Abstract: Disputes over the right to use sea areas fall within the exclusive jurisdiction of maritime courts. The Civil Code adopts the provisions on the right to use sea areas previously established under the Property Law, defining such right as a type of usufructuary right. Lawfully obtained rights to use sea areas are protected by law. However, issues such as the subjects, objects, effectiveness, characteristics, transferability of the right to use sea areas, and its conflicts and coordination with other usufructuary rights are not explicitly stipulated. In judicial practice, there are divergent views on the jurisdiction and application of law in cases involving disputes over the right to use sea areas. This article, using the characteristics of the right to use sea areas as the point of departure and with reference to actual cases, provides a systematic analysis of jurisdictional issues, legal attributes, applicable law, and adjudication approaches, with the aim of offering a comprehensive framework for the adjudication of such cases.

Keywords: Exclusive jurisdiction; Usufructuary right; Certificate of the right to use sea areas; Real right claim

I. Legal Characteristics of Disputes over the Right to Use Sea Areas

(i) Definition and Legal Nature of the Right to Use Sea Areas  

The right to use sea areas refers to the exclusive right, obtained in accordance with the law, by entities or individuals to control specific state-owned sea areas. The subject of this right may be an entity or an individual; its object is a specific sea area regarded as immovable property; and its content is the exclusive control of that specific sea area for a defined purpose [1]. The sea area that forms the object of such right includes the interior waters, the surface, body, seabed and bottom soil of the territorial seas of the People's Republic of China. As a maritime power, China has jurisdiction over nearly three million square kilometers of sea area, equivalent to one-third of its land territory. It has more than 18,000 kilometers of mainland coastline and over 14,000 kilometers of island coastline, containing rich resources such as biological, mineral, shipping, and tourism resources. The state has the responsibility to manage these abundant resources, and the legal basis for such management is the state's ownership of sea areas.

There is scholarly debate regarding whether the right to use sea areas is of a public or private law nature. However, both the former Property Law of the People's Republic of China (the "Property Law")and the current Civil Code of the People's Republic of China (the "Civil Code") reference the right to use sea areas under the general provisions on usufructuary rights. Though no separate chapter is dedicated to it, the right to use sea areas has been affirmed by higher-level legislation as an increasingly important category of usufructuary right. Detailed provisions can be found in the Sea Areas Administration Law of the People's Republic of China (the "Sea Areas Administration Law") and relevant administrative regulations. The academic community is reaching increasing consensus that the right to use sea areas possesses both public and private law attributes. There is also general agreement on the scope of rights included under the right to use sea areas, as follows:

(1) Exclusive use. Paragraph 3 of Article 2 of the Sea Areas Administration Law stipulates that "This Law shall be applicable to any exclusive continuous use of the seas within specific sea areas of the interior waters or territorial seas for three months or longer." Paragraph 1 of Article 23 provides that "The right of holder of the right to lawfully use sea areas and obtain proceeds shall be protected by law, and may not be infringed upon by any entity or individual." Article 44 further states that "If any one violates the provisions... by hampering or disturbing the right holder to use sea areas, the right holder may plead the maritime administrative authority to remove the hindrance, or institute a suit at the people's court. If nay losses have resulted, he may also plead for damages." These provisions clearly establish that the right to use sea areas entails an exclusive right of use. (2) Restrictive use. The use of sea areas is subject to both spatial and temporal restrictions, as well as limitations on the exclusivity of rights. The right pertains to specific sea areas approved through examination and review, thus having spatial constraints. Article 25 of the Sea Areas Administration Law stipulates the maximum term for using sea areas based on different purposes, indicating time-based restrictions. Furthermore, Paragraph 2 of Article 23 of the same law states that "The holder of the right to use sea areas may not hinder the non-exclusive use of the sea so that it does not hamper its use of the sea areas," which shows that even the exclusivity of rights is not absolute. (3) Transferability. Article 27 of the Sea Areas Administration Law explicitly provides for the transfer of the right to use sea areas through equity participation, assignment, and inheritance. Many scholars further argue that, as a type of usufructuary right, the right to use sea areas can also be mortgaged. Accordingly, unlike many natural resource rights that are often underutilized in practice, the right to use sea areas carries real property attributes, with each element of the right consistent with the essential characteristics of property rights.

(ii) Definition and Attributes of Disputes over the Right to Use Sea Areas

According to the Provisions on Causes of Action in Civil Cases issued by the Supreme People's Court, disputes over the right to use sea areas fall under the category of disputes over usufructuary rights, which are a subset of property right disputes. As a usufructuary right explicitly provided for in the Civil Code, the right to use sea areas possesses all the characteristics of a property right. Therefore, any civil dispute involving this right may be classified under this cause of action. Disputes over the right to use sea areas mainly include cases involving transfer, inheritance, profit from use, donation, pledge, and maritime torts. However, if the dispute concerns administrative approval of the right to use sea areas, it constitutes an administrative dispute and the party concerned shall file an administrative lawsuit accordingly.

