A contract dispute case involving [Company Name] Holding Co., Ltd. (formerly [Company Name] Limited), Shenyang [Company Name] Real Estate Development Co., Ltd., the Shenyang Land Trading Center, and the Urban Construction Bureau of Huanggu District, Shenyang City.

Keywords: Investment Agreement, Land Grant

Key points for the referee: 
1. The contents of documents such as the “Investment Agreement” signed between the government and enterprises during the process of attracting investment are binding on both parties. Provided they do not violate any prohibitive provisions of the law, both parties shall abide by these agreements and fulfill their obligations accordingly; otherwise, they shall bear the corresponding liability for breach of contract. 
2. The “Investment Agreement” signed as a result of government-led investment promotion activities differs in nature from the separate civil legal acts—such as land transfer agreements—that various government departments enter into with investors to fulfill the Investment Agreement itself. In the course of case adjudication, these two types of actions cannot be considered in isolation. Instead, attention should be paid to the high degree of interrelation among the various government departments, and the civil acts undertaken by these departments in fulfillment of the Investment Agreement should be evaluated as a whole when determining the basic facts of the case.

Facts of the Case: The construction project involving the disputed plot was the result of efforts made in 2009 by the then-Mayor of Shenyang to attract investment from Hong Kong. Subsequently, the plaintiff, No. 1 [Company Name] Holding Co., Ltd. (hereinafter referred to as “Nanhua Company”), entered into an “Investment Agreement” and a “Supplementary Agreement” with the defendant, the Urban Construction Bureau of Huanggu District, Shenyang City (hereinafter referred to as “Huanggu District Urban Construction Bureau”), which served as concrete measures to implement the investment attraction project. Meanwhile, the plaintiff No. 2, Shenyang [Company Name] Real Estate Development Co., Ltd. (hereinafter referred to as “Shenyang [Company Name]”), is a project company specifically established by [Company Name] pursuant to the terms of the “Investment Agreement” to fulfill its obligations under that agreement with respect to the plot in question. 
In March 2010, a certain entity in Shenyang won the bid for the land parcel in question through an open auction process, paying a total price of 1.176 billion RMB. It then signed a “Land Transaction Confirmation Letter” with the defendant, the Shenyang Land Trading Center. At the same time, it paid an initial down payment of 235 million RMB, equivalent to the agreed-upon 20% of the total land transfer price. Of the land transfer proceeds collected, approximately 47.39 million RMB was remitted to the Shenyang Municipal Finance Bureau, while the remaining amount—about 187 million RMB—was transferred to the Huanggu District Government for land acquisition compensation. 
Subsequently, the Urban Construction Bureau of Huanggu District and the Huanggu District Government repeatedly cited changes in national policies—specifically, that the down payment ratio must not be lower than 80%; otherwise, the demolition permit could not be obtained, and demolition activities could not be initiated—demanding that Shenyang某某 Company make up for the land transfer payment. Shenyang某某 actively communicated and coordinated with both the district and municipal governments, yet no resolution was reached. As of September 2015, no demolition work had been carried out on the plot in question, and the government had taken no measures to prevent further losses. Moreover, the 235 million yuan paid by Shenyang某某 for the land had still not been returned. Although the Shenyang Municipal Government held multiple meetings and issued several “Minutes of Meetings” deciding that the party holding the funds should return the principal and interest to Nanhua, the Huanggu District Government and the Land Trading Center refused to pay interest, insisting that Shenyang某某 accept a proposal for repayment of the principal without interest. Consequently, the two plaintiffs had no choice but to seek a legal resolution to the issue of interest payments on the disputed funds, filing a lawsuit with the Liaoning Provincial Higher People’s Court and asserting the following claims: First, rescind the “Investment Agreement” and its supplementary agreement signed between Nanhua Real Estate Co., Ltd. and the Huanggu District Urban Construction Bureau; Second, rescind the “Transaction Confirmation Letter” signed between Shenyang某某 Company and the Shenyang Land Trading Center (given that the Shenyang Land Trading Center had verbally agreed on numerous occasions to return the entire land payment already made, there is currently no dispute between the parties regarding this issue; therefore, the plaintiffs are temporarily withholding their claim for the return of contract payments but reserve the right to pursue such claims later); Third, order the Huanggu District Urban Construction Bureau to pay Nanhua