Case

　　2012 Year 6 In the month of [month], Ke, Lin Yi, and Huang signed a contract with Lin Jia and Tang for the contracting of a cave and slab factory. The contract stipulated that Lin Jia and Tang would transfer to them the caves they had already mined (with an area of approximately [area]). 3800 square meters) was contracted out to three individuals, including Ke Mou, for operation and management, with a contract term of 6 Year. Ke and two others had already prepaid the first installment of the contract fee when the contract was signed. 100 Ten thousand yuan, with the agreement that if, within six months after the three parties have paid the first installment of the contract fee, the cave cannot be mined due to government reasons, Lin Jia and Tang must unconditionally refund the entire contract fee in full.

　　2013 Year 1 In the month of [month], Ke and two other individuals filed a lawsuit with the court, requesting that the contract for the cave and board factory subcontracting signed by both parties be declared invalid; Lin Jia and Tang are jointly ordered to return the subcontracting payments made by the three plaintiffs. 100 Ten thousand yuan.

　　Lin Jia filed a counterclaim, requesting that the contract for the cave and board factory be declared invalid and that Ke and two other individuals jointly compensate him and Tang for their economic losses. 100 Ten thousand yuan.

　　Trial

　　The court of first instance held that the defendants Lin Jia and Tang Mou, without obtaining a mining license, subcontracted the cave in question to the plaintiffs Ke Mou, Lin Yi, and Huang Mou, and entered into a contract for the subcontracting of the cave and the slab factory. Given that this contract violates the provisions of the "Mineral Resources Law," it should be deemed invalid. The two defendants shall return the contract payments made by the three plaintiffs. 100 RMB 10,000. The illegal mining activities carried out by the plaintiff and the defendant, as well as the profits they obtained therefrom, will be subject to judicial recommendations sent to the relevant authorities for lawful handling. The defendant, Tang, was summoned by subpoena but failed to appear in court without justifiable reason; therefore, the trial and judgment were conducted in his absence in accordance with the law. Consequently, the contract for the cave and board factory subcontracting is declared invalid. Lin Jia and Tang are ordered to return the subcontracting payments to the three plaintiffs. 100 Ten thousand yuan.

　　Lin Jia, dissatisfied, filed an appeal.

　　The second-instance court held that Lin Jia and Tang Mou, without having obtained mining rights for the cave in question, subcontracted the operation of the cave to Ke Mou and two other individuals. The contract entered into by the parties accordingly does not meet the requirements set forth in Article 6 of the Mineral Resources Law regarding the transfer of prospecting rights and mining rights; therefore, it should be deemed invalid according to law. Lin Jia and Tang Mou failed to obtain mining rights for the cave through lawful application and approval, nor did they acquire a mining permit. Consequently, their claim that Ke Mou and the other two individuals should compensate them for economic losses incurred due to the stone materials lacks both legal and factual basis, and the court does not uphold this claim. Furthermore, their assertion that Ke Mou and the other two individuals should pay for the use of the slab factory and machinery and equipment was unsupported by relevant evidence, and thus lacked factual basis; hence, the court also rejects this claim.

　　The first-instance court’s issuance of judicial recommendations to the relevant authorities for handling the illegal mining activities and proceeds obtained by all parties involved was appropriate and should be upheld. Accordingly, the court rules: Dismiss the appeal and uphold the original judgment.

　　Interpretation

　　In this case, the parties Lin Jia and Tang Mou subcontracted the cave in question to Ke Mou, Lin Yi, and Huang Mou without obtaining a mining permit. The subcontracting agreement was, in effect, a contract for the transfer of mining rights. Although the contract had been concluded, it had not become effective because it had not been approved. Since both parties engaged in illegal mining activities without possessing mining rights or a mining permit, the court of first instance held that a judicial recommendation should be issued to the competent authorities for appropriate handling. The court of second instance upheld this decision. This approach correctly exercised the court’s power of judicial review.

　　In this case, the court’s judicial recommendation addresses the unlicensed mining activities engaged in by both parties. However, in reality, the parties involved in this case have committed not only unlicensed mining but also illegal transfer of mineral rights. Moreover, during the trial, the court has already ruled that the contract through which the parties ostensibly transferred mineral rights via a contracting arrangement was invalid. Therefore, the judicial recommendation should also reflect this illegal transfer of mineral rights.

