u t i o n s a r e d r i v e n b y c o n s i d e r a t i o n s o f f i n a n c i a l g a i n a n d p o l i t i c a l p r e s t i g e t o c o m p e t e f o r e v e r - l a r g e r s h a r e s o f C h i n a ' s d i s p u t e r e s o l u t i o n m a r k e t , t h e p o s s i b i l i t y a r i s e s o f i n c r e a s e d r e s p o n s i v e n e s s t o t h e n e e d s o f d i s p u t a n t s f o r g r e a t e r r i g o r a n d p r e d i c t a b i l i t y o f p r o c e s s a n d p r a c t i c e . 2 4 2 T h i s m a y b o d e w e l l f o r t h e e m e r g e n c e o f i n d e p e n d e n t a n d e f f e c t i v e d i s p u t e r e s o l u t i o n p r o c e s s e s . H o w e v e r , a s f o r t h e d i s p u t e r e s o l u t i o n i n s t i t u t i o n s d i s c u s s e d i n t h i s t h e s i s , i . e . , t h e c o u r t s w h i c h , b e s i d e s t h e c o s t s o f a c t i o n , a r e m o s t l y f i n a n c i a l l y s u p p o r t e d b y t h e g o v e r n m e n t , a n d t h e a d m i n i s t r a t i v e o r g a n s w h i c h d o n o t c h a r g e t h e a p p l i c a n t s a t a l l , t h e y m a y n o t b e a b l e t o o b t a i n t h e s a m e d r i v i n g f o r c e a s a r b i t r a t i o n c o m m i s s i o n s i n t e r m s o f i n s t i t u t i o n a l i m p r o v e m e n t . S o f a r t h e r e i s l i t t l e t o i n d i c a t e t h a t c o m p e t i t i o n f o r d i s p u t e r e s o l u t i o n c a s e s h a s m o t i v a t e d c o u r t s o r a r b i t r a l o r g a n s t o i n c r e a s e t h e i r a u t o n o m y a n d / o r p r o c e d u r a l r i g o r . I n s t e a d , i n s t i t u t i o n a l c o m p e t i t i o n s e e m s t o b e t a k i n g t h e f o r m m a i n l y o f i n c r e a s e d e f f o r t s t o s t r e n g t h e n t i e s w i t h g o v e r n m e n t d e p a r t m e n t s . 2 4 3 A c t u a l i n s t i t u t i o n a l p e r f o r m a n c e r e m a i n s c o n t i n g e n t o n d o m e s t i c p o l i t i c a l a n d See Pitman B. Potter, supra note 235. 1 See Pitman B. Potter, supra note 13, pp. 142. 2 see Pitman B. Potter, supra note 235. 3 See generally, Pitman B. Potter, supra note 13, pp. 137-142. 122 s o c i o - e c o n o m i c c o n d i t i o n s . T h e m a i n o b s t a c l e s t o t r a n s p a r e n c y - e n h a n c i n g r e f o r m s a r e p o l i t i c a l . A t t e m p t i n g t o o v e r c o m e t h e n a t u r a l p o l i t i c a l d y n a m i c i n f a v o r o f " c o n c e n t r a t e d b e n e f i t s " i s a n o n g o i n g s t r u g g l e f o r a l l p o l i t i c a l s y s t e m s . L a c k o f t r a n s p a r e n c y a l s o s h i e l d s g o v e r n m e n t o f f i c i a l s f r o m a c c o u n t a b i l i t y . T h u s , m a n y a c t o r s — b o t h i n s i d e a n d o u t s i d e t h e p u b l i c s e c t o r ~ c a n h a v e a s t a k e i n n o n - t r a n s p a r e n t p r a c t i c e s . 2 4 4 I t i s f o r t h i s r e a s o n t ha t , d e s p i t e t h e b r o a d a p p a r e n t a g r e e m e n t i n p r i n c i p l e a b o u t t h e i r b e n e f i t s , a c t u a l i m p l e m e n t a t i o n o f t r a n s p a r e n c y - e n h a n c i n g r e f o r m s a r e l i k e l y t o i n v o l v e p a i n f u l s h i f t s i n t h e w a y p o l i c i e s a r e m a d e a n d i m p l e m e n t e d , e s p e c i a l l y i n c o u n t r i e s w i t h h i g h l y o p a q u e p o l i c y e n v i r o n m e n t s s u c h a s C h i n a . I t i s a d m i t t e d t h a t f u r t h e r o b s t a c l e s to c o u r t a u t o n o m y w i l l b e r e s o l v e d o n l y b y p o l i t i c a l c h a n g e . P o l i t i c a l i n t e r f e r e n c e w i t h t h e c o u r t s , f o r e x a m p l e , i s s t i l l i n s t i t u t i o n a l i z e d . W h i l s t i n t e r f e r e n c e i s l e s s e v i d e n t i n c i v i l c a s e s w h e r e t h e p a r t y a n d t h e s t a t e g e n e r a l l y h a v e l i t t l e o r n o i n t e r e s t i n t h e o u t c o m e , i n c r i m i n a l , a d m i n i s t r a t i v e , a n d e v e n e c o n o m i c c a s e s p o l i t i c a l i n t e r f e r e n c e i s l e g e n d . 2 4 5 T h e r e f o r e , t h e d i f f i c u l t y f o r g r e a t e r t r a n s p a r e n c y w i l l b e t o d e v e l o p t h e p o l i t i c a l m o m e n t u m f o r p r o - t r a n s p a r e n c y r e f o r m a n d t o p r e v e n t b a c k s l i d i n g . W i t h C h i n a ' s m o r e i n v o l v e m e n t i n t o i n t e r n a t i o n a l c o m m u n i t y , t r a n s p a r e n c y c o m m i t m e n t s u n d e r t h e W T O a n d i n t e r n a t i o n a l p e e r p r e s s u r e m a y h e l p C h i n a f a c e t h i s d i f f i c u l t y . 2 4 4 See supra note 44. 2 4 5 See Edward J. Epstein, "Law and Legitimation in Post-Mao China", in Pitman, B. Potter ed, Domestic Law Reforms in Post-Mao China (New York: M.E. Sharpe, Inc., 1994), pp. 41. 