On 7/8, the People's Court of Thai Nguyen province heard an administrative lawsuit between the plaintiff, Dai Bac TNKS Investment Joint Stock Company, and the defendant, the People's Committee of Thai Nguyen province.

According to the lawsuit, Dai Bac TNKS was the investor in a hotel project on nearly 8,300 m2 of prime land on Phan Dinh Phung street in the former Thai Nguyen city, with a total investment of 254 billion VND.

The investment certificate was issued in 2009, but the province did not hand over the land until mid-2014. The company completed site clearance, leveling, and compensation by 2015.

A year later, after a provincial planning adjustment, the land was designated for residential use. In June 2021, the province approved a change to a residential housing project. A year later, the Thai Nguyen Department of Planning and Investment stated the company's proposed adjustments lacked sufficient grounds for implementation.

The administrative lawsuit was heard by the People's Court of Thai Nguyen Province. Photo: Thanh Lam

The administrative lawsuit was heard by the People's Court of Thai Nguyen Province. Photo: Thanh Lam

The company claims it waited for six years (2016-2022) and followed the planning adjustment guidance from authorities, receiving approval, yet the opportunity to develop the project remained uncertain. They "continuously" submitted petitions.

In 2024, the provincial People's Committee issued a land reclamation decision. The lawsuit states that while the company was appealing and seeking resolution, the province approved the auction of the land to another company.

With the lawsuit, the company requests the court to annul the province's land reclamation decision and demands the province pay 35 billion VND for initial investment and site clearance compensation.

At the trial, the summoned individuals and entities, including the chairman of the People's Committee of Thai Nguyen province, Thai Nguyen city, Phan Dinh Phung ward, representatives of these units, and the Department of Finance, requested to be excused.

The deputy director of the Department of Agriculture and Environment and the defendant's legal representative were present.

Thai Nguyen Province: Land handed over for 11 years, but the company "hasn't touched it."

At the court, the deputy director of the Department of Agriculture and Environment affirmed the nearly 8,300 m2 plot was in a "very advantageous location," and the project was "very important." Therefore, the province wished to entrust it to a capable company to promptly build a hotel and contribute to local economic development. However, after two inspections, the province found the company's capacity limited, with only two containers on site. With no construction or other assets inside, it "could not be considered active implementation or construction on the land."

"We acknowledge the delays due to some unavoidable reasons, which is why we requested the company to apply for an extension. Otherwise, we would have reclaimed the land immediately," the deputy director stated.

"In reality, by the time the inspection conclusion was issued, the project was 11 years behind schedule, from 2014 to 2024," he said, adding that authorities had worked with the company's authorized representative multiple times, who signed confirmations and committed to cooperate in resolving the issues, but no progress was made.

Regarding the company's proposal to adjust the project to align with the new planning, the deputy director said the locality held interdisciplinary meetings and consulted the Ministry of Planning and Investment, concluding that converting from a hotel to residential housing was unfounded at that time. The entire project was designated for commercial services, with no residential land allocation.

Thai Nguyen province subsequently issued the land reclamation decision. The province's auctioning of the land after reclamation is "completely unrelated to the company's lawsuit."

In response, Dai Bac company asserted it did not "abandon" the land, citing the completed site clearance, compensation, fencing, and fulfillment of financial obligations.

The company denied "delayed progress," stating the province initially delayed for 5 years, handing over the site in 2014, issuing the land use right certificate in 2015, and yet to grant a construction permit.

"In your opinion, without a land use right certificate or a construction permit, can an investor build on the land? If we built without permission to ensure progress and then violations occurred, who would bear the responsibility?" the company questioned.

In response, the provincial representative stated that according to the Land Law, project delays are calculated from the date of land handover, which is 2009, with no other basis.

The fenced land, filled with construction vehicles, remains without any built structures, facing Phan Dinh Phung street, on 7/8. Photo: Thanh Lam

The plaintiff continued: If the company was truly 11 years behind schedule, as alleged, and subject to reclamation, why did the departments still guide project adjustments, causing "all those years of following the guidance only to have it reclaimed in the end?"

The provincial representative suggested the Department of Finance would have more clarity on this issue but was absent from the trial and he could not answer on their behalf.

The plaintiff cited that in 2017, after an inspection and identification of delays and violations, the province requested two conflicting solutions: "Guidance to urge the investor to adjust the project, concurrently with extending the land use term." Legally, project adjustments are not grounds for extension. Conversely, if an extension is granted, adjustments are not required.

"In your opinion, with two conflicting directives in the document, which should the investor follow?" the plaintiff asked.

Following a brief debate, the province asserted that during the drafting of documents and decisions, "the wording may not have been precise," but in essence, the province issued the reclamation decision in accordance with the law.

He emphasized the company's fault in delaying progress and failing to actively address the issues. "Being allocated land in a very favorable location, yet for a decade, no project was implemented besides site leveling, and the land was even encroached upon without their knowledge, demonstrating very poor implementation responsibility," he assessed.

The representative also cited the law regarding "force majeure," arguing that none of the reasons cited by the company fell under this definition, but were merely "objective conditions." He attributed the delay to the company's weak capacity and lack of commitment to the project.

In the ensuing debate, the plaintiff expressed a continued desire for dialogue and a common understanding of the issues. However, the provincial representatives did not attend any of the three court-mediated reconciliation sessions.

The plaintiff explained they received no guidance from any agency on how to proceed with the conversion or resolve the difficulties to continue the project, resulting in significant losses due to investments, site clearance, and the dedication of resources, time, and effort.

Court dismisses all claims

In the verdict announced on 7/8, the judging panel assessed that the company's claim of project delays due to the reasons stated was inaccurate.

Following changes in provincial planning in 2016, at the province's request, the company adjusted the project into a commercial housing project and received approval. However, in 2021, the Housing Law was amended and supplemented. To implement this type of project, investors must possess legal residential land or obtain permission from the State to convert land use purposes to residential.

In two meetings with Dai Bac company, the relevant departments all agreed that the project lacked residential land, so approving a commercial housing project would be difficult for the authorities.

After consultation, the Ministry of Planning and Investment responded in 4/2022 that approving the company's commercial housing project was not in compliance with legal regulations because the project land was not residential. (According to the Land Use Right Certificate granted to the company, the entire area of over 8,200 m2 was designated for commercial services, with no residential land).

The Department of Planning and Investment therefore issued a document to the company, stating that there were insufficient grounds for implementing the project adjustment, and the explanation provided was reasonable.

In 9/2022, the assigned units coordinated and guided the project termination, but the company neither terminated nor continued the project until the time of reclamation.

According to the court, the issuance of the reclamation decision was necessary. Despite encouragement and persuasion, the company did not hand over the land, necessitating compulsory reclamation.

The court deemed the claims unfounded and therefore dismissed the case.

Thanh Lam