Interpretation of the Supreme People's Court concerning Some Issues on Application of the Arbitration Law of the People's Republic of China

Interpretation of the Supreme People's Court concerning Some Issues on Application of the Arbitration

Announcement of the Supreme People's Court

The "Interpretation of the Supreme People's Court concerning Some Issues on Application of the Arbitration Law of the People's Republic of China", which was adopted at the 1375th meeting of the Judicial Committee of the Supreme People's Court on December 26, 2005, is hereby promulgated, and shall come into force on September 8, 2006.

August 23, 2006

Interpretation of the Supreme People's Court concerning Some Issues on Application of the Arbitration Law of the People's Republic of China

(Adopted at the 1375th meeting of the Judicial Committee of the Supreme People's Court on December 26, 2005, Interpretation No. 7 [2006] of the Supreme People's Court)

In accordance with the "Arbitration Law of the People's Republic of China", the "Civil Litigation Law of the People's Republic of China" and other legal provisions, we hereby give our interpretation as follows concerning some issues on application of law for the people's courts to try arbitration-related cases:

Article 1  The term "agreements for arbitration in other written forms" as prescribed in Article 16 of the Arbitration Law shall include the agreements on resorting to arbitration which are reached in the forms of contracts, letters or data message (including telegraph, telefax, fax, electronic data interchange and e-mail), etc.

Article 2  Where the parties concerned synoptically agree that the matters to be arbitrated are contractual disputes, the disputes arising out of formation, effectiveness, modification, assignment, performance, liabilities for breach, interpretation, rescission, etc. of the contract may all be ascertained as matters to be arbitrated.

Article 3  Where the name of an arbitration institution as stipulated in the agreement for arbitration is inaccurate, but the specific arbitration institution can be determined, it shall be ascertained that the arbitration institution has been selected.

Article 4  Where an agreement for arbitration only stipulates the arbitration rules applicable to the dispute, it shall be deemed that the arbitration institution is not stipulated, unless the parties concerned reach a supplementary agreement or may determine the arbitration institution according to the arbitration rules agreed upon between them.

Article 5  Where an agreement for arbitration stipulates two or more arbitration institutions, the parties concerned may choose either arbitration institution upon agreement when applying for arbitration; if the parties concerned cannot agree upon the choice of the arbitration institution, the agreement for arbitration shall be ineffective.

Article 6  Where an agreement for arbitration stipulates that the disputes shall be arbitrated by the arbitration institution at a certain locality and there is only one arbitration institution in this locality, the arbitration institution shall be deemed as the stipulated arbitration institution. If there are two or more arbitration institutions, the parties concerned may choose one arbitration institution for arbitration upon agreement; if the parties concerned fail to agree upon the choice of the arbitration institution, the agreement for arbitration shall be ineffective.

Article 7  Where the parties concerned agree that they may either apply to the arbitration institution for arbitration or bring a lawsuit with people's court for settlement of dispute, the agreement for arbitration shall be ineffective, unless after one party applies to the arbitration institution for arbitration, the other party fails to propose any objection within the period prescribed in Paragraph 2 of Article 20 of the Arbitration Law.

Article 8  Where a party concerned is merged or divided after concluding an agreement for arbitration, the agreement for arbitration shall be binding upon the successor of its rights and obligations.

Where a party concerned has died after concluding an agreement for arbitration, the agreement for arbitration shall be binding upon the inheritor who inherits his rights and obligations in the matter to be arbitrated.

The circumstances prescribed in the preceding two paragraphs shall not be applicable if the parties concerned have otherwise agreed between each other when concluding the agreement for arbitration.

Article 9  Where the credits or debts are entirely or partially assigned, the agreement for arbitration shall be binding upon the assignee, unless the parties concerned have otherwise agreed, or the assignee explicitly objects to the assignment of the credits or debts or does not know there is a separate agreement for arbitration.

Article 10  Where a contract does not become effective or is cancelled after being formed, the effectiveness of the agreement for arbitration shall be ascertained under Paragraph 1 of Article 19 of the Arbitration Law.

Where the parties concerned reach an agreement for arbitration regarding a dispute when concluding the contract, the effectiveness of the agreement for arbitration shall not be impacted if the contract is not formed.

Article 11  Where a contract stipulates that an effective arbitration clause in another contract or document shall apply in order to settle the disputes, the parties concerned shall, when a contractual dispute arises, resort to arbitration according to the said arbitration clause.