123 E f f o r t s i n s e e k i n g g r e a t e r t r a n s p a r e n c y m a y n o t b e w e l l p a i d b u t f o r m o r e r e g u l a t o r y i n s t i t u t i o n s a n d i m p r o v e d i n s t i t u t i o n a l p r a c t i c e n o t o n l y a t a n a t i o n a l l e v e l b u t a l s o a t a l o c a l l e v e l . I t h a s b e e n w i d e l y a c k n o w l e d g e d t h a t C h i n a ' s a c c e s s i o n to t h e W T O s h o u l d b e v i e w e d i n l i g h t o f d o m e s t i c c o n d i t i o n s . 2 4 6 H e n c e , g i v e n C h i n a ' s l o c a l c o n d i t i o n s o f r a p i d s o c i o - e c o n o m i c a n d p o l i t i c a l t r a n s f o r m a t i o n , m o r e p a r t i c u l a r c h a l l e n g e s f o r i n s t i t u t i o n a l c a p a c i t y a r i s e . 2 4 7 I n t h e v i e w o f m a n y W e s t e r n e r s , C h i n a ' s l o c a l o r g a n i z a t i o n a l i n t e r e s t s a n d i d e o l o g i c a l p e r s p e c t i v e s h a v e o f t e n r e s i s t e d t h e c o n c e s s i o n s m a n d a t e d b y W T O m e m b e r s c o n s i d e r i n g C h i n a ' s a p p l i c a t i o n . 2 4 8 H o w e v e r , r e c e n t l y , i t h a s b e e n n o t e d t h a t n u m e r o u s l o c a l o r g a n i z a t i o n a l n o r m s a r e n o t e n t i r e l y d i s c o u r a g i n g i n t e r m s o f C h i n a ' s p u r s u i t o f g r e a t e r t r a n s p a r e n c y . B y c o n t r a s t t o t h e s k e t c h y a n d r o u g h s t i p u l a t i o n o f c e n t r a l l a w s , l o c a l r e g u l a t i o n s i n s o m e d e v e l o p e d , b i g m u n i c i p a l c i t i e s a r e m o r e p a r t i c u l a r i z e d a n d m o r e p r a c t i c a b l e a n d t h u s m a y c o n t r i b u t e m o r e t o l o c a l i n s t i t u t i o n a l i m p r o v e m e n t . 2 4 9 O n t h i s p o i n t , u n b a l a n c e d d e v e l o p m e n t o f d i s p u t e r e s o l v i n g i n s t i t u t i o n s , w h i c h w i l l n o t d i s a p p e a r i n 2 4 0 See Merle Goldman and Roderick MacFarquhar (eds.), The Paradox of China's Post-Mao Reforms (Cambridge MA: Harvard University Press, 1999); Elizabeth J. Perry and Mark Selden (eds.), Chinese Society: Change Conflict and Resistance (London: Routledge 2000) 2 4 7 See Pitman B. Potter, supra note 235. 2 4 8 Pitman. B. Potter, The Legal Implications of China's Accession to the WTO, The China Quarterly, Vol. 167 (September 2001), p. 594; also see "China sets deadline for GATT re-entry, slams U.S. Road Blocks'," Agence France Presse English Wire, 10 July 1994, in China News Digest; "Foot-stomping helps China in GATT Bid," South China Morning Post, 1 August 1994, in China News Digest; "China vows not to beg for WTO membership," China News Digest, 23 September 1995. 2 4 9 Examples can be referred to the previous discussion in Part II about the procedural fairness of administrative reconsideration, where some local regulations stepping forward than national law in terms of procedural fairness of administrative reconsideration are mentioned. 124 a s h o r t t i m e , s t r e n g t h e n s t h e c o m p l e x i t y o f d o i n g b u s i n e s s i n C h i n a . T h e i m p r e s s i v e p r o g r e s s o f t h e p a s t s i x t e e n y e a r s h a s l a i d d o w n a n d c l a r i f i e d t h e r u l e s f o r d o i n g b u s i n e s s i n C h i n a , b u t e n f o r c e m e n t i s s t i l l u n r e l i a b l e . S o m e t i m e s p e r s o n a l r e l a t i o n s h i p s s t i l l c o u n t m o r e t h a n w r i t t e n c o n t r a c t s ; c o n c i l i a t i o n m a y h a v e t o b e r e s o r t e d to r a t h e r t h a n g o i n g t o a r b i t r a t i o n o r t o c o u r t e v e n t h o u g h i t m a y s e e m t h e l e s s s a t i s f a c t o r y w a y o f r e s o l v i n g a d i s p u t e . 2 5 0 D u e d i l i g e n c e a n d s e n s i t i v i t y t o t h e c u l t u r a l e n v i r o n m e n t i n w h i c h o n e o p e r a t e s a r e a b s o l u t e l y e s s e n t i a l f o r d o i n g b u s i n e s s 251 i n C h i n a . E v e n i f t h e t r a n s p a r e n c y p r i n c i p l e i s a p p l i e d t o C h i n a t h r o u g h t h e P r o t o c o l o n C h i n a ' s A c c e s s i o n a n d to a n e x p a n d e d r a n g e o f t r a d e r e l a t i o n s , t h e i n s t i t u t i o n s a n d p r a c t i c e s o f t h e C h i n e s e d i s p u t e r e s o l u t i o n s y s t e m l a g s e r i o u s l y b e h i n d , a s t h e l o c a l c u l t u r e t h a t i n f o r m s t h e b e h a v i o r o f C h i n e s e l e g a l i n s t i t u t i o n s a n d a c t o r s c o n t i n u e s t o p l a c e a h i g h p r i o r i t y o n l o c a l p a r o c h i a l c o n c e r n s a n d p o l i t i c a l 252 a r r a n g e m e n t s . I n s t i t u t i o n a l a n d c u l t u r a l f a c t o r s m a k e t h e i m p r o v e m e n t s t o t h e l e s s c o n c r e t e a s p e c t s o f C h i n a ' s l e g a l e n v i r o n m e n t n o t e a s y . A l t h o u g h f o r e i g n t r a d e i n v e s t m e n t h a s b e e n b o o m i n g t h e s e y e a r s , t h e d e g r e e t o w h i c h f o r e i g n i n v e s t o r s ' l e g a l r i g h t s a n d i n t e r e s t s c a n b e p r o t e c t e d i n C h i n a w i l l s t i l l l a r g e l y i n f l u e n c e t h e i r d e c i s i o n t o i n v e s t h e r e . 