Real estate perspective... Does the cooperative development of new energy projects constitute the effectiveness of "buying and selling roads" and "buying and selling roads?

"Road strip" refers to the approval documents for the preliminary work of the project during the development of the new energy power station. The approval document means that the project can enter the annual construction scale "target", and the local often has requirements for the grid connection period and gives the corresponding purchase electricity price guarantee. Especially for power stations that enjoy national electricity subsidies, the "road strip" is not only a construction permit, but also a guarantee of income.
 

1 Basic facts

Company A has the construction approval procedures (I. e. index documents) for the Xiaozaohuo 300000 KW wind farm project, which is planned to be implemented in six phases. It has obtained the relevant approval procedures for the first phase of the project (50000 KW) and completed the construction of some infrastructure projects. After that, Company A plans to jointly develop and operate with Company B, an investment unit. Both parties jointly fund the establishment of a project company. The project company will complete the investment, construction and operation of the Xiaozaohuo 300000 KW Wind Farm Project. Company A and Company B hold 10% and 90% of the equity of the project company respectively. Company A will transfer the resources of the Xiaozaohuo wind farm project to the project company for a fee, and the transfer price includes tangible assets (drawings, construction permits and other documents associated with the project) and intangible assets (all procedures required for the approval and approval of the relevant government departments for the legal construction and operation of the project).

After the 49.5MW project of Xiaozaohuo Wind Farm Phase I was completed and connected to the grid for power generation, the Development and Reform Commission of the place where the project is located issued a Letter on Agreeing to Change the Owner of 49.5MW Project of Xiaozaohuo Wind Farm Phase I, which agreed to change the owner of 49.5MW Project of Xiaozaohuo Wind Farm Phase I from Company A to Project Company.

2. Referee ideas

The court decided that the "cooperative development" between Company A and Company B did not constitute a "sales road" for the following reasons:

▶First, the identity perspective of Company A.Company A is the owner of the assets and the shareholder of the project company. Therefore, it transfers tangible assets (drawings, construction permit and other documents related to the project) and intangible assets (all procedures required for the legal construction and operation of the project to be approved by relevant government departments) to the project company and the project company pays the transfer price, which is obviously different from the general asset sales contract.

▶Secondly, the administrative action to determine the force angle.The Development and Reform Commission of the location of the project issued an official document clearly approving the change of the development subject of the project from Company A to the project company, which is of great significance to the court's decision tendency.

▶Finally, the perspective of cooperative behavior results.The wind farm involved in the case has been completed and accepted and connected to the grid for power generation. The cooperation between Company A and Company B has not resulted in the normal development of the wind farm project involved.

Regarding the legal effect of the "buying and selling road", the judicial practice judgment scale is different: one view is that the behavior is the true intention of both parties, does not violate the mandatory provisions of laws and administrative regulations, does not harm the public interest, and is effective; another view is that the behavior violates the mandatory provisions of laws and administrative regulations and is invalid.
 

▶The view of the referee that is valid:

(2022) Shaanxi 05 Minzhong No. 321 Judgment holds that although the formation and conclusion of the cooperation agreement involved in the case is contrary to the provisions of the State Energy Administration to regulate the order of project investment and development and is suspected of "buying and selling by road", it does not violate the prohibitive provisions of laws and administrative regulations, and is the true intention of both parties, and its contract effect should be valid.

(2020) Judgment No. 1146 held that KONE's reasons for claiming the invalidity of the contract involved whether it violated the mandatory provisions of laws and administrative regulations and harmed the public interest. First of all, in terms of whether it violates the mandatory provisions of laws and regulations, the Interim Measures for the Management of Distributed Photovoltaic Power Generation Projects is an administrative regulation. The Notice of the National Energy Administration on Further Strengthening the Construction and Operation Management of Photovoltaic Power Stations and the Notice of the National Energy Administration on Regulating the Investment and Development Order of Photovoltaic Power Stations are normative documents, not laws and administrative regulations, and the mandatory provisions that lead to the invalidity of the contract mainly refer to the mandatory provisions of effectiveness, and the above-mentioned administrative regulations and normative documents are mainly for the management of the filing and management of photovoltaic power generation projects. Therefore, even if KONE and Mingfen The "Letter of Intent for Cooperation" signed by the company violates the above-mentioned mandatory regulations of management, it does not of course cause the contract to be invalid. From the perspective of whether it violates the public interest, the state encourages the development of the photovoltaic industry. With the further promotion of streamlining administration and delegating powers, there is no need for the development and reform department to issue approval documents for the preliminary work of the project in Jiangxi Province. The concept of "road strip" as an informal expression of "approval documents for the preliminary work of the project" is not applicable to the projects involved in this case. Even if the content of the "Letter of Intent for Cooperation" violates Article 13 of the "Interim Measures for the Management of Distributed Photovoltaic Power Generation Projects", "Management departments at all levels and project units shall not change the main items of the project filing documents by themselves, including the investment entity, construction location, project planning, Operation mode, etc., when changes are really needed, the filing department shall handle the administrative processing according to the procedures", which shall be handled by the national energy management department, it cannot be directly inferred from this that the act violates the market development order and thus violates the public interest. Therefore, the Court does not support KONE's claim that the "Letter of Intent for Cooperation" violates the public interest and causes the contract to be invalid.

