[Keywords] 
Administrative/Revocation of Administrative Disposition Decision/Release of Transaction Confirmation Letter/Specific Administrative Act 
【Key Points of the Ruling】 
The authority responsible for the transfer of state-owned land use rights is the administrative department of natural resources under the municipal and county people's governments. After determining the winning bidder for a parcel of land through auction, this department has the power to sign a transaction confirmation letter with the winning bidder. The act of the land administration department transferring state-owned land use rights via auction and signing a transaction confirmation letter with the winning bidder constitutes a specific administrative act. The administrative department of natural resources has the authority to issue an administrative decision terminating the Transaction Confirmation Letter; such a decision also qualifies as an administrative act. Any disputes arising from this act shall be resolved through administrative litigation. 
The “Confirmation of Auction Transaction” is a preliminary procedure preceding the signing of the land transfer contract, and its contents constitute an integral part of the land transfer contract. Therefore, the termination of the “Confirmation of Auction Transaction” shall be governed by the relevant provisions of the Contract Law. If the parties have stipulated in the “Confirmation of Auction Transaction” clauses on liability for breach of contract, and the successful bidder fails to pay the land transfer fee within the prescribed time limit, the administrative authority for natural resources and land has the right to unilaterally terminate the Confirmation of Auction Transaction. In accordance with Article 93, Paragraph 2 of the Contract Law of the People’s Republic of China, the administrative authority for natural resources and land possesses the right to terminate the contract by agreement and is entitled to issue an administrative decision terminating the “Confirmation of Auction Transaction” in compliance with the agreed terms. 
[Basic Facts of the Case] 
On January 15, 2013, the Shenyang Municipal Bureau of Planning and Land & Resources—specific branch (the “Branch”) (hereinafter referred to as the “Bureau”) issued the auction notice for the land parcel in question. On January 29, 2013, a certain company submitted a bid application to the Bureau. The company undertook to make payment within the time limit specified in the “Confirmation of Auction Transaction,” to sign the “Contract for the Transfer of State-Owned Land Use Rights,” and to comply with relevant provisions regarding late payment penalties and the cancellation of the bidder’s qualification in case of delayed payment. 
On January 30, 2013, a certain company won the bid for the land parcel in question. The company and the Municipal Bureau of Planning and Land Resources signed the “Confirmation of Auction Transaction for Plot SHN08-03-09, DL-12064, in [Certain District] (New District)” (hereinafter referred to as the “Confirmation of Transaction”). The Confirmation of Transaction clearly stipulates the land transaction price, payment schedule, the signing of the “Contract for the Grant of State-Owned Land Use Rights,” and the liability for breach of contract in case of late payment. On the same day, the company paid a bidding deposit of 14 million yuan. 
After the “Transaction Confirmation Letter” was signed, a certain company failed to pay the remaining land premium within the agreed-upon deadline. The Municipal Planning and Land Resources Bureau subsequently attempted to collect the outstanding payment from the company through various methods, including in-person delivery, postal delivery, and public notice in newspapers. However, the company still has not paid the remaining land premium as of today, nor has it signed the “Contract for the Transfer of State-Owned Land Use Rights” with the Municipal Planning and Land Resources Bureau within the agreed-upon timeframe. 
On March 9, 2018, a certain Land and Resources Bureau issued an administrative decision terminating the “Transaction Confirmation Letter” for Plot DL-12064SIN08-03-09, rescinding the “Transaction Confirmation Letter” signed with a certain company, revoking the bidding qualification of that company, and confiscating the bid deposit of RMB 14 million paid by the company. Dissatisfied with this administrative decision, the company filed a lawsuit against the Land and Resources Bureau in the People’s Court of Dadong District, Shenyang City. 
【Judgment Result】 
The People's Court of Dadong District, Shenyang City, issued Administrative Judgment No. (2018) Liao 0104 Xing Chu 298, ruling to dismiss the plaintiff company’s claim. 
The company, dissatisfied with the first-instance judgment, filed an appeal to the Shenyang Intermediate People's Court. The Shenyang Intermediate People's Court issued Administrative Judgment No. (2019) Liao 01 Xing Zhong 345, dismissing the appeal and upholding the original judgment. 