2 5 0 See Rajib N. Sanyal & Turgut Guvenli, American Firms In China: Issues In Managing Operations, 9 Multinational Bus. Rev. (1 Oct. 1 2001), p.41. 2 5 1 See George O. White III, Navigating the Cultural Malaise: Foreign Direct Investment Dispute Resolution in the People's Republic of China, Transactions: the Tennessee Journal of Business Law (Fall 2003), p. 55. 2 5 2 See generally, Pitman B. Potter, supra note 13, pp. 137-142. 125 T h e r e a r e f r e q u e n t c a s e s w h e r e t h e l e g a l r i g h t s a n d i n t e r e s t s o f f o r e i g n i n v e s t o r s a r e v i o l a t e d d u e t o i m p r o p e r a c t i v i t i e s b y j u d i c i a l o r g a n s , a d m i n i s t r a t i v e i n t e r f e r e n c e a n d 253 l o c a l p r o t e c t i o n i s m . F o r e i g n i n v e s t o r s a r e f r u s t r a t e d b y y e a r - l o n g c a s e s , w h i c h t a k e t h e m t i m e , e n e r g y a n d m o n e y to r e s o l v e . I n s o m e c a s e s , p r o b l e m s a r e s t i l l p e n d i n g . T h i s s i t u a t i o n , u n l e s s t h o r o u g h l y i m p r o v e d , w i l l s u b s t a n t i a l l y s h a k e f o r e i g n i n v e s t o r s ' c o n f i d e n c e i n i n v e s t i n g i n C h i n a . 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I n d e p e n d e n c e o f t h e J u d i c i a r y : I n d e p e n d e n c e f r o m W h a t a n d W h y . 5 8 N. Y. U. Ann. Surv. Am. L. 135 7 2 . W a n g . F u h u a . 1 9 9 9 . M i n s h i S h e n p a n G o n g k a i Z h i d u d e S h u a n g c h o n g H a n y i ( T w o - L e v e l M e a n i n g o f O p e n n e s s S y s t e m o f C i v i l T r i a l ) . Dangdai Faxue {Modern Law Science). N o . 2 . 7 3 . W a n g , L i a n c h a n g . 1 9 9 4 . e t . a l . Xingzheng Faxue (Science of Administrative Law). B e i j i n g : C h i n a U n i v e r s i t y o f P o l i t i c a l S c i e n c e a n d L a w P r e s s . 7 4 . W a n g , S h e n g c h a n g . 1 9 9 6 . Resolving Disputes in the PRC. A s i a : S w e e t & M a x w e l l L t d . 75. W a n g , Y a x i n . F e b 2 0 0 0 . " M i n s h i S u s o n g Z h u n b e i C h e n g x u y a n j i u " ( O n P r e p a r a t o r y P r o c e d u r e s o f C i v i l L i t i g a t i o n ) . Zhongwai Faxue (Law Science of China and Foreign Countries). N o . 2 . 7 6 . W a n g , Y u j u n . 1 9 9 4 . L u n X i n g z h e n g C a i j u e d e Q i s u T u j i n y u S h e n l i ( O n W a y s t o S u e A d m i n i s t r a t i v e A d j u d i c a t i o n a n d t h e T r i a l s ) , Remin Sifa (People s Judiciary), N o . 1 0 . 7 7 . W e b e r , M a x . 1 9 7 8 . Economy and Society: An Outline of Interpretative Sociology ( G u e n t h e r R o t h a n d C l a u s M i t t i c h e d s ) . B e r k e l e y : U n i v e r s i t y o f C a l i f o r n i a P r e s s , 7 8 . W e b e r , M a x . 1 9 9 7 . Economy and Society ( t r a n s p l a n t e d b y L i n g , R o n g y u a n ) . B e i j i n g : T h e C o m m e r c i a l P r e s s . 7 9 . W e n , Z h e n g b a n g , X u e , Z u o m i n & W a n g , B i n g . 1 9 9 6 . S h i c h a n g J i n g j i y u 136 X i n g z h e n g S i f a Z h i d u d e J i a n s h e y u G a i g e ( M a r k e t E c o n o m y a n d E s t a b l i s h m e n t a n d R e f o r m s o f A d m i n i s t r a t i v e A d j u d i c a t i o n S y s t e m ) . Xiandai Faxue (Modern Law Science). N o . 4 . 8 0 . W h i t e I I I , G e o r g e O . F a l l 2 0 0 3 . N a v i g a t i n g t h e C u l t u r a l M a l a i s e : F o r e i g n D i r e c t I n v e s t m e n t D i s p u t e R e s o l u t i o n i n t h e P e o p l e ' s R e p u b l i c o f C h i n a . 5 5 Transactions: the Tennessee Journal of Business Law. 8 1 . W u , M i n g t o n g . 1 9 9 9 . Z h i j i e K a i t i n g y u S h e n l i q i a n d e Z h u n b e i Z h i w o J i a n ( O n D i r e c t T r i a l a n d P r e - t r i a l ) . Faxue PingLun (Law Review). V o l . 9 4 . N o . 2 . 8 2 . W u , X i a n h u a . 2 0 0 2 . W T O y u Z h o n g g u o S i f a G a i g e ( W T O & C h i n a ' s J u d i c i a l R e f o r m s ) . Guangxi Shehui Kexue (Guangxi Social Sciences). N o . 3 . C u m u l a t i v e l y N o . 8 7 . 8 3 . X i a , J i n l a i & Y e , B i f e n g . 2 0 0 3 . D u i W T O T i z h i x i a G u o j i M a o y i X i n g z h e n g S u s o n g d e S i k a o ( O n A d m i n i s t r a t i v e L i t i g a t i o n I n R e l a t i o n t o t h e I n t e r n a t i o n a l T r a d e u n d e r t h e W T O ) . Faxue Pinglun (Law Review). V o l . 1 1 9 . N o . 3 . 8 4 . X i a , Y o n g . e d . 1 9 9 5 . Zou Xiang Quanli de Shidai: Zhongguo Gongmin Quanli Fazhan Yanjiu (Toward a Time of Rights: A Perspective of the Civil Rights Development in China). B e i j i n g : C h i n a U n i v e r s i t y o f P o l i t i c a l S c i e n c e a n d L a w . 8 5 . X i e , X i a o y a o . 2 0 0 3 . W T O T o u m i n g d u : G u y o u J i a z h i y u B a o z h a n g J i z h i ( W T O T r a n s p a r e n c y : I n h e r e n t V a l u e a n d P r o t e c t i v e M e c h a n i s m ) . Falv kexue (Law 137 Science). N o . l . 