2019Nu46413. Revocation of restrictions on qualifications for participation in competitive bidding

1. A stock company;

2. R Co. (former trade name: B)

3. C Stock Company:

4. Daehan:

5. E company.

6. Fran Stock Company;

7. G stock company.

8. S Co., Ltd., the lawsuit taking over of H.

9. I stock company;

10. J Co., Ltd.

[Defendant-Appellant] Plaintiff LLC et al.

Attorney Shin-chul et al.

1. The Minister of SMEs and Startups (formerly named: Administrator of the Small and Medium Business Administration);

Government Legal Service Corporation (Law Firm LLC)

Attorney Lee Jin-ok

2. The Administrator of the Public Procurement Service;

Seoul Administrative Court Decision 2014Guhap4665 decided September 4, 2014

Seoul High Court Decision 2014Nu65174 Decided June 12, 2015

Supreme Court Decision 2015Du46987 Decided May 10, 2019

November 5, 2019

December 17, 2019

1. The plaintiffs' appeals against the defendants are all dismissed.

2. The plaintiffs are responsible for total costs of the lawsuit following the filing of a lawsuit.

The judgment of the first instance court is revoked. The Minister of SMEs and Startups (attached Form 1)’s disposition of confirming enterprises subject to the restriction on participation in competitive tendering process open only to small and medium enterprise proprietors, which the plaintiffs entered in the list and [Attachment 2] list, is revoked on each corresponding date (the plaintiffs filed a claim against the Minister of SMEs and Startups for cancellation of the disposition made on each date listed in the list (attached Form 1), and the claim for cancellation of the disposition made on each date listed in the list (attached Form 2), and changed the form of the above consolidation into simple combination of claims at this court after remanding). The disposition of restriction on participation in competitive tendering process open only to small and medium enterprise proprietors which the plaintiffs made on February 4, 2014

1. Basic facts

A. Status of the plaintiffs

1) The Plaintiffs (hereinafter referred to as “the Plaintiffs”) are small and medium enterprise owners under Article 2 of the Framework Act on Small and Medium Enterprises who engage in K production and sales business.

2) From March 22, 2013 to June 27, 2013, the Plaintiffs issued a small and medium enterprise confirmation form (hereinafter “small and medium enterprise confirmation form”) under Article 8(2) of the former Act on the Promotion of Purchase of Small and Medium Enterprise Products and the Support of Market Support (amended by Act No. 12499, Mar. 18, 2014; hereinafter “Small and Medium Enterprise Support Act”) from the Minister of SMEs and Startups, and a public institution has bid to the K supply contract that places an order by means of “competitive bidding among small and medium enterprises under Article 7 of the Act on the Promotion of Market Support.”

(b) Notification of participation restriction by the Minister of SMEs and Startups;

1) The Defendant Minister of SMEs and Startups conducted a fact-finding survey on the companies that participated in competitive tendering process open only to small and medium enterprises, and determined that the Plaintiffs were ‘a company in a dominant or subordinate relationship with a large enterprise’ as prescribed by Article 8-2(1)2 of the Act on the Development of Agricultural and Fishing Villages and Article 9-3 of the Enforcement Decree of the same Act, and requested the public institution to present its opinion on the plan to notify the Plaintiffs of the plan to restrict their participation in competitive tendering process open only to small and medium enterprises during the period from May 3, 2013 to May 1

2) After that, on June 28, 2013, the defendant Minister of SMEs and Startups sent to a public institution a public document stating that "the main time is to restrict participation in a bid through a competition system that is ordered through small and medium enterprise proprietors, including the plaintiffs, at a public institution on the basis of a list of enterprises subject to restriction on participation." In addition, the defendant Minister of SMEs and Startups around that time taken measures to include the phrase "the main time is to be entered" (hereinafter referred to as "the phrase on restriction on participation") in the letter when the company subject to restriction on participation applies for the issuance of a small and medium enterprise's confirmation through a comprehensive information network for public purchase (www. Sp.go.r.).

