In the first article, "Administrative Agreement Dispute Practice Series (I) - From the Perspective of a Government Franchise Agreement Litigation," we briefly introduced the merits of the case, discussed the concept and essential elements of administrative agreements, as well as the significance and methods of distinguishing between administrative agreements and civil contracts. At the same time, we mentioned that after the Dagong County Government issued a "Notice" to Warmheart Company on April 15, 2016, Warmheart Company only filed an administrative lawsuit on November 8, 2019 to revoke the "administrative act of the defendant Dagong County Government in the form of a" Notice "to terminate the heating franchise agreement and recover the plaintiff's heating franchise rights" on the grounds that "a hearing should have been held but not held.". However, due to the expiration of the prosecution period, the Shandong High Court rejected the prosecution.

This article is the second in a series of articles that will focus on the following issues: 1. How to determine the limitation of action and the duration of action for administrative agreement disputes; After taking over the case, why did we apply to the Heze Intermediate Court to add a lawsuit request for "requesting confirmation that the administrative action of the defendant Dagong County Government to terminate the heating franchise agreement and recover the plaintiff's heating franchise right made in the form of a Notice on April 15, 2016 is invalid"; 3. Whether an action to confirm the invalidity of an administrative act is subject to the limitation of the prosecution period.

1、 Litigation Limitation and Prosecution Period of Administrative Agreement Disputes

（1） In terms of the time limit for requesting protection of rights, administrative agreement litigation adopts a dichotomy approach

Article 25 of the Judicial Interpretation of Administrative Agreements stipulates that if an administrative counterpart brings a lawsuit against an administrative organ that fails to perform the administrative agreement in accordance with the law or the agreement, the limitation of action shall be determined by reference to civil legal norms; "If a lawsuit is brought against an administrative organ for administrative acts such as changing or terminating an administrative agreement, the time limit for the lawsuit shall be determined in accordance with the Administrative Procedure Law and its judicial interpretation.". Accordingly, in terms of the time limit for requesting protection of rights, administrative agreement litigation adopts a dichotomy:

On the one hand, the limitation of action system is applicable to disputes over the performance of contracts where administrative organs fail to perform in accordance with the law or the agreement. The limitation of action is generally "three years from the date on which the obligee knows or should have known that the right has been damaged and the obligor".

On the other hand, when a lawsuit is filed against a unilateral administrative act of authority by an administrative organ that changes or rescinds an agreement, the prosecution period system is applicable in administrative proceedings. The prosecution period is generally "six months from the date on which the administrative act was or should have been known to have been committed" [2].

（2） The Difference between Litigation Prescription and Litigation Period

The limitation of action and the duration of action are both set for a certain period, and after the period expires, it will have some adverse impact on the plaintiff, thereby urging the obligee to exercise their rights in a timely manner. However, there are significant differences between the two:

1. The legal nature is different. The time limit for prosecution is the legal requirement for a lawsuit to be accepted by the court. It is stipulated in the administrative procedure law and is a procedural legal system. The limitation of action is a reasonable element of litigation, which is related to the determination of whether the rights of the obligee are complete rights, and is a civil substantive legal norm.
The legal consequences are different. "After the expiration of the prosecution period without justified reasons, the plaintiff loses the right to sue, and the people's court will no longer accept the lawsuit filed by the plaintiff. If the case has been filed, it will rule to dismiss the lawsuit [3].". After the expiration of the statute of limitations, the parties concerned can bring a lawsuit in the court, which should still be accepted by the court. It is not allowed to dismiss the lawsuit or not accept it on the grounds that the statute of limitations has passed, but the substantive rights of the obligee will not be protected by the court's coercive force.

3. Different variability. The limitation of action can be interrupted, suspended, and extended when certain conditions are met. The prosecution period is fixed, and only under special circumstances can an application be made for extension or deduction of the delayed time, but under no circumstances will the issue of interruption or suspension occur.

4. The initiative of judicial review is different. The court does not actively review whether the limitation period has passed without the parties raising a plea against it. As one of the conditions for prosecution, the court should actively review whether the prosecution time has exceeded the deadline, regardless of whether the parties have raised a defense. If so, the court should rule to dismiss the prosecution according to law.