8 6 . Y a n g , H a i k u n & L i u , Y a n g l i n . M a r c h 2 0 0 2 . G u a n y u Z h o n g g u o X i n g z h e n g C h e n g x u F a d i a n h u a d e T a o l u n ( D i s c u s s i o n o f C o d i f i c a t i o n o f C h i n e s e A d m i n i s t r a t i v e P r o c e d u r e s ) . Jiangsu Gongan Zhuanke Xueyuan Xuebao (Journal of Jiangsu Public Security College). V o l . 1 6 . N o . 2 . 8 7 . Y a n g , H a i k u n & H u a n g , X u e x i a n . 1 9 9 9 . Zhongguo Xingzheng Chengxu Fadianhua - cong Bijiaofa Jiaodu Yanjiu (Codification of Chinese Administrative Procedures - From Comparative Perspective). B e i j i n g : L a w P u b l i s h e r s . 8 8 . Y a n g , Y i n . F e b . 2 0 0 2 . X i n g z h e n g C h e n g x u L i f a y u W T O G u i z e ( L e g i s l a t i n g A d m i n i s t r a t i v e P r o c e d u r e s a n d t h e W T O R u l e s ) . Journal of China University of Political Science and Law. V o l . 2 0 . N o . 1. 8 9 . Y i n g , S o n g n i a e d . 1 9 9 3 . S c i e n c e o f A d m i n i s t r a t i v e A c t s . B e i j i n g : P e o p l e ' s P r e s s . 9 0 . Y i n g , S o n g n i a n . 1 9 8 8 . Xingzheng Faxue Jiaocheng (Administrative Jurisprudence). C h i n a U n i v e r s i t y o f P o l i t i c a l S c i e n c e a n d L a w P r e s s . 9 1 . Y i n g , S o n g n i a n . e t . a l . 1 9 9 3 . Xingzheng Xingweifa: Zhongguo Xingzheng Fazhi Jianshe Lilun yu Sijian (Administration Action of Law: Theory and Practice of the Construction of China's Administrative Legal System). B e i j i n g : P e o p l e ' s P r e s s . 138 9 2 . Y i n g , S o n g n i a n & Y u a n , H o n g s h u . 2 0 0 1 . Zouxiang Zhengfu Fazhi (Walking towards Rule of Government). B e i j i n g : L a w P r e s s . 9 3 . Y u , A n . 2 0 0 0 . W T O X i e d i n g d e G u o n e i S h i s h i W e n t i ( I s s u e s o n D o m e s t i c I m p l e m e n t a t i o n o f W T O R u l e s ) . Zhongguo Faxue (China s Science of Law). N o . 3 . 9 4 . Z h a n g , C h u n s h e n g & T o n g , W e i d o n g . 1 9 9 9 . W o g u o X i n g z h e n g F u y i Z h i d u d e F a z h a n h e W a n s h a n ( I m p r o v e m e n t a n d D e v e l o p m e n t o f C h i n a ' s A d m i n i s t r a t i v e R e c o n s i d e r a t i o n S y s t e m ) . China's Science of Law (Zhongguo Faxue). N o . 4 . 9 5 . Z h a n g , S h a o h u a . 1 9 9 9 . W o g u o X i n g z h e n g S i f a L i l u n z h i P i p a n y u C h o n g g o u ( C r i t i q u e a n d R e c o n s t r u c t i o n o f C h i n a ' s A d m i n i s t r a t i v e A d j u d i c a t i o n T h e o r y ) . Xingzheng Faxue Yanjiu (Study on Science of Administrative Law), N o . 3 . 9 6 . Z h a n g , S h a n g z u . e t a l . 1 9 9 1 . Zouchu Digit de Zhong Xingzheng Faxue (China's Administrative Jurisprudence Stepping out of Low Tide Development). B e i j i n g : C h i n a U n i v e r s i t y o f P o l i t i c a l S c i e n c e a n d L a w P r e s s . 9 7 . Z h a n g , S h u y i . et . a l . 1 9 9 1 . Xingzheng Faxue Xinlun (On Administrative Jurisprudence). B e i j i n g : C u r r e n t A f f a i r s P r e s s . 9 8 . Z h o u , W a n g s h e n g . 1 9 8 8 . Lifa xue (The Study of Legislation). P e k i n g U n i v e r s i t y P r e s s . 139 9 9 . Z h u , C h e n x i a . 2 0 0 2 . X i n g z h e n g S h e n p a n H e y i t i n g X i a n z h u a n g L u n x i " ( O n C o l l e g i a l S y s t e m o f A d m i n i s t r a t i v e T r i a l ) . Zhengzhou Daxue Xuebao (Journal of Zhenzhou University). V o l . 3 5 . N o . 6 . 140 Appendix: Chinese Cases Cited Fengxiang Trade Ltd., Shanghai v Salt Administrative Bureau, Shanghai ( 2 0 0 2 ) Source: S h a n g h a i N o . 2 I n t e r m e d i a t e P e o p l e ' s C o u r t : A d m i n i s t r a t i v e J u d g m e n t ( 2 0 0 2 ) N o . 6 0 H u E r Z h o n g Z i • G a z e t t e o f t h e S u p r e m e C o u r t o f t h e P R C , v o l 8 1 , 1 J a n 2 0 0 3 • S h a n g h a i N o . 2 I n t e r m e d i a t e P e o p l e ' s C o u r t W e b s i t e : h t t p : / / w w w . s h e z f y . c o m / B i g C a s e D e t a i l . a s p ? i d = 4 2 Parties: P l a i n t i f f ( A p p e l l a n t ) : F e n g x i a n g T r a d e L t d . , S h a n g h a i D e f e n d a n t ( A p p e l l e e ) : S a l t A d m i n i s t r a t i v e B u r e a u , S h a n g h a i Dispute Resolving Institutions: A d m i n i s t r a t i v e R e c o n s i d e r a t i o n O r g a n : C o m m e r c e C o m m i s s i o n o f S h a n g h a i F i r s t I n s t a n c e C o u r t : P e o p l e ' s C o u r t , J i n g a n D i s t r i c t , S h a n g h a i C o u r t o f A p p e a l ( f i n a l d e c i s i o n ) : S h a n g h a i N o . 