3) Meanwhile, on June 28, 2013, the defendant Minister of SMEs and Startups notified the plaintiffs that they constituted a company subject to restriction on participation (hereinafter referred to as "notification subject to restriction on participation") as follows.

A person shall be appointed.

C. The plaintiffs' primary administrative litigation

1) On September 16, 2013, the Plaintiffs filed a lawsuit seeking revocation as Seoul Administrative Court 2013Guhap23546 by asserting that the notification pertaining to the restriction on participation was unlawful, and filed an application for suspension of execution (hereinafter referred to as the “first case”), and the application for suspension of execution was accepted.

2) On October 18, 2013, when the first case was in progress, Defendant SMEs and Startups sent a public notice stating that the notification was not a disposition of restriction on competitive participation but a disposition of restriction on participation by the plaintiffs, which was merely an instruction that the plaintiffs constituted a company subject to restriction on participation. In order to prevent the occurrence of misunderstanding that it is an administrative disposition that has the effect of restriction on participation in bidding and that it is an administrative disposition that has the effect of restriction on participation, the notification is withdrawn. In order to prevent legal disputes for the same reason, the public institution withdraws the existing public document and the list of enterprises subject to restriction on participation is to provide convenience for public institutions to decide whether to restrict participation in competitive bidding between small and medium enterprises. Meanwhile, Defendant SMEs and Startups issued a small and medium enterprises confirmation.

3) On December 13, 2013, the Seoul Administrative Court: (a) took measures to include the phrase of restriction on participation in a small and medium enterprise’s confirmation when a company subject to the restriction on participation applies for the issuance of a small and medium enterprise’s confirmation document; (b) premised on the premise that it is an administrative disposition subject to appeal; and (c) taken measures to prevent the entry of the phrase of restriction on participation in the confirmation issued to the Plaintiffs after October 18, 2013 by the chief of the defendant small and medium venture business from being issued to the Plaintiffs; and (d) accordingly, the said lawsuit was dismissed on the ground that the aforementioned measures were lawfully withdrawn; and (e) the said

(d) Details of changes in matters related to the phrases on restrictions on participation;

Details of changes in matters related to the phrase of restriction on participation in small and medium enterprises issued by the Minister of SMEs and Startups to the plaintiffs pursuant to Article 8-2 of the Act on the Development of Support for Residents

1) On April 12, 2013, the term of validity of the small and medium enterprise certification issued to Plaintiff J, April 19, 2013 by the Minister of SMEs and Startups, Plaintiff I, Plaintiff F, April 25, 2013, and June 27, 2013 is from April 1, 2013 to March 31, 2014, and the bottom of the restriction on participation is written down.

2) Meanwhile, the small and medium enterprise confirmation letter issued after sending to the Plaintiffs on October 18, 2013 by the Minister of SMEs and Startups, stating that the disposition on June 28, 2013 was withdrawn, does not include any phrase on restriction on participation in the small and medium enterprise confirmation letter.

(e) Certification of small and medium enterprises by the defendant;

1) The term of validity of the confirmation of small and medium enterprises issued to the Plaintiffs on the date indicated in the date of each disposition of the first disposition list by the Defendant Minister of SMEs and Startups (attached Form 1) shall be from February 18, 2014 to March 31, 2014 (Plaintiff J), from April 1, 2013 to March 31, 2014 (Bas Plaintiffs) and the lower part shall include the phrase of restriction on participation at the end (hereinafter “Defendant Minister of SMEs and Startups”).

2) On the date indicated in the item column of each disposition date in the second disposition list (attached Form 2), Defendant SMEs and Startups issued to the Plaintiffs on the date on which the first disposition date in the second disposition list becomes final and conclusive, stating that the term of validity is from April 1, 2014 to March 2015, and written at the bottom that the term of restriction on participation is specified in the lower part (hereinafter “Defendant SMEs and Startups’s confirmation act indicated in the small and medium enterprise confirmation document issued to the Plaintiffs on the date of the second disposition list” (hereinafter “the second confirmation”).