(2020) Su 11 Min Zhong No. 1165 Judgment held that the contract involved involved Gu Xuelin's cooperation in photovoltaic project approval, filing, access, grid connection and other work, that is, the so-called "road transfer" content. The agreement is the true intention of both parties and does not violate the mandatory provisions of laws and regulations. The photovoltaic power generation project involved in the case has also been completed and has been connected to the grid. Therefore, the terms of the contract of "other cooperation with Shenfei Company to obtain the filing and access approval of the first phase of photovoltaic project of Taizhou Xinhai Investment Co., Ltd." are valid, and both parties shall perform their respective rights and obligations in accordance with the contract.

▶Invalidation of the referee's point of view:

(2022) Gan 02 Min Zhong No. 236 Judgment held that although the equity transfer agreement involved in the case was called "equity transfer", it was actually a "road" document sale. Photovoltaic power generation projects are green power development energy projects, which are conducive to environmental and ecological protection, and are related to social and national public interests. According to the provisions of Articles 14 and 33 of the Interim Measures for the Management of Photovoltaic Power Station Projects, Article 13 of the Interim Measures for the Management of Distributed Photovoltaic Power Generation Projects, and the Notice on Further Strengthening the Construction and Operation Management of Photovoltaic Power Stations, it is stipulated that "it is forbidden to buy and sell project filing documents and related rights and interests, and photovoltaic power station projects that have gone through filing procedures shall be re-filed if the investment subject changes significantly", the Notice of the State Energy Administration on Carrying out Special Supervision on the Investment and Development Order of New Power Supply Projects stipulates that the filing of all provincial power supply projects, the progress of various work before the power supply projects are put into operation, the changes in equity before the power supply projects are put into operation, and the completion and commissioning of power supply projects are listed as the key contents of special supervision. It can be seen from this that the above regulations do not completely prohibit the change of the investment subject after the photovoltaic power station project is filed and before it is put into production. For commercial purposes such as mergers and acquisitions, reorganization, etc., the investment subject needs to be changed before the production, and the filing procedures need to be re-filed. However, it is still prohibited to buy and sell "road strips" for the purpose of speculation, that is, it is prohibited not to invest and develop for the purpose, however, enterprises with the purpose of reselling project filing documents or illegally transferring them for illegitimate interests change the behavior of investment subjects without authorization after going through the filing procedures and before putting into production. In this case, Fenghua Energy Company and Zhejiang Zhengtai Company are both companies engaged in energy and new energy. Knowing the above provisions, without the consent of the filing authority, they agreed to conduct "road" transactions in the form of "equity transfer". The unauthorized transfer of the case involves photovoltaic power generation projects and the change of investment subjects, seeking illegitimate interests, disrupting the state's management order of photovoltaic power station projects and harming social and public interests, in accordance with the second paragraph of Article 52 of the the People's Republic of China Contract Law: "In one of the following circumstances, the contract is invalid:... the illegal purpose is (III) covered up in a legal form", so Fenghua Energy Company's appeal on the validity of the equity transfer agreement involved in the case is not established, the Court does not support it, and the first instance judgment of the equity transfer agreement involved in the case is invalid and not improper.

(2017) Su 04 Min Zhong No. 744 Judgment holds that: from the content point of view, it is essentially the transfer of the investment and development rights of the relevant project (photovoltaic power station investment and construction indicators). The agreement violates the state's stipulation that "the project unit shall not change the important matters of the photovoltaic power station project filing documents by itself, including the main boundary conditions such as the project investment subject, project site, construction scale and so on." the evidence provided by the company can not prove that the two sides have fulfilled the cooperation agreement. In the trial, the company claimed that the investment subject changed and only needed to be re-filed. However, the contract involved in the case should be invalid if the company could not prove that the above-mentioned acts could be ratified by re-filing.

▶The lawyer tendentious point of view:

The validity of "buying and selling road strips" cannot be generalized. The buying and selling of road strips for wind power projects is invalid, while the buying and selling of road strips for photovoltaic projects is valid for the following reasons:

According to the relevant provisions of the catalogue of investment projects approved by the government (2016 version), the administrative measures for the development and construction of offshore wind power and the administrative measures for the approval and filing of enterprise investment projects, the development of wind power projects shall be approved by the investment department of the State Council and the investment department of the provincial government, and the "approval" belongs to the administrative licensing matters. According to the relevant provisions of the "Administrative Licensing Law", administrative licenses obtained in accordance with the law shall not be transferred except as stipulated by laws and regulations in accordance with legal conditions and procedures. Therefore, the act of "buying and selling roads" of wind power projects is invalid due to violation of the mandatory provisions of laws and administrative regulations.

Although the road sales of photovoltaic projects also violate the relevant industry regulatory regulations, the regulations are all departmental regulations and normative documents. The documents are mainly for the management mandatory regulations on the filing and management of photovoltaic power generation projects, rather than laws and administrative regulations. In addition, from the perspective of whether it violates the public interest, "road sales" is a commercial transaction between equal subjects, it is to value the preliminary work of the project. The agreement signed by both parties based on the true intention should be protected by law. Moreover, the project grid-connected electricity price also has corresponding standards, which will not cause damage to the overall and public interests. Therefore, the behavior of "buying and selling roads" in photovoltaic projects is effective.