Where a relevant international treaty applicable to contracts involving foreign interests contains an arbitration provision, the parties concerned shall, when a contractual dispute arises, resort to arbitration in accordance with the arbitration provision in the international treaty.

Article 12  A case in which a party concerned applies to the people's court for confirmation of the effectiveness of an agreement for arbitration shall be under the jurisdiction of the intermediate people's court at the locality of the arbitration institution agreed upon in the agreement for arbitration; if the arbitration institution in the agreement for arbitration is not clearly stipulated, the said case shall be under the jurisdiction of the intermediate people's court at the locality of conclusion of the agreement for arbitration or at the respondent's domicile.

A case on applying for confirmation of the effectiveness of an agreement for arbitration involving foreign interests shall be under the jurisdiction of the intermediate people's court at the locality of the arbitration institution agreed upon in the agreement for arbitration, at the locality of conclusion of the agreement for arbitration, or at the claimant's or respondent's domicile.

A case on the effectiveness of an agreement for arbitration of a maritime dispute shall be under the jurisdiction of the maritime court at the locality of the arbitration institution agreed upon in the agreement for arbitration, at the locality of conclusion of the agreement for arbitration, or at the claimant's or respondent's domicile; if there is no maritime court at the above-mentioned places, it shall be under the jurisdiction of the nearest maritime court.

Article 13  As required by Paragraph 2 of Article 20 of the Arbitration Law, if a party concerned fails to object to the effectiveness of the agreement for arbitration prior to the first hearing in the arbitral tribunal, and then applies to the people's court for confirming the agreement for arbitration as ineffective, the application shall not be accepted by the people's court.

Where, after an arbitration institution makes a decision on the effectiveness of an agreement for arbitration, a party concerned applies to the people's court for confirming the agreement for arbitration as effective or applies for revoking the arbitration institution's decision, the application shall not be accepted by the people's court.

Article 14  The term "the first hearing" as mentioned in Article 26 of the Arbitration Law shall refer to the first trial in court, which is organized by the people's court after expiry of the period for defense, excluding all procedural activities prior to the trial.

Article 15  A people's court shall, when trying a case for confirmation of the effectiveness of an agreement for arbitration, form a collegial panel to make examination, and shall inquire of the parties concerned.

Article 16  The examination of the effectiveness of an agreement for arbitration which involves foreign interests shall be governed by the laws agreed upon between the parties concerned; if the parties concerned did not agree upon the applicable laws but have agreed upon the place of arbitration, the laws at the place of arbitration shall apply; if they neither agreed upon the applicable laws nor agreed upon the place of arbitration or the place of arbitration is not clearly agreed upon, the laws at the locality of the court shall apply.

Article 17  Where a party concerned applies for revocation of an arbitral award on a ground not prescribed in Article 58 of the Arbitration Law or Article 260 of the Civil Litigation Law, the application shall not be supported by the people's court.

Article 18  The term "no agreement for arbitration" as prescribed in Item (1) of Paragraph 1 of Article 58 of the Arbitration Law shall refer to that the parties concerned did not reach an agreement for arbitration. If the agreement for arbitration is ascertained as ineffective or is revoked, it shall be deemed that there is no agreement for arbitration.

Article 19  Where a party concerned applies for revocation of an arbitral award on the ground that the matter under arbitration goes beyond the scope of the agreement for arbitration, and the application is found true from examination, the people's court shall revoke the excessive part in the arbitral award. If, however, the excessive part is inseparable from other matter under arbitration, the people's court shall revoke the arbitral award.

Article 20  The term "violation of legal procedures" as prescribed in Article 58 of the Arbitration Law shall refer to violation of the arbitration procedures prescribed in the Arbitration Law or a circumstance under which the arbitration rules chosen by the parties concerned might affect the correct award for the case.

Article 21  Where a case regarding which a party concerned applies for revoking the domestic arbitral award is under any of the following circumstances, the people's court may, in accordance with Article 61 of the Arbitration Law, notify the arbitral tribunal to arbitrate the case for a second time within a time limit:

(1) The evidence on which the arbitral award is based is forged; or

(2) The other party concealed any evidence, which is enough to impact the impartial award.

The people's court shall state in the notice the specific ground for requiring re-arbitration.

Article 22  Where an arbitral tribunal fails to begin the re-arbitration within the time limit specified by the people's court, the people's court shall rule to terminate the revocation procedures; if the re-arbitration is not begun, the people's court shall rule to resume the revocation procedures.