(f) Announcement of tender by Defendant Administrator;

1) On May 31, 2013, the Defendant Administrator of the Public Procurement Service publicly announced a tender for the annual unit price contract (hereinafter “instant tender”) with L on the tender announcement number L in 2013. The main contents of the tender publicly announced by the Administrator of the Public Procurement Service are as follows.

Article 9(2) of the Act on the Promotion of Development and Support of Small and Medium Enterprises (hereinafter referred to as "qualified cooperative"), which is a joint supply and demand organization comprised of small and medium enterprises that can be supplied by bidding classification within the scope of the competition market for participation in bidding (No. 2012-146) or a small and medium enterprise cooperative that meets the conditions for participation

The members and participating partners shall meet all the following qualifications.Third, a person who falls under Article 8-2 (1) of the Act on the Assistance to Enterprise Markets held by the date preceding the date of the bidding (open/Small/Small/Small/Small/Small/Small/Small/Small/Small/Small/Small/Small/Small/Small/Small/Small/Medium" pursuant to the Guidelines for the Confirmation of Companies with Disabilities (Public Notice No. 2012-1, Jan. 1, 2012) shall not participate in this bidding, and a person who falls under Article 8-2 (2) (1) of the Act on Assistance to Enterprise Markets shall not be allowed to participate in this bidding, and shall not be allowed to recover the amount of termination of the contract

2) The Plaintiffs participated in the instant bidding as a member of the Plaintiff and won the bid. Accordingly, the Defendant’s Administrator concluded the K Annual Unit Price Contract (hereinafter “instant contract”) with M Cooperatives (Plaintiff R, F, E), N Cooperatives (Plaintiff G, C, D), O Cooperatives (Plaintiff I), P Cooperatives (Plaintiff J), and P Cooperatives (Plaintiff J) for each contract term until May 31, 2014.

The Plaintiffs entered into the instant contract as a member of each of the instant cooperatives. However, in 2012, Plaintiff H entered into a contract as a member of Q cooperative, but Q cooperative participated in the instant bidding except Plaintiff H in the instant bidding in 2013.

3) The main contents of the additional special terms and conditions (K) of the purchase contract added to the terms and conditions of the instant contract are as follows.

Article 4 (Quantities Allocation) (1) In the case of a cooperative member participating in a competitive tendering procedure with a contract, the relevant cooperative shall be held by the joint contractor in the case of a joint contractor, and the individual contractor shall be held by the Public Procurement Service in the case of a joint contractor.Article 4-3 (Disposition against Disqualified Persons, etc.) (1) In any of the following cases, the other party to the contract shall suspend the allocation of goods or recover the quantity allocated to him/her.

Suspension of the allocation of quantity during the period of sanctions: Provided, That if it is deemed impossible to supply the union as the union is excluded, the allocation of quantity (other than the members of the association causing the cause)

4) According to the notification given by the Minister of SMEs and Startups as to the restriction on participation on June 28, 2013, Defendant Administrator of the Public Procurement Service suspended the allocation of quantity to the pertinent association members, who are parties to a contract through each local government procurement agency based on Article 4-3(1)1 of the K public tender notice and additional special conditions.

5) Meanwhile, when the application for the suspension of the execution of the first case on November 6, 2013 was accepted, the Defendant’s Administrator temporarily resumed the allocation of the K quantity to the Plaintiffs through each local government procurement office on November 29, 2013, but the said judgment dismissed the lawsuit, and upon the invalidation of the decision to suspend the execution, the Defendant again ordered the suspension of the allocation to each local government procurement office on December 19, 2013.

6) The plaintiffs requested the Administrator of the Public Procurement Service to allocate government-level volume, and the defendant Administrator of the Public Procurement Service, on January 6, 2014, ordered the plaintiffs to review whether the allocation of government-level volume is resumed upon submitting a small and medium enterprise confirmation document.