Real Estate Co., Ltd. the actual loss of 1,401,821 yuan caused by its breach of the “Investment Agreement,” which rendered the agreement unenforceable; and hold the Huanggu District Government jointly and severally liable for this loss; Fourth, order the Shenyang Land Trading Center to pay Shenyang某某 Company a total of 190,021,471.76 yuan for actual losses and lost expected profits resulting from its breach of the “Transaction Confirmation Letter.” Of this amount, the interest loss on the 235 million yuan already paid under the contract is calculated based on the contemporary loan interest rate set by the People’s Bank of China until the date of repayment; as of August 31, 2015, the interest loss totaled 83,655,886.76 yuan. The land appreciation loss amounts to 100 million yuan (the total loss should have been 386.17 million yuan; in this lawsuit, the plaintiffs only claim 100 million yuan, reserving the right to pursue the remaining 286.17 million yuan at a later date). Other losses amount to 6,365,585 yuan; Fifth, order the Municipal Land and Resources Bureau to bear joint and several liability for the fourth claim; Sixth, order the District Government to bear joint and several liability for the fourth claim.Seventh, order the Municipal Finance Bureau to bear joint and several liability for the corresponding interest loss on the 47.39 million yuan portion of the total land price involved in the fourth claim. Following the judgment of the Liaoning Provincial Higher People’s Court: First, rescind the “Investment Agreement” and its supplementary agreement signed between Nanhua Real Estate Co., Ltd. and the Huanggu District Urban Construction Bureau; Second, rescind the “Transaction Confirmation Letter” signed between Shenyang某某 Company and the Shenyang Land Trading Center; Third, within 10 days after the judgment takes effect, the Shenyang Land Trading Center shall pay Shenyang某某 Company interest on the principal amount of 235,362,120 yuan (calculated from March 3, 2010, until the date of repayment of the principal amount, at the contemporary loan interest rate set by the People’s Bank of China); Fourth, within 10 days after the judgment takes effect, the Shenyang Land Trading Center shall also pay Shenyang某某 Company the actual expenses incurred from the company’s establishment in 2010 until the date of filing the lawsuit—expenses related to maintaining normal business operations and the development and construction of the plot, which have been recorded in the company’s accounts and amount to 6,365,585 yuan; Fifth, the Huanggu District Urban Construction Bureau shall bear joint and several liability for the third and fourth judgments above; Sixth, dismiss all other claims of the plaintiffs. If the monetary obligations specified in the judgment are not fulfilled within the prescribed period, the debtor shall, in accordance with Article 253 of the Civil Procedure Law of the People’s Republic of China, pay double the interest on the delayed debt during the period of delay. The case filing fee of 998,917 yuan shall be borne equally by the Shenyang Land Trading Center and the Huanggu District Urban Construction Bureau, each paying 50%. 
After the first-instance judgment was rendered, both the Shenyang Land Trading Center and the Huanggu District Urban Construction Bureau filed appeals, requesting that the original judgment be reversed and the claims of the two plaintiffs be dismissed, or that the case be remanded for a new trial. Subsequently, following a hearing before the Second Circuit Court of the Supreme People's Court, the final judgment in this case is as follows: First, the first, second, third, fifth, and sixth items of the civil judgment (2015) Liaomin No. 00041 issued by the Liaoning Provincial Higher People's Court are upheld, namely: “1. The Investment Agreement and its supplementary agreement signed between Nan Moumou Co., Ltd. and the Huanggu District Urban Construction Bureau of Shenyang City shall be terminated; 2. The Confirmation Letter of Transaction for the Parcel at No. 63 Ningshan Middle Road signed between Shenyang Moumou Real Estate Development Co., Ltd. and the Shenyang Land Trading Center shall be terminated; 3. Within 10 days after the judgment becomes effective, the Shenyang Land Trading Center shall pay interest to Shenyang Moumou Real Estate Development Co., Ltd., calculated on the principal amount of RMB 235,362,120 (from March 3, 2010, until the date the principal amount of RMB 235,362,120 is paid in full, at the contemporary loan interest rate set by the People's Bank of China); 5. The Huanggu District Urban Construction Bureau of Shenyang City shall bear joint and several liability for compensation with respect to the third and fourth items of the judgment; 6. The other claims of the plaintiffs are dismissed.” Second, item four of the civil judgment (2015) Liaomin No. 00041 issued by the Liaoning Provincial Higher People's Court is amended to read: Within 10 days after the judgment becomes effective, the Shenyang Land Trading Center shall compensate Shenyang Moumou Real Estate Development Co., Ltd. for its operational losses in the amount of RMB 4,026,831.98.