II. Difficulties and Challenges in the Adjudication of Disputes over the Right to Use Sea Areas

(i) Current Status of Adjudication of Disputes over the Right to Use Sea Areas

In early July 2021, the authors conducted a search using the China Judgments Online database with "disputes over the right to use sea areas" as a civil cause of action. A total of 900 case documents were found. Geographically, the cases were mainly concentrated in Liaoning, Shandong, Zhejiang, and Shanghai. By refining the search with the keywords "disputes over the right to use sea areas" and "concluded by judgment," 257 civil judgments dated from 2010 to 2021 were located. Among these, Liaoning Province published 136 cases, Shandong 40, Zhejiang 18, Fujian and Shanghai 14 each, while Hainan, Jiangsu, Guangdong, Hebei, Tianjin, and Guangxi Zhuang Autonomous Region each published fewer than 10 judgments of this type. In terms of court hierarchy, 59 second-instance judgments were rendered by high people's courts, 160 by intermediate people's courts, and 31 by primary people's courts. To date, there are no guiding cases or exemplary model judgments. Although the Supreme People's Court has accepted applications for retrial and issued rulings on jurisdiction concerning such cases, it has yet to render a substantive civil judgment in this area. Judging from the number of published cases, disputes over the right to use sea areas remain a relatively niche category. However, the number of such cases has steadily increased since 2014 and has grown significantly since 2017. In the past three years, these cases have accounted for over 70% of all cases accepted in the past decade. These statistics indicate that, with the development of the marine economy and the standardization of the registration and administration of the right to use sea areas, public awareness of and emphasis on this right have grown substantially. Consequently, a range of practical legal issues, such as jurisdiction and applicable law, require urgent resolution.

(ii) Conflicts in Jurisdictional Provisions for Disputes over the Right to Use Sea Areas

According to the Guidelines of the Supreme People's Court on the Application of Causes of Action and the Right to Claim in Civil Cases (hereinafter the "Guidelines"), disputes over the right to use sea areas arise from interests in immovable property and thus fall under the exclusive jurisdiction of the people's court in the location of the immovable property. Where disputes arise from the transfer, mortgage, inheritance, or lease of the right to use sea areas, jurisdiction should be determined according to the relevant provisions of the Civil Procedure Law of the People's Republic of China (the "Civil Procedure Law") based on the underlying legal relationship relevant to the disputes. However, in accordance with the Provisions of the Supreme People's Court on the Scope of Cases Accepted by Maritime Courts (Fa Shi [2016] No. 4, hereinafter the "Provisions 2016 No.4"), maritime courts have jurisdiction over civil cases involving the right to use sea areas. These are divided into two categories: first, disputes over the right to use sea areas (including contractual disputes over contracting, transfer, and mortgage, as well as related tort disputes), excluding disputes over confirmation of rights arising from applications for the right to use sea areas; and second, disputes over intermediary or agency contracts related to such rights. Therefore, pursuant to the Provisions 2016 No.4, disputes over the right to use sea areas fall under the exclusive jurisdiction of maritime courts and not the jurisdiction of courts in the location of the immovable property as stipulated in the Guidelines.