2 I n t e r m e d i a t e P e o p l e ' s C o u r t Date: F i n a l d e c i s i o n : 2 4 M a y 2 0 0 2 141 Summary of Facts: T h e p l a i n t i f f i n t r o d u c e d i n d u s t r y s a l t t o S h a n g h a i f r o m A n H u i P r o v i n c e o n 1 6 M a y 2 0 0 1 . A t t h e t r a i n s t a t i o n , t h e d e f e n d a n t f o u n d t h a t t h e p l a i n t i f f v i o l a t e d t h e " S h a n g h a i R e g u l a t i o n s o n M a n a g e m e n t o f S a l t " f o r l a c k o f a b u s i n e s s l i c e n s e o f i n d u s t r y s a l t . T h e d e f e n d a n t m a d e a n a d m i n i s t r a t i v e c o e r c i v e m e a s u r e t o d e t a i n t h e i n d u s t r y s a l t o n 2 1 M a y 2 0 0 1 a n d s e r v e t h e n o t i c e o f t h i s d e c i s i o n . T h e p l a i n t i f f r e f u s e d a n d a p p l i e d t o t h e C o m m e r c e C o m m i s s i o n o f S h a n g h a i f o r a d m i n i s t r a t i v e r e c o n s i d e r a t i o n , w h i c h m a i n t a i n e d t h e d e c i s i o n o f a d m i n i s t r a t i v e c o e r c i v e m e a s u r e o n 2 1 A u g u s t 2 0 0 1 . T h e p l a i n t i f f s u e d . Issues: W h e t h e r t h e d e c i s i o n o f a d m i n i s t r a t i v e c o e r c i v e m e a s u r e m a d e b y t h e d e f e n d a n t o n 2 1 A u g u s t 2 0 0 1 i s p r o p e r ? Decision: M a i n t a i n e d t h e d e c i s i o n o f a d m i n i s t r a t i v e c o e r c i v e m e a s u r e o n 2 1 A u g u s t 2 0 0 1 . Reasons: T h e r e w e r e c l e a r f a c t s a n d a d e q u a t e e v i d e n c e t h a t t h e p l a i n t i f f i n t r o d u c e d t h e i n d u s t r y s a l t f r o m a n o t h e r p r o v i n c e . T h e a r g u m e n t t h a t t h e b e h a v i o r h a p p e n e d b e f o r e t h e " S h a n g h a i R e g u l a t i o n s o n M a n a g e m e n t o f S a l t " a n d t h u s s h a l l n o t b e b o u n d b y t h i s 142 w a s o b j e c t e d . T h e i n t r o d u c t i o n o f i n d u s t r y s a l t i n t o S h a n g h a i w a s a c o n t i n u o u s b e h a v i o r . I t c o n t i n u e d t i l l w h e n t h i s r e g u l a t i o n c a m e i n t o f o r c e . Appeal and Basis: T h e p l a i n t i f f a p p e a l e d . It w a s a r g u e d t h a t t h e f i r s t i n s t a n c e f a i l e d t o a p p l y t h e l a w p r o p e r l y . Decision on Appeal (with Reasons): J u d g m e n t r e s c i n d e d . T h e A p p e l l e e f a i l e d t o a p p l y t h e r i g h t l a w . T h e Regulations on Salt of the PRC s t i p u l a t e d t h e k i n d o f t h e s a l t , w h i c h s h a l l b e m a n a g e d b y t h e s t a t e . I n d u s t r y s a l t i s n o t t h e s u b j e c t . S i n c e t h e a p p e l l a n t ' s b u s i n e s s l i c e n s e d i d i n c l u d e t h e i n d u s t r y s a l t , t h e a p p e l l a n t w a s e n t i t l e d t o d o s u c h b u s i n e s s . T h e a d m i n i s t r a t i v e d e c i s i o n a t i s s u e m a d e a c c o r d i n g t o t h e " S h a n g h a i R e g u l a t i o n s o n M a n a g e m e n t o f S a l t " w a s n o t p r o p e r . T h e Official Reply Salt Administrative Bureau, Shanghai.On Whether the Wholesale of Salt Shall Be Managed on a United Basis " b e l o n g e d t o i n t e r n a l d o c u m e n t g i v e n b y L i g h t I n d u s t r y D e p a r t m e n t o f t h e P R C . I t c o u l d n o t b e r e g a r d e d a s a l e g i s l a t i v e a u t h o r i t y a n d h a d n o e x t e r n a l b i n d i n g f o r c e . Jin Man Ke Electric Ltd. v State Revenue of Shenzhen ( 1 9 9 7 ) 143 Source: R e n m i n F a y u a n A n l i X u a n ( C a s e s S e l e c t i o n o f P e o p l e ' s C o u r t ) , V o l 3 , 2 0 0 0 ; c u m u l a t i v e l y v o l . 3 3 . Parties: P l a i n t i f f : J i n M a n K e E l e c t r i c L t d . D e f e n d a n t : S t a t e R e v e n u e o f S h e n z h e n Dispute Resolving Institutions: A d m i n i s t r a t i v e R e c o n s i d e r a t i o n O r g a n : S t a t e R e v e n u e o f S h e n z h e n ( d e f e n d a n t ) C o u r t : S h e n z h e n I n t e r m e d i a t e P e o p l e ' C o u r t Date: 18 A u g u s t 1 9 9 7 Summary of Facts: O n 1 2 J u n e 1 9 9 6 , t h e 2 n d b r a n c h b u r e a u o f t h e d e f e n d a n t f o u n d t ha t t h e p l a i n t i f f c o n c e a l e d a n d u n r e p o r t e d t a x e s d u r i n g t h e p r e v i o u s t w o y e a r s a n d t h e n m a d e a n a d m i n i s t r a t i v e d e c i s i o n t h a t t h e p l a i n t i f f s h a l l p a y t h e d u e t a x a s w e l l a s t h e l a t e f e e a n d t h e f i n e . T h e p l a i n t i f f o b j e c t e d a n d a p p l i e d t o t h e d e f e n d a n t f o r a d m i n i s t r a t i v e 144 r e c o n s i d e r a t i o n . O n 31 D e c 1 9 9 6 , t h e d e f e n d a n t m a d e t h e d e c i s i o n o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . I t c o n f i r m e d t h e a d m i n i s t r a t i v e p e n a l t i e s i m p o s e d o n t h e p l a i n t i f f w h i l e i t a l s o c h a n g e d t h e s p e c i f i c a m o u n t o f t a x p a y m e n t a n d t h e f i n e a n d c a n c e l l e d t h e l a t e f e e ( " d e c i s i o n a t i s s u e " ) . T h e p l a i n t i f f s u e d a g a i n s t t h e d e f e n d a n t . Issues: W h e t h e r t h e d e f e n d a n t s h a l l m a k e t h e d e c i s i o n o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n ( " d e c i s i o n a t i s s u e " ) w h i c h c o n f i r m e d t h e o r i g i n a l a d m i n i s t r a t i v e p e n a l t i e s i m p o s e d o n t h e p l a i n t i f f ? Decision: Q u a s h t h e d e c i s i o n o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . Reason: T h e l e g i s l a t i v e a u t h o r i t i e s w h i c h t h e d e f e n d a n t ' s d e c i s i o n a t i s s u e b a s e d o n w e r e n o t o p e n t o t h e p u b l i c . I n a d d i t i o n , t h e h e a r i n g s h o u l d h a v e b e e n h e l d a c c o r d i n g t o t h e State Revenue: Implement Measures of Hearing Procedures of Administration Penalties on Tax Management. 