7) On January 1, 2014, the Plaintiffs submitted a small and medium enterprise confirmation document to the Administrator of the Public Procurement Service, but the Defendant Administrator of the Public Procurement Service specified the terms of restriction on participation in the small and medium enterprise confirmation document submitted by the Plaintiffs to the Plaintiffs on February 2, 2014. If the Plaintiffs fall under a company subject to restriction on participation in a competitive tendering process open only to small and medium enterprises as of the present date, the Plaintiffs notified the Plaintiffs that they are bound to suspend the allocation of government-fundedK quantity pursuant to Article 4-3(1)1 of the Additional Terms and Conditions for Goods Purchase Contracts (K) (hereinafter “instant notification”).

G. Progress of the instant lawsuit

1) On March 4, 2014, the Plaintiffs filed the instant lawsuit with the Minister of SMEs and Startups by claiming revocation of the first verification of the instant case and claiming against the Defendant Administrator of the Public Procurement Service. On March 31, 2014, the period of validity of the first verification of the instant case expires and the second verification of the instant case is confirmed by the Minister of SMEs and Startups, and on April 3, 2014, the Plaintiffs added the conjunctive claim against the Defendant Minister of SMEs and Startups seeking revocation of the second verification of the instant case.

2) After reversal and return, the Plaintiffs changed the form of the above consolidation of claims against the Defendant Minister of SMEs and Startups into simple annexation.

[Reasons for Recognition] Facts without dispute, Gap's statements, Gap's 1 through 4, 6 through 9, 11, 14, 20 evidence (including branch numbers; hereinafter the same shall apply), Eul's statements, Eul's evidence 5, 12, 14, Eul's evidence 1 through 9, and the purport of the whole pleadings

2. Relevant statutes;

[Attachment 3] The entry of "related Acts and subordinate statutes" is as follows.

3. Judgment on the claim against the defendant Minister of SMEs and Startups

A. Determination on this safety defense

1) As to a defense that is not the subject of an appeal litigation

A) Summary of the defense

The Minister of SMEs and Startups confirms whether a small or medium enterprise that intends to participate in competitive tendering process open only to small or medium enterprises pursuant to Article 8-2(2) of the Act on the Support of Development of Agricultural and Fishing Villages is subject to restrictions on participation in competitive tendering process. However, such verification itself does not affect a small or medium enterprise’s rights and interests, and only when the head of a public institution separately restricts the participation in competitive tendering process open only to small or medium enterprises, his/her rights and interests are restricted.

B) Determination

(1) The term “disposition”, which is the subject of an appeal litigation, refers to the exercise or refusal of public power as an enforcement of law with respect to a specific fact by an administrative agency, and other administrative actions corresponding thereto (Article 2(1)1 of the Administrative Litigation Act). Whether a certain act by an administrative agency may be the subject of an appeal litigation cannot be determined abstractly and generally. Determination is based on the content and purport of relevant Acts and subordinate statutes, the subject, content, form, and procedure of the act, the substantial relation between the act and the disadvantage suffered by interested parties, such as the other party, and the principle of administration by the rule of law and the attitude of the administrative agency and interested parties related to the act, etc. (see, e.g., Supreme Court en banc Decision 2008Du167, Nov. 18, 2010; Supreme Court Decision 2015Du52395, Nov. 29, 2018).

(2) Based on the above legal principles, comprehensively taking account of the following circumstances, it is reasonable to view the first confirmation of Defendant SMEs as an act that directly affects the rights and obligations of the people and constitutes an administrative disposition, which is the subject of appeal, as an act that directly affects the rights and obligations of the people (see, e.g., the first confirmation of this case, and the second confirmation of this case, hereinafter referred to as the "the second confirmation of this case"), and the second confirmation of Defendant SMEs and Startups's defense of this case is without merit.