In judicial practice, the legal community also holds differing views on the jurisdiction over cases involving disputes over the right to use sea areas. Taking Guangdong Province as an example, the authors searched the China Judgments Online database and found that as of July 1, 2021, a total of 10 civil cases with "disputes over the right to use sea areas" as the cause of action had been published in Guangdong. These included decisions by other primary people's courts on jurisdictional issues, decisions by the court granting permission to withdraw lawsuits or rendering judgments, and decisions and judgments by the Guangdong High People's Court. Overall, there is basic consensus that disputes over the right to use sea areas fall under the jurisdiction of maritime courts. However, in one particular case involving the validity of an agreement for the transfer of the right to use sea areas, where the sea area involved was located in Longgang District, Shenzhen, the case was tried in the first instance by the Longgang District People's Court and adjudicated in the second instance by the Shenzhen Intermediate People's Court on July 26, 2018. Based on published judgments on the China Judgments Online database, a total of 23 first-instance civil judgments related to disputes over the right to use sea areas have been issued by primary courts nationwide. Such cases are clearly inconsistent with the provisions that designate maritime courts as having exclusive jurisdiction over disputes involving the right to use sea areas. Therefore, further clarification is still needed in judicial practice. Disputes over the right to use sea areas are often intertwined with other disputes, such as construction contract disputes, land contract disputes, and fishery contract disputes. When accepting such cases, the court must first ascertain whether the disputed parcel of land is a sea area or a land area. If it is confirmed to be a sea area, the court must then determine whether it is a dispute over the right to use sea areas and subsequently confirm jurisdiction. According to the Supreme People's Court Civil Ruling (Min Xia No. 62 [2020]) published on the China Judgments Online database, the Court reiterated through a ruling that such cases fall under the exclusive jurisdiction of the maritime court in the location of the sea area in question. The case involved a dispute over the right to use sea areas between plaintiffs Qi Benlin and Qi Yuhong and defendant Fan Longyan. The Binhai County People's Court of Jiangsu Province accepted and adjudicated the case in 2018. After the plaintiffs appealed, the Yancheng Intermediate People's Court ruled that the case involved a lease contract dispute over the right to use sea areas and therefore fell within the exclusive jurisdiction of maritime courts. The court revoked the original first-instance judgment and transferred the case to the Shanghai Maritime Court. The Shanghai Maritime Court, however, found that the disputed area—990 mu of fishponds on the western side of the southern section of Biandangang in Binhai County—lacked a valid certificate of the right to use sea areas in the materials provided and therefore could not be identified as a lease dispute over the right to use sea areas under the exclusive jurisdiction of maritime courts. Accordingly, the case was returned to the Yancheng Intermediate People's Court, which then transferred the case to the newly established Nanjing Maritime Court. The Nanjing Maritime Court sought instructions from the Jiangsu High People's Court regarding the designation of jurisdiction. The Jiangsu High People's Court, citing multiple transfers and procedural irregularities, upheld the validity of the Yancheng court's decision to transfer the case to the Shanghai Maritime Court and submitted the case to the Supreme People's Court for designation of jurisdiction. The Supreme People's Court held that Article 36 of the Civil Procedure Law of the provides: "If a people's court discovers that a case it has accepted is not within its jurisdiction, it shall refer the case to the people's court with jurisdiction, which shall accept the case. If a people's court to which a case is referred considers that the case does not come under its jurisdiction in accordance with regulations, it shall report to the superior people's court for designation of jurisdiction and shall not further refer the case at its own discretion." In this case, the Shanghai Maritime Court, as the court to which the case was referred, directly returned the case to the Yancheng Intermediate People's Court, which then transferred it to the Nanjing Maritime Court—this procedure violated the aforementioned provisions. Pursuant to Article 63 of the Provisions 2016 No.4, disputes over the right to use sea areas (including contractual disputes over contracting, transfer, and mortgage, as well as related tort disputes) fall within the exclusive jurisdiction of maritime courts. Based on findings submitted by the reporting courts, the area in question in this case was confirmed to be a sea area, and the dispute between the parties indeed pertained to the right to use sea areas. Accordingly, the case should fall under the exclusive jurisdiction of a maritime court. Since the sea area involved came under the jurisdiction of the Nanjing Maritime Court after December 2019, it was appropriate for that court to hear the case. This case illustrates that, to improve judicial efficiency, adjudicators—when handling cases involving usufructuary rights, especially land contract disputes, disputes over the right to use sea areas, and fishery contract disputes—must first determine whether the immovable property involved pertains to the right to use sea areas. If it does, the court must then ascertain whether it has jurisdiction. If it does not, the case must be transferred in accordance with the relevant laws and regulations.

Regarding the issue of jurisdiction over the right to use sea areas, it is also important to distinguish whether a case is of a civil or administrative nature. Article 63 of Part I of the Provisions 2016 No.4, which came into effect on March 1, 2016, only provides a general description of the types of cases involving disputes over the right to use sea areas, without detailing or clarifying which specific types of such disputes fall within the jurisdiction of maritime courts. Specifically, the phrase "including contractual disputes over contracting, transfer, and mortgage, as well as related tort disputes" affirms that civil and commercial disputes between equal parties arising from the right to use sea areas fall within the scope of acceptance by maritime courts. However, the regulation does not provide explicit guidance on disputes involving administrative authorities or their affiliated enterprises in relation to the right to use sea areas. On March 1, 2016, the Provisions of the Supreme People's Court on Jurisdiction over Maritime Litigation (Fa Shi [2016] No. 2) (the "Provisions 2016 No.2") officially came into effect. Paragraph 1 of Article 2 of the regulation clearly stipulates that maritime courts have jurisdiction over maritime administrative cases. The Provisions 2016 No.4, which took effect simultaneously, also defines the scope of maritime administrative cases. On February 8, 2018, the Interpretation of the Supreme People's Court on the Application of the Administrative Procedure Law of the People's Republic of China (Fa Shi [2018] No. 1) came into operation. Paragraph 2 of Article 3 of the Interpretation provides that specialized people's courts and people's tribunals shall not hear administrative cases, nor shall they review or enforce cases where administrative organs apply for enforcement of their administrative actions. However, for specialized people's courts such as railway transport courts that do hear administrative cases, the provisions of Paragraph 2 of Article 18 of the Administrative Procedure Law shall apply. As a result, some administrative authorities and parties have raised doubts as to whether maritime courts may exercise jurisdiction over maritime administrative cases. On March 9, 2018, the Supreme People's Court issued the Notice on Further Strengthening the Adjudication of Maritime Administrative Cases (Fa [2018] No. 63), which reaffirmed that maritime courts shall exercise their adjudicative functions and try maritime administrative cases in accordance with the provision "maritime courts shall hear first-instance maritime administrative cases" as stipulated in the Provisions 2016 No.2. Therefore, administrative cases involving the right to use sea areas should also fall under the jurisdiction of maritime courts. In supplementary cases concerning the right to use sea areas, particular attention must be paid to determining whether the case is civil or administrative in nature.