Judgment: In this case, the Supreme People's Court has issued a final judgment as follows: First, the Investment Agreement and its supplementary agreement signed between Nan Moumou Co., Ltd. and the Urban Construction Bureau of Huanggu District, Shenyang City, are hereby terminated; Second, the Confirmation of Transaction for the Land Parcel at No. 63, Ningshan Middle Road, signed between Shenyang Moumou Real Estate Development Co., Ltd. and the Shenyang Land Trading Center, is hereby terminated; Third, within 10 days after the judgment becomes effective, the Shenyang Land Trading Center shall pay interest to Shenyang Moumou Real Estate Development Co., Ltd., calculated on the principal amount of RMB 235,362,120 (starting from March 3, 2010, and continuing until the date the principal amount of RMB 235,362,120 is paid in full, at the prevailing loan interest rate set by the People's Bank of China); Fourth, the Urban Construction Bureau of Huanggu District, Shenyang City, shall bear joint and several liability for compensation with respect to the above-mentioned items three and four; Fifth, within 10 days after the judgment becomes effective, the Shenyang Land Trading Center shall compensate Shenyang Moumou Real Estate Development Co., Ltd. for its operational losses in the amount of RMB 4,026,831.98.

Reasons for the Ruling: The Supreme People's Court holds that there are two key issues in this case: First, determining the liability for breach of contract—specifically, whether the Shenyang Land Trading Center and the Huanggu District Urban Construction Bureau bear responsibility for breach of contract; and second, identifying the party responsible for and quantifying the operational losses claimed by Shenyang某某 Company. 
I. On the Determination of Liability for Breach of Contract 
On November 2, 2009, the Urban Construction Bureau of Huanggu District and Nan Hua Company signed an “Investment Agreement,” which represented a preliminary intention and framework agreement reached by both parties regarding the development of the land in question. The agreement stipulated that “upon the successful auction of the land parcel, Party B shall pay a down payment equal to 20% of the total land price specified in the ‘Transaction Confirmation Letter’ (including the bidding deposit), with the remaining balance to be paid according to the progress of demolition and relocation.” In accordance with the principle of contractual relativity, the contents of the aforementioned agreement should be binding on both the Huanggu District Urban Construction Bureau and Nan Hua Land Development Company. Subsequently, Nan Hua Land Development Company established Shenyang某某 Company, which, by participating in the land auction procedure, successfully won the right to acquire the land in question. On March 3, 2010, the Shenyang Land Reserve Trading Center issued a “Transaction Confirmation Letter” to Shenyang某某 Company, confirming the location, area, price, and payment terms of the land acquired by Shenyang某某 Company. This confirmation letter was duly stamped and confirmed by both the Shenyang Land Reserve Trading Center and Shenyang某某 Company, thus becoming legally binding on both parties. The confirmation letter further stipulated that “the successful bidder shall pay 20% of the total land transaction price as a down payment on the day of the transaction, with the remaining balance to be paid in advance according to the progress of demolition and relocation of the land parcel, and the entire balance must be fully paid within one year from the date of the land transaction.” After Shenyang某某 Company paid the 20% down payment as agreed in the confirmation letter, the Shenyang Land Trading Center began urging Shenyang某某 Company to pay the remaining land price. Shenyang某某 Company argued that it had already paid the down payment as stipulated in the contract; however, since the demolition and relocation work for the land parcel had not yet been initiated, Shenyang某某 Company refused to pay the full remaining balance, thereby giving rise to a dispute between the two parties. 
