A developer concluded a contract worth nearly RMB 20 million with Xianghe Property in respect of land required for a relocation project. The village committee claimed the money was land requisition compensation payable to it, while Xianghe argued it was payment due under the contract. With principal and interest at RMB 25 million, the dispute turned on characterisation.

Issue

Whether the sum was compensation for expropriation — payable to the collective as land owner — or consideration under a commercial contract, which determines both the recipient and the basis of calculation.

Outcome

The firm acted for Xianghe. The defence established the contractual chain, the performance actually rendered and the parties’ conduct, and the court upheld Xianghe’s entitlement to the payment as contract consideration.