In the authors' view, because the right to use sea areas is a privileged right of administrative licensing, and its acquisition, transfer, and administration involve strong administrative management characteristics, cases involving this right may fall under either civil and commercial or administrative categories. If the dispute pertains to the approval of the right to use sea areas, it constitutes an administrative dispute. Disputes over compensation for expropriation of the right to use sea areas may involve both administrative approval and relationships between equal civil subjects. The term "expropriation compensation for the right to use sea areas" refers to compensation provided to the holder of the right to use sea areas when the government exercises its authority to reclaim the right in advance. Article 30 of the Sea Areas Administration Law stipulates: "For the purpose of public interest or the security of the state, the people's government shall made the approval may lawfully take back the right to use sea areas. If the right to use sea areas is withdrawn pursuant to the provisions of the preceding paragraph prior to the expiration of the term of use, appropriate compensations shall be made to the right holder." With respect to expropriation compensation for the right to use sea areas, the administrative expropriation component constitutes a unilateral administrative act, meaning that the expropriation is a decision made solely by an administrative authority and falls within the category of specific administrative acts. However, the administrative compensation component is realized through consultation and the signing of a compensation agreement between the administrative authority and the administrative counterparty, and therefore falls under the category of administrative contracts. The method and amount of compensation must be determined by mutual agreement through consultation. If no administrative compensation contract is concluded, and the government has not issued a specific administrative act during the consultation process, no concrete impact has yet been imposed on the parties' rights, and thus the matter is not actionable. Unlike the unilateral nature of a specific administrative act, the signing of a compensation agreement requires consensus between the administrative authority and the counterparty. In local practice, such compensation agreements are often signed between enterprises affiliated with the expropriating authority and the holders of the certificates of the right to use sea areas. In our view, the nature of such agreements is that of compensation for the occupation of the right to use sea areas, and does not constitute an administrative contract. In an administrative contract, one party must be an administrative body engaged in administrative functions, while the other party is in a subordinate or passive position. By contrast, both parties to these compensation contracts are equal civil subjects, and the agreement is reached through mutual consultation. Maritime courts have jurisdiction over such cases. In other words, maritime courts exercise exclusive jurisdiction over marine contract disputes, maritime tort disputes, and administrative disputes related to the right to use sea areas, with the exception of disputes over confirmation of rights arising from applications for the right to use sea areas.

(iii) Practical Difficulties in the Judicial Protection of the Right to Use Sea Areas  

1. Insufficient Legal Provisions for the Substantive Trial of Disputes over the Right to Use Sea Areas

The Property Law only includes a single provision on the right to use sea areas in a principled manner. It does not cover matters such as registration, transfer, lease, mortgage, or capital contribution involving the right to use sea areas. The Sea Areas Administration Law only provides for two forms of secondary circulation of the right to use sea areas: transfer and inheritance. The Interim Regulation on Immovable Property Registration, effective from March 1, 2015, and its Implementing Rules, which came into force on January 1, 2016, incorporated the registration of the right to use sea areas into the unified immovable property registration system. However, other related matters await future revision of the Sea Areas Administration Law. The Civil Code, effective January 1, 2021, inherits the provision from the Property Law but still does not set forth detailed regulations on the right to use sea areas. In practice, particularly in coastal provinces and cities, dynamic circulation of the right to use sea areas is quite common, inevitably leading to disputes in the process. To resolve these disputes, a sound legal system is indispensable. Since the acquisition and exercise of the right to use sea areas are aimed at obtaining economic benefits, such economic value represents the core of the private-law nature of the right. Although sea use activities can be lawfully restricted or regulated based on the public nature of sea areas, the economic interests of the holder of the right to use sea areas must be sufficiently protected. This necessitates respect for the real right effect of the right to use sea areas—respecting the independence of the exercise of such rights, which must not be interfered with unless for public interest; and respecting the exclusivity of the right—once a sea area is designated, no other exclusive sea-use activity or obstructive non-exclusive activity may take place within it. Meanwhile, if public interest requires restrictions or even revocation of the right, full economic compensation must be granted to the right holder. As this article focuses on analyzing and resolving issues surrounding the protection of the right to use sea areas in judicial practice, it addresses the matter not from the perspective of environmental protection but from the viewpoint of safeguarding the interests of the right holder.

