In a marine construction project at Huidong Sea Turtle Bay, China's sole sea turtle nesting site, the contract was deemed invalid due to the absence of an environmental impact assessment, failure to secure sea area usage rights, and damage to public interests. How would the resulting dispute between the two parties be resolved?

Basic Facts

Beneath the blue skies of Huidong Sea Turtle Bay, a conflict emerged over sea turtle conservation and commercial investment. The XXX Turtle Management Bureau and Company A had previously entered into an investment cooperation contract. The Bureau provided the beach and sea area within its managed nature reserve, while Company A funded and built a marine project, including an offshore laboratory, pier, anti-pollution embankment, artificial reefs, and underwater corridors for the sea turtle center.

However, the cooperation did not proceed as smoothly as expected. During the project, Company A entrusted technical development to the XXX Research Institute and assigned the construction task to Company B. In early April 2016, Company B entered the beach within Huidong Sea Turtle Bay and began the construction of a cement platform measuring 30 meters by 30 meters with a height of 5 meters, weighing a total of 2,000 tons. The work halted in December 2016.

The XXX Turtle Management Bureau stated that Company A had not completed the project within the agreed timeframe, and the quality of the construction was subpar. It thus filed a lawsuit with the Guangzhou Maritime Court, requesting the termination of the investment cooperation contract and the removal of the structures occupying the sea area, as well as compensation for the loss arising from land occupation.

This dispute concerns both the protection of sea turtle habitats and the balance between the conservation of sea turtle resources and commercial interests.

Court Decision

The Guangzhou Maritime Court ruled that the Huidong Harbor Sea Turtle National Nature Reserve is an ecologically sensitive marine area where endangered marine species nest, including sea turtles nest. Both parties involved in the case proceeded with large-scale marine construction without conducting an environmental impact assessment, evaluating the effects on sea turtle migration and other marine environments, or establishing environmental protection measures. Moreover, the two parties did not obtain sea area usage rights as required by law, which constituted a violation of mandatory legal regulations and harmed the public interest. Hence, the contract was deemed invalid. Although both parties argued that the investment cooperation contract was valid, the court determined that the validity of the contract was a legal issue under the court's authority. The contract was thus invalid from the outset and lacked legal binding force. The XXX Turtle Management Bureau's request for contract termination was not supported due to lack of legal grounds. Company A had invested in preliminary design and construction costs, while the XXX Turtle Management Bureau proceeded with the sea area project in the nature reserve without securing a sea area usage certificate. The Bureau's unauthorized occupation of the sea area and construction of structures constituted the primary fault, making it liable for the consequences. The claim for structure removal and land occupation compensation was dismissed due to insufficient legal grounds.

The XXX Turtle Management Bureau appealed the judgment, and the Guangdong High People's Court upheld the original decision.

Key Significance

This case involves a dispute over ocean development and utilization caused by marine construction, with a focus on the protection of sea turtle resources. Strict ecological protection measures should be taken to prevent damage to the marine ecological environment and natural resources. Sea turtles are classified as endangered species, and their habitats and nesting grounds are threatened by human activities, including interference and destruction. Many sea turtle nesting sites, including the Huidong Harbor Sea Turtle National Nature Reserve, have not seen any signs of sea turtles nesting for many years. In this case, the court played an active role in guiding the rule of law and values in national governance and social governance, not supporting the parties' claims regarding the validity of the investment cooperation contract. The court actively reviewed and ruled that the agreement without environmental impact assessments, lacking sea area usage rights, and harming public interest was invalid. By strengthening the review of the contract's validity, the court dismissed the related claims and, after the judgment took effect, issued a Judicial Proposal to multiple agencies. The proposal called for enhanced law enforcement, prohibition of breaches of red lines of marine ecological protection, and legal penalties for responsible agencies. It also urged prompt restoration of local marine ecology, strict enforcement of source protection systems, and effective regulation of natural resource development and utilization. This case holds significance for strengthening the protection of the marine ecological environment and promoting sustainable development.