Article 23  Where a party concerned is dissatisfied with a re-arbitration award, it may, within six months as of service of the re-arbitration award, apply to the people's court for revocation of the re-arbitration award in accordance with Article 58 of the Arbitration Law.

Article 24  With respect to a case regarding which a party concerned applies for revocation of the arbitral award, the people's court shall form a collegial panel to try it, and inquire of the parties concerned.

Article 25  Where, after a people's court accepts the application filed by a party concerned for revocation of the arbitral award, the other party applies for enforcement of the same arbitral award, the people's court that accepts the said enforcement application shall rule to suspend the enforcement after the acceptance.

Article 26  Where, after the application filed by a party concerned to the people's court for revocation of the arbitral award is rejected, the said party proposes its demur to no enforcement in the enforcement procedures on the same ground, such a demur shall not be supported by the people's court.

Article 27  Where a party concerned did not object to the effectiveness of an agreement for arbitration in the arbitration procedures, and requests revocation of the arbitral award or proposes demur to no enforcement on the ground of ineffectiveness of the agreement for arbitration after the arbitral award is rendered, the people's court shall not support its request or demur.

Where a party concerned objects to the effectiveness of an agreement for arbitration in the arbitration procedures, but requests revocation of the arbitral award or proposes demur to no enforcement on that ground after the arbitral award is rendered, the request or demur shall be supported by the people's court if it is found from examination to conform to Article 58 of the Arbitration Law or Article 217 or 260 of the Civil Litigation Law.

Article 28  Where a party concerned requests no enforcement of a letter of arbitral reconciliation or an arbitral award rendered on the basis of the reconciliation agreement between the parties, such a request shall not be supported by the people's court.

Article 29  A case regarding which a party concerned applies for enforcement of the arbitral award shall be under the jurisdiction of the intermediate people's court at the domicile of the party under enforcement or at the locality of the properties to be enforced.

Article 30  When actually required by the trial of a case on revocation or enforcement of an arbitral award, the people's court may ask the arbitration institution to make an explanation or may consult arbitration files from the relevant arbitration institution.

The ruling rendered by a people's court in the process of handling a case involving arbitration may be served on the relevant arbitration institution.

Article 31  The present Interpretation shall come into force as of the date of promulgation.

In case any previous judicial interpretation promulgated by the present court is inconsistent with the present Interpretation, the present Interpretation shall prevail.

service process Hague Service convention in China

Below please find our brief descriptions on service under Hague Service Convention in China:

(1)          According to the Hague Service Convention and the relevant PRC laws and regulations, the service of the Documents upon Yantai shall follow the procedures below:

(i)                Within five (5) days upon receipt of the Documents by the Department of Judicial Assistance and Foreign Affairs of the PRC Ministry of Justice (“MOJ”), MOJ shall forward them to the PRC Supreme People’s Court (“Supreme Court”).

(ii)               The Supreme Court shall forward the Documents to the competent higher people’s court  within 5 days upon receipt, which shall then forward the Documents to the competent intermediate people’s court, i.e., within 3 days upon receipt.

(iii)            

The intermediate court

shall finish the process of service within 10 days upon receipt of the Documents. Upon completion of the service, the Intermediate

 Court

shall deliver a proof of service to 

Higher Court

, which will forward the same to the Supreme Court, and then the Supreme Court to MOJ.

(iv)             MOJ shall complete a certificate based on the proof of service and send it to the applicant of the service according to the Hague Service Convention, stating that the Documents have been served and specifying the method, place and date of service and the person to whom the Documents are delivered. If the Documents fail to be served, the certificate shall set out the reasons for the failure.

service process Hague Service convention in China

Service turnaround time can take between 4-7 months through the Central Authority of China.The turnaround time of 4-7 months means it may take that long for plaintiff to receive the proof of service from China. 

 

Service of Process in China

International Service of Process in China under the Hague Service Convention

The People’s Republic of China (“the PRC”) acceded to the Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, also called the Hague Service Convention, on May 6, 1991, and its provisions entered into force on January 1, 1992.
US attorneys seeking service in the PRC would be wise to familiarize themselves with the mandatory character of the Hague Service Convention as set forth in the US Supreme Court case Volkswagenwerk A.G. v. Schlunk (486 U.S. 694 (1988)).

The Hague channels for Service

The Hague Service Convention offers plaintiffs a number of channels by which service may be accomplished in the foreign country.  All of these channels constitute proper “Hague Service” under US law, although there are advantages and disadvantages to each in terms of cost, speed and enforceability.
The most commonly used channels for service under the Hague Service Convention are:

• service through a Central Authority in the foreign country (Article 5)
• service through an alternative channel (diplomat, mail, judicial officer) in the foreign country, provided that the  country does not formally object (Articles 8, 9 and 10).

