2017Guhap75576 Withdrawal of Disposition of Redemption of Research and Development Expenses

A Educational Foundation University

Law Firm Barun (LLC)

Attorney Kim Hong-do, and Sark-young

1. The Minister of Science and ICT;

Law Firm LLC et al., Counsel for defendant-appellant

Attorney Lee Young-young

2. Korea;

The Minister of Justice shall grant his/her legal representative stay.

Stand-type of a litigation performer;

March 14, 2018

May 4, 2018

1. The lawsuit against the defendant in the main claimant among the lawsuit in this case shall be dismissed.

2. The plaintiff's conjunctive claimant's claim against the Republic of Korea is dismissed.

3. The costs of lawsuit shall be borne by the Plaintiff.

In the first place, the Minister of Science and ICT revoked the disposition to recover research and development costs of KRW 1,836,568,560 against the Plaintiff on June 1, 2017, and confirms that there is no obligation to return research and development costs to the Plaintiff’s Republic of Korea for the joint use of radioactive radiation sources of KRW 1,836,568,560.

1. Basic facts

A. The Plaintiff is a school operations institution of A University, a private university, and the B research institute affiliated with A University has been performing a support project for the joint use of radiation radiation source from around 1995 (hereinafter “instant project”).

B. A. The Ministry of Science, ICT and Future Planning (hereinafter referred to as the "Ministry of Science, ICT and Future Planning, as at the time, the Ministry of Science, ICT and Future Planning was reorganized into the Ministry of Science, ICT and Future Planning on July 26, 2017; hereinafter referred to as the "Ministry of Science, ICT and Future Planning") entered into the standard agreement on research and development tasks of the instant project (hereinafter referred to as the "Convention") during the relevant year from January 1, 2015 to December 31, 2015, the research period of which is from January 1, 2015 to December 31, 2015.

(1) From January 1, 2013 to December 31, 2015, research and development funds for each item of research and development project (three years): The balance of the research and development funds paid by the Plaintiff for each item of research and development project (three years) and the balance of the research and development funds paid by the Plaintiff for each item of research and development project (three years): The amount of funds transferred by the Plaintiff for each item of research and development project and the balance of the research and development funds paid by the Plaintiff for each item of research and development project (three years): The amount of funds transferred by the Plaintiff for each item of research and development project and the balance of the funds transferred by the Plaintiff for each item of research and development project under Article 3 of the Regulations on the Settlement of Research and Development Funds and the Rules on the Settlement of Research and Development Funds (the Rules on the Settlement of Funds and Funds for each item of research and development project) shall be classified as follows:

D. Notwithstanding the above notification given by the Defendant Science and ICT, the Minister of Science and ICT notified on June 1, 2017 that the Plaintiff would not pay the amount in full, and that the Defendant would pay KRW 1,836,568,560 in return expenses following the above settlement (hereinafter “instant notice of payment”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1, 3 through 5, the purport of the whole pleadings

2. Determination

A. Relevant provisions

It is as shown in the attached Form.

B. Judgment on the main claim

1) Defendant Ministry of Science and ICT’s defense prior to the merits

As follows, the Minister of Science and ICT, with regard to the Plaintiff’s primary claimant’s primary claimant’s claim for cancellation of the instant payment notice to the Minister of Science and ICT, defenses as follows. The instant payment notice is not a notification of redemption of government contributions based on Article 11-2 of the former Framework Act on Science and Technology (amended by Act No. 1339, Jun. 22, 2015; hereinafter the same) but is merely a collection and payment notification of settlement money under Article 4(5) of the instant Convention and Article 19(4) of the former Management Regulations (amended by Presidential Decree No. 28210, Jul. 26, 2017). In other words, the instant payment notice is merely a notification of the result of settlement of the project cost that unfairly collects the amount as a result of settlement after the completion of research and development, and is not an administrative disposition that is subject to appeal as an exercise of public authority,

2) Determination

A) Even if an administrative agency’s unilateral declaration of intent has terminated the legal relationship between itself and the other party, it cannot be readily concluded that the expression of intent is an administrative disposition by exercising public authority as an administrative agency. Whether the expression of intent constitutes an administrative disposition subject to appeal litigation or whether it constitutes an expression of intent made on an equal status as a party to a contractual relationship under public law depending on how relevant statutes specifically provide for the other party’s legal relationship (see, e.g., Supreme Court Decisions 95Nu10617, May 31, 1996; 2013Du6244, Apr. 24, 2014).

