Dae Young Construction Co., Ltd. and one other (Law Firm Cheongung, Attorneys Kim Young-ro et al., Counsel for the plaintiff-appellant)

Cheongju-si (Attorney Yu Jae-sung et al., Counsel for the defendant-appellant)

Construction Financial Cooperative (Attorney Jeon Soo-chul, Counsel for the plaintiff-appellant)

may 22, 2007

Cheongju District Court Decision 2005Gahap3493 Decided June 23, 2006

1. Revocation of a judgment of the first instance;

2. All plaintiffs' claims are dismissed.

3. The costs of the lawsuit are assessed against the Plaintiffs.

1. Purport of claim

The defendant shall pay to the plaintiff Dae Young Construction Co., Ltd. 49,500,000 won with 77,000,000 won per annum from the day following the delivery of a copy of the complaint of this case to the day of complete payment.

2. Purport of appeal

The same shall apply to the order.

1. Basic facts

(a) Conclusion of a contract for construction works;

피고는 2002. 5. 28. 백일건설 주식회사(이하 ‘백일건설’이라 한다)를 대표사로 하고 백일건설, 대부건설 합자회사, 주식회사 삼덕건설, 기영종합건설 주식회사로 구성된 공동수급체와 사이에, 명암지━산성간 도로개설공사(이하 ‘이 사건 공사’라 한다)에 대하여 계약금액 25,425,180,000원(부가가치세 포함), 착공일 2002. 6. 3., 준공일 2002. 12. 31.로 하고 공사계약일반조건 및 공사계약특수조건을 적용하기로 하는 내용의 시설공사도급계약을 체결하였고(이하 이 사건 공사계약이라 한다), 위 공동수급체 내부적 도급비율은 백일건설이 50%, 나머지 3개 회사의 합계 비율이 50%{(대부건설 합자회사 25%, 주식회사 삼덕건설 20%, 기영종합건설 주식회사(대흥건설 주식회사로 상호가 변경된 것으로 보인다) 5%}이다.

(b) Conclusion of subcontract agreements;

(1) Construction as a representative of the consortium was executed with the Plaintiff Company each of the instant subcontracts (hereinafter “instant subcontract”) with respect to a part of the instant construction as follows.

① Subcontract to Plaintiff Dae Young Construction Co., Ltd. (hereinafter “Plaintiff Dae Young Construction”).

Contract Date: September 19, 2003

Subcontract Project Details: Earth and Transport Project

Subcontract Amount: 5,189,360,000 won ( per value-added tax)

② Subcontracts to the Plaintiff, Dong Mine Construction Co., Ltd. (hereinafter “Plaintiff Dong Mine Construction”).

Date of contract: December 30, 2002

Subcontract Details: Construction of structures and earth and sand parts

Subcontract Amount: 1,890,020,000 won (value-added tax Note 2) for the part of the structure

earth and sand portion 7,336,560,000 (not including value-added tax Note 3)

Total KRW 9,226,580,000 (=1,890,020,000 + 7,336,560,000)

(2) The instant subcontract provides that the payment of the price per month shall be made once a month without advance payment (Article 6 of the Standard Subcontract Agreement for Construction Works).

(c) Conclusion of advance payment guarantee contracts and advance payment;

(1) On August 9, 2004, with the Defendant’s Intervenor’s Intervenor, entered into an advance payment guarantee contract (hereinafter “the instant guarantee contract”) with the Defendant for the guarantee period of KRW 777,408,00 (the aggregate of KRW 748,00,000 and interest KRW 29,408,00 per annum on a rate of 7% per annum for the advance payment). The guarantee period of the advance payment contract was from August 9, 2004 to March 1, 2005.

(2) On Aug. 10, 2004, the Defendant submitted a guarantee under the instant guarantee agreement from the construction of the white day, and on Aug. 10, 2004, paid KRW 748,00,000 as advance payment for the instant construction (round that time, an amount equal to 50% of the internal shares of the instant construction out of KRW 1,496,00,000 for advance payment paid by the Defendant to the joint contractors in relation to the instant construction).

(3) According to the instant guarantee agreement, where a contractor (a contractor) fails to return an advance payment even though the grounds for return of the advance payment have occurred within the guarantee period, the guarantor (defendant’s Intervenor) shall pay to the secured creditor an advance amount that the contractor must return to the secured creditor within the contract performance date within the scope of the guaranteed amount, but where there is any unpaid amount for the construction works performed by the contractor, it shall be determined that the contractor deducts the unpaid amount.