It can be seen that when the administrative counterpart "knew or should have known that the administrative organ unilaterally changed or rescinded the agreement" has exceeded the prosecution period, but did not exceed the statute of limitations, there may be fundamental differences in the outcome of initiating administrative or civil litigation for dispute resolution.

2、 In this case, Warmheart Company filed a lawsuit with Heze Intermediate People's Court to "revoke the administrative act of Dagong County Government to terminate the franchise agreement", which has exceeded the statutory prosecution deadline

The prosecution period for administrative litigation is usually six months. According to Article 64 of the Interpretation of the Supreme People's Court on the Application of the Administrative Procedure Law of the People's Republic of China, if an administrative organ fails to notify the prosecution period when making an administrative act, the prosecution period shall be calculated from the date on which the opposing party knows or should know the prosecution period, but the maximum period shall not exceed one year from the date on which the content of the administrative act is known or should be known.

In this case, on April 15, 2016, the Dagong County Government issued a "Notice" to Warmheart Company, specifying the need to terminate the franchise agreement and withdraw the franchise rights. Due to the fact that the "Notice" issued by the Dagong County Government did not inform Warmheart of the prosecution deadline, the prosecution deadline should expire on April 15, 2017 at the latest.
On November 8, 2019, Warm Heart Company filed an administrative lawsuit requesting the cancellation of the administrative act of Dagong County Government unilaterally terminating the franchise agreement, which clearly exceeded the prosecution deadline. The Shandong High Court's rejection of Warm Heart Company's lawsuit was in accordance with the legal provisions.

3、 "We apply for the addition of a lawsuit to confirm the invalidity of the administrative action to terminate the franchise agreement, one of the purposes of which is to make up for the issue that the prosecution period has expired."

After the failure of the administrative action revocation lawsuit, Warm Heart Company felt that the amount standard of administrative compensation is usually lower than the standard of administrative compensation. Therefore, it did not file an administrative compensation lawsuit in accordance with the guidelines of the Heze Intermediate Court and the Shandong High Court in the judgment documents, but instead filed an administrative compensation lawsuit alone. The so-called "alone" refers to directly requesting the county government to compensate for its losses of 310 million yuan without confirming that the county government violated the law.

According to Article 21 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Compensation Cases" (hereinafter referred to as the "Old Administrative Compensation Interpretation", Fa Fa [1997] No. 10, which expires on May 1, 2022), a compensation claimant who files an administrative compensation lawsuit alone shall meet the following conditions:... (4) If the injurious act is a specific administrative act, the act has been confirmed as illegal; (5) The organ liable for compensation has dealt with it in advance or has not dealt with it beyond the statutory deadline (7) Comply with the legal deadline for prosecution. [Note: There are changes to this regulation, in accordance with the "Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Compensation Cases" (hereinafter referred to as the "New Bank Compensation Interpretation", Fa Shi [2022] No. 10, which took effect on May 1, 2022) Article 13. If an administrative act is not confirmed as illegal and the counterpart brings an administrative compensation lawsuit, the people's court shall consider it as bringing an administrative compensation lawsuit together with the administrative lawsuit. "If an administrative act has been confirmed as illegal and meets the following conditions, the counterpart may file a separate administrative compensation lawsuit:... ④ The compensation obligation organ has dealt with it in advance or has not dealt with it beyond the statutory deadline;... ⑥" Initiate a lawsuit within the time limit prescribed by law. That is, when the counterpart files an administrative compensation lawsuit, if the administrative act is not confirmed to be illegal and meets the conditions for administrative litigation, it shall be deemed to file an administrative compensation lawsuit together; For a separate administrative compensation lawsuit, while meeting the relevant prosecution conditions, it is also necessary to assume that the administrative act has been confirmed as illegal. [5]】