145 Shitong Communication Equipment Ltd. of Guanezhou v People's Government of Guangzhou ( 1 9 9 9 ) S u p e r i o r P e o p l e ' s C o u r t o f G u a n g d o n g p r o v i n c e : A d m i n i s t r a t i v e J u d g m e n t ( 1 9 9 9 ) N o . 3 3 Y u e G a o F a X i n g Z h o n g Z i Source: S t a t e I n f o r m a t i o n C e n t e r : S t a t e R e g u l a t i o n s D a t a b a s e N u m b e r : 9 0 1 9 3 0 0 1 9 9 9 0 0 7 Parties: P l a i n t i f f ( a p p e l l a n t ) : S h i t o n g C o m m u n i c a t i o n E q u i p m e n t L t d . o f G u a n g z h o u D e f e n d a n t ( A p p e l l e e ) : P e o p l e ' s G o v e r n m e n t o f G u a n g z h o u T h i r d P a r t y : B o w l i n g C o m p a n y Dispute Resolving Institutions : A d m i n i s t r a t i v e o r g a n f o r r e s o l v i n g d i s p u t e : G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u A d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r g a n : P e o p l e ' s G o v e r n m e n t o f G u a n g z h o u ( d e f e n d a n t ) F i r s t I n s t a n c e : G u a n g z h o u I n t e r m e d i a t e P e o p l e ' s C o u r t 146 C o u r t o f a p p e a l ( F i n a l d e c i s i o n ) : S u p e r i o r P e o p l e ' s C o u r t o f G u a n g d o n g p r o v i n c e Date: F i n a l d e c i s i o n : 1 9 9 9 / 1 2 / 0 3 Summary of Facts: T h e t h i r d p a r t y w a s a n e f f e c t i v e l y e s t a b l i s h e d c o m p a n y . M r . C u i R o n g w a s t h e l e g a l r e p r e s e n t a t i v e . T h e p l a i n t i f f c o m p a n y , M r . X i h a o . M r . Z h a n g S h u j u n a n d M r . Z h a n g S h a o y i n w e r e t h e s h a r e h o l d e r s . T h e t h i r d p a r t y c o m p a n y a p p l i e d t o t h e G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u f o r c h a n g i n g t h e r e g i s t r a t i o n o f s t o c k r i g h t a n d l e g a l p e r s o n b y s u b m i t t e d r e l e v a n t d o c u m e n t s i n c l u d i n g A g r e e m e n t o f S t o c k R i g h t s T r a n s f e r , D e c i s i o n o f R e v i s i n g t h e A r t i c l e s , C e r t i f i c a t e o f L e g a l P e r s o n H o l d i n g P o s t ( h e r e i n a f t e r " r e l e v a n t d o c u m e n t s " ) . T h e a p p l i c a t i o n g o t a p p r o v e d . T h e s h a r e h o l d e r s w e r e c h a n g e d i n t o t h e p l a i n t i f f a n d M r . X i h a o . L a t e r , M r . C u i R o n g ( o r i g i n a l l e g a l p e r s o n ) , M r . Z h a n g S h u j u n a n d M r . Z h a n g S h a o y i n f l i e d t h e c o m p l a i n t t o t h e G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u , b y a r g u i n g t h a t t h e r e l e v a n t d o c u e m t n s p r o v i d e d b y t h e t h i r d p a r t y c o m p a n y w h e n a p p l y i n g f o r c h a n g i n g t h e r e g i s t r a t i o n o f s t o c k r i g h t a n d l e g a l p e r s o n w a s f o r g e d . A t t h e s a m e t i m e , t h e y s e n t t h e r e l e v a n t d o c u m e n t m a t e r i a l s ( o r i g i n a l v e r s i o n ) t o t h e C r i m i n a l S c i e n c e T e c h n o l o g y I n s t i t u t e o f G u a n g z h o u f o r a u t h e n t i c a t i o n , t o g e t h e r w i t h t h e i r p e r s o n a l h a n d w r i t i n g . A f t e r a u t h e n t i c a t i o n , i t w a s f o u n d t h a t t h e s i g n a t u r e o n t h e r e l e v a n t d o c u m e n t s w a s n o t d o n e b y t h e s e t h r e e c o m p l a i n a n t s . B a s e d o n t h i s e x p e r t s ' 147 c o n c l u s i o n , G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u r e v o k e d t h e a p p r o v a l ( h e r e i n a f t e r " c a n c e l l a t i o n d e c i s i o n " ) a n d i m p o s e d f i n e o n t h e t h i r d p a r t y c o m p a n y . T h e p l a i n t i f f a p p l i e d to t h e d e f e n d a n t f o r a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . T h e d e f e n d a n t q u a s h e d t h e c a n c e l l a t i o n d e c i s i o n m a d e b y G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u . T h e r e a s o n s w e r e : f i r s t l y , t h e v a l i d i t y o f t h e e x p e r t s ' c o n c l u s i o n w a s u n c e r t a i n b e c a u s e h a n d w r i t i n g w a s p r o v i d e d b y t h e c o m p l a i n a n t s t h e m s e l v e s , w h o h a d d i r e c t i n t e r e s t e d r e l a t i o n t o t h e a p p l i c a t i o n f o r a u t h e n t i c a t i o n ; s e c o n d , t ha t G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u i m p o s e d t h e f i n e w h e n i t h a d m a d e t h e c a n c e l l a t i o n d e c i s i o n v i o l a t e d C o m p a n y l a w ( a r t i c l e 2 0 5 ) w h i c h d i d n o t s a y t h e e t w o k i n d s o f p u n i s h m e n t c o u l d b e a p p l i e d a t t h e s a m e t i m e . T h i r d , t h e l e g a l p r o c e d u r e s w e