(d) Default, settlement of accounts, etc. of construction of white days;

(1) As a result of the bankruptcy on February 14, 2005, the management status of the instant construction has rapidly deteriorated, thereby making it impossible to normally perform the instant construction work any longer.

According to the results of the other Section (4) examination conducted on March 14, 2005 for the settlement related thereto, the unpaid progress payment for the construction in the period of the above default was KRW 264,550,000 (the amount equivalent to 50% of the total progress payment for the entire construction in the instant case at KRW 529,100,000) and the unpaid advance payment for the construction in the period of 415,250,000.

(2) 위 부도 당시까지 백일건설에, 원고 대영건설은 이 사건 하도급계약에 따른 총 공사대금으로 422,840,000원을 청구하여, 그 중 106,918,000원만 지급받고, 나머지 315,922,000원(=422,840,000원 ━ 106,918,000원)은 지급받지 못하고 있었고, 원고 동광건설은 이 사건 하도급계약에 따른 총 공사대금으로 1,442,100,000원을 청구하여, 그 중 668,250,000원만 지급받고, 나머지 773,850,000원(=1,442,100,000원 ━ 668,250,000원)은 지급받지 못하고 있었다.

On the other hand, according to the result of the above sagrative test that was implemented for the settlement of the bankruptcy and the waiver of construction, the completion amount of the construction completion of the Plaintiff Dae Young Construction was calculated as KRW 9,00,000 and the completion amount of the construction completion of the Plaintiff Dae Young Construction as KRW 154,00,000 until the time.

(3) On February 16, 2005, the Plaintiffs requested the Defendant, the ordering person, to pay the subcontract price directly, as stipulated in the instant subcontract agreement, and the Fair Transactions in Subcontracting Act.

(4) 피고 보조참가인은 2005. 2. 17. 피고에게 “백일건설의 부도와 관련하여, 부도 당시까지의 기성고에 해당하는 공사대금 중 미지급된 금액과 미정산 선급금을 대등액에서 상계한다”는 의사를 표시하였고, 위 (1)에서 본 바와 같은 타절(4회)기성검사 결과에 따라 2005. 5. 11. 피고에게 선급금 정산금으로 150,700,000원{=415,250,000원(미정산 선급금) ━ 264,550,000원(미지급 기성액)}을 지급하였다.

(5) After that, on July 20, 2005, the Defendant notified the Plaintiffs on the ground that the payment for the unpaid portion of the construction in advance is offset against the advance payment to be returned by the construction in advance on a white day, and that there is no longer any time payment to be made for the construction in the white day (However, on July 1, 2005, the Defendant paid the Plaintiffs a subcontract amounting to 50% of the supply share of the remaining three joint contractors except for the construction in the white day among the completion amount of the construction in other forms of the Plaintiffs, which was normally directly paid the subcontract amounting to 49,50,000 won (=9,000,000 x 50%) and the Plaintiff’s mining construction in the same case (i.e., 77,000,000 won (=15,000,000 won) x 50%).

(6) On the other hand, on March 8, 2005, the Defendant received the waiver of the instant construction from the construction on the 000-day date, and had Daesan Construction Co., Ltd., a joint guarantor of the construction on the 00-day date construction, perform the remaining construction on behalf of the 00-day construction.

[Ground for Recognition] A; evidence No. 1-3; evidence No. 2-1 through 3; evidence No. 3; evidence No. 4; evidence No. 5-1, 2; evidence No. 6-1, 2; evidence No. 5; evidence No. 1 through 5; evidence No. 6-1 through 6; evidence No. 7; evidence No. 8-1, 2; Eul-A; evidence No. 9-1 through 4; evidence No. 10-1, 10-2; evidence No. 11; Eul-A; evidence No. 12-1, 2-1, 13-2; evidence No. 14-1, 2-1, 15-1, 2-2, 15-1, 2-1, 7-1, 2-1, 7-1, 1-2, and 7-1; and

2. Determination:

(a) Occurrence of obligation to pay the subcontract price directly;

(1) Relevant provisions

Article 35 (Direct Payment of Price for Subcontract)

(1) In cases falling under any of the following subparagraphs, the ordering person may pay directly the subcontract price corresponding to the portion performed by the subcontractor to the subcontractor. In such cases, the obligation to pay the price to the contractor to the subcontractor shall be deemed extinguished within the limit of the payment made

1. Where an agreement is reached between the project owner and the contractor by clarifying the intent that the subcontract price may be paid directly to the subcontractor and the method and procedure for the payment thereof;

2. (Omission)

3. (Omission)

4. Where the ordering person deems that there is an obvious reason that the contractor is unable to pay the subcontract price due to his bankruptcy, etc.