According to the "Old Bank Compensation Interpretation", there are three legal obstacles to Warm Heart's independent administrative compensation lawsuit: first, the unilateral cancellation of the franchise agreement by the Dagong County government has not been recognized as illegal; Secondly, there is no situation where the Dagong County government has handled the matter in advance or has not handled it beyond the statutory deadline; Third, the administrative compensation lawsuit of Warmheart Company is highly likely to have exceeded the statutory prosecution deadline.
In order to avoid the above legal difficulties, we believe that Warmheart Company should not file an administrative compensation lawsuit alone, but should file an administrative lawsuit together as a prerequisite. In this way of thinking, after the lawsuit for revocation of administrative actions has failed, in theory, the administrative actions that Warm Heart Company can bring include "applying for confirmation of administrative action illegality", "applying for cancellation of administrative agreement", and "applying for confirmation of administrative action invalidity". Let's analyze the feasibility one by one:

First of all, with regard to "the lawsuit confirms that the administrative act is illegal", Article 23 of the "Old Bank Compensation Interpretation" stipulates that if the opposite party files an administrative compensation claim together with the administrative lawsuit, the prosecution period shall be implemented in accordance with the provisions of the administrative lawsuit prosecution period. In other words, in terms of the prosecution deadline, there is no difference between the confirmation of illegality of the lawsuit and the withdrawal of the lawsuit. As a result, Warmheart Company has exceeded the six month prosecution deadline. (Note: Although there are changes to this regulation, namely, the "New Bank Claims Interpretation" Article 19 stipulates that if the opposing party files an administrative compensation lawsuit together, and the people's court considers that the administrative lawsuit does not meet the conditions for prosecution after examination, it shall rule not to file the administrative compensation lawsuit filed together; "If the case has been filed, the court shall rule to dismiss the prosecution.". "However, it does not affect the final judgment and results, as both the new and old regulations mean that if a case of administrative act of infringement is not eligible for legal prosecution as the main complaint, the administrative compensation lawsuit filed together also does not meet the prosecution requirements [6]." Therefore, this road does not work.

Secondly, although the counterpart's "application for rescission of the administrative agreement" has legal basis [7], its legal consequences also include compensation for losses [8]. However, in view of the fact that an administrative agreement is entered into by an administrative organ to achieve public interests or administrative management objectives, when the agreed conditions for rescission are met or legal rescission occurs, the counterpart's delay in exercising the right to sue for rescission of the agreement will lead to an uncertain and unstable state of the agreement relationship, which will further harm the national and social public interests. Therefore, the counterpart should request the court to rescind the agreement within a certain period or a reasonable period, Once the determined period or reasonable period is exceeded, the court should not support its claim. As for what constitutes a "reasonable time limit", the people's court shall determine it based on the specific circumstances of the case [9]. The second paragraph of Article 95 of the Contract Law does not clearly stipulate the time limit for exercising the right to terminate without notice. Based on Article 564 of the Civil Code and Article 11 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Disputes over Commercial Housing Sales Contracts, we can see that the time limit for excluding the right to terminate is usually one year. Therefore, even if Warmheart Company has the statutory or agreed right to terminate the contract, after the county government rescinded the agreement and took back the franchise rights in 2016, and only filed a lawsuit to terminate the agreement in September 2021, its right to terminate will also be extinguished due to a more than one year exclusion period, making it difficult for the court to support the request for termination. Therefore, we did not choose this relief path.

Finally, regarding the lawsuit "Request to confirm that the administrative act of the Dagong County Government to terminate the franchise agreement is invalid". The mainstream view is that "the application for confirmation of the invalidity of administrative acts" is not subject to the limitation of the prosecution period. If this viewpoint is used by me, it can just make up for the fundamental defect that the prosecution period of Warmheart Company in this case has expired. Moreover, according to Article 76 of the Administrative Procedure Law, if the judgment of the people's court is confirmed to be invalid and causes losses to the plaintiff, the defendant shall be judged to bear the liability for compensation according to law. Therefore, logically, the litigation of invalidity of administrative acts and administrative compensation claims can be smoothly connected.

Based on the above reasons, we applied for the addition of litigation claims before the first instance hearing, namely, "confirming that the administrative act of Dagong County Government to terminate the franchise agreement is invalid.". Our litigation idea is to advocate that the Dagong County government unilaterally rescind the franchise agreement without legal or agreed contract rescission circumstances and without holding a hearing, which is a significant and obvious violation of the law, and the court should confirm its invalidity [10]. Moreover, due to this invalid administrative act, which has caused significant economic losses to Warm Heart Company, Dagong County Government should compensate [11].

