What is Judicial Review?
Judicial Review is the legal process in which courts examine the constitutionality and legality of government decisions, regulations, or administrative actions. In China, judicial review is limited compared to Western legal systems and primarily focuses on administrative law cases. The courts do not have authority to challenge laws enacted by the National People’s Congress (NPC) but can review decisions made by government agencies.
The Supreme People’s Court (SPC) oversees judicial review cases, ensuring administrative decisions comply with existing laws. Judicial review is critical for foreign businesses involved in commercial disputes, regulatory challenges, and investment arbitration cases.
Relevance in China
Foreign investors and multinational corporations may encounter legal disputes in China related to:
- Business Contracts – Joint Venture disagreements, licensing disputes, and shareholder conflicts.
- Regulatory Compliance – Challenges with business licenses, tax assessments, and customs penalties.
- Intellectual Property Protection – Cases involving trademark infringements or patent disputes.
Unlike in common law countries where judicial review can overturn laws, China’s system is primarily used to assess the fairness of administrative decisions. Foreign companies often seek legal representation in cases involving:
- Arbitration over business contracts
- Tax disputes with the State Taxation Administration (STA)
- Customs penalties issued by the General Administration of Customs (GACC)
How to Use Judicial Review for Business Disputes in China
- File an Administrative Complaint
- Before going to court, companies must submit a formal complaint to the government agency that issued the decision.
- Submit a Case to the People’s Court
- If the administrative decision remains unfavorable, businesses can file a case with the local Intermediate People’s Court.
- Engage in Arbitration or Mediation
- Many foreign businesses prefer arbitration, as it offers more neutrality than local courts. Arbitration can be conducted through:
- China International Economic and Trade Arbitration Commission (CIETAC)
- Shanghai International Arbitration Center (SHIAC)
- Many foreign businesses prefer arbitration, as it offers more neutrality than local courts. Arbitration can be conducted through:
- Seek Legal Representation
- Work with China-based law firms specializing in business litigation and administrative law.
- Ensure Compliance with Regulatory Rulings
- If the court rules in favor of the government agency, companies must comply with all penalties, tax adjustments, or licensing restrictions.