5. (Omission)

Article 14 (Direct Payment of Subcontract Price)

(1) Where any ground prescribed by Presidential Decree occurs, such as where a principal contractor is unable to pay the subcontract consideration due to his/her bankruptcy, dishonor, etc., the person ordering shall directly pay the subcontract consideration equivalent to the portion manufactured, repaired or constructed by the subcontractor to the relevant subcontractor.

(2) Where any cause under paragraph (1) occurs, the obligation to pay the price to the principal contractor by the ordering person, and the obligation to pay the subcontract price to the subcontractor by the principal contractor shall be deemed extinguished within the scope of such obligation

Article 4 (Direct Payment of Subcontract Price)

(3) An ordering person shall bear the obligation to pay the subcontract price directly within the scope of the obligation to pay the principal contractor.

(4) Where the requirements for the direct payment of the subcontract consideration are met and the subcontract consideration for the portion manufactured, repaired or constructed by the subcontractor has been finally fixed, the person ordering shall pay the subcontract consideration to the subcontractor pursuant to the provisions of the contract.

Article 43 of the General Conditions of the Construction Contract of this case

(1) Where the other party to a contract falls under any of the following subparagraphs, a contracting officer shall directly pay to the subcontractor concerned an amount equivalent to the portion executed by the subcontractor during the subcontract concluded under the provisions of related Acts and subordinate statutes such as the Framework Act on the Construction Industry, deeming that the other party to the contract has requested the subcontractor to pay the price

1. (Omission)

2. Where the other party to a contract becomes unable to pay the subcontract price to the subcontractor due to bankruptcy, dishonor, business suspension, revocation of license, etc.;

3. (Omission)

(Omission)

(3) Where the counter-party to a contract intends to request an inspection for a report on the completion of construction under Article 27 (1) or for a request for the payment of the cost of work completed under Article 39, he/she shall separately apply for the details of the portion executed by the subcontractor, and where a request for the payment of the cost including the cost of the subcontract under paragraph (1) is made under Articles 39 and 40, he

Article 21 (Direct Payment of Subcontract Price)

(1) Where an ordering person (the defendant; hereinafter the same shall apply) falls under any ground for direct payment of the subcontract price under related Acts and subordinate statutes, such as the Framework Act on the Construction Industry, etc., B (the plaintiff; hereinafter the same shall apply) may request the ordering person to pay the subcontract

(2) Where Eul requests the direct payment of the subcontract price under paragraph (1) or the ordering person intends to pay the subcontract price to Eul pursuant to related Acts and subordinate statutes, Gap (construction on a white day) shall cooperate in the methods and procedures for the payment unless any special reason exists to the contrary.

[Evidence Evidence] Unsatisfy, Eul's statement 18-1

(2) Determination

Examining the above facts in light of the above-mentioned provisions, the defendant is obligated to pay the subcontract price directly to the plaintiffs, who are the subcontractor of 00 days construction, the principal contractor, in accordance with the above-mentioned provisions. Since the plaintiffs perform construction works under the subcontract of this case, the defendant is obligated to pay the construction price corresponding to each completed portion directly to the plaintiffs, barring special circumstances.

(b) Scope of obligation to pay subcontract consideration;

(1) The parties' assertion

(A) On the premise that the Defendant, as seen earlier, bears the obligation to directly pay the subcontract consideration to the Plaintiffs, the Plaintiffs seek payment of the amount of money claimed by the Plaintiffs, which is the subcontract price based on the supply and demand ratio (50%) of the 00-day construction, until the suspension of construction due to the failure to pay the 00-day construction, which is the principal contractor (Plaintiff 99,000,000,000, and Plaintiff 154,000,000).