2. Challenges in Legal Characterization and Burden of Proof for the Right to Use Sea Areas

Disputes over the right to use sea areas encompass both tort claims and breach of contract actions. The rule of "he who asserts must prove" applies to both types of actions. Entities and individuals who hold the right to use sea areas and act as plaintiffs must first prove their lawful ownership of the right, and then demonstrate that such right has been infringed or that they have suffered losses due to the defendant's actions. The certificate of the right to use sea areas serves as legal proof of lawful sea use. Only entities and individuals who have obtained such certificates are deemed holders of the right to use sea areas. These certificates define the scope of the sea area and include maps delineating the boundaries. However, due to the vastness of sea areas, the lack of fixed coordinates, the high cost of determining sea area boundaries, and the difficulty in assessing the economic value of damage, right holders often face evidentiary challenges when trying to prove infringement. Among the 257 published judgments reviewed by the authors, 42 cases saw the plaintiffs' claims dismissed.

III. Analytical Framework for the Adjudication of Disputes over the Right to Use Sea Areas

(i) Nature and Scope of the Right to Use Sea Areas

1. The right to use sea areas is a usufructuary right and constitutes a special type of immovable property. In tort litigation, the right must be registered to establish a valid real right claim.

The nature of the right to use sea areas has long been debated in both academia and judicial practice. While current laws and regulations designate it as a usufructuary right with a defined purpose and term, its basis differs from that of typical usufructuary rights. Normally, such rights arise from a contract between equal civil parties. In contrast, the establishment of the right to use sea areas is an administrative act by the state, represented by the government, as the owner of sea area resources. Therefore, the acquisition of this right carries strong administrative characteristics. Unlike the typical "contract plus public notice" model used for establishing other usufructuary rights, the establishment of the right to use sea areas requires not only the consent of the competent authority but also compliance with legally prescribed formalities [2]. In terms of acquisition procedures, it must follow a strict process of application, approval, registration, certificate issuance, and public notice, in accordance with laws, administrative regulations, and departmental rules related to administrative licensing. That is, the right is granted only after an administrative license has been approved and registered in accordance with the law. Relevant laws, regulations, and normative documents on the registration of the right to use sea areas indicate that the system in China follows the principle of "registration as a constitutive requirement." Without registration, the right cannot be validly established. Even if approval is granted by a competent administrative authority, failure to register invalidates the right to use sea areas. Whether or not the right is registered determines its legal establishment or modification. Once the registration is approved, the holder of the certificate formally acquires the right to use sea areas from the date of issuance.

In cases involving disputes over the right to use sea areas heard by maritime courts, tort disputes concerning such rights involve real right claims based on the right to use sea areas. A real right claim in this context refers to the right of the holder of the right to use sea areas to request the other party to perform or refrain from performing certain acts in order to remove or prevent hindrance when the complete status of the right is infringed or is in imminent danger of being infringed. These claims include the following:

(1) Claim for return of sea area based on the right to use. This is the right of the holder of the right to use sea areas to request the return of the sea area from a party who unlawfully possesses or appropriates the sea area. This type of claim is the most fundamental among the real right claims derived from the right to use sea areas. It stems from the state's ownership of the sea and is granted to the holder concurrently with the establishment of the right to use. The elements of such a claim include the unlawful possession of the specific sea area by the other party, and the consequence of exercising the claim is that the unlawful possessor must return the sea area. The content of this claim involves not only the return of the original object but also compensation for damage if the object cannot be returned, and whether expenses can be reimbursed.

(2) Claim for removal of hindrance. This refers to the right of the holder of the right to use sea areas to remove acts that hinder the exercise of the right. It differs from a claim for damages: the right holder cannot demand restoration to the original state but may only request the removal of the hindrance, as hindrance is distinct from damage. Damage refers to the adverse consequences caused by acts of hindrance and falls under the scope of tort liability, governed by the Tort Liability Law. Where the holder of the right is obliged to tolerate certain acts, such as in cases involving neighboring land use, the alleged hindering party may invoke a defense that the conduct does not constitute hindrance.

(3) Claim for prevention of hindrance. This refers to the right of the holder of the right to use sea areas to request the prevention of potential hindrance by a third party. The purpose of such a claim is to prevent anticipated hindrance, based on the existence of an unlawful risk to the holder's ability to exercise control over the sea area. The party responsible for the potential hindrance (risk) bears the obligation to eliminate the danger and must bear the resulting costs [3]. The right to request prevention of hindrance is particularly important. With the advancement of modern industry, marine pollution has become increasingly serious. It is common, especially in coastal regions, for untreated industrial wastewater to be discharged directly into the sea, causing damage to aquaculture operations conducted by sea area right holders. In such cases, where the holder has sufficient evidence to prove that the right is at risk of being infringed, they may lawfully file a preventive hindrance claim without waiting for actual damage to occur.

