Recently, the (II) of Interpretation of the Supreme People's Court on Applicable Legal Issues in Trial of Disputes over Construction Contracts of Construction Projects is about to come out, in the "open" discussion version of the association in the circle of friends, the revision of whether the audit opinions of government audit units or the evaluation conclusions of financial evaluation institutions (hereinafter referred to as administrative audit conclusions) can become the basis for settlement has also set off a dispute over whether the settlement of government investment projects should be strictly subject to the conclusion of administrative audit. The author makes an analysis of the recent cases as follows.

(I) current legal norms and judicial practice have unified and made it clear that the autonomy of the parties is the primary prerequisite

As early as 2001, the Supreme People's Court announced the ''Telephone Reply Opinions on How to Apply Legal Issues when the confirmed project final account price of both parties in the construction project contract case is inconsistent with the project final account price audited by the audit departments', ''and clarified that the audit is a state to the construction unit. A kind of administrative supervision does not affect the validity of the contract between the construction unit and the construction unit. The case of a construction project contract shall be based on the agreement of the parties as the basis for the court's decision. The audit conclusion can only be used as the basis for judgment if the contract expressly agrees to use the audit conclusion as the basis for settlement or if the contract agreement is unclear and the contract agreement is invalid. Since then, in 2008, the Supreme People's Court published the reply on how the people's court determines the audit conclusion issued by the financial evaluation center in the trial of construction contract disputes, which once again clarified this view.

However, at this time, there are still many local laws and regulations on auditing and government investment project management that still require administrative audit conclusions to be used as the basis for project settlement of government investment projects. For example, the "Beijing Municipal Audit Regulations" promulgated on July 27, 2012, and the "Shenzhen Municipal Government Investment Project Management Regulations" promulgated in 2000 and used until 2014 all have relevant provisions stipulating that government investment and construction projects dominated by government investment, The audit conclusion shall be used as the basis for the settlement of the project between the two parties. The mandatory provisions of these local regulations have received the attention of the Legal Work Committee of the Standing Committee of the National People's Congress through the feedback of the China Construction Industry Association. In June 2017, the Legal Work Committee of the Standing Committee of the National People's Congress issued a reply to the China Construction Industry Association, clarifying that the audit results are directly used as the basis for completion settlement in local regulations and should be stated in the bidding documents or agreed in the contract. The provisions as the basis for completion settlement restrict civil rights and exceed the authority of local legislation and should be corrected. At the same time, the feedback has been printed and sent to the standing committees of the people's congresses of all provinces, autonomous regions, and municipalities directly under the Central Government's "Research opinions on local laws and regulations using audit results as the basis for the completion and settlement of government-invested construction projects" by the legal work Committee of the standing Committee of the National people's Congress. Since then, local regulations such as the aforementioned "Beijing Audit Regulations" and "Shenzhen Municipal Government Investment Project Management Regulations" have been revised.

in fact, article 49 of the 2015 supreme people's court's minutes of the national civil trial work conference clearly stipulates: "both parties shall perform the legally valid construction contract in accordance with the contract. Unless otherwise agreed in the contract, the parties' request to use the audit report made by the auditing organ or the evaluation conclusion made by the financial evaluation institution as the basis for the settlement of the project price shall not be supported. If the contract stipulates that the audit opinion issued by the auditing organ shall be used as the basis for the settlement of the project price, it shall follow the original intention of the parties to conclude the contract and determine the basis for the settlement of the project price as a true and effective audit conclusion." Before and after this, the high courts of Anhui Province, Hebei Province, Jiangsu Province and other places have successively issued guidance on the trial of construction contract disputes, all of which make it clear that the autonomy of the parties is the primary prerequisite. only those that are clearly agreed in the contract to take the conclusion of the administrative audit as the basis for the settlement of the project price will be supported, otherwise the settlement shall not be based on the conclusion of the administrative audit.

The (II)'s agreement to accept administrative audit must be specific and clear, and no presumption can be interpreted