　　2007 Year 3 Moon ， The Supreme People's Court issued the "Notice on Further Strengthening Judicial Advisory Work to Provide Judicial Services for Building a Socialist Harmonious Society." People's courts at all levels are required to promptly submit judicial recommendations to the relevant authorities whenever they identify issues that are either widespread or warrant attention in their adjudicatory work. They must not simply conclude a case and move on; rather, they should elevate the importance and status of judicial recommendation work to a new level. 2012 Year 3 Moon ， The Supreme People's Court issued the “Notice on Issuing the ‘Opinions on Strengthening the Work of Judicial Suggestions’ by the Supreme People's Court.” Emphasize “ Judicial recommendations are an important duty entrusted to the people's courts by law and constitute an essential part of their work. ” It also clarifies the circumstances under which people's courts should submit judicial recommendations in their trial and enforcement work, and standardizes the unified format, drafting, and submission procedures for judicial recommendation letters.

　　According to relevant regulations and judicial practice, in hearing disputes over mining rights, the People’s Courts may submit judicial recommendations to the competent department of natural resources and land regarding the following circumstances:

　　Unlicensed exploration and unlicensed mining. The main scenarios of unlicensed exploration and unlicensed mining include: conducting mineral exploration without obtaining a mineral resource exploration license, or engaging in mining activities without obtaining a mining license; illegally entering state-planned mining areas or mining areas of significant importance to the national economy for exploration or mining; illegally mining specific mineral types that the state has designated for protective mining; and units or individuals entering the mining areas of state-owned mines or other mines legally established by others for exploration or mining. In addition, both exploration and mining licenses are limited to specific exploration operation zones or mining area boundaries; therefore, any exploration or mining conducted beyond the approved mining area boundaries also falls within the broad category of unlicensed exploration and unlicensed mining.

　　Destructive mining refers to the act of extracting mineral resources in violation of the mineral resource development and utilization plan reviewed and approved by the competent authority for geology and mineral resources, thereby causing damage to these mineral resources.

　　Illegal transfer of mining rights. The transfer of mining rights refers to the act by which a mining rights holder transfers its mining rights, including such transfer methods as sale, contribution of equity in kind, cooperation, and public listing. It also includes acts that, though ostensibly conducted through leasing or mortgage, are in fact disguised forms of transferring mining rights. The transfer of mining rights must meet both substantive and procedural requirements; otherwise, it constitutes an illegal transfer. Furthermore, the transferee of exploration rights or mining rights must satisfy the relevant conditions for applicants of exploration rights or mining rights as stipulated in the "Administrative Measures for the Registration of Mineral Resource Exploration Blocks" or the "Administrative Measures for the Registration of Mineral Resource Exploitation." Procedurally, regardless of the form of mining rights transfer, both parties involved must submit an application to the registration and management authority and, after review and approval, proceed with the registration amendment procedures.

　　Other circumstances. These primarily include: failure to fulfill or violation of the commitment to pay the mining rights fee; improper disposal of mining rights, including illegal leasing of mining rights, illegal mortgaging of mining rights, and violations by entrusted intermediary agencies, bidding evaluation committees, bidders, tenderers, and appraisal institutions in the bidding and auction processes of mining rights—such as failure to comply with legally prescribed bidding and auction procedures; improper disposal of mineral resources, including illegally transferring mineral resources through sale, lease, or other means, and violating regulations regarding the acquisition and sale of mineral products subject to unified state procurement; falsification of exploration qualifications; falsification of geological data, i.e., mining right holders forging or falsifying geological data submissions; obstruction of law enforcement, including refusal to cooperate with, resistance to, or use of violence or threats to impede state officials engaged in the supervision and management of mineral resource exploration and mining from performing their duties according to law; dereliction of duty, where state officials responsible for the supervision and management of mineral resource exploration and mining, staff of approval and administrative authorities, registration and management authorities, and other relevant state personnel, during the performance of their official duties, engage in favoritism, abuse their powers, or neglect their responsibilities; and other circumstances involving mining rights that are regulated by laws and regulations other than those specifically governing mining rights management—for example, theft or robbery of mineral products and other property belonging to mining enterprises and exploration units, destruction of mining and exploration facilities, disruption of production and work order in mining areas and exploration zones, as well as environmental pollution and ecological damage caused during exploration and mining activities.

　　In the above-mentioned circumstances, both administrative penalties and criminal prosecution against the parties involved, as well as administrative disciplinary actions and criminal prosecution against state functionaries, are implicated. When hearing cases involving disputes over mining rights, the People's Courts shall, in such situations, submit judicial recommendations to the relevant administrative authorities, which shall handle the matters in accordance with the law. If the case involves suspected criminal offenses, it shall be promptly referred to the relevant judicial authorities for criminal prosecution in accordance with the law.