r e n o t p r o p e r l y f o l l o w e d b y t h e G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u w h e n i t m a d e t h e a d m i n i s t r a t i v e p e n a l t y d e c i s i o n . I t v i o l a t e d t h e a r t i c l e 31 o f A d m i n i s t r a t i v e P e n a l t y L a w o f t h e P R C , w h i c h s a y s , b e f o r e t h e a d m i n i s t r a t i v e p e n a l t y d e c i s i o n i s m a d e , t h e a d m i n i s t r a t i v e a g e n c y s h o u l d i n f o r m t h e c o n c e r n e d p a r t y o f t h e f a c e , r e a s o n s a n d t h e i r d u e r i g h t s . T h e p l a i n t i f f r e f u s e d t o a c c e p t t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n d e c i s i o n a n d s u e d a t t h e G u a n g z h o u I n t e r m e d i a t e P e o p l e ' s C o u r t . Issues: W h e t h e r t h e d e c i s i o n o f a d m i n i s t r a t i v e r e c o n s i d e r a t i o n m a d e b y t h e d e f e n d a n t w a s 148 p r o p e r ? Decision: T h e d e c i s i o n a t i s s u e m a i n t a i n e d . Reason: I t w a s r i g h t f o r t h e d e f e n d a n t t o d e c i d e t ha t G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u a p p l i e d t h e l a w i n c o r r e c t l y a n d v i o l a t e d t h e l e g a l p r o c e d u r e s b e c a u s e G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u f a i l e d t o i n f o r m t h e d u e r i g h t s Appeal and Basis: T h e p l a i n t i f f a p p e a l e d . I t w a s a r g u e d t h a t t h e a p p l i c a t i o n f o r t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n h a d e x p i r e d t h e l e g a l l i m i t a t i o n a n d t h u s t h e A p p e l l e e s h a l l n o t a c c e p t t h e a p p l i c a t i o n a t a l l . Decision on Appeal (with Reasons): A p p e a l e d d i s m i s s e d . T h e G u a n g z h o u I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u a p p a r e n t l y v i o l a t e d t h e l e g a l p r o c e d u r e s i n m a k i n g t h e a d m i n i s t r a t i v e d e c i s i o n . T h e A p p e l l e e w a s e n t i t l e d t o a c c e p t t h e a p p l i c a t i o n f o r t h e a d m i n i s t r a t i v e r e c o n s i d e r a t i o n . Mr. En Wang v People's Government. Heping District, Tianjin (1997) Source: C a s e s S e l e c t i o n o f t h e P e o p l e ' s C o u r t ( R e n m i n F a y u a n A n l i X u a n ) , V o l 4 , 1 9 9 7 ( v o l 3 0 i n a l l ) Parties: P l a i n t i f f ( A p p e l l e e ) : M r . E n W a n g D e f e n d a n t ( a p p e l l a n t ) : P e o p l e ' s G o v e r n m e n t . H e p i n g D i s t r i c t , T i a n j i n Dispute Resolving Institutions: F i r s t I n s t a n c e : T i a n j i n N o . 1 I n t e r m e d i a t e P e o p l e ' s C o u r t C o u r t o f a p p e a l ( f i n a l d e c i s i o n ) : S u p e r i o r P e o p l e ' s C o u r t o f T i a n j i n Date: F i n a l d e c i s i o n : 6 J u n e 1 9 9 7 Summary of Facts: T h e p l a i n t i f f w a s a n i n d i v i d u a l p r o p r i e t o r w i t h a l l n e c e s s a r y l i c e n s e s . O n e o f h i s l i c e n s e , L i c e n s e o f T e m p o r a r y O c c u p a t i o n o f R o a d w a s v a l i d f r o m 1 J a n 1 1 9 9 6 t i l l 3 1 D e c 1 9 9 6 . O n O c t 1 9 9 6 , t h e d e f e n d a n t m a d e a n a d m i n i s t r a t i v e d e c i s i o n ( " t h e 150 d e c i s i o n a t i s s u e " ) t o c l e a r u p t h e p l a i n t i f f ' s s t a l l . T h e p l a i n t i f f s u e d o n t h e b a s i s t ha t t h e d e f e n d a n t i n f r i n g e d o n h i s m a n a g e r i a l a u t h o r i t y . Issues: W h e t h e r t h e a d m i n i s t r a t i v e d e c i s i o n a t i s s u e m a d e b y t h e d e f e n d a n t w a s p r o p e r ? Decision: T h e d e c i s i o n a t i s s u e q u a s h e d . Reason: T h e d e f e n d a n t w a s ultra vires i n m a k i n g t h e d e c i s i o n a t i s s u e . Appeal and Basis: T h e d e f e n d a n t a p p e a l e d . T h e y a r g u e d t h a t t h e y d i d n o t d e m a n d t h e A p p e l l e e t o s t o p t h e o p e r a t i o n . T h e A p p e l l e e a r g u e d t h a t b u t f o r a p p e l l a n t ' s o r a l n o t i c e , h e w o u l d n o t c e a s e t h e o p e r a t i o n a n d w o u l d n o t s u f f e r t h e e c o n o m i c l o s s . Decision on Appeal (with Reasons): A p p e a l d i s m i s s e d . A l t h o u g h t h e a p p e l l a n t p r o v i d e d n e w r e g u l a t i o n a s t h e b a s i s f o r t h e i r a d m i n i s t r a t i v e a c t , t h e y f a i l e d t o p r o v i d e t h e l e g i s l a t i v e a u t h o r i t i e s b e f o r e t h e 151 f i r s t i n s t a n c e . B a s e d o n t h e s e , a c c o r d i n g t o Administrative Procedural Law of the PRC ( a r t i c l e 3 2 , 5 4 ( 2 ) ) , t h e a d m i n i s t r a t i v e a c t s h a l l b e w i t h d r a w n . T h e n e w r e g u l a t i o n t h e a p p e l l a n t p r o v i d e d a t t h e s e c o n d i n s t a n c e c o u l d n o t b e r e g a r d e d a s t h e l e g i s l a t i v e a u t h o r i t i e s o f t h e a d j u d i c a t i o n . * Mr. Sun Liangren v Administrative Commission of High Technology Development Areas, People's Government of Chongqin ( 2 0 0 1 ) Source: R e n m i n F a y u a n A n l i X u a n ( C a s e s S e l e c t i o n o f P e o p l e ' s C o u r t ) , V o l . 