(B) As to this, according to the result of the examination of the feasibility of Section 4, the Defendant and the Defendant’s supplementary intervenor show that the Defendant’s unpaid construction payment for the 00,000 won was 264,550,000 won at the time of the failure to pay the due payment for the 00,000 won, and that the 415,250,000 won was not paid for the 00,000 advance payment for the 00,000 advance payment for the 0000 advance payment, if the Defendant and the Defendant’s supplementary intervenor who are the guarantee business operator for the 00,700,000 advance payment for the 150,700,000 advance payment for the 150,000

(C) In other words, the Plaintiffs asserts that the proviso of Article 44(5) of the General Conditions of the above Construction Contract provides for exceptional settlement agreements or special agreements prohibiting offset that shall be paid in preference to advance payment, i.e., if advance payment is not returned from the principal contractor, the ordering person shall first pay the subcontractor’s subcontract price prior to offsetting the principal contractor’s unpaid construction price or the price paid. The ordering person shall pay the subcontractor’s subcontract price prior to offsetting the principal contractor’s unpaid construction price, and the remainder except the period of subcontract construction in relation to such payment of subcontract price by deeming the remainder as the principal contractor’s construction price to be appropriated as advance payment, and the Defendant and the White Construction concluded a contract for a third party through the above provision, the Defendant shall pay the beneficiary’s subcontract price preferentially

(D) In addition, the proviso of Article 44(5) of the General Conditions of the Construction Contract cannot be seen as a provision on the exceptional settlement agreement of advance payment or the special agreement on the prohibition of set-off. In addition, even if the above provision is an exceptional settlement agreement on the deferred appropriation of advance payment, the above provision is premised on the cancellation or termination of the instant construction contract between the Defendant and the White Construction. Therefore, there is no reason for the Defendant to apply the provision of the general condition of the construction contract in the above construction contract inasmuch as the contract was rescinded or terminated. In the event of the dishonor of the principal contractor, etc., the above provision constitutes a ground for direct payment of subcontract consideration under Article 43(1)2 of the General Conditions of the Construction Contract, but it also constitutes a ground for return of advance payment under Article 6(1)3 and (3) of the General Conditions of the Construction Contract, which is invoked by Article 1 of the Local Government Rules of the Construction Contract, and thus, the advance payment was appropriated

(2) The issues of the instant case

The key issue of the instant case is: (a) In the event that the principal contractor’s default, etc. makes it impossible to perform construction works any longer, whether the unpaid advance payment is naturally appropriated for the principal contractor’s unpaid construction payment or is appropriated for the remainder after excluding the construction price paid by the sub-beneficiary, or not; (b) how to include the subcontract consideration within the scope of the contract consideration in repayment of the obligation to pay the construction price; and (c) how to consider the priority between the appropriation of unpaid construction price to the principal contractor of the advance payment and the payment of the subcontract consideration; and (b) whether the proviso of Article 44(5) of the General Conditions of the Construction Contract can be deemed as an exceptional settlement agreement or set-off special agreement for the deferred appropriation of advance payment; and (c) whether the general conditions of the construction contract should be applied as the cancellation or termination of the instant construction contract, or only shares are adjusted,

(3) Determination

(A) Determination on the priority order or the scope of the appropriated construction cost

In light of the fact that advance payment is the pre-payment that the contractor pays the pre-payment to the contractor in order to ensure smooth progress of the construction work without difficulty in securing materials and paying wages, etc., the advance payment is the pre-payment that the contractor pays the pre-payment to the contractor. If the contract is rescinded or terminated after the advance payment was made, or the advance payment was returned in violation of the terms and conditions of the advance payment, etc., the advance payment is paid as part of the construction cost, regardless of whether the subcontract was made or not, if the advance payment was appropriated for the pre-paid construction work without a separate set-off intention and there remains a balance of the construction cost, the advance payment will only be paid. If the advance payment is appropriated for the unpaid construction cost, and if it remains, it would be reasonable in light of the nature of the advance payment, to view that the contractor has a right to return the remaining advance payment.

In addition, the term of this case includes not only the portion executed by the original contractor but also the parts executed by the subcontractor who is its execution assistant, and the provision that "the contractor shall pay directly the amount equivalent to the portion executed by the subcontractor, considering that the contractor is requested to the subcontractor for the payment of the price," which is stipulated in Article 43 (1) of the General Conditions of the Construction Contract, etc., is an advance payment, and if there is any remainder of the construction price after appropriating it to the construction cost for the already fixed height, the subcontractor shall pay the subcontract price directly to the subcontractor.

