A NSW court has thrown out the conviction of a former resources minister and ordered a retrial over his role in the granting of a coal exploration licence in 2008.

Ian Macdonald had been serving a 10-year jail sentence after being found guilty of public misconduct over the granting of the Doyles Creek exploration licence in the NSW’s Hunter Valley.

The licence was granted to Doyles Creek Mining in December 2008, but the company was eventually taken over by NuCoal Resources (ASX:NCR).

The government passed legislation in January 2014 revoking the licence after the State’s Independent Commission Against Corruption recommended cancelling it because of the “allegedly” corrupt way in which it was granted.

Following a court case that found Mr Macdonald and his friend, former union boss John Maitland, guilty, the pair lodged an appeal.

Mr Maitland had been charged as an accessory because at the time he was the chairman and a shareholder in Doyles Creek Mining, and the sale of his shares to NuCoal under the takeover deal netted him $6m.

The NSW Court of Appeal has now quashed the conviction and ordered a new trial for both men.

The convictions were thrown out because “the court held that the trial judge had misdirected the jury as to the state of mind required to be found guilty of the offence of wilful misconduct in public office”.

The appeal judgement said that “the trial judge should have directed the jury that Mr Macdonald could only be found guilty if the power to grant consent to apply for an exploration licence and the power to grant the exploration licence would not have been exercised, except for the illegitimate purpose of conferring a benefit on Mr Maitland and Doyles Creek Mining Pty Ltd.”

In April 2015, NuCoal lost its court challenge over the cancellation of the licence.

Five years after NuCoal’s Doyles Creek licence was cancelled, the junior explorer is still fighting for compensation.

The company is pursuing legal action domestically and internationally.

NuCoal’s shares climbed as much as 50 per cent to an intra-day high of 1.5c on Monday on the back of the news, before edging back to 1.2c.

Stockhead is seeking comment from NuCoal on the potential implications the decision will have for the company.