In the construction of construction projects involving state-owned funds, the bidding documents generally stipulate that the project funds shall be settled on the basis of the price review conclusion issued by the price review institution designated by the government. Although the administrative price review has become a substantial "price reduction review" and harmed the interests of the project contractor, due to the prior agreement, the court generally will not deny the government price review results in judicial practice.

Recently, the court of first and second instance adopted the opinion of our lawyer in a case of construction contract dispute involving the refined decoration bid section of Volvo Car's headquarters in Asia Pacific region, which was represented by our lawyer, and did not accept the price review conclusion issued by the price review agency designated by the government, thus supporting our client's appeal.

In this case, our party promised in the bidding document to accept the price review report issued by the government price review agency as the basis for project payment settlement. After the completion and handover of the project involved in the case in 2019, the government appointed a price review agency to review the project funds for fine decoration, and the owner has paid more than 94 million of the project funds to our party's account in full. Our party did not accept the conclusion of the price review, and believed that the project cost should be 121 million yuan. If the negotiation failed, we appealed to the court.

During the court hearing, the lawyers represented by the Firm gave full evidence on the major problems in the government price review report, such as the bill of quantities, material price difference, tax difference, labor cost standard, etc. The court finally decided that the price review report issued by the price review agency designated by the government had major defects, so it was not recognized, and then designated a third-party agency to conduct judicial appraisal of the project cost, with the appraisal result of RMB 119 million.

In July 2022, the court of first instance ordered the defendant to pay the remaining principal and interest of our party's project more than 29 million yuan. The defendant refused to accept the appeal and went to the Shanghai Second Intermediate People's Court. The Shanghai Second Intermediate People's Court ruled on November 23, 2022 to reject his appeal and uphold the original judgment.

Lawyers Bai Lituan and Nie Shengnan of the Firm represented the first and second trials of the case.

Case No. of the first instance of this case: 2021H0114MRC No. 4116

Case No. of the second instance of the case: 2022 Hu 02 Min Zhong 10,022