【Reasons for the Ruling】 
The court of first instance held that, pursuant to Article 2, Paragraph 2 of the “Regulations on the Granting of State-Owned Land Use Rights through Tendering, Auction, and Listing,” the authority responsible for granting state-owned land use rights is the administrative department of natural resources under the municipal or county people’s government. As the administrative department of natural resources for a certain district in Shenyang City, the defendant is authorized to determine the holders of state-owned land use rights within its jurisdiction by means of tendering, auction, or listing. Article 20, Paragraph 1, provides: “After the successful bidder or winning bidder has been determined through tendering, auction, or listing, the bid bond or auction deposit paid by the successful bidder or winning bidder shall be converted into a earnest money deposit for the acquired land parcel. The grantor shall issue a notice of award to the successful bidder or sign a transaction confirmation with the winning bidder.” After determining the winning bidder—the company—in question through auction, the defendant was vested with the authority to sign a transaction confirmation with that company. 
The Supreme People’s Court’s “Reply Concerning the Nature of Auction Activities and Related Auction Announcements Conducted by Land Administration Authorities Prior to the Grant of State-Owned Land Use Rights,” [2009] Xing Ta No. 55, states: “Auction activities conducted by land administration authorities prior to the grant of state-owned land use rights, as well as related auction announcements and other such actions, constitute administrative acts. If a party dissatisfied with such acts files an administrative lawsuit, the people’s court shall accept the case in accordance with the law.” In its “Reply to the Request for Guidance on the Nature of the Act by Which the Land Administration Authority Signs a Transaction Confirmation Letter with the Successful Bidder Following the Auction for the Grant of State-Owned Construction Land Use Rights,” (2010) Xing Ta No. 191, the Administrative Adjudication Division of the Supreme People’s Court further clarified: “The act by which the land administration authority grants state-owned construction land use rights through auction and signs a transaction confirmation letter with the successful bidder constitutes a specific administrative act. If a party dissatisfied with this act files an administrative lawsuit, the people’s court shall accept the case in accordance with the law.” In this case, the defendant is authorized to make an administrative decision terminating the “Transaction Confirmation Letter” for Plot DL-12064SHN08-03-09. This decision itself is an administrative act, and any dispute arising from this act must be resolved through administrative litigation procedures. 
The “Notice of the Ministry of Land and Resources on Strengthening the Supply and Regulation of Real Estate Land” stipulates that, following the successful conclusion of a land auction, the land transfer contract must be signed within 10 working days. In this case, both the auction notice issued by the defendant and the “Confirmation of Transaction” signed by the plaintiff and the defendant clearly state that the winning bidder for the land parcel shall sign the “Contract for the Transfer of State-Owned Construction Land Use Rights” with the relevant branch of the Shenyang Municipal Bureau of Planning and Land Resources within ten working days from the date of the transaction. It is evident that the “Confirmation of Transaction” serves as a preliminary procedure preceding the signing of the land transfer contract, and its contents constitute an integral part of the land transfer contract itself. Therefore, the termination of the “Confirmation of Transaction” should be governed by the relevant provisions of the Contract Law. Article 93, paragraph 2 of the Contract Law of the People’s Republic of China provides that the parties may agree on conditions under which one party may terminate the contract. When such termination conditions are met, the party entitled to terminate the contract may do so. Article 94 further stipulates that, in any of the following circumstances, a party may terminate the contract: (3) when one party delays in performing its principal obligation and fails to perform within a reasonable period after being urged to do so; (4) when one party delays in performing its obligation or engages in other breaches of contract resulting in the failure to achieve the purpose of the contract. In this case, the “Confirmation of Transaction” signed by the plaintiff and the defendant specifies the time for the winning bidder to pay the land price, the final deadline for delayed payment, and the provision that if the winning bidder fails to pay the land price on time despite repeated reminders, the party entitled to terminate the contract may do so. Currently, the company concerned has failed to pay the land price within the agreed-upon period, and despite multiple reminders from the defendant, it still has not paid the land premium. Therefore, the administrative decision made by the relevant branch of the Shenyang Municipal Bureau of Planning and Land Resources to terminate the “Confirmation of Transaction” for Plot DL-12064SHN08-03-09 in accordance with the contract terms is entirely justified. 
The second-instance court holds that the original trial court’s finding that the appellee possessed the authority to make the administrative decision in this case was correct and is hereby affirmed. In this case, the “Transaction Confirmation Letter” signed by both parties stipulated the time for the successful bidder to pay the land price, the final deadline for delayed payment, and the right of the party entitled to rescind the agreement to terminate the “Transaction Confirmation Letter” if the successful bidder failed to pay the land price on time despite repeated reminders. Currently, the company in question failed to pay the land price within the agreed-upon period and, despite multiple reminders from the appellee, still has not paid the land premium. Therefore, the administrative decision issued by the Shenyang Municipal Bureau of Planning and Land Resources—Sub-bureau, as the party entitled to rescind the agreement, to terminate the “Transaction Confirmation Letter” for Plot DL-12064SHN08-03-09 is entirely proper. The original judgment dismissing the appellant’s claim is in compliance with the law. The appellant’s appeal lacks both factual and legal basis, and thus is not supported by this court. 
