China's revised Administrative Procedure Law will take effect from May 1, but Chinese courts have already begun to put the spirit of this revision into practice. In February, a small but significant legal ruling by a Guangzhou court might point the way towards a new legal paradigm in China - a private enterprise brought suit against a government agency for administrative and monopoly abuses and won the case, the country's first-ever verdict of this kind. In March, China's Supreme People's Court held three days of nationwide live video streaming training on the new Administrative Procedural Law for judges at various levels, the first televised national training of this kind for judges.
Recent amendments to Chinese law will make it easier for citizens to take the government to court. The National People's Congress (NPC) approved an amendment to Administrative Procedure Law, which stresses people's right to sue, on November 1. The revised law will take effect from May 1.
But even before the law's formal implementation, Chinese lawyers and judges have already begun to put the spirit of this revision into practice in real trials.
"A private company has dared to stand up to sue and win a trial against a government agency for administrative abuses and monopoly. Mine was the first such case in China," said lawyer Wei Shilin proudly to the Global Times. Wei is representing the plaintiff in the case of Shenzhen Sware Technology against the Department of Education of Guangdong Province.
The Legal Daily newspaper hailed Wei's case as "a breakthrough," 25 years after the implementation of the Administrative Procedure Law and seven years after the passage of China's Anti-Monopoly Law, both of which were intended in part to check abuses of administrative power by government departments.
Sware and Wei's story began in early 2014, when China's Ministry of Education decided to organize a "cost engineering" competition for students in construction engineering programs around the country. To select contestants, each province was required to organize provincial level contests. On April 1, 2014, the Guangdong Provincial Department of Education designated Glodon Software as its exclusive provider of construction data software.
In the relatively specialized market for construction data software, there are several major providers, including Sware and its competitor Glodon, as well as dozens of smaller companies.
After the Department of Education's administrative order, Sware took the view that the order was an abuse of administrative power and a breach of China's Anti-Monopoly Law.
Sware alleged that the Department of Education used an opaque selection process and abused its administrative power, adding that if all vocational college students are trained in its competitor's system, it will be placed at a competitive disadvantage when the students graduate and enter the workforce.
After several rounds of unsuccessful communication with the Department of Education, Sware filed a suit with the Guangzhou Intermediate People's Court against the department, alleging that it had abused its administrative power to eliminate or restrict competition.
However, the road towards a ruling was bumpy. The first major obstacle Sware met was the law itself. Since it was China's first lawsuit in which a private company sued a government agency on the grounds of the Administrative Procedure Law and Anti-Monopoly Law, the Guangdong court took its time in evaluating whether the case met the relevant legal conditions.
After almost seven days' deliberation, the court accepted the case and held a hearing on June 26. Even the hearing itself was considered a breakthrough, as it was the first time a court had to agree on a case of this type.
"Sware has tried all other methods to try to ask the Department of Education to withdraw its administrative order. But it failed. Few private companies in China dare to sue government agencies. The bigger the company, the larger its fears, because the stakes are higher. If a company monopolizes a product at a national level through government designation, its competitors are left with no way to survive. Sware is desperate. The law is our last and only resort," Wei told the Global Times.
After the hearing, eight months were spent waiting for the court's decision. Wei wrote several letters to the court to inquire about progress; the court told him to wait patiently, since this was the first case of its type.
Finally, on February 2, 2015, the court issued a verdict stating that, by granting one company's product exclusive status in its contest, the Department of Education of Guangdong Province had in fact used an opaque selection process and abused its administrative power.
"The Guangzhou court's verdict is a milestone. This case is a small case but has huge significance in China. A private enterprise brought suit against a government agency for administrative abuses and monopoly - two of the key obstacles to the smooth functioning of a market economy - and won the case. Government intervention into normal market activities might disturb the market's own adjustment," Sheng Jiemin, director of economic law research office at Peking University, told the Global Times. He is also an expert witness in this case.