In judicial practice, attention should be paid to the following: on the one hand, if the sea area involved is registered under the name of a third party, and although a lease relationship exists between the lessee (the party claiming infringement) and the registered right holder, the lease is not registered with the competent government authority. As a result, the lessee cannot prove that the leased right has been lawfully recognized under applicable laws and regulations, and thus cannot enjoy real right claims over the disputed sea area pursuant to the Civil Code and the Sea Areas Administration Law. Accordingly, the lessee may not request the infringer to remove the hindrance. On the other hand, even where the plaintiff does possess a real right claim, the court may not uphold a claim for cessation of infringement and restoration to the original state if doing so would result in a significant loss or waste of public assets. For example, in the case of Guangxi Qinzhou Gengbo Energy Co., Ltd. v. SDIC Qinzhou Port Co., Ltd., the first-instance judgment was rendered by the Beihai Maritime Court and upheld on appeal by the Guangxi Zhuang Autonomous Region High People's Court. In this case, the defendant invested RMB 1.4 billion to construct a terminal after the plaintiff had obtained the right to use the sea area. With construction nearing completion, the plaintiff requested cessation of the infringement, restoration to the original state, and return of the sea area—explicitly waiving any claim for economic damages. The Beihai Maritime Court found that the defendant's conduct constituted infringement, and that the plaintiff could have claimed compensation. However, as the plaintiff insisted on cessation of construction and restoration rather than seeking monetary damages, and because granting such relief would have resulted in significant waste of public resources and property, the court declined to support the plaintiff's claim [4].

It should be noted that a party without a legally registered right does not enjoy real right claims, but this does not preclude them from seeking economic compensation. Where the lawful holder of the right to use a sea area suffers harm, appropriate compensation should still be granted based on the specific circumstances of the case [5].

2. The scope of the right to use sea areas is limited to sea areas, as specified in the certificate of use right, and does not include the shoreline; the holder is subject to a duty of tolerance.

The right to use sea areas possesses a partially exclusive character of control. In other words, conflicting rights to use the same sea area cannot coexist. Once the right is established, the holder may exercise control and use over the designated area at their discretion. However, acquiring the right to use sea areas does not confer absolute exclusivity; the holder is under a duty of tolerance and may not obstruct the lawful use of the sea by others so long as such use does not hinder their own legal sea-use activities.

In judicial practice, disputes often arise over whether the immovable property involved in a case pertains to a sea area or to land. For example, in Case No. 62 (2007) Xia Hai Fa Shi Chu Zi, heard by the Xiamen Maritime Court, the dispute concerned tort liability for maritime infringement arising from the use of a terminal. The key issues were the validity of the certificate of the right to use sea areas and the nature of the right itself [6]. In its civil judgment, the court determined that the right to use sea areas covers only sea areas and does not extend to adjacent land areas. This case was included in the China Case Trial Highlights, where it was clearly stated that the approval authority of maritime administrative authorities is limited to sea areas. Once a civil subject lawfully acquires the right to use a sea area, their legal status as the right holder is confirmed, entitling them to possess, use, and derive benefits from the designated sea area. Such rights are exclusive in nature. However, holders of the right to use sea areas must also fulfill their duty of tolerance. Paragraph 2 of Article 23 of the Sea Areas Administration Law stipulates: "The holder of the right to use sea areas may not hinder the non-exclusive use of the sea so that it does not hamper its use of the sea areas." Moreover, the land adjacent to the sea area and the shoreline do not fall within the scope of the right to use sea areas. The approval authority over land (e.g., storage yards) lies with the natural resources administration authority, and approval over the shoreline lies with the port authority. Therefore, the area listed in the certificate of the right to use seas areas issued by the maritime administrative authority refers solely to the sea area and does not include adjacent land or shoreline. If another party sets up a crane or stores oyster shells on the terminal, such conduct constitutes use of the land area and does not infringe upon the right to use sea areas.

3. The right to use sea areas has a specific purpose and term; upon expiration, the right is extinguished.

According to Article 25 of the Sea Areas Administration Law, the maximum term for using sea areas are defined for six purposes as follows: 15 years for aquatic breeding; 20 years for ship dismantle; 25 years for tourism and entertainment; 30 years for salt production and mineral exploitation; 40 years for public interests; 50 years for construction projects including ports, shipbuilding factories, etc. Article 29 of the Sea Areas Administration Law stipulates that where the right to use sea areas expires and no application for renewal is made or the application for renewal is not approved, the right to use sea areas shall be terminated. These provisions indicate that governments that approve sea-use applications may reclaim the right to use sea areas in two ways: (1) by revoking it prior to expiration, or (2) by denying renewal upon expiration. While related laws and regulations generally favor approving renewal applications submitted by right holders, Article 26 of the Sea Areas Administration Law expressly states that renewal may be denied when necessary for public interest or national security. To qualify for expropriation compensation, the right holder must still lawfully possess the right at the time of expropriation—that is, the certificate of the right to use sea areas must still be valid. Even if the certificate is close to expiring, compensation should still be provided if expropriation occurs before expiration [7]. If the holder fails to apply for renewal two months before expiration and the approval authority has not revoked the right, the question of whether legal remedies are available and what those remedies might be falls within the scope of administrative authority. Civil courts should refrain from making direct negative determinations in such matters.

4. Balancing interests when the right to use sea areas conflicts with other usufructuary rights such as the right to aquaculture or the right to fish.