Therefore, the advance payment of this case must be appropriated as a matter of course for the payment of unpaid construction costs, and the scope of such advance payment shall include the plaintiffs' subcontract price as a matter of course, barring any special circumstance. Therefore, the plaintiff's assertion that the advance payment of this case should be preferentially paid prior to such appropriation or set-off is without merit.

(b) Determination as to the existence of exceptional settlement arrangements or non-Offset agreements

According to the evidence No. 18-1 of Eul, Article 44 of the General Conditions of the Construction Contract (Cancellation or Termination of Contract due to Reasons attributable to the Contractor) stipulates as follows:

(1) Where the other party to contracts falls under any of the following subparagraphs, a contracting officer may cancel or terminate all or part of the relevant contracts: Provided, That in cases of subparagraph 3, he shall cancel or terminate such contract:

1. (Omission)

2. Where construction works are not completed or are unlikely to be completed by the deadline for completion due to reasons attributable to the other party to the contract;

3. (Omission)

(2) From to (4)

(5) Where a contract is rescinded or terminated under paragraph (1), if there exists any unpaid balance of the advance payment received, the other party to the contract shall repay the balance to the ordering agency by adding the agreed amount to the agreed amount. In this case, the contracting officer may offset the amount to be redeemed and the price for the completed portion: Provided, That where the price for the subcontract is directly paid under Article 43 (1), if any balance exists after the payment of the subcontract price, he may offset it.

On the other hand, as in the instant case, how to determine the content of the advance payment should be in accordance with the agreement between the parties to the subcontract. However, in the event that there is any difference in the interpretation of the contract between the parties on this point and the interpretation of the parties’ intent expressed on the disposal document is at issue, such interpretation shall be reasonably interpreted in accordance with logical and empirical rules by comprehensively taking into account the contents of the text, the motive and background leading up to such agreement, the purpose to be achieved by the agreement, the parties’ genuine intent, etc. However, in the settlement relationship following the termination or cancellation of the subcontract, since there are many interested parties who conflict with each other as to the advance payment return claim and the claim for the advance payment claim, it shall be careful to recognize the existence of an exceptional settlement agreement that may have a large influence on their interests (Article 6).

6. The Plaintiffs asserted that there exists an agreement on separate settlement of accounts for the aforementioned advance payment based on the proviso to Article 44(5) of the General Conditions for the Construction Contract. However, considering the location of the above provision and the text 8), if advance payment is made, it is merely a provision confirming that advance payment should be made first pursuant to the provision on preferential appropriation for advance payment, and if advance payment is not made, it is difficult to interpret that advance payment should be made first to meet the terms of the above provision on preferential appropriation for advance payment, and that it would be difficult to interpret that advance payment should be made first to meet the terms of the above provision on preferential appropriation for advance payment, and that it would be difficult to interpret that advance payment would be made directly on the premise that there would be no difference between the owner and the contractor’s contractual relationship with the above provision on preferential appropriation for advance payment.

(C) Determination on whether to cancel or terminate the instant construction contract

Furthermore, even if the proviso of Article 44(5) of the General Conditions of the Construction Contract provides for the Plaintiffs’ assertion as to the exceptional settlement agreement or special agreement on the prohibition of offsetting, it is apparent that it is a provision on the premise of settlement following the rescission or termination of the contract, and the Defendant does not cancel or terminate the construction contract in this case, the Defendant does not maintain the contractual relationship with the construction in the above joint venture, and instead adjusts the investment shares of the construction in the remaining construction to 0% to 3.46% and reduces the final investment shares from 50% to 3.46% by limiting the investment shares in the above joint venture to 0%, and adjusts the investment shares in the remaining construction to 0%, the final investment shares have been renounced or excluded from the rest of the construction in this case. According to the guidelines set forth in subparagraph 2, subparagraph 3, 3, or 6, Article 16 of the Construction Contract as follows:

Article 1 of the Special Conditions for Construction Contracts (Advance Payment, etc.)

The scope of the advance payment, the securing of claims, the use of the advance payment, the settlement and return of the advance payment, claims, etc. shall be governed by the Guidelines for the Prohibition of Local Government Election prescribed by the Minister of the Interior.

Article 6 of the Guidelines for Prohibition of Local Governments' Election (Request for Return)

(1) Where it falls under any of the following subparagraphs after the advance payment is made, the return of the balance of the relevant advance payment shall be demanded to the other party to the contract without delay: Provided, That where the return is made due to any cause attributable to the other party to the contract, the amount corresponding to the agreed interest shall

1. Where the contract is rescinded or terminated;

2. Where he/she violates the terms and conditions of advance prohibition;

3. Where the return is deemed inevitable on account of an accident, disaster, etc.;

(2) The calculation method of the amount equivalent to the interest under paragraph (1) shall be calculated on a daily basis on the balance of the advance payment, and the calculation period shall be until the return is made.