For further information about all of the Hague channels of transmission provided by the Service Convention see below.

Service through the Central Authority

The Hague Service Convention provides that service may always be effected through the judicial system of the destination country.  This is accomplished by filing a request with the Central Authority designated by that country (as described in Article 5 of the Convention), and requesting either formal also called compulsory service or informal also called voluntary service.
Hague Forms. The Hague Service Convention provides that a set of three model forms (“Request,” “Certificate,” “Summary of the Document to be Served,”) and one recommended form (“Notice”) must accompany the documents to be served.  These forms are designed to summarize the key contents of the court documents and guide the defendant to the appropriate action.
Central Authority. The Central Authority for the PRC is:
The Ministry of Justice
Department of Judicial Assistance and Foreign Affairs
Division of Judicial Assistance
10, Chaoyangmen Nandajie
Chaoyang District
Beijing 100020
People’s Republic of China
Legal Authority for Service. Service through the Chinese Central Authority is authorized by Article 247 of the Civil Procedure Law of the PRC.
Methods of Service. Chinese law provides for several types of service:

• Personal service by a court bailiff  (“direct service”) (commonly employed by the Central Authority)
• Service by mail
• Service by mandate
• If defendant refuses service, by service by insertion into a mailbox at defendant’s place of residence
• Informal notice  (voluntary acceptance of service)
• Some forms of subsituted service
• Service by publication (not generally employed by the Central Authority)

At present, service of foreign pleadings by fax or e-mail is not valid in the PRC.

Caveat: Certain types of substituted service and mailbox service which are routinely effected under Chinese law may be deemed insufficient under US law.

Who effects service? A court bailiff, a clerk of the court or a postman (depending upon the method of service employed).

Service through the alternative channels

The PRC has filed the following declarations with respect to the alternative channels of Hague service:

Articles 8 and 9:

With regard to direct service upon nationals of the requesting state or direct service (without compulsion) upon nationals of the destination state via diplomatic or consular agent:
China objects to service in its territory by foreign diplomats upon Chinese nationals. (Pursuant to the Convention, China cannot object to service by foreign diplomats upon nationals of the diplomat’s own state.)

Caveat: US litigants should be aware that US diplomats will generally not serve process abroad and this channel is rarely employed in US civil actions.   (For further information, see US Consular Regulations).

Article 10(a):

With regard to direct service by postal channel:
China objects to service by postal channel.

Caveat: US plaintiffs may not have recourse to direct mail service upon defendants in the PRC. Moreover, even where permitted, mail service pursuant to the Hague Service Convention is fraught with problems, including potential problems with later enforcement of US judgments in the destination state—even when the destination state has not objected to such service.  US courts are also split regarding propriety of mail service under the Convention.  US plaintiffs are advised to proceed with caution when employing this channel.  (For further information, see Service by Mail.)

Articles 10(b) and (c):

With regard to direct service by a judicial officer, official or other competent person of the destination state:
China objects to service by judicial officer.

Caveat: US plaintiffs may not have recourse to direct service by judicial officer upon defendants in the PRC.

Furthermore, note that “judicial officer,” “official” or “competent person” are terms defined under the laws of the destination state, not under the laws of the requesting state.  Chinese attorneys, detectives, policemen or private persons are not judicial officers and are not empowered to serve process. Private process service is unknown.  (For further information, see Service by Judicial Officers.)

Translation Requirements under Chinese law

The PRC requires a translation into Chinese of all documents to be formally served (that is, served using compulsion) pursuant to Article 5, subparagraph 1 or Article 10(b) and (c).
Note that while Mandarin Chinese is the official spoken dialect of the PRC, the appropriate written language for legal pleadings to be served in Mainland China is Simplified Chinese .
Article 7 of the Hague Service Convention provides that the Hague model forms should be completed in English or in French or may be completed in the language of the destination country.
The PRC does not require translation into Chinese for service effected pursuant to Article 5, subparagraph 2 (voluntary service) or Article 10(a) (mail service); however, note that US notions of due process will always require that the defendant understand the documents with which he or she is being served.  US due process is a constitutional right under US law and as such, trumps the requirements of the Convention and foreign law.
For further information on translation requirements under the Hague Service Convention, contact us by phone at 1-800-755-5775 or by email at the International Litigation Support Department of Legal Language Services for a FREE consultation.