B) Article 11-2(1) of the former Framework Act on Science and Technology provides that “Where research and development outcomes of institutions, individuals, etc. participating in national research and development projects are determined as suspended or failed as a research and development task conducted by a central administrative agency due to extremely poor outcomes, the relevant person may be restricted from participating in the national research and development project and may recover all or part of the project cost already contributed, if the relevant person breached his/her duty, such as using research and development

The detailed criteria for recovery of project costs under Article 11-2 of the former Framework Act on Science and Technology are stipulated in the former Management Regulations (amended by Presidential Decree No. 26729, Dec. 22, 2015) [Attachment 5]. According to the above attached Table, where research and development results are extremely poor and the central administrative agency has decided as a result of evaluation conducted or failed, and where research and development costs are used for any purpose other than the original purpose, the criteria for recovery are within the total amount of contributions for the pertinent year, and the criteria for recovery of "where research and development contents are divulged or leaked to domestic or foreign countries without due process," and "where the details of research and development are divulged or leaked without due process, within the total amount of contributions paid during the total implementation period, the criteria for recovery shall not be limited to the amount of the recovery within the scope of the project costs directly related to the violation,

C) However, according to the instant settlement notification, which forms the basis for the instant notice of payment, “The Plaintiff, a school management institution, bears the corporate contributions from the research and development funds received in relation to the instant project from 2013 to the payment of the corporate contributions. As such, the instant notice of payment is based on Article 19 of the former Management Regulations (amended by Presidential Decree No. 28210, Jul. 26, 2017; hereinafter the same), and Article 19 of the former Management Regulations (amended by Presidential Decree No. 28210, Jul. 26, 2017; hereinafter the same). In light of the fact that Article 6(4) of the instant Convention provides that specific matters concerning the collection of unfair spending of research and development expenses are governed by the management regulations, etc., the instant notice of payment is deemed a measure based on Article 19 of the former Management Regulations.

Article 19 (4) of the former Management Regulations provides that "the head of a central administrative agency shall recover an amount equivalent to the share of government contributions out of the relevant amount, if any balance remains after excluding any of the following amounts from research and development expenses after the completion of a research and development task, or any amount has been wrongfully disbursed as a result of the examination of the details of the report on the actual use of research and development expenses under paragraph (1) and the settlement of research and development expenses under paragraph (2)." Article 30 (1) of the former Management Regulations (amended by Ordinance No. 1 of the Ministry of Science and Technology Information and Communications Technology Information and Communications Network Directive No. 1 of July 27, 2017; hereinafter the same shall apply) provides that "the Minister or the head of a specialized agency shall recover the balance after subtracting any of the following amounts from research and development expenses after the completion of the performance of the research and development task, if any, or after the settlement of research and development expenses under Article 29 (2) and the settlement under Article 29 (3)."

D) As such, the instant payment notice requires the Defendant’s executing institution to return the amount unfairly disbursed as a result of use pursuant to the agreement after the termination of the agreement, which is not recognized as a result of use after examining the actual use of research and development expenses submitted by the Defendant’s executing institution. This is merely a part of the settlement procedures pursuant to the former Management Regulations and the former Management Regulations, and cannot be deemed an administrative disposition, which is a unilateral exercise of public authority, as a law enforcement on specific facts. In short, unlike the redemption disposition that restricts the participation of national research and development projects as sanctions based on Article 11-2 of the former Framework Act on Science and Technology when using research and development expenses for purposes other than the intended purpose, the aforementioned request for return of project expenses

If there is any amount paid in violation of the agreement among the research and development expenses paid, it is nothing more than the settlement of the project cost that notifies the return of unjust enrichment to the extent of unjust enrichment.