4、 Is the lawsuit of invalid administrative act limited by the prosecution period?

Is there any limitation on the time limit for the prosecution of invalid administrative acts? The answer to this question has undergone some changes:

（1） In its earlier judgment documents, the Supreme Court either considered that an administrative action that is invalid is also subject to the limitation of the prosecution period, or based on the substantive outcome of the case, that is, if the administrative action does not meet the circumstances of invalidity after the trial, the prosecution period system should be applied

In some cases, the Supreme Court believes that "the prosecution of invalid administrative acts should be limited by the prosecution period.". For example, In the (2017) Supreme Law Enforcement Shen No. 4580 case "Regarding the issue of Chen Hongxiang's assertion that there is no prosecution period for invalid administrative acts, there are no special provisions on the prosecution period for invalid administrative acts in the Administrative Procedure Law and relevant judicial interpretations. If an administrative counterpart or interested party files a lawsuit to confirm the invalidity of an administrative act, the general provisions on the prosecution period in the Administrative Procedure Law and relevant judicial interpretations are still applicable. The courts of first and second instance have ruled to dismiss Chen Hongxiang's lawsuit and appeal, which are consistent with Compliance with legal provisions "; In the (2017) Supreme Court Executive Shen No. 8558 case, it was held that "even if a party files a claim to confirm the invalidity of an administrative act, whether in accordance with the revised Administrative Procedure Law and its judicial interpretation, or in accordance with the revised Administrative Procedure Law and its judicial interpretation, there is no provision that a claim to confirm the invalidity is not subject to the limitation of the prosecution period"; In the case (2016) No. 2233 of the Supreme Law of the People's Republic of China, it was held that "although the Administrative Procedure Law of the People's Republic of China does not explicitly stipulate whether a request for confirmation of the invalidity of an administrative act is applicable to the time limit for prosecution, according to general procedural principles, requests for confirmation of the invalidity of an administrative act must still be filed within an appropriate period of time. If circumstances change and the old matter is brought up again, it is difficult to maintain the stability of the legal order, and there is no suspicion of abuse of the right of action."

In other cases, the Supreme Court believes that "after the parties file a lawsuit confirming invalidity, the court should conduct preliminary screening and review. If it does not fall within the invalidity situation, the system of prosecution period should be applied, and if it expires, the prosecution of the opposite party should be rejected.". For example:

In the case (2018) No. 8971 of the Supreme People's Court, it was held that "the retrial applicant claimed that the administrative licensing act involved in the case was invalid from the beginning and the prosecution period cannot be applied. According to Article 75 of the Administrative Procedure Law of the People's Republic of China and Article 99 of the Interpretation of the Supreme People's Court on the Application of the Administrative Procedure Law of the People's Republic of China, the so-called invalid administrative act should have "The executive subject of an administrative act does not have the qualification of an administrative subject, or there is no legal and normative basis for the administrative act that impairs rights or increases obligations, or the content of the administrative act is objectively impossible to implement." Such "significant and obvious illegal circumstances", and the administrative licensing act involved in the case does not have the above circumstances, so this claim cannot be established. " "Therefore, the request of the retrial applicant does not meet the prosecution requirements for administrative litigation, and the courts of first and second instance have ruled to dismiss the prosecution and appeal, respectively, which comply with the legal provisions."

In the (2018) Supreme Court Executive Shen No. 2243 case, it was held that "Wang Zongxiang's assertion that an administrative act that is invalid is invalid from the beginning, and the provisions on the time limit for prosecution cannot be applied. According to Article 75 of the Administrative Procedure Law of the People's Republic of China, the so-called invalid administrative act requires significant and obvious illegal circumstances such as" the administrative act has the qualification of an executive subject but does not have the qualification of an administrative subject or has no basis ", There are no significant and obvious violations in this case. "Therefore, Wang Zongxiang should have been aware of the content of the" Decision on Compensation for Expropriation "since June 18, 2015. He only filed a lawsuit on March 21, 2016, which has exceeded the statutory six-month prosecution period and has no legitimate reasons. The courts of first and second instance have ruled to dismiss his lawsuit and appeal, which comply with legal provisions."