Conflicts may arise between the right to use sea areas and lawfully acquired rights to fish or engage in aquaculture, and there has long been debate over how to apply the law in such cases. Both the former Property Law and the current Civil explicitly provide for these rights, and all of them are categorized as usufructuary rights. Moreover, the Sea Areas Administration Law, which governs the right to use sea areas, and the Fisheries Law, which governs the right to fish and the right to aquaculture, are of the same legal rank. Some scholars argue that, in principle, the right to fish and the right to aquaculture—being directly related to livelihood and essential to the basic survival of the rights holders—should be prioritized over the right to use sea areas, which carries strong administrative attributes and was designed to facilitate national management of maritime resources. From a legal perspective, they contend that livelihood-related rights should be given greater protection. Conversely, some judges, considering the institutional design and practical sea use, believe that when the establishment or exercise of the right to use sea areas infringes on existing fisheries rights, appropriate compensation should be provided to the fisheries rights holders. The volume Interpretation and Judicial Application of the Book on Real Rights in the Civil Code, compiled by the Civil Adjudication Theory Committee of the China Trial Theory Research Association, advocates a comprehensive approach to determining applicable law. If evidence clearly establishes the chronological priority of the rights, the later-created right that infringes upon the earlier one should yield to the prior right. If the chronological order cannot be determined from the evidence, the conflict should be resolved based on legal principles. This underscores that conflicts between the right to use sea areas and rights to fish or aquaculture remain a difficult issue in judicial practice and must be addressed on a case-by-case basis.

Another common type of case involving the right to use sea areas is maritime property damage liability. For example, in Case No. 117 (2011) Jin Hai Fa Shi Chu Zi, heard by the Tianjin Maritime Court, the plaintiffs (eight individuals including Li Shuqiang) filed a lawsuit against the Islamic Republic of Iran Shipping Line for compensation over marine aquaculture damage. The court held that individuals or entities engaged in aquaculture activities within sea areas must obtain both a certificate of the right to use sea areas and an aquaculture license in accordance with the law. If the parties fail to provide valid and lawful certificates before the close of court debate, such activities constitute unlicensed aquaculture. Where aquaculture is conducted without the necessary permits, the responsible party is not liable for compensating lost aquaculture income, but is only liable for compensating the cost of aquaculture. These costs may be calculated using authoritative industry reports. Any aquaculture expenses saved as a result of the damaging event should be deducted from the damages awarded. Moreover, the parties must apply to the maritime authority to issue navigational warnings and notices for their claimed aquaculture areas, and must establish visible safety measures such as warning signs within such areas.

In summary, the following points should be emphasized when adjudicating infringement cases involving the right to use sea areas: First, the legal basis for the claim asserted by the parties must be examined. The party may assert various claims, such as a real right claim, a claim for damages, or other types of relief. In cases of overlapping rights, the party's choice should be respected, whether they pursue a single legal basis or combine multiple claims in accordance with law. Second, the legal status of the claimed rights must be reviewed, particularly their legitimacy. For sea area users, the certificate of the right to use sea areas must be verified. If the use involves aquatic breeding, an aquaculture license must be reviewed. If it involves fishing activities, a fishing license must be examined. If the party cannot provide the necessary documentation, the court may consult relevant administrative authorities in the fields of maritime affairs or fisheries to ascertain the actual legal status. For traditional fishermen who contract collectively owned or collectively used sea areas or tidal flats, their contract or contracting certificate should be verified, as it also serves as documentary evidence of real rights. Third, courts must properly exercise their duty of clarification. While maintaining neutrality and impartiality during adjudication, courts should guide vulnerable parties in navigating the litigation process [8].

5. The right to use sea areas is a usufructuary right transferable by law, with exchangeable property value and circulation permissible, subject to mandatory provisions of validity.

To ensure the rational development and utilization of sea area resources and the environment, and to promote the optimal effectiveness of sea areas, implementing a multi-tiered, functional zoning system is the most effective means for achieving comprehensive and sustainable development of the right to use sea areas. In practice, particularly in coastal provinces and cities, dynamic circulation of the right to use sea areas is quite common, However, it must be noted that the purpose of the sea area may not be altered without authorization during the process of such circulation. Article 28 of the Sea Areas Administration Law stipulates: "The holder of the right to use the sea areas shall not change the approved uses of the sea areas without authorization. Where it is necessary to change, the change shall be in conformity with the functional divisions of the sea and approval of the people's government that made the approval shall be obtained." If the sea-use purpose is altered without approval and to the detriment of public interest, any contract related to the transfer of the right to use sea areas may be deemed invalid for violating mandatory provisions of law. Whether this provision constitutes a mandatory provision affecting the validity of a contract has been a subject of debate. In a dispute over the right to use sea areas heard by the Wenzhou Intermediate People's Court, the court held that: (1) although Article 28 does not explicitly state that a violation renders the contract invalid, in the case at hand, the tidal flat in question was used for industrial construction, clearly infringing upon public interest; (2) the provision addresses the content of the act, namely, the change of sea-use purpose, and such change requires a strict approval process, reflecting the state's strict public law control over the re-zoning of sea areas. Therefore, the contract signed between the parties, which altered the purpose of the sea area without obtaining approval from the original approving government, violated a mandatory legal provision and should be deemed invalid.