Service of US Subpoenas in China

US subpoenas are not routinely served upon foreign witnesses pursuant to the Hague Service Convention.
Residents or citizens of the United States located abroad however  must be responsive to US subpoenas served upon them. For further information on the issues involved, contact us by phone at 1-800-755-5775 or by email at the International Litigation Support Department of Legal Language Services for a FREE consultation.
On the other hand, any national who is not a resident or citizen of the United States is not required to respond to a US subpoena delivered to him or her in the PRC.  In essence, such a subpoena loses its coercive effect once it leaves US borders.  Because it is no longer a coercive instrument, and because the witness is not subject to the jurisdiction of the issuing court, the question of “how to properly serve” a subpoena is irrelevant.
LLS can offer you extensive advice on securing such evidence pursuant to the Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters, the Hague Evidence Convention and foreign law.  Note that the state of judicial assistance in China is evolving over time.  Please contact an LLS consultant for advice on the latest developments.
LLS can also assist you in arranging voluntary depositions of willing witnesses on foreign soil.  Although the Chinese government prohibits voluntary depositions in the PRC pursuant to Chapter II the Hague Evidence Convention, LLS has successfully moved Chinese deponents out of the PRC for depositions in Hong Kong and Singapore.   LLS can also provide court reporters, videographers, interpreters and videoconferencing for private depositions and formal hearings.
For further information, contact our International Litigation Support Department at (800) 755-5775 (outside the US and Canada: +1.913.341.3167) and ask to speak to a specialist in foreign evidence-taking.

Note:

The information provided on this site is for informational purposes only and should not be construed as legal advice.  The advice is believed to be accurate at the time of posting;  however, LLS is not responsible for any information which may have become outdated or inaccurate.
We welcome feedback and suggestions regarding the content contained on this page.  Send your comments to claforge@legallanguage.com.

Renewable Energy Law of the People's Republic of China

Renewable Energy Law of the People's Republic of China

Promulgating Institution:	Standing Committee of the National People's Congress
Document Number:	Order No. 23 of the President of the People's Republic of China
Promulgating Date:	12/26/2009
Effective Date:	04/01/2010
Validity Status:	Valid

(Adopted at the 14th meeting of the Standing Committee of the Tenth National People's Congress on February 28, 2005 and amended by the Decision to Amend the "Renewable Energy Law of the People's Republic of China" adopted at the 12th meeting of the Eleventh National People's Congress on December 26, 2009)

Table of Contents

Chapter 1    General provisions

Chapter 2    Resource survey and development plan

Chapter 3   Industry guidance and technology support

Chapter 4  Promotion and application

Chapter 5    Price management and fee compensation

Chapter 6    Economic incentives and supervisory measures

Chapter 7    Legal liabilities

Chapter 8    Supplementary provisions

Chapter 1    General provisions

Article 1     In order to promote the development and utilization of renewable energy, increase energy supply, improve energy structure, safeguard energy security, protect the environment and realize the sustainable development of the economy and society, this Law is hereby enacted.

Article 2     For the purposes of this Law, renewable energy shall mean such non-fossil energy as wind energy, solar energy, water energy, biomass energy, geothermal energy and ocean energy.

Application of this Law in hydropower shall be prescribed by the competent energy departments of the State Council and approved by the State Council.

This Law does not apply to the direct burning of straw, firewood and dejecta on low-efficiency stoves.

Article 3     This Law applies to the territory and other sea area of the People's Republic of China.

Article 4     The State specifies the development and utilization of renewable energy as the priority in energy development and promotes the establishment and development of the renewable energy market by setting the total volume target for the development and utilization of renewable energy and taking corresponding measures.

The State encourages economic entities of all ownerships to participate in the development and utilization of renewable energy and protect the legitimate interest of the developers and users of renewable energy in accordance with the law.

Article 5     The competent energy departments of the State Council implement uniform management for the national development and utilization of renewable energy. The relevant departments of the State Council are responsible for the management of the development and utilization of renewable energy within their respective scope of duties.

The energy administrative departments of the local people's governments above the county level are responsible for the management of the development and utilization of renewable energy within their own administrative regions. Relevant departments of the local people's governments above the county level are responsible for the management of the development and utilization of renewable energy within their respective scope of duties.

Chapter 2    Resource Survey and Development Plan

Article 6     The competent energy departments of the State Council are responsible for organizing and coordinating national surveys on renewable energy resources, and work with the relevant departments of the State Council to formulate technical regulations for resource surveys.