In the (2017) Supreme Law Enforcement Application No. 4081 case, "Regarding the issue that the retrial applicant claims that the sued administrative act should be invalid and not subject to the limitation of the prosecution period, this court believes that the Administrative Procedure Law of the People's Republic of China" The premise for confirming an invalid administrative act specified in Article 75 must be that there are significant and obvious violations of the administrative act, such as the fact that the implementing subject does not have the qualification of an administrative subject or has no basis. The administrative act sued in this case is the act of changing the owner of the residential land use right at No. 23, Fengzhuang Village West Street, Jingguang Road Office, Erqi District, from He Zixue to Li Wei, even if there is an illegal change claimed by the retrial applicant, "It also does not reach the level of suspected significant and obvious illegality. Therefore, the claim of the retrial applicant that this case is not subject to the prosecution deadline cannot be established, and this court does not support it."

In the (2018) Supreme Law Enforcement Shen No. 293 case, "Regarding the issue of whether the lawsuit filed by the applicant He Mou1 and Zhou Lijuan to confirm the invalidity has exceeded the prosecution period, Article 75 of the Administrative Procedure Law of the People's Republic of China stipulates that... The lawsuit filed by the retrial applicant to confirm the invalidity of the agreement should not be subject to the prosecution period. According to Article 75 of the Administrative Procedure Law of the People's Republic of China, invalid administrative acts need to have "If there are significant and obvious violations of the administrative act, such as the subject of the administrative act not possessing the qualification of the administrative subject or having no basis," the court shall conduct a preliminary screening and review after the parties file a lawsuit confirming the invalidity. "If the illegality of the administrative act complained of in this case obviously does not reach the extent that it may be confirmed as invalid, it should not be considered as a lawsuit for confirmation of invalidity for further review.". "The time limit for bringing an administrative lawsuit against the demolition agreement in the case by He Mou 1 and Zhou Lijuan shall be calculated from the date of signing the demolition agreement in the case, i.e. September 11, 2009, and the lawsuit shall be filed no later than January 28, 2016. Although the time limit for filing a civil lawsuit in the court can be deducted, it also clearly exceeds the legal time limit for filing a lawsuit."

（2） The current view of the Supreme Court tends to be unanimous, and it is inclined to believe that an action to confirm the invalidity of an administrative act is not subject to the limitation of the prosecution period

The Supreme People's Court issued the "Reply to Recommendation No. 2452 of the First Session of the 13th National People's Congress" on September 10, 2018, which clearly states: "Whether or not an action to confirm the invalidity of an administrative act should be subject to the limitation of the prosecution period is not clearly stipulated in the revised legal provisions and judicial interpretations of the Administrative Procedure Law. We tend to believe that an action to confirm the invalidity of an administrative act is not subject to the limitation of the prosecution period, and the administrative counterpart can request the competent state organ to confirm the invalidity of the act at any time." The people's court should directly enter the substantive trial of an invalid lawsuit on the premise of confirming that the lawsuit is not subject to the limitation of the prosecution period. If it is ultimately determined that the administrative act is not invalid, it will no longer rule to dismiss the lawsuit of the party on the grounds of exceeding the prosecution period, but should rule to reject the lawsuit request of the party. The fundamental characteristic of invalid administrative acts is initial invalidity, which determines that under any circumstances, an initial invalid administrative act cannot be delayed through a deadline and obtain a 'certainty'. "If the opposing party requests the court to confirm that the administrative act is invalid, it must also submit it to the court within the prosecution period, which in fact confuses the" significant and obviously illegal "invalid act with the general illegal act."
At present, the mainstream view still upholds the traditional theoretical view that invalid litigation should not be subject to time limits. The Supreme Court adopts the mainstream view in administrative trials, believing that the plaintiff's lawsuit to confirm the invalidity of administrative acts is not subject to the limitation of the prosecution time limit. For example:

