中国法律博客
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AML Rollout Proceeding According to Plan
媒体来源: 中国法律博客

Well, that's my opinion on our experience with the new Anti-monopoly Law thus far. Here's the latest news:

The No. 1 Intermediate People's Court of Beijing on Thursday rejected an anti-monopoly case considered the first of its kind in China, the Beijing Times reported.

In a first-instance trial ruling, the court cited a factor that the plaintiffs filed litigation after its validity period expired as the reason for turning down the case, the newspaper quoted Zhou Ze, the attorney on the case, as saying.

It went further to defend its decision by citing Article 58 of the Administrative Procedure Law and the first item of Article 41 of the Interpretation Regarding Issues Related to Implementation of the Administrative Procedure Law.

This may be an oversimplification, but you can look at the AML as including two different kinds of procedures: first, there is an administrative review of certain kinds of transactions (e.g. mergers and acquisitions), and second, the AML can be used within the context of civil litigation. The case cited above is an example of the latter.

Why is this news business as usual? Dan Harris puts his finger on it:

I am still not surprised by the result. I am not surprised by the result simply because I simply do not believe China's courts are ready for antitrust cases and their response to this will be to dismiss them on whatever grounds they can find.

Courts are not ready? Yes, to the extent that judges here have absolutely no experience with these kinds of cases and the government has provided very little in the way of guidance on application of the law. Dan is also correct in stating that dismissals will follow in many cases, sometimes on procedural grounds.

Why are judges so conservative about implementing the new law? Shouldn't they be excited about trailblazing this new legal frontier?

Not exactly. Remember that the notion of an independent judiciary is a relatively new concept here, and that we have a very long way to go before that might possibly become a reality. The judiciary is therefore very much part of the bureaucracy and is subject to the same tendencies.

If you are a judge charged with applying this new law, what are you thinking? At the end of the case, you will have to make your decision based on very incomplete information (again, very little guidance from the legislature or Supreme People's Court). You make that decision and then hope that your interpretation was "correct" based on subsequent review and interpretation. In other words, by making that decision, you are way out on a judicial limb. I don't think any judge in any country would enjoy being in that position, although due to their historical role, I suspect that Common Law judges would be much less uncomfortable with the prospect.

So what do you do? Obviously, finding a way out of making a decision at all would be the first choice. Thus I am not surprised to see this sort of procedural grounds for dismissal. Wouldn't be surprised to see more of this in the near term.

We have seen this many times before as new laws have been rolled out in China. This conservative approach is common not only with the judiciary, but also with administrative officials. When restrictions on foreign investment in certain industry sectors are removed, for example, it usually takes many months for "the word" to filter down to the local officials about when/how to implement the decision.

Bureaucrats do not want to be trailblazers or activists. The uncertainties are too great, and no one appreciates having their superiors tell them they got it wrong.

By the way, do not jump to the usual reactionary Cold War conclusion that the reason why a judge is reluctant to "get it wrong" is that he will be tossed out of his job and sent to some Kafka-esque remote location for attitude adjustment. No, the biggest danger these days is that the decision will be overturned, the judge will be embarrassed, yelled at, and his career will be harmed. That's certainly bad enough to make one reluctant to act.