administrative agreement

In the process of attracting investment by administrative agencies, the administrative agencies will make various administrative promises. Some of them are in compliance with legal provisions and are within the scope of their powers. However, in some investment promotion agreements, although relevant administrative promises are made, this promise is simply impossible to realize, or the administrative promise itself violates relevant legal provisions, and this kind of administrative promise is invalid. Or this kind of administrative promise is not within the scope of its powers at all. Although the relevant administrative agencies have made such a promise, this promise cannot be realized at all. Because there is no corresponding administrative authority, it must be recognized by other departments before it can be realized. However, the two parties to a general administrative agreement do not have a third-party department. Therefore, if the administrative commitment is not within the scope of its authority, how can the administrative counterparty safeguard its rights in this case? How to safeguard the corresponding interests? The following case gives us the answer.

In March 2006, the competent department of a district in Shenyang City, Liaoning Province signed a letter of intent with a club to establish an advertising company and operate business in the district. It was agreed that the prerequisite for investment was that the district competent authority was responsible for handling legal operations and advertising business licenses and other procedures. In June 2006, the district administrative department signed an agreement with the club on the production of advertising vehicles and the establishment of an advertising company. It was stipulated that the district administrative department should ensure that the new legal entity of the club obtains a business license and operation license for the use of advertising vehicles for legal advertising operations in Shenyang City, and assist in the application of business licenses and operation licenses for the use of advertising vehicles for legal advertising operations in Liaoning Province and other cities in China, and be responsible for the approval procedures of relevant departments required for legal procedures.

The advertising company invested and established by the club in Shenyang purchased advertising vehicles, but did not obtain an advertising operation license. In July 2015, the club mailed a letter to a district authority requesting it to fulfill its commitments, but the district authority did not respond after signing for it. The club filed a lawsuit, requesting to confirm that the district competent authority did not have the administrative authority to grant the relevant license, and if it had the corresponding authority, to confirm that the district authority's failure to perform the agreement to grant it the administrative license was illegal.

The Intermediate People's Court of Shenyang City, Liaoning Province held in the first instance that according to the relevant provisions of the "Shenyang City Outdoor Advertising Setup Management Measures", the district competent authority did not have the legal authority to establish a business license and operation license for advertising companies to use advertising vehicles for legal advertising operations in Shenyang City. Therefore, its behavior in making a promise to the club was illegal, and the judgment confirmed that the district competent authority's behavior in making a promise was illegal. The district authorities were dissatisfied and appealed. The second-instance judgment of the Liaoning Provincial Higher People's Court rejected the appeal and upheld the original judgment.

Administrative commitment is a unilateral beneficiary act made by an administrative subject within the scope of its own discretion based on the provisions of laws and regulations. The principle of good faith is the objective basis of administrative promise obligations. As long as the content of the promise is legal and valid, the administrative subject should perform the corresponding obligations in accordance with the legal promise. Even if an administrative promise is confirmed to be illegal, if the administrative counterpart has reasonable reliance on the promise, the administrative subject shall bear corresponding responsibilities.

In this case, the district administrative body made a promise to the club without the legal authority to grant advertising business licenses and operation licenses to advertising vehicles. Despite subsequent coordination, the district administrative subject still failed to perform its obligations as promised. The People's Court accordingly confirmed that the district administrative subject's behavior in making the promise was illegal, and clearly pointed out that if the club has evidence to prove that it has caused losses, the district administrative department shall bear the liability for compensation. This case not only reflects the People's Court's equal protection for Chinese and foreign enterprises and promotes the unswerving expansion of opening up to the outside world, but also serves as a warning to administrative agencies to make administrative commitments prudently during the process of attracting investment, and once made, they should actively and fully implement them to maintain a good image of the rule of law and integrity.

From this case, we can see that when encountering administrative litigation and other similar issues, if you have a dispute with an administrative department, you must seek judicial relief in a timely manner, and find a breakthrough to solve the problem and protect your rights and interests through professional analysis and evidence sorting by lawyers. The litigation process may be very difficult and tortuous, but the final result of this case still allows the legitimate rights and interests of the parties to be protected. Lawyer Ying Ting also reminds all parties involved that when encountering such problems, they must consult us in time. After analysis, they should understand the laws and regulations, policy basis, and similar case handling ideas before making a decision, so as not to miss the best opportunity to protect their rights and interests and cause irreparable losses to themselves.

The legal knowledge in this article does not represent legal advice. If you encounter similar problems, you should analyze them in detail.