The Supreme People’s Court held that, first, regarding whether the Shenyang Land Trading Center should bear liability for breach of contract: According to the contractual agreement and considering the relevant evidence in this case, on the date the land parcel was sold, Shenyang Company X paid 20% of the total land transaction price—amounting to RMB 235,362,120—as a down payment, which complied with the terms of both the “Investment Agreement” and the “Transaction Confirmation.” Shenyang Company X argued that the remaining balance should be paid according to the progress of the demolition project, a position supported by contractual provisions. However, after Shenyang Company X had paid the agreed-upon down payment for the land, the Huanggu District Government and the relevant departments failed to obtain the “Demolition Permit” nor did they initiate any other demolition work. Under these circumstances, Shenyang Company X was entitled to refuse to pay the remaining land purchase price. As the counterparty to the contract, the Shenyang Land Reserve Trading Center was unable to provide the corresponding land as agreed upon in the contract, thus constituting a breach of contract toward Shenyang Company X. After the Shenyang Land Reserve Trading Center was split into the Shenyang Land Reserve Center and the Shenyang Land Trading Center, the relevant rights and obligations were assumed by the Shenyang Land Trading Center. Therefore, the Shenyang Land Trading Center should bear liability for breach of contract toward Shenyang Company X. Second, regarding the issue of joint and several liability of the Huanggu District Urban Construction Bureau: Although the Huanggu District Urban Construction Bureau claimed that it was not a party to the “Transaction Confirmation” between the Shenyang Land Trading Center and Shenyang Company X, but rather only a party to the framework “Investment Agreement,” the “Investment Agreement” served as the premise and foundation for the “Transaction Confirmation.” The investment and development relationship between the two parties clearly exhibited characteristics of attracting investment. As analyzed in the original judgment, the Huanggu District Urban Construction Bureau had a highly correlated relationship of rights and obligations with several other government departments. Thus, the Huanggu District Urban Construction Bureau and the Shenyang Land Trading Center could be regarded as a single overarching contracting party, each bearing the obligation to perform the relevant actions as stipulated in the contract. In this case, the Huanggu District Urban Construction Bureau effectively acted in the capacity of the demolisher. The failure to fulfill the “Investment Agreement” and the “Transaction Confirmation” was directly related to the Huanggu District Government and the Huanggu District Urban Construction Bureau’s delay in initiating the demolition process. Therefore, the original judgment holding the Huanggu District Urban Construction Bureau jointly and severally liable for the debts of the Land Trading Center was legally sound. 
II. Issues Regarding the Assumption of Breach Damages and the Determination of Their Amount 
Article 97 of the Contract Law of the People's Republic of China stipulates that after a contract is terminated, the parties are entitled to claim compensation for losses incurred. The breaching party shall bear liability for damages arising from the non-breaching party’s losses fully suffered as a result of the breach. In this case, according to the Investment Agreement signed between the Urban Construction Bureau of Huanggu District and Nanhua Real Estate Company, the Urban Construction Bureau of Huanggu District selected Nanhua Real Estate Company as the sole developer, and Nanhua Real Estate Company undertook to register a wholly-owned real estate development company in Huanggu District, Shenyang City, Liaoning Province, prior to bidding for land use rights. The Shenyang Company specifically established by Nanhua Real Estate Company has a business scope that includes the development of the land involved in the case and the sale of commercial housing. After its establishment, Shenyang Company did not engage in any other business activities. Therefore, the normal operating expenses of Shenyang Company constitute expenses incurred in performance of the contract at issue and fall within the scope of direct losses. As the breaching party, the Shenyang Land Trading Center should therefore bear liability for compensation. 
Regarding the determination of the amount of loss. In the second instance, Shenyang [Company Name] submitted its “Detailed Ledger,” which documented the company’s operating expenses from 2010 to 2015, covering four major categories and 26 specific expense items: development indirect costs totaling 851,255.12 yuan, fixed assets amounting to 3,300 yuan, management expenses totaling 3,195,973.32 yuan, and financial expenses totaling 2,298,246.54 yuan, for a total of 6,345,474.98 yuan. Upon examination, the “Detailed Ledger” provided by Shenyang [Company Name] showed that business entertainment expenses under the category of development indirect costs amounted to 14,960.60 yuan, while under the category of management expenses, such expenses totaled 2,318,643 yuan. The business entertainment expenses under management expenses exceeded one-third of the company’s total operating expenses, clearly exceeding a reasonable range. Moreover, the appellant raised objections, and Shenyang [Company Name] failed to provide a reasonable explanation. Therefore, this court reduces the amount of operating loss determined in the original judgment that Shenyang Land Trading Center is required to bear for Shenyang [Company Name]. Specifically, Shenyang Land Trading Center shall compensate Shenyang [Company Name] for operating losses in the amount of 4,026,831.98 yuan. 