The relevant departments of the State Council are responsible for the relevant renewable energy resource surveys within their respective scope of duties. The survey results will be summarized by the competent energy departments of the State Council.

The results of the survey of renewable resource energy shall be released to the public, with the exception of confidential contents as stipulated by the State.

Article 7     Based on the national energy demand and the actual situations of the renewable energy resources, the competent energy departments of the State Council set medium and long-term target of the total volume for the national development and utilization of renewable energy, which shall be implemented and released to the public after being approved by the State Council.

The competent energy departments of the State Council shall, on the basis of the target of total volume prescribed in the previous paragraph, as well as the economic development and actual situations of renewable energy resources of all provinces, autonomous regions and municipalities directly under the Central Government, cooperate with people's governments of provinces, autonomous regions and municipalities directly under the Central Government in establishing medium and long-term targets for the development and utilization of renewable energy in each administrative regions and release the targets to the public.

Article 8     The competent energy departments of the State Council shall, on the basis of the medium and long-term total volume target of the national development and utilization of renewable energy and the development status of the renewable energy technologies, work with the relevant departments of the State Council to prepare national renewable energy development and utilization plan, which is to be implemented after being approved by the State Council.

The relevant departments of the State Council shall formulate relevant plans that are conducive to promoting the realization of the medium and long-term target of the total volume for the national development and utilization of renewable energy.

The energy administrative departments of the people's governments in provinces, autonomous regions and municipalities directly under the Central Government shall, on the basis of the national renewable energy development and utilization plan and the medium and long-term target for the development and utilization of renewable energy in their own administrative regions, work with the relevant departments of the people's governments at their own level to prepare renewable energy development and utilization plan for their own administrative regions, which shall be implemented after being approved by people's governments at their own level and submitted to the competent energy departments of the State Council and the national power regulatory authorities for filing.

The approved plan shall be released to the public, with the exception of confidential content as stipulated by the State.

In the event that the approved plan needs to be modified, approval of the original approving authorities shall be obtained.

Article 9    The renewable energy development and utilization plan shall be formulated and coordination and arrangement shall be made for the development and utilization of renewable energies such as wind energy, solar energy, water energy, biomass energy, geothermal energy and ocean energy under the principles of taking actions to suit local circumstances, coordinating to take into consideration every aspect of the matter, reasonable arrangement and orderly development. The content of the plan shall include development objectives, major tasks, regional arrangement, key projects, implementation progress, construction of ancillary grids, service systems and protection measures.

The authorities organizing the plan shall consult the opinions of the relevant entities, experts and the public and the scientific verification shall be made.

Chapter 3    Industry Guidance and Technology Support

Article 10    The competent energy departments of the State Council shall, based on the national renewable energy development and utilization plan, prepare and publish the development guidance catalogues for renewable energy industries.

Article 11     The standardization administrative departments of the State Council shall set and publish technical standard for renewable power of the State and the national standards for relevant renewable energy technology and products for which technical requirements need to be standardized at the national level.

For those technical requirements not prescribed in the national standard specified in the previous paragraph, relevant departments of the State Council may establish relevant industrial standard, which shall be reported to the standardization administrative departments of the State Council for filing.

Article 12     The State includes scientific and technological research in the development and utilization of, and the industrialized development of, renewable energy, as the priority for technological development and hi-tech industrial development and in the State technological development plan and hi-tech industrial development program, and allocates funding to support the scientific and technological research, application demonstration and industrialized development of the development and utilization of renewable energy so as to promote technological advancement in the development and utilization of renewable energy, reduce the production cost of renewable energy products and improve the quality of products.

Education administrative departments of the State Council shall incorporate the knowledge and technology on renewable energy into general and occupational education curricula. 

Chapter 3    Promotion and application

Article 13     The State encourages and supports grid-connected power generation with renewable energy.

For the construction of grid-connected projects of power generation with renewable energy, administrative permits shall be obtained or filing shall be made in accordance with the laws and the provisions of the State Council.

For grid-connected projects of power generation with renewable energy that requires the acquisition of administrative license, if there is more than one applicant for the same project license, the licensee shall be determined through a tender in accordance with the law.

Article 14     The State implements the full protection purchase system on power generated by renewable energy.