[Relevant Statutes] 
Reply of the Administrative Adjudication Division of the Supreme People's Court to the Request for Guidance on the Nature of the Act by Which the Land Administration Department and the Successful Bidder Sign a Transaction Confirmation Letter Regarding the Auction and Transfer of the Right to Use State-Owned Construction Land (2010) Xing Ta No. 191 
Article 93 of the Contract Law of the People's Republic of China: The parties may agree on conditions under which one party may terminate the contract. When such termination conditions are met, the party entitled to terminate the contract may do so. 
Article 94 of the Contract Law of the People's Republic of China: Where any of the following circumstances exists, a party may terminate the contract: (3) One party delays in performing the principal obligation and, after being urged to do so, still fails to perform within a reasonable period of time. 
[Lawyer’s Perspective] 
The handling lawyer argues that the Land and Resources Bureau of a certain district has the legal authority to issue the “Decision on Cancellation of the Transaction Confirmation,” and is thus empowered to exercise its right of cancellation through an administrative decision. According to Article 2 of the “Regulations on the Granting of State-Owned Construction Land Use Rights through Bidding, Auction, and Listing,” the entity authorized to grant state-owned construction land use rights is the administrative department of natural resources under the municipal or county people’s government. Furthermore, in accordance with Paragraph 1 of Article 20, after determining the successful bidder or winning bidder through bidding, auction, or listing, the grantor shall issue a notice of award to the successful bidder or sign a transaction confirmation with the winning bidder. The plot involved in this case is located within the administrative jurisdiction of a certain district in Shenyang City. As the Land and Resources Administrative Department for that district, the relevant bureau possesses the authority, pursuant to the aforementioned provision, to sign the “Transaction Confirmation” with the company that won the bid for the plot. 
According to the breach-of-contract liability provisions set forth in the “Auction Notice” of the auction documents for the land parcel involved in the case, as well as the breach-of-contract liability provisions stipulated in the “Transaction Confirmation Letter” signed by both parties, if a certain company fails to pay the land price within the prescribed period of more than 60 days and remains unable to make the payment even after being urged to do so, the relevant Land and Housing Bureau shall, based on the aforementioned agreements, have the contractual right to terminate the contract, and, pursuant to Article 94 of the Contract Law, also possess the statutory right to terminate the contract. Therefore, the relevant Land and Housing Bureau is entitled to rescind the Transaction Confirmation Letter. 
According to the “Reply of the Administrative Adjudication Division of the Supreme People’s Court Regarding the Nature of the Act by Which the Land Administration Department Signs a Transaction Confirmation Letter with the Successful Bidder in the Auction and Transfer of State-Owned Construction Land Use Rights,” [2010] Xing Ta No. 191, the act of the land administration department signing a transaction confirmation letter with the successful bidder after auctioning and transferring the use rights of state-owned construction land constitutes a specific administrative act. Given that the act of a certain Planning and Land Resources Bureau signing a transaction confirmation letter with a certain company is a specific administrative act, the lawful rescission of such a transaction confirmation letter also constitutes a specific administrative act. Therefore, the relevant Planning and Land Resources Bureau should exercise its right of rescission through an administrative decision. 
The “Decision on Cancellation of the Transaction Confirmation Letter” issued by a certain Planning and Land Resources Bureau does not constitute an administrative penalty decision and therefore is not subject to the administrative penalty procedure. According to the Administrative Penalty Law, administrative penalties are imposed for violations of administrative order committed by citizens, legal persons, or other organizations, and the types of administrative penalties are prescribed by law. The administrative decision issued by the Planning and Land Resources Bureau to cancel the Transaction Confirmation Letter reflects its lawful exercise of the right to terminate the agreement. Given that the Supreme People’s Court has affirmed in its reply that the Planning and Land Resources Bureau’s signing of the Transaction Confirmation Letter constitutes a specific administrative act, and considering that the revised Administrative Litigation Law has, for the first time, explicitly recognized administrative agreements and included them within the scope of cases accepted by administrative courts, the Planning and Land Resources Bureau’s exercise of its right to terminate the Transaction Confirmation Letter likewise qualifies as an administrative act and should be resolved through an administrative decision. Therefore, the “Decision on Cancellation of the Transaction Confirmation Letter” issued by the Planning and Land Resources Bureau does not fall under the category of an administrative penalty decision and is thus exempt from undergoing the administrative penalty procedure.