E) In addition, despite the instant notice of payment, if the Plaintiff fails to repay the expenses, there is no provision in the public law that can take measures, such as administrative sanctions, and only claims collection can be taken in cases where the Plaintiff delays the return for at least three months pursuant to Article 30(6) of the former Management Rules. In light of the above, the instant notice of payment issued by the Defendant Minister by the Minister of Science and ICT is merely a demand to the Plaintiff, the other party to the

3) Sub-decisions

Therefore, since the main claim part of the lawsuit of this case is unlawful, the defendant's defense before the main claim is justified.

C. Determination on the conjunctive claim

1) The plaintiff's assertion

In addition, Article 12(2) of the former Management Regulations and Article 23(2) of the former Management Regulations provide that "the head of a central administrative agency shall not bear the research and development expenses if the university-funded research institute is a main research institute." In addition, the head of the central administrative agency shall not bear the research and development expenses if the university-funded research institute is a main research institute."

In addition, Article 47 (1) of the Pension for Private School Teachers and Staff Act (hereinafter "the Pension Act") does not prohibit a general provision that declares that a person who is liable to pay corporate contributions to a private school is a school institution, not a school, and it does not prohibit a third party from receiving subsidies from a school.

In full view of the contents and purport of these regulations, the portion of the corporation’s share of private school pension, which is the same nature as the national pension, is subject to the expenditure of the instant research and development expenses, and thus, the Plaintiff is not obliged to refund the amount equivalent to the Plaintiff’s share of private school pension out of the instant research and development expenses to the Defendant Republic of Korea

2) Determination

A) Since a private school pension holder is excluded from the eligibility to subscribe to the National Pension (proviso of Article 6 of the National Pension Act), it is reasonable to view the provisions of attached Table 2 of the former Management Regulations and attached Table 3 of the former Management Regulations to the effect that a researcher of a university-funded research institute is included in the subject of the payment of research and development expenses, as in the case of a national pension even in the case of

B) However, considering the facts acknowledged earlier, considering the following circumstances, which can be seen by adding up the overall purport of the pleadings to the statement No. 13, it is difficult to view that the corporation contributions exceeding the individual contributions of private school pension and also included in the subject of the instant research and development expenses.

(1) An educational foundation shall manage its accounts separately from the accounting of the school foundation. The accounting of the school foundation is divided into school expenses accounts and its affiliated hospital accounts, and the accounting of the school foundation is divided into general business accounts and profit-making business accounts (Article 29(1), (2), and (3) of the Private School Act). An educational foundation shall manage tuition fees and other money due from the accounting of school expenses. In principle, it shall not transfer or lend school expenses to other accounts (Article 29(2) and (6) of the Private School Act). Corporate contributions shall be borne by an educational foundation as they raise funds for retirement benefits and expenses for bereaved family benefits (Article 29(2) and (6) of the Private School Act. Corporate contributions shall be appropriated from the accounting of the school foundation. Where it is impossible to fully or partially pay corporate contributions, corporate contributions may be appropriated from the accounting of the school foundation (Article 47(1) and (5) of the Private School Act). Of school foundations, private school foundations among those that belong to the school foundation shall either be appropriated from the accounting of the school foundation or be appropriated into the school foundation’s.

In light of the fact that the instant research and development expenses are subject to criminal punishment, the instant research and development expenses are separate from the general school expenses and are operated as separate accounts in accordance with Article 12-2(1) of the former Management Regulations. However, the Plaintiff executed and used the corporate contributions of private school pension from the research and development expenses of the instant case, thereby causing a non-Plaintiff to bear the corporate contributions of private school pension in violation of Article 47(1) of the Private School Pension Act. In addition, in this process, the Plaintiff did not obtain approval from the Minister of Education required under Article 47(2) of the Private School Pension Act.

