【Summary】

In June 2021, Jiangsu Longyuan Zhenhua Marine Engineering ., Ltd. (hereinafter referred to as “Longyuan Zhenhua”) signed an Engineering Construction Contract with Shengzhi Wind Power Technology (Shanghai) Co., Ltd.(hereinafter referred to as “Shengzhi”) for the installation and construction of wind turbines for an offshore wind power project, agreeing that Shengzhi would provide ship equipment to cooperate with Longyuan Zhenhua’s construction. Zhongcheng Non-financing Guarantee(Shenzhen) Co., Ltd. (hereinafter referred to as “Zhongcheng”) accepted Shengzhi 's commission to provide guarantee to Longyuan Zhenhua, who paid Shengzhi 5 million yuan in advance for the construction costs. In August 2021, “Shengzhi 1”, the ship used by Shengzhi for construction, arrived at the periphery of the wind farm, but the actual construction configuration of the ship did not meet the technical requirements. Although Shengzhi made several commitments, the "Shengzhi 1" ship still could not meet the offshore wind turbine lifting needs. In September 2021, Shengzhi applied to Longyuan Zhenhua to terminate the contract involved in the case. Both parties confirmed that until the installation of all the wind turbines in the project was completed, “Shengzhi 1” failed to meet the on-site construction conditions and did not proceed with on-site construction. Due to Shengzhi 's failure to refund, Longyuan Zhenhua appealed to Nanjing Maritime Court, requesting confirmation that the contract signed by both parties had been terminated, that Shengzhi should return the prepaid project payment and pay the liquidated damages, and that Zhongcheng should assume the responsibility of guaranteeing the refund of Shengzhi.

【Judgment】

After trial, the court held that the installation of offshore wind turbines should have corresponding qualifications according to the relevant laws and regulations, and because Shengzhi had no professional contracting qualification or labor subcontracting qualification of offshore wind power engineering, the construction contract signed by Longyuan Zhenhua and Shengzhi Company should be invalid, and the guarantee provided by Zhongcheng should also be invalid. Accordingly, Shengzhi was ordered to return Longyuan Zhenhua's project advance payment of 5 million yuan in accordance with the law, and other litigation claims of Longyuan Zhenhua were dismissed. After the verdict, neither party appealed.

【Significance】

Under the guidance of the carbon peaking and carbon neutrality goals，offshore wind power has become an important sector in driving the development of renewable energy in China. The lawful regulation of the offshore wind power construction market is of great significance in ensuring the high-quality development of the marine economy. Engineering quality is the lifeline of engineering construction. Compared to onshore wind power, the installation cost of offshore wind power facilities is higher,and the construction difficulty is greater. Thereby, enterprises must possess legal qualifications and construction capabilities to carry out offshore wind power, coastal and offshore engineering construction. In this case, without the qualifications and corresponding capabilities for offshore wind power engineering construction, the defendant's construction platform has always been unable to meet construction needs, resulting in obstacles to the original construction arrangements and the inability to fulfill the contract. During the litigation process, although the parties requested the termination of the contract, the court, based on a comprehensive investigation of the facts of the case, determined that the contract involved was invalid in accordance with the law, and reasonably determined the rights, obligations and legal responsibilities of all parties. This case has positive guiding significance for regulating the order of offshore engineering construction such as offshore wind power, helping market entities prevent and resolve risks, and creating a fair and orderly market competition environment.

[Case No.] （2022）Su72Minchu No.1534