Dispute resolution mechanisms of ppp agreements in China: a research based on judicial decisions

• Author: Dispute resolution mechanisms of ppp agreements in China: a research based on judicial decisions
• Pages: 360-386

FRONTIERS OF LAW IN CHINA

VOL. 14 SEPTEMBER 2019 NO. 3

DOI 10.3868/s050-008-019-0018-6

FOCUS

RETHINKING PUBLIC–PRIVATE PARTNERSHIPS

DISPUTE RESOLUTION MECHANISMS OF PPP AGREEMENTS IN CHINA:

A RESEARCH BASED ON JUDICIAL DECISIONS

YU Wenguang∗

Abstract Based on research on a number of judicial decisions regarding

concession and Public–Private Partnership (PPP) agreements, this paper

demonstrates the problems and dilemmas of China’s current PPP dispute resolution

mechanism and clarifies three fundamental issues: concession≠PPP; concession

agreement ≠administrative agreement; and disputes related to administrative

agreements≠administrative disputes. On the grounds of these conclusions, the

paper argues that the logical chain of China’s existing PPP and concession dispute

resolution mechanism is untenable. The logic of the current mechanism starts from

the definition of an administrative agreement; it then classifies concession

agreement as administrative agreement; and finally subjects the disputes over

concession agreements to administrative litigation. Yet, this starting point is

problematic because the definition of administrative agreement and the distinction

between public and private law attributes are difficult to determine precisely, as they

lack the necessary theoretical clarity and uniqueness. Overall, the current legal

situation of PPP in China is far from being satisfactory because a statutory law on

PPP is absent, the existing laws and regulations on administrative agreements are

primitive, and the judicial practice has not yet established unified and clear criteria.

Against this backdrop, this paper proposes a possible way out. First, we should

critically reflect on the current administrative agreement and PPP agreement theory.

Then, we should apply the method of legal fact research, adopt doctrinal tools of the

legal relationship theory and contract construction theory, and eventually establish a

multiple dispute resolution mechanism to resolve disputes effectively.

Keywords public−private partnerships, PPPs, concession agreements, administrative

agreement, dispute resolution mechanism, legal relationship theory

∗ (喻文光) Dr. jur., Faculty of Law, Goethe University Frankfurt, Frankfurt am Main, Germany; Associate

Professor, School of Law, Renmin University of China; Researcher, Law and Technology Institute, Renmin

University of China, Beijing 100872, China. Contact: yu_wenguang@hotmail.com

This work was supported by the funding research project of Renmin University of China (Project No.:

17XNA001).

2019] DISPUTE RESOLUTION MECHANISMS OF PPP AGREEMENTS IN CHINA 361

INTRODUCTION .................................................................................................................... 361

I. CURRENT STATUS OF AND DEBATES ON DISPUTE RESOLUTION MECHANISMS OF

CONCESSION AND PPP IN EXISTING LAWS AND REGULATIONS............................... 363

II. CONTROVERSIES OVER DISPUTE RESOLUTION MECHANISMS OF CONCESSION AND

PPP IN JUDICIAL PRACTICE .................................................................................... 366

A. The Legal Nature of and the Jurisdiction over Concession Agreements........... 367

B. Difficulties in Identifying the Element of “Exercise of Administrative Power” in

Concession Agreements and Predicament of the Dual Dispute Resolution

Mechanism........................................................................................................ 370

1. Disputes over Non-Performance of Contractual Obligations by the

Government under Government Investment Promotion Agreements............371

2. The Legal Nature of the Government’s Temporary Takeover of Concession

Projects.......................................................................................................... 372

3. Disputes over the Nature of the Government’s Unilateral Termination of the

Agreement..................................................................................................... 373

C. Nonidentity between Disputes Related to Administrative Agreement and

Administrative Disputes.................................................................................... 376

III. RECONSTRUCTION OF PPP AND CONCESSION AGREEMENT THEORIES ................. 378

A. Exploring the Real Problems and Empirical Rules in the Practice of PPP and

Administrative Agreements in China Using the Legal Fact Research

Method.............................................................................................................. 378

B. Giving up the Logical Obsession of Referring to the Remedy of Administrative

Litigation Based on the Definition and Attributes of the Agreement................ 380

C. Reconstructing the Administrative Agreement and PPP Agreement Theory with

the Legal Relationship Theory and the Contract Construction Theory............ 383

D. Establishing a Multiple PPP Dispute Resolution Mechanism for the Purpose of

Resolving Disputes Effectively.......................................................................... 384

CONCLUSION........................................................................................................................ 385

INTRODUCTION

Public–Private Partnership (PPP), a new innovative form of public administration and

public goods supply after privatization, deregulation, and reregulation, has been spreading

around the world since the 1990s. Starting from the 1984 Shajiao B Power Station BOT

Project in Shenzhen, PPP has been operational in China for more than 30 years, during

which it has experienced several up and downs. Since 2014, due to the supportive policy

from the central government, especially from the National Development and Reform

Commission and the Ministry of Finance, PPP has once again drawn great attention,