(2) The purpose of Article 12(1), (2), and attached Table 2 of the former Management Regulations is to provide the State with the expenses to be borne by the research institute participating in the national research and development project. The corporate contributions for private school pensions are the expenses to be borne by the school foundation, not the expenses to be borne by the research institute or A university, which is a research institute.

In addition, according to the attached Table 3, etc. of the former Management Rules, the research institute of this case can execute and use the amount obtained by multiplying the amount of actual labor cost paid by the "amount of actual labor cost" by the "amount of actual labor cost paid" as another institution. However, even if the "amount of actual labor cost paid" as the plaintiff's assertion is interpreted as the "amount of actual labor cost actually paid to the researchers of the research institute of this case," not the "amount of actual labor cost actually paid to the researchers of the research institute of this case", it is difficult to view the research institute of this case as the "amount of actual labor cost actually paid to the researchers of the research institute of this case."

(3) Article 12(2) of the former Management Regulations and Article 23(2) of the former Management Rules provide that "the head of a central administrative agency shall not bear research and development expenses if a university-funded research institute is a research-funded research institute." However, the above provisions provide that "the head of a central administrative agency may contribute all or part of research and development expenses to a research-funded research institute" under Article 12(1) of the former Management Rules, if a university-funded research institute is a research-funded research institute, it shall bear all or part of research and development

However, the key issue of the instant case is whether the corporate contributions of private school pension can be included in the calculation item of the instant research and development expenses, i.e., the scope of recognition of research and development expenses, and thus, it is difficult to view Article 12(2) of the former Management Rules and Article 23(2) of the former Management Rules as the grounds for allowing the State to bear the corporate contributions of private school pension of research institutes

(4) Although researchers working at the instant research institute did not perform their duties on behalf of the Plaintiff, the Plaintiff’s burden of all private school pension corporations is unfair as a result of having the Plaintiff bear only financial burden without any benefit. In particular, the Plaintiff asserts that it would be too harsh to refund the amount equivalent to the corporate contributions of private school pensions executed from the research and development costs even though the Plaintiff donated the radioactive ray, which is the result of the instant research institute’s business, to the State.

However, based on Article 11-3(1) of the Framework Act on Science and Technology, Article 20(1) and (2) of the former Management Regulations, and Article 13(1) and (2) of the Convention, A university or the research institute of this case shall, in principle, be the owner of tangible and intangible performance, such as research equipment, research equipment, and intellectual property rights, which are obtained according to the project in this case, and may collect royalties from those who intend to use research and development outcomes, etc. based on Article 11-4(1) of the Framework Act on Science and Technology and Article 22(1) of the former Management Regulations. Thus, it cannot be concluded that the project in this case and the agreement in this case may only cause financial damage

3) Sub-decisions

Therefore, it is difficult to view that the private school pension exceeds the individual contributions and the corporation contributions are subject to the execution of the research and development expenses of this case. Thus, the plaintiff's assertion that there is no obligation to return the amount equivalent to the private school pension contributions executed and used from the research and development expenses of this case to the defendant Republic of Korea is without merit.

3. Conclusion

Therefore, the plaintiff's primary claim against the Minister of Science and ICT is unlawful, and thus, the conjunctive claim against the defendant in Korea is dismissed. It is so decided as per Disposition.

Judgment of the presiding judge;

Judges Slocks

Judges Kang Jae-sung

1) The Plaintiff asserts that the payment notice in this case constitutes a disposition to recover government contributions under the Framework Act on Science and Technology, and is subject to sanctions.

Government contributions restitution disposition shall be governed by the law that was enforced at the time of the violation (see, e.g., Supreme Court Decision 86Nu63, Jan. 20, 1987). The Plaintiff

The research institute of this case is deemed to have executed and used research and development expenses from the year 2013 to the year 2015 as the Plaintiff’s contributions to the private school pension corporation.

Since the Framework Act on Science and Technology amended by Act No. 1339 on June 22, 2015 was enforced on December 23, 2015, the previous amendment thereto was made.

The Framework Act on Education and Technology shall be deemed as the basis of the disposition of recovery of government contributions claimed by the plaintiff.