In addition, when Shenyang [Company Name] and Nanhua Land Development Company filed their lawsuit, they raised seven claims. The first-instance judgment fully upheld the first and second claims but only partially upheld the amount of damages claimed in the fourth claim; the remaining claims were dismissed. Given that Shenyang [Company Name] and Nanhua Land Development Company achieved partial victory and partial defeat, the original first-instance judgment ordered that the case filing fee be borne entirely by the Shenyang Land Trading Center and the Huanggu District Urban Construction Bureau—thus violating the civil litigation principle that litigation costs should be borne by the losing party. Accordingly, this court has adjusted the ruling in accordance with the law.

Relevant statutory provisions: 
Contract Law: 
Article 94 
【Statutory Termination of Contract】 A party may terminate the contract if any of the following circumstances exists: 
(1) The purpose of the contract cannot be achieved due to force majeure; 
(2) Before the expiration of the performance period, one party explicitly states or demonstrates through its conduct that it will not perform the principal obligation; 
(3) One party to the contract delays in performing the principal obligation and, after being urged to do so, still fails to perform within a reasonable period of time; 
(4) One party’s delay in performing its obligations or other breach of contract renders it impossible to achieve the purpose of the contract; 
(5) Other circumstances prescribed by law. 
Article 97 
【Effect of Termination】 After a contract is terminated, any obligations that have not yet been performed shall cease to be performed; as for those already performed, depending on the nature of the performance and the terms of the contract, the parties may request restoration to the original state, take other remedial measures, and are entitled to claim compensation for losses. 
Article 113 
【Scope of Damages】If one party fails to perform its contractual obligations or performs them in a manner that does not conform to the agreed terms, causing loss to the other party, the amount of damages shall be equivalent to the loss caused by the breach, including the benefits that could have been obtained had the contract been performed. However, such damages shall not exceed the loss that the breaching party could have foreseen or ought to have foreseen at the time of entering into the contract as a result of the breach.

Lawyer’s Perspective: 
First, the defendant, Shenyang Land Trading Center (hereinafter referred to as the “Land Trading Center”), failed to perform its obligations under the “Confirmation of Transaction for the Parcel at No. 63 Ningshan Zhonglu” (hereinafter referred to as the “Transaction Confirmation”), specifically regarding the demolition work on the parcel in question and the timely delivery of the parcel to Shenyang [Name]. Such failure constitutes a breach of contract. As a result of this breach, it is now impossible to complete the demolition work on the parcel according to the schedule stipulated in the contract, and the purpose of the Transaction Confirmation can no longer be achieved. Therefore, Shenyang [Name] is entitled to request the People’s Court to rescind the Transaction Confirmation in accordance with the law.

On March 3, 2010, Shenyang某某 obtained the land parcel in question through a public bidding process and signed a “Transaction Confirmation Letter” with the Land Trading Center on the same day. According to Article 4 of the “Transaction Confirmation Letter,” which stipulates that “Upon winning the bid for the land, Party B shall pay a down payment equal to 20% of the total land price specified in the ‘Land Transaction Confirmation Letter’ (including the bid bond), with the remaining balance to be paid in advance according to the progress of demolition and relocation,” Shenyang某某 paid the initial land payment (including the bid bond) of RMB 235,362,120 to the Land Trading Center. However, the Land Trading Center failed to carry out the demolition of the land parcel as agreed upon in the “Transaction Confirmation Letter,” nor did it deliver the land to Shenyang某某 on time. As of the date of the court hearing, no progress had been made at all in the demolition work on the land parcel. Since the signing of the “Transaction Confirmation Letter,” Shenyang某某 has repeatedly contacted government departments at various levels in Shenyang, seeking their assistance in expediting the demolition work and promptly signing the “Land Use Right Transfer Contract.” Yet, despite numerous attempts at negotiation, no agreement has been reached. 
In fact, after the “Confirmation of Transaction” was signed, the third party in this case—the People’s Government of Huanggu District, Shenyang City (hereinafter referred to as the Huanggu District Government)—entered into a demolition contracting agreement with the Land Trading Center, under which the Huanggu District Government undertook responsibility for the demolition work on the land parcel in question. However, since receiving from the Land Trading Center the sum of 187 million yuan earmarked for the demolition of the land parcel, the Huanggu District Government has consistently failed to initiate any demolition activities on the parcel. Instead, it has repeatedly demanded that Shenyang某某 continue to pay the land premium, citing as justification the provisions of Document No. 74 [2009] issued by the Finance and Comprehensive Department and Document No. 34 [2010] issued by the Ministry of Natural Resources and Land, which stipulate that the initial payment for land transfer fees must be no less than 50% of the total land price. Otherwise, the demolition permit cannot be processed. The aforementioned Document No. 74 was issued in mid-November 2009, and Document No. 34 was issued on March 8, 2010. Yet, the initial down payment ratio for the land transfer fee for the land parcel in question—20%—had already been set forth in the “Investment Agreement” signed on November 2, 2009 between Hong Kong Nam Wah Properties and the Huanggu District Urban Construction Bureau. Moreover, the “Confirmation of Land Transaction” signed on March 3, 2010 explicitly stipulated that the initial down payment for the land premium for this parcel would also be 20%. Furthermore, the minutes of the Shenyang Municipal Government’s meeting No. 14 held at the beginning of 2010 also confirmed that, in order to uphold the government’s credibility, the initial down payment ratio for the land parcel in question would be implemented at 20%. 