With respect to the circulation of the right to use sea areas, such circulation includes forms like leasing and mortgage, covering not only the transfer of current interests but also of expected interests. The leasing and transfer of this right must meet certain qualification standards to ensure maximum sustainability in the use of marine resources [9]. For example, a contractor may obtain the right to operate a sea area based on a valid and lawful contract and derive corresponding benefits. In addition to contractual operation, the right to use sea areas may also be subject to mortgage. With increasing emphasis on the monetization of property rights, there is growing demand to utilize the exchange value of the right to use sea areas as a financing tool. Although Article 395 of the Civil Code allows for the mortgage of property not explicitly prohibited by law or administrative regulations, and although the Interim Regulation on Real Property Registration and its implementation rules provide for the registration of mortgages over the right to use sea areas, some registration authorities still reject such applications on the grounds that the law lacks explicit authorization. As a result, legal uncertainties remain regarding the establishment, validity, scope of security, and realization of mortgage rights over the right to use sea areas. The right to use sea areas should be recognized as a type of immovable property that is eligible for mortgage registration. Even if the holder fails to apply for renewal two months prior to the expiration of the term, and the approval authority has not yet revoked the right, the right to use sea areas and any mortgage right attached thereto does not automatically lose their legal effect. In such cases, courts may rule that the mortgagee retains the mortgage right over the sea area within the timeframe permitted by the administrative authority for approval or renewal. It is important to emphasize, however, that the leasing or transfer of the right to use sea areas must not endanger or harm national territory or national security.

In conclusion, although disputes over the right to use sea areas represent a relatively small proportion of maritime cases, this does not mean that research on such disputes should be overlooked. With the continuous development of the marine economy, maritime courts are likely to handle more such cases in the future. The legal issues and adjudication approaches surrounding them merit further study and exploration.

Authors: Yan Hui, and Liu Yufei, Guangzhou Maritime Court

Cited Documents:

[1] See Guidelines of the Supreme People's Court on the Application of Causes of Action and the Right to Claim in Civil Cases, compiled by People's Publishing House, p. 135.

[2] Quoted from Faxin case database: The certificate of the right to use sea areas is the documentary evidence of lawful sea use by the parties.

[3] Excerpted from a case heard by the Shanghai Maritime Court: Nantong Pengsheng Aquaculture Co., Ltd. v. Liu Shankang (dispute over the right to use sea areas). Case name: Unregistered Sea Area Users Are Not Entitled to Real Right Claims – A Fisheries Company v. Liu (Sea Area Use Dispute). Case authors and source not shown in Faxin.

[4] Detailed analysis can be found in the following judgments: (2015) Hai Shang Chu Zi No. 49 issued by the Beihai Maritime Court and (2016) Gui Min Si Zhong Zi No. 190 issued by the Guangxi High People's Court. Quoted from Faxin: Where a Plaintiff Requests the Infringer to Cease Infringement and Restore the Original State, But This Would Cause Serious Waste of Public Resources, the Court May Deny the Claim – Guangxi Qinzhou Gengbo Energy Co., Ltd. v. SDIC Qinzhou Port Co., Ltd.

[5] Quoted from Faxin: Occupying Another Party's Sea Area Use Right Entitles the Lawful Right Holder to Appropriate Compensation – A Fisheries Company v. A Tourism Investment Development Company.

[6] Quoted from China Case Trial Highlights, commentary by Lin Jing: The Area Indicated in the Certificate of the Right to Use Sea Areas Should Refer Only to the Sea Area, Excluding Land and Shoreline.

[7] Quoted from Faxin: Occupying Another Party's Sea Area Use Right Entitles the Lawful Right Holder to Appropriate Compensation – A Fisheries Company v. A Tourism Investment Development Company, tried by the Shanghai Maritime Court.

[8] Quoted from Faxin: Where a Lawfully Acquired Sea Area Use Right Conflicts with an Unauthorized Aquaculture Right, the Lawful Right Prevails – Li v. Subdistrict Office and Development Management Committee of the New District (Dispute over the Right to Use Sea Areas), second instance: (2011) Zhe Wen Min Zhong Zi No. 1094.

[9] Quoted from Ge Huaqing, A Preliminary Study on the System of the Right to Use Sea Areas in China.

References:

[1] People's Court Press (Ed.), Guidelines of the Supreme People's Court on the Application of Causes of Action and the Right to Claim in Civil Cases (2nd Edition), People's Court Press.

[2] Civil Adjudication Theory Committee of the China Trial Theory Research Association (Ed.), Interpretation and Judicial Application of the Book on Real Rights in the Civil Code, Law Press.

[3] Zou Tingqian, On the Adjudication of Disputes over the Right to Use Sea Areas and the Judicial Criteria Thereof, published in Application of Law, Issue 11, 2014.