In Wang Shurong's Administrative Ruling on Retrial [(2020) Supreme Law Enforcement Re No. 341, Decision Date: December 31, 2020], The Supreme Court believes that: "Significant and obviously illegal administrative acts are invalid administrative acts, which are absolutely invalid from the beginning and have no legal effect due to the passage of time. The parties concerned can file a request for confirmation of invalidity at any time for administrative acts made after May 1, 2015, without being subject to the limitation of the prosecution period. At the same time, in order to avoid situations where the parties abuse the confirmation of invalid litigation requests to circumvent the prosecution period system, the plaintiff should consider the sued administrative act as null and void The defendant can also provide evidence to deny the other party's claim. The people's court shall examine whether an administrative act is invalid, and if it is deemed to be invalid, it shall not be subject to the limitation of the time limit for prosecution; "If the administrative act is not considered invalid, the people's court shall explain it to the plaintiff.". After explanation, if the plaintiff changes his request for revocation of the administrative act, the people's court shall continue to hear and examine whether it meets the requirements for the time limit for filing the revocation action. If the legal time limit for filing the action is exceeded, the court shall rule to dismiss the action; "If the plaintiff refuses to modify the claim, the judgment shall reject the claim."

It can be seen that an action to confirm the invalidity of an administrative act is not subject to the limitation of the prosecution period, and the plaintiff can apply for confirmation of the invalidity of the administrative act at any time. As a result, Warmheart Company increased the number of litigation requests for "invalid administrative actions", making this case no longer subject to the limitation of the prosecution period, and avoiding the legal obstacle of "the prosecution period has expired". Finally, the Heze Intermediate Court adopted our opinion and conducted a substantive trial of the case of invalid administrative acts.

5、 Advice and Advice

The prosecution deadline system in administrative litigation is very rigid, and the court will actively review the deadline, beyond which it cannot enter the litigation process. In this case, even if Warmheart Company is justified, it is indeed regrettable that it failed to revoke the illegal administrative act due to overdue prosecution. In practice, there are many cases where administrative litigation fails due to the expiration of the prosecution period. Natural persons, legal persons, and other organizations are themselves in a weak position in the process of dealing with administrative organs. When encountering injustice, it is important to consult professional lawyers and take appropriate legal action as soon as possible to avoid missing relief channels due to the expiration of the prosecution period. There is no reason to say that, and lawyers are also lacking in skills.

In addition, in practice, invalid provisions of administrative acts are mainly remedial measures in special cases where the parties have exceeded the statutory deadline. For a lawsuit within the statutory time limit, invoking the invalid administrative act clause is of little significance; If a party exceeds the legal deadline but still needs to be accepted by the court, the invalidity theory is at stake [12]. However, because the court's review of the invalidity of administrative acts is extremely rigorous and prudently applied, there are certain risks in relying on litigation for the invalidity of administrative acts. It is wise for the opposite party to request the revocation of illegal administrative acts within the statutory time limit.

References and Notes:

[1] Article 188 of the Civil Code and Article 188 of the General Principles of the Civil Code.

[2] Article 46 of the Administrative Procedure Law.

[3] Article 69 (2) of the Interpretation of the Supreme People's Court on the Application of the Administrative Procedure Law of the People's Republic of China.

[4] Article 2 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Litigation Limitation System to the Trial of Civil Cases.

[5] The person in charge of the Administrative Tribunal of the Supreme People's Court answered reporters' questions on the "Provisions on Several Issues Concerning the Trial of Administrative Compensation Cases".

[6] Ibid.

[7] Article 17 and Article 9 (5) of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Agreement Cases.

[8] Article 27 (2) of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Agreement Cases, and Article 97 of the Contract Law.

[9] "Interpretation and Application of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Agreement Cases", compiled by the Administrative Tribunal of the Supreme People's Court, p. 253.

[10] Article 75 of the Administrative Procedure Law: If the plaintiff applies for confirmation of the invalidity of an administrative act under significant and obvious illegal circumstances such as the subject of the administrative act not possessing the qualification of the administrative subject or having no basis, the people's court shall make a judgment confirming the invalidity.

[11] Article 76 of the Administrative Procedure Law: If a people's court determines that the judgment is illegal or invalid, it may also order the defendant to take remedial measures at the same time; "If losses are caused to the plaintiff, the defendant shall be judged to bear the liability for compensation according to law.".

[12] "Administrative Procedure Law", pp. 257-258, Law Press, 3rd edition, by He Haibo。