(3) The balance of the advance payment shall be preferentially appropriated for the unpaid amount, in cases where there is any amount unpaid as at the time of a request for refund under paragraphs (1) and (2).

In full view of the facts recognized as above, special conditions of the construction contract and the details and purport of Article 1 of the Guidelines for the Prohibition of Local Government Election which invokes the above provisions, the defendant may seek the return of advance payment in cases where the other party to the contract violates the conditions of the prohibition of advance payment even if the contract was not rescinded or terminated, or there is an inevitable reason to return the advance payment due to the occurrence of an accident, etc., even if the contract was not rescinded or terminated, and the construction contract in this case between the defendant and the White Construction is maintained without cancelling or terminating the contract in this case and is maintained through the adjustment of equity shares is as mentioned above. Since the advance return was inevitable due to the impossibility of the execution of the contract in this case due to the failure of payment on February 14, 2005, it shall be deemed that there was an inevitable reason to return the advance payment. Thus, the defendant may claim the return of the advance payment for the White Construction under Article 6

Ultimately, Article 44(5) of the General Conditions of the above Construction Contract does not apply to this case, and the provision of Article 6(3) of the Rule on the Prohibition of Local Government Election is merely a general note 12 that confirms that the advance payment should be basically appropriated for the cost of construction work due to the nature of the advance payment. However, unless the foregoing provision is applied to the advance payment based on an exceptional settlement agreement, the advance payment is naturally appropriated for the construction cost corresponding to the advance payment by the time without a separate declaration of offset regardless of whether the advance payment was made or not, so the Plaintiffs’ assertion is groundless.

(4) The theory of lawsuit

Therefore, in this case where it cannot be deemed that there exists a separate adjustment agreement or set-off agreement that can oppose the defendant with respect to the settlement relation of advance payment, the advance payment of KRW 415,250,000 due to the occurrence of the grounds for return due to the waiver of construction works, etc., and according to the general legal principles of appropriation, the above advance payment of KRW 415,250,00 as of February 14, 2005, was appropriated as of February 14, 2005 for the above unpaid construction cost of KRW 264,50,000 as of February 14, 2005, the defendant would no longer have to pay the unpaid construction cost to the defendant who is the beneficiary under the above direct payment provision of subcontract payment.

3. Conclusion

Therefore, the plaintiffs' claims in this case are dismissed due to the lack of all reasons, and the judgment of the court of first instance is unfair, so the defendant's appeal is accepted and the judgment of the court of first instance is revoked and the plaintiffs' claims are dismissed. It is so decided as per Disposition.

Judges Gangnam-gu (Presiding Judge) Kim Jong-won

Note 1) The amount of KRW 4,797,100,000 was increased on January 18, 2005.

Note 2) The amount of KRW 4,570,500,000 was increased on January 18, 2005.

Note 3) The amount of KRW 10,604,00,000 was increased on January 18, 2005.

[Defendant-Appellant] Plaintiff 1 and 3 others (Law Firm Domin, Attorney Park Jong-soo, Counsel for defendant-appellant-appellant-appellant-appellant-appellant-appellant-appellant-appellant-appellant-Appellee)

Note 5) See the above Decision 2001Da83845, and the above Decision 97Da5060

Note 6) See the above Decision 2003Da69713

Note 7) It is only included in the provision on “cancellation or termination of a contract due to a contractual party’s responsible cause.”

Note 8) Only takes the form of the proviso clause in paragraph 5.

9) The premise is that the subcontract price is directly paid pursuant to Article 43(1).

10) The issue of the protection of subordinate recipients is an issue between the principal contractor and the subordinate recipients, and it is extremely exceptional to resolve the matter by which the ordering person intervenes, and in this case where there is no statute or agreement on the direct payment of subcontract consideration as seen earlier, the said provision cannot be interpreted to the effect that it infringes on the interests of the ordering person in a position of a third party for the protection of the subordinate recipients without any reasonable ground.

Note 11) See the above Decision 2003Da69713

Note 12) Supreme Court Decision 2002Da68362 Delivered on November 26, 2004