In addition, regarding the issuance of the demolition permit, since the “Transaction Confirmation Letter” stipulated that the land to be transferred was “clean land,” Shenyang [Company Name] also paid the initial land payment at the agreed-upon clean land price. Obtaining the demolition permit is a prerequisite for bringing the land in question up to clean land standards; it is not part of the demolition work itself. Issuing the demolition permit is an obligation of the Huanggu District Government and is unrelated to Shenyang [Company Name]. 
Moreover, it is particularly important to emphasize that in this case, the special characteristics of government departments should be fully taken into account. The Land Trading Center, the Huanggu District Government, the Huanggu District Urban Construction Bureau, and the Municipal Finance Bureau are all functional departments under the unified leadership of the Shenyang Municipal Government. Each of these departments has entered into multiple contracts with Nan Hua Company and a certain entity in Shenyang, within the scope of its respective authority. Furthermore, the Land Trading Center and the Huanggu District Government have also signed a demolition compensation agreement. The purpose of all these contracts is to facilitate and implement the specific procedures and steps required for the municipal government’s investment promotion project (the plot at No. 63 Ningshan Middle Road). None of these contracts can be considered independently; they are highly interrelated and must be viewed as a whole. 
In summary, the Land Trading Center and the Huanggu District Government failed to carry out the demolition work on the land parcel in question as agreed upon in the “Transaction Confirmation Letter,” resulting in a substantial increase in demolition costs. It is now impossible to complete the demolition work according to the demolition methods and land payment terms stipulated in the “Transaction Confirmation Letter.” Consequently, Shenyang [Company Name] can no longer obtain the right to use the land parcel as agreed in the “Transaction Confirmation Letter.” Therefore, after Shenyang [Company Name] paid the initial land payment, the failure of the Land Trading Center to initiate the demolition work as agreed constitutes a breach of contract. As the entity responsible for the demolition, the Huanggu District Government bears an inescapable responsibility for this breach. In accordance with Article 94, Paragraphs (3) and (4) of the Contract Law—“Where one party delays in performing its principal obligation and fails to perform within a reasonable period following a reminder;” and “Where one party’s delay in performing its obligation or other breach of contract renders it impossible to achieve the purpose of the contract”—Shenyang [Company Name] is legally entitled to request the People’s Court to rescind the “Land Transaction Confirmation Letter” signed by both parties. 
II. In accordance with Articles 97 and 113 of the Contract Law, the Land Trading Center shall bear liability for compensation totaling RMB 190,021,471.76 for all losses incurred by Shenyang [Name] due to the termination of the “Transaction Confirmation Letter” resulting from its breach of contract (including direct losses and loss of interest for late payment), as detailed below: 
1. The Land Trading Center shall compensate Shenyang [Name] for the interest loss on the land payment already made (calculated at the People's Bank of China’s benchmark lending rate up to August 31, 2015), totaling RMB 83,655,886.76. 
Shenyang [Name] paid the initial land payment (including the bid bond) of RMB 235,362,120 to the Land Trading Center in fulfillment of the “Transaction Confirmation.” Subsequently, since the Land Trading Center failed to fulfill its obligations under the “Transaction Confirmation” regarding demolition and land delivery, and has yet to return the aforementioned payment, the Land Trading Center should compensate Shenyang [Name] for the interest loss on the land payment already made, calculated at the benchmark lending rate set by the People's Bank of China, totaling RMB 83,655,886.76. 
2. The land trading center shall compensate Shenyang某某 for the expected profit of RMB 100 million that could have been earned from the appreciation of the land parcel involved in the case. 