4 , 2 0 0 1 ( C u m u l a t i v e l y V o l . 3 8 ) Parties: P l a i n t i f f ( a p p e l l a n t ) : M r . L i a n g r e n S u n D e f e n d a n t ( A p p e l l e e ) : A d m i n i s t r a t i v e C o m m i s s i o n o f H i g h T e c h n o l o g y D e v e l o p m e n t A r e a s , P e o p l e ' s G o v e r n m e n t o f C h o n g q i n Dispute Resolving Institutions: F i r s t I n s t a n c e C o u r t : C h o n g q i n N o . 1 I n t e r m e d i a t e P e o p l e ' s C o u r t C o u r t o f A p p e a l ( f i n a l d e c i s i o n ) : S u p e r i o r P e o p l e ' s C o u r t o f C h o n g q i n 152 Date: F i n a l d e c i s i o n : 21 m a r c h 2001 Summary of Facts: T h e d e f e n d a n t d e f i n e d t h e e n t e r p r i s e i n w h i c h t h e p l a i n t i f f w o r k e d a s a c o l l e c t i v e - o w n e d e n t e r p r i s e . T h e p l a i n t i f f o b j e c t e d a n d s u e d , a r g u i n g t h a t t h e e n t e r p r i s e b e l o n g e d t o t h e p r i v a t e e n t e r p r i s e . Issues: W h e t h e r t h e d e f e n d a n t ' s d e c i s i o n t h a t t h e e n t e r p r i s e a t i s s u e w a s c o l l e c t i v e - o w n e d w a s p r o p e r ? Decision: T h e d e c i s i o n a t i s s u e q u a s h e d . T h e d e f e n d a n t s h a l l m a k e a n e w a d m i n i s t r a t i v e d e c i s i o n . Reason: I t w a s c o r r e c t t h a t t h e d e f e n d a n t d e f i n e d t h e e n t e r p r i s e a t i s s u e w a s c o l l e c t i v e - o w n e d a c c o r d i n g t o Provisional Measures on How to Define the Property Right of Collectively-owned Enterprises in Cities and Towns. H o w e v e r , t h e d e f e n d a n t f a i l e d t o s h o w t h e a p p l i c a b l e l a w o n t h e w r i t t e n d e c i s i o n , w h i c h , t h e r e f o r e , s h a l l b e r e m a d e . Appeal and Basis: T h e p l a i n t i f f a p p e a l e d o n t h e b a s i s t h a t t h e e n t e r p r i s e a t i s s u e w a s c o l l e c t i v e - o w n e d o n t h e f a c e w h i l e i t w a s p r i v a t e a c t u a l l y . Decision on Appeal (with Reasons): T h e a p p e a l d i s m i s s e d . T h e r e a s o n s a d o p t e d b y t h e f i r s t i n s t a n c e c o u r t a f f i r m e d . * Mr. Chuanlin Tu v Industrial and Commercial Administrative Bureau, Qinghuai District, Nanjing, Jiandsu Province ( 1 9 9 6 ) Source: S t a t e I n f o r m a t i o n C e n t e r : S t a t e R e g u l a t i o n s D a t a b a s e N u m b e r : 1 1 5 6 1 1 9 9 8 0 2 5 I s s u e d b y : A p p l i e d L a w I n s t i t u t e o f t h e P R C , S u p r e m e C o u r t o f t h e P R C Parties: P l a i n t i f f : M r . C h u a n l i n T u D e f e n d a n t : I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u , Q i n g h u a i D i s t r i c t , N a n j i n g , J i a n g s u P r o v i n c e Dispute Resolving Institutions: 154 A d m i n i s t r a t i v e r e c o n s i d e r a t i o n o r g a n : I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u , N a n j i n g , J i a n g s u P r o v i n c e C o u r t : N a n j i n g I n t e r m e d i a t e P e o p l e ' s C o u r t Date: 3 0 O c t 1 9 9 6 Summary of Facts: T h e d e f e n d a n t , f i n d i n g t h a t t h e p l a i n t i f f c a r r i e d t o b a c c o w i t h o u t l i c e n s e , d e c i d e d t ha t t h e p l a i n t i f f v i o l a t e d State Council: Provisional Regulations of Administrative Penalties on Speculation and Profiteering ( a r t i c l e 3 ( 1 ) ( i ) ) a n d m a d e t h e d e c i s i o n o f a d m i n i s t r a t i v e p e n a l t i e s ( " d e c i s i o n a t i s s u e " ) . T h e p l a i n t i f f a p p l i e d t o t h e I n d u s t r i a l a n d C o m m e r c i a l A d m i n i s t r a t i v e B u r e a u , N a n j i n g , J i a n g s u P r o v i n c e f o r a d m i n i s t r a t i v e r e c o n s i d e r a t i o n , w h i c h m a i n t a i n e d t h e d e c i s i o n a t i s s u e . T h e p l a i n t i f f s u e d . Issues: W h e t h e r t h e d e c i s i o n a t i s s u e w a s m a d e p r o p e r l y ? Decision: T h e d e c i s i o n a t i s s u e q u a s h e d . Reason: 155 I t w a s w r o n g f o r t h e d e f e n d a n t t o a p p l y t h e State Council: Provisional Regulations of Administrative Penalties on Speculation and Profiteering. T h e p l a i n t i f f ' s b e h a v i o r s h a l l b e g o v e r n e d b y t h e Law of the PRC on Tobacco Monopoly ( a r t i c l e 3 8 ) . T h e f o r m e r l a w b e l o n g s to a d m i n i s t r a t i v e r e g u l a t i o n w h i l e t h e l a t t e r i s l a w . T h e l e g a l v a l i d i t y o f t h e f o r m e r i s l o w e r t h a n t h e l a t t e r . I n t h e e v e n t o f l e g i s l a t i v e c o n f l i c t s a r i s i n g b e t w e e n t h e l a w a n d a d m i n i s t r a t i v e r e g u l a t i o n s , t h e l a w s h a l l b e a b i d e d b y . 156 

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