The competent energy departments of the State Council together with the national power regulatory authorities and the finance department of the State Council shall, based on the national renewable energy development and utilization plan, determine the ratio of the power that can be generated by renewable energy during the planning period to the total power generated, formulate the specific measures for the prioritized dispatch of power grid enterprises and full acquisition of power generated by renewable energy, which shall be implemented under the supervision of the competent energy departments of the State Council and the national power regulatory authorities in mid-year.

Power grid enterprises shall enter into grid connection agreement with renewable power generation enterprises that have legally obtained administrative license or for which filing has been made based on the renewable energy development and utilization plan, and buy all the on-grid power produced by the grid-connected projects of power generation with renewable energy within the coverage of their power grid and meets the grid-connection technological standard. The power generation enterprise has the obligation to cooperate with the power grid enterprises to ensure the safety of the grids.

Power grid enterprises shall strengthen grid construction, expand the distribution area of power generated by renewable energy, develop and apply smart grids and energy saving technology, improve the management of gird operation, increase the ability to absorb power generated by renewable energy and provide grid-connection service for the generation of power with renewable energy.

Article 15     The State supports the construction of independent renewable power systems in areas not covered by the power grids to provide power service for local production and living.

Article 16     The State encourages clean and efficient development and utilization of biological fuel and encourages the development of energy crops.

If the gas and heat produced with biological resources conform to the network connection technological standard of urban gas pipeline networks and heat pipeline networks, enterprises operating gas pipeline networks and heat pipeline networks shall accept them into the networks.

The State encourages the production and utilization of biological liquid fuel. Enterprises engaging in the sales of oil shall, in accordance with the provisions of the competent energy departments of the State Council or people's governments at the provincial level, include biological liquid fuel conforming to the national standard into its fuel-selling system.

Article 17     The State encourages entities and individuals to install and use solar energy utilization systems such as solar energy water-heating system, solar energy heating and cooling system and solar photovoltaic system.

The competent construction departments of the State Council shall work with the relevant departments of the State Council in establishing technical economic policies and technical standards with regard to the combination of solar energy utilization system and construction.

Real estate development enterprises shall, based on the technical standards in the previous paragraph, provide necessary conditions for the utilization of solar energy in the design and construction of buildings.

For buildings already built, residents may, on the condition that its quality and safety is not affected, install solar energy utilization system that conforms to technical standards and product standards, unless an agreement has been otherwise reached between relevant parties.

Article 18    The State encourages and supports the development and utilization of renewable energy in rural areas.

The energy administrative departments of local people's governments above the county level shall, based on the actual situations such as the local economic and social development, ecological protection and health and treatment need, work with the relevant departments to prepare renewable energy development plan for the rural area and promote the application of technologies such as the conversion of biomass energy like the marsh gas, household solar energy, small-scale wind energy and small-scale hydraulic energy.

People's governments above the county level shall provide financial support for the renewable energy utilization projects in the rural areas.

Chapter 5    Price Management and Fee Compensation

Article 19     On-grid tariff of projects of power generation with renewable energy shall be determined by the price authorities of the State Council based on the features of different types of power generated by renewable energy and the situations of different regions, under the principle of being conducive to promoting the development and utilization of renewable energy and being economic and reasonable, and timely adjustment shall be made based on the development of technology for the development and utilization of renewable energy. On-grid tariff shall be announced.

For the on-grid tariff of projects of power generation with renewable energy subject to tender as stipulated in paragraph 3 of Article 13 of this Law, the bid-winning price shall be implemented. However, such a price shall not exceed the level of on-grid tariff of similar projects of power generation with renewable energy determined in accordance with the provisions of the preceding paragraph.

Article 20     The excess of the expenses incurred by a power grid enterprise purchasing power generated by renewable energy at the on-grid tariff determined in accordance with the provisions of Article 19 of this Law over the expenses incurred on the basis of average on-grid tariff of power generated by conventional energy shall be compensated by the surcharge of the renewable energy tariff charged on the sales of power throughout the country.

Article 21     Reasonable grid connection expenses paid by power grid enterprises for the purchase of renewable power and other reasonable expenses may be included into the power grid enterprise's power transmission cost and recovered from the selling price of power.

Article 22     For the selling price of power generated from independent renewable power system invested or subsidized by the State, classified selling price of the same area shall be adopted, and the excess of its reasonable operation and management expenses over the selling price of power shall be compensated in accordance with the provisions of Article 20 of this Law.

Article 23      The price of renewable heat and gas that enters the urban pipeline network shall be determined on the basis of price management authorities under the principle of being conducive to promoting the development and utilization of renewable energy and being economic and reasonable.