On September 9, 2015, a certain individual from Shenyang entrusted Liaoning Beichen Land Asset Evaluation Co., Ltd. to conduct an appraisal, which determined the current value of the land parcel located at No. 63 Ningshan Road to be RMB 3,107,619,200. After deducting the total land price agreed upon in the “Transaction Confirmation Letter,” which amounts to RMB 11,768.106 million, the appreciation of the land parcel involved in this case is RMB 19,308.086 million. 
Due to the default behavior of the land trading center, the demolition work on the plot in question has remained indefinitely stalled, preventing Shenyang [Company Name] from paying the full land price and acquiring the land-use rights as agreed upon in the “Transaction Confirmation Letter.” Furthermore, the construction project on the plot has failed to proceed as scheduled, resulting in a loss of expected profits for Shenyang [Company Name]. Therefore, the loss of expected profits suffered by Shenyang [Company Name] due to the appreciation of the plot should be calculated at 20% of the plot’s increased value, amounting to 386.17 million yuan. In this lawsuit, Shenyang [Company Name] is seeking compensation of 100 million yuan. 
3. The land trading center shall compensate Shenyang Moumou for various other losses totaling 6,365,585 yuan RMB. 
According to the provision of Article 6 of the Investment Agreement signed between the plaintiff, Nan Hua Company, and the defendant, Huanggu District Urban Construction Bureau, Nan Hua Company established Shenyang [Name Redacted], which is specifically responsible for investing in and constructing the project on the plot located at No. 63 Ningshan Road. The purpose of establishing Shenyang [Name Redacted] is to acquire the plot at No. 63 Ningshan Road. The business scope stated in its business license is: “Real estate development, leasing of self-owned properties, and property management. (For businesses requiring licenses, operations shall be conducted only with the relevant permits.) For projects that are legally required to obtain approval, business activities may only commence after obtaining approval from the relevant authorities.” The business scope indicated in its “Approval Certificate for Enterprises Invested by Taiwan, Hong Kong, Macao, and Overseas Chinese” is: “Real estate development and sale of commercial housing developed by this company (the project’s land boundaries are as follows: east to Changjiang Street, west to Jinshajiang Street, south to the planned road, and north to Ningshan Middle Road; land parcel number: 2010-010, plot at No. 63 Ningshan Middle Road; project name: Beixing Central Plaza); leasing of self-owned properties.” 
According to Article (1) of Document No. 171 [2006] issued by the Ministry of Construction, “Opinions on Regulating Foreign Investment Access and Management in the Real Estate Market,” which states: “(1) Foreign institutions and individuals investing in and purchasing non-self-use real estate within China shall adhere to the principle of commercial presence and, in accordance with relevant regulations governing foreign-invested real estate enterprises, apply for the establishment of a foreign-invested enterprise. Only after obtaining approval from the relevant authorities and completing the requisite registration procedures may such enterprises engage in related business activities within the scope of their approved business operations.” and Article (3): “(3) The establishment of foreign-invested real estate enterprises shall be approved and registered in accordance with the law by the competent commerce authorities and the administration for industry and commerce, which shall issue a one-year ‘Approval Certificate for Foreign-Invested Enterprises’ and a ‘Business License.’ After the enterprise has fully paid the land-use right transfer fee, it may, with these certificates, apply to the land administration department for a ‘Certificate of State-Owned Land Use.’ Based on the ‘Certificate of State-Owned Land Use,’ the enterprise shall obtain a formal ‘Approval Certificate for Foreign-Invested Enterprises’ from the competent commerce authority, then exchange this certificate for a ‘Business License’ with a validity period consistent with that of the ‘Approval Certificate for Foreign-Invested Enterprises’ at the administration for industry and commerce, and finally complete tax registration at the tax authority.” and Article (6): “(6) Foreign investors who have not obtained the ‘Approval Certificate for Foreign-Invested Enterprises’ and the ‘Business License’ shall not engage in real estate development or operational activities,” combined with the scope of business of Shenyang某某, Shenyang某某 is prohibited from engaging in any business activities other than the construction of the plot involved in this case. Since its establishment in 2010, Shenyang某某 has incurred total actual expenses amounting to RMB 6,365,585 to maintain normal company operations and to carry out the construction and development of the plot involved in this case. All of these expenses were caused by the breach of contract committed by the Land Trading Center, and thus Shenyang某某 is entitled to compensation from the Land Trading Center for the aforementioned expenses.