in the fourth issue of the bulletin case issued by the supreme people's court in 2014, chongqing Construction Engineering Group Co., Ltd. and China Railway 19th Bureau Group Co., Ltd. construction project contract dispute case [case No.:(2012) min ti zi No. 205] the main points of the judgment are clear. First, according to the provisions of the audit law, the audit of the project construction unit by the state audit institution is a kind of administrative supervision behavior, the legal relationship between the auditor and the auditee as a result of the national audit is of a different nature than the civil legal relationship between the parties to the case. Therefore, in a civil contract, the parties' agreement on the acceptance of administrative audit as the basis for determining the civil legal relationship should be specific and clear, and not by interpreting the presumption that when the contract is signed, the parties have agreed to accept the intervention of the audit behavior of the state organ in the civil legal relationship. Second, in the case that the two parties have confirmed the settlement price of the project through the settlement agreement and have basically completed the performance, the audit report made by the state audit organ shall not affect the validity of the settlement agreement between the two parties. In this case, the final settlement price stipulated in the contract shall be subject to the owner's audit. Therefore, the court held that the determination of the settlement project payment is true and reasonable. The result must be approved by the owner, and should not be interpreted as after the owner has accepted the audit by the national audit institution. The audit results are settled. In the case of the construction contract dispute between the municipal center and Anjiashun Company, which is the ninth of the ten typical cases issued by Fujian Provincial Higher People's Court: the case of the construction contract dispute between the municipal center and Anjiashun Company, the court's judgment point is further clarified. Even if the contract only stipulates that the financial review should be submitted, but does not explicitly stipulate that the financial review conclusion should be used as the basis for settlement, the financial review conclusion, the conclusion is not naturally binding force on both parties to the contract, the contractor has no right to claim the conclusion of the financial review as the basis for settlement.

it can be seen from this that the current legal norms and judicial practice are basically clear, and only when the contract clearly stipulates that the administrative audit conclusion of relevant government departments shall be taken as the basis for settlement, and without other written agreement to change, can be based on the conclusion of the administrative audit settlement.

if both parties clearly use the administrative audit conclusion as the basis for settlement, should they act according to the administrative audit conclusion without any doubt or change?

Article 49 of the 2015 Supreme People's Court's "Minutes of the National Civil Trial Conference" clearly stipulates: "The contractor provides evidence to prove that the audit opinions of the audit organ are untrue and unobjective, the people's court may permit the parties to correct the defects in the audit opinion by means of supplementary appraisal, re-examination or supplementary cross-examination. If the above methods cannot be solved, the parties shall be allowed to apply for an appraisal of the cost of the project." In the ninth of the ten typical cases of construction contract disputes issued by the Fujian Provincial Higher People's Court: the case of construction contract disputes between the municipal center and an Jiashun company, the court held that if the contract stipulates that the audit opinion issued by the audit institution shall be taken as the basis for the settlement of the project price, the original intention of the parties shall be followed, The basis for the settlement of the project price agreed in the contract shall be determined as a true and effective audit conclusion. If the contractor provides evidence to prove that the audit opinion of the audit institution is untrue and not objective, the people's court may permit the parties to correct the defects in the audit opinion by means of supplementary appraisal, re-examination or supplementary cross-examination. If the above-mentioned methods cannot be solved, the parties concerned shall be allowed to apply for the appraisal of the project cost.

from the perspective of the rights and obligations of civil subjects, the essence of the administrative audit conclusion is the third party's determination of the project price, which is used as evidence in civil litigation or arbitration cases, there is no doubt that the department that issued the conclusion is a public authority. From the above provisions and the court's decision point of view, as long as there is evidence to the contrary, the administrative audit conclusion can also be improved by means of supplementary appraisal and re-appraisal.

At present, many projects are still facing the problem of "long-delayed" administrative audit conclusions. If the contract expressly agrees to use the administrative audit conclusion as the basis for settlement, but the administrative audit conclusion is delayed, will the contractor's lawsuit only be rejected by the court for not meeting the payment conditions?

in the latest "(II) of interpretation of the supreme people's court on applicable legal issues in the trial of construction contract disputes" (association discussion draft), article 16, paragraph 2, clearly stipulates that, it is agreed in the construction contract that the project cost shall be determined according to the audit opinion of the government audit unit or the evaluation conclusion of the financial evaluation institution. If the government audit unit or the financial evaluation institution fails to issue the audit opinion or evaluation conclusion within a reasonable time due to the reasons of the contractor, and the contractor applies for judicial appraisal to determine the project cost, the people's court shall allow it. In view of the current problems of "long delay" and "long delay" of government investment projects, this provision makes up for the judicial gap to a certain extent, but the duration of the reasonable time is still unclear.

Although there are no relevant laws and regulations to stipulate the disposal path for overdue and unaudited, the practical point of view has basically made it clear that the party that exceeds the deadline will lose the "initiative", the overdue audit not caused by the contractor can determine the settlement price through judicial appraisal, and the author thinks that this processing path is also in line with the essence of returning to administrative audit as a third party to evaluate the project price, and at the same time to achieve the effect of judicial dispute settlement. As for the grasp of "reasonable time limit", because many places have issued relevant management regulations for government investment projects, the author believes that the restrictions on the audit period in such regulations can be given priority, and the principle of no relevant restrictions is one year. "Reasonable period", if it is a major national investment project, if there is evidence that the audit cannot be completed within one year, it can be extended to 18 months, ensure that the maximum period of exercise of the right to priority compensation is not exceeded, thereby ensuring that the exercise of the Contractor's right to priority compensation is not affected.

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