Chapter 6    Economic Incentives and Supervisory Measures

Article 24     A renewable energy development fund is established with the State budget. The source of funding includes specialized funds arranged by the State for the financial year and the surcharge of renewable power price charged in accordance with the law.

The renewable energy development fund is used to compensate the difference in the expenses as stipulated in Article 20 and Article 22 of this Law and is used to support the following:

(1) Scientific and technological research, standard establishment and pilot project for the development and utilization of renewable energy;

(2) Renewable energy utilization projects in rural and pasturing areas;

(3) Construction of independent renewable power systems in remote areas and islands;

(4) Surveys and assessments of renewable energy resources and the construction of relevant information systems;

(5) Localized production of equipment for the promotion of the development and utilization of renewable energy.

A power grid enterprise that cannot recover the grid connection expenses and other relevant expenses prescribed in Article 21 of this Law through the selling price of power may apply for subsidy from the renewable energy development fund.

The specific measures for the collection, utilization and management of the renewable energy development fund shall be formulated by the finance departments of the State Council and the competent energy and price departments of the State Council.

Article 25     Financial institutions may offer preferential loan with financial interest subsidy to renewable energy development and utilization projects that are listed in the national renewable energy industrial development guidance catalogue and meet the conditions for granting loans.

Article 26     The State grants tax benefits to projects listed in the renewable energy industrial development guidance catalogue, and specific measures are formulated by the State Council.

Article 27    Power enterprises shall authentically and completely record and store relevant information of power generation with renewable energy, and shall accept the inspection and supervision of power regulatory authorities.

Power regulatory authorities shall conduct inspection in accordance with the stipulated procedures, and shall keep trade secrets and other secrets for inspected entities.

Chapter 7    Legal liabilities

Article 28     The competent energy departments of the State Council and the energy administrative departments and other relevant departments of the local people's governments above the county level that breach the provisions of this Law and are engaged in any of the following acts when supervising and administering the development and utilization of renewable energy will be ordered by the relevant departments of the people's governments of or above their own level to make rectification and the competent personnel that are liable and other directly responsible personnel will be imposed an administrative penalty in accordance with the law. If the violation constitutes a criminal offense, the violating party shall be subject to criminal liability in accordance with the law:

(1) Failure to make administrative licensing decision in accordance with the law;

(2) Failure to conduct an investigation and impose penalty when illegal activities are discovered;

(3) Other acts of not legally performing supervision and management duties.

Article 29     If a power grid enterprise breaches the provisions of Article 14 of this Law and fails to complete the purchase of renewable power in accordance with the provisions, which results in economic loss to the renewable power generation enterprise, such power grid enterprise shall be liable for compensation and be ordered by the national power regulatory authority to make rectification within the stipulated period. In case of refusal to make rectification, a fine of less than twice the economic loss of the renewable power generation enterprise shall be imposed.

Article 30     In the event that an enterprise operating gas pipeline network or heat pipeline network breaches the provisions of paragraph 2 of Article 16 of this Law and does not permit the connection of gas and heat that conform to the grid connection technical standard into the network, which results in economic loss to the gas and heat production enterprise, the relevant enterprise shall be liable for compensation and be ordered by the energy administrative department of the people's government at the provincial level to make rectification within the stipulated period. In case of refusal to make rectification, a fine of less than twice the said economic loss of the gas and heat production enterprise shall be imposed.

Article 31     If an enterprise engaging in the sales of oil breaches the provisions of paragraph 3 of Article 16 of this Law and fails to include biological liquid fuel that conforms to the national standard into its fuel-selling system, which results in economic loss to the biological liquid fuel production enterprise, the relevant enterprise shall be liable for compensation and be ordered by the competent energy department of the State Council or the energy administrative department of the people's government at the provincial level to make rectification within the stipulated period. In case of refusal to make rectification, a fine of less than twice the said economic loss of the biological liquid fuel production enterprise shall be imposed.

Chapter 8    Supplementary Provisions

Article 32      Terms used herein shall have the following meanings:

(1) Biomass energy: means energy converted from natural plants, dejecta as well as urban and rural organic waste.

(2) Independent renewable power system: means renewable power system that operates separately and is not connected to the power grid.

(3) Energy crop: means herbage and wood plants specially planted and used as raw materials of energy.

(4) Biological liquid fuels: means liquid fuels derived from biomass resources, such as methanol, ethanol and bio-diesel.

Article 33    This Law shall come into force from January 1, 2006.