administrative agreement

【Key words】

Delinquent accounts Government audit Forensic audit Basis for settlement

【Case summary】

A certain district health commission and a pharmaceutical company agreed that the transactions between the two parties would be settled based on government audits, but they subsequently defaulted on the payment on the grounds that the original bills were missing and the government audit had not been completed. In this regard, the People's Court verified the authenticity of the bill through four letters, on-site investigations, etc., and determined that the correlation between the government audit involved in the case and the facts of the dispute between the two parties was unclear, and the audit period was also unclear. In this case, if the agreement still applies, it constitutes the sixth provision of the Private Economy Promotion Law of the People's Republic of China. The situation stipulated in the first paragraph of Article 17, that is, it is "mandatory to use the audit results as the basis for settlement", so the judicial audit applied by a pharmaceutical company was allowed, and based on this, it was judged that a certain district health committee paid a payment of more than 26.96 million yuan to a pharmaceutical company. Both parties agreed to the verdict and reached a settlement agreement for installment payment.

【Details】

In June 2023, a pharmaceutical company and a certain district health commission reconciled early supplies and current accounts, and it was clear that a certain district health commission owed more than 35.4 million yuan in accounts. A certain district health commission stamped its official seal on the "Current Account Reconciliation Letter" and stated that "the amount is proved to be correct, and the final audit results of the certain district audit bureau shall prevail." A pharmaceutical company repeatedly pressed for payment but to no avail, so it filed a lawsuit with the People's Court of a certain district in Wuhan City, Hubei Province, demanding that the health commission of a certain district pay the payment and interest.

During the trial of the case, a certain district health committee refused to pay a pharmaceutical company on the grounds that the government audit results had not yet been issued and therefore the payment terms had not been fulfilled. It also refused to recognize the authenticity of the evidence on the grounds that the delivery documents provided by a pharmaceutical company were not original. In order to find out the facts of the case, the People's Court of a certain district in Wuhan City, Hubei Province sent letters to government agencies four times and sent personnel to other provinces for verification, and finally confirmed the authenticity of the copy of the delivery document held by a pharmaceutical company.

In the first instance, the People's Court of a certain district in Wuhan City, Hubei Province held that although the settlement amount agreed between a certain district health commission and a certain pharmaceutical company was based on the audit results of a certain district's audit bureau, the ongoing audit by the district's audit bureau was not clearly related to the case, and the audit period was also unclear. It had been nearly three years since the transaction involved in the case was completed, and the government audit as a condition for settlement had not yet been completed. If the settlement agreement between the two parties applies to the machinery, it is tantamount to forcing private enterprises to use government audit results as the basis for settlement in disguise, which may cause the payment to be in arrears indefinitely, which is not conducive to the timely payment of accounts of private enterprises. It violates Article 67 of the "Private Economy Promotion Law of the People's Republic of China" that stipulates that government agencies shall not force the use of audit results as the basis for settlement. Therefore, the judicial audit application submitted by a pharmaceutical company is allowed in accordance with the law. After comprehensively considering the judicial audit results, payment status, agreed settlement conditions and other factors, it was ordered that a certain district health committee pay a payment of more than 26 million yuan to a pharmaceutical company. After the verdict of the case, both parties agreed and settled the lawsuit. After the judgment came into effect, a pharmaceutical company and a certain district health commission reached an implementation settlement agreement for installment repayment, and the first installment has been paid.

【Typical meaning】

In this case, a pharmaceutical company had difficulty in providing evidence because it did not possess the original delivery receipt, while a certain district health committee insisted on using government audit results as the basis for payment. Both parties held different opinions. In order to promote the resolution of disputes, the People's Court verified and determined the authenticity of copies of delivery documents through proactive correspondence, on-site investigations and other judicial means. On this basis, it conducted judicial audits, made timely judgments, and successfully resolved the issue of arrears with private enterprise accounts. The case implements the rigid provisions on account payment in the Private Economy Promotion Law, which is conducive to boosting the confidence of business entities and promoting the healthy development of the private economy.