(A) According to Articles 7(1), 8(2), and 8-2(2) of the Act on the Development of Market Support, a small and medium enterprise owner who intends to participate in a competitive bidding at a small and medium enterprise level, which is ordered by the head of a public institution, and whose sales expansion is deemed necessary by a small and medium enterprise owner through direct production and provision, shall obtain confirmation as to whether the products are subject to participation eligibility or participation restriction on competitive bidding from the Minister of SMEs and Startups every year, and the defendant Minister of SMEs and Startups shall make a new disposition following a practical examination each year. If the products are not verified or are verified as subject to participation restriction on competitive bidding, a public institution may not participate in competitive bidding as ordered by the Minister of SMEs and Startups. Accordingly, the

(B) Article 8-2(1) of the Act on the Promotion of Development and Support of Small and Medium Enterprises provides for the grounds for restrictions on participation in competitive tendering process open only to small and medium enterprises and the head of a public institution shall restrict participation of small and medium enterprises in any of the following cases. At the same time, Article 8-2(2) of the same Act provides that a small and medium enterprise owner who intends to participate in competitive tendering process open only to small and medium enterprises shall apply to the Minister of SMEs and Startups to verify whether it is subject to restrictions on participation in competitive tendering process open only to small and medium enterprises and the Minister of SMEs and Startups shall confirm

According to the regulatory structure and contents, determination on whether the relevant small or medium enterprise is actually subject to restrictions on participation in competitive tendering process open only to small or medium enterprises is made by the Minister of SMEs and Startups, and public institutions are subject to restrictions on participation in competitive tendering process based on such confirmation. In such cases, it is unreasonable to conclude that the determination on whether the relevant small or medium enterprise is subject to restrictions on participation in competitive tendering process only to the head of the public institution that has given notice of the disposition of restrictions on participation in competitive tendering procedure outside the scope

(C) Article 6(1) [Attachment 2] of the Guidelines for Confirmation of Small and Medium Enterprises, Small and Medium Enterprises, Small and Medium Enterprises, and Companies with Disabilities, based on Article 8-2(2) of the Act on the Support of Market Support (hereinafter referred to as the "Notice of this case") provides that, if a company is subject to the restriction on participation, it shall be noted that it is a company subject to the restriction on participation in competitive tendering process for small and medium enterprises and small-medium enterprises pursuant to Article 8-2 of the Act on the Support of Market Support and Small-Medium Enterprises, and shall be noted in the letter of confirmation that it is subject to the restriction on participation in competitive tendering process for the small and medium enterprises. According to this, although the evaluation of whether it is subject to

(D) A small and medium business proprietor is in a state of legal uncertainty, which makes it impossible to participate in competitive bidding immediately upon receipt of the confirmation that he/she falls under a subject subject to restriction on participation in competitive bidding from the Minister of SMEs and Startups. Therefore, it accords with the principle of rule of law administration to enable a small and medium business proprietor to resolve legal uncertainty by disputing the legality of the verification act at the stage of obtaining the confirmation that

2) As to the defense that there is no interest in a lawsuit

A) Summary of the defense

Even if the phrase of restriction on participation itself exists, the plaintiffs can resolve the dispute at once by dispute over the disposition of restriction on participation in competitive bidding conducted by public institutions against the plaintiffs. Thus, there is no benefit of lawsuit to independently dispute the first and second confirmation disposition of this case, i.e., the phrase of restriction on participation itself.

B) Determination

As seen earlier, a determination on which a small or medium enterprise is subject to restrictions on participation in competitive tendering process open only to small or medium enterprises is made by the Minister of SMEs and Startups. As such, the dispute cannot be solved as to whether the defendant's first and second dispositions of this case by the Minister of SMEs and Startups only contests the restrictions on participation in competitive tendering process against public institutions subject to such restrictions

Therefore, the plaintiffs should be deemed to have legal interest as stipulated by Article 12 of the Administrative Litigation Act, i.e., the legal interest in the lawsuit. Thus, the above defense by the Minister of SMEs and Startups is without merit.

3) As to the defense against the illegality of a lawsuit against a non-administrative agency that issued an administrative disposition

A) Summary of the defense

According to Article 8-2(1) of the Act on the Development of Market Support, the subject of restriction on participation in competitive bidding is a public institution that is not the defendant but the Minister of SMEs and Startups. Therefore, the lawsuit of this case against the defendant Minister of SMEs and Startups is unlawful.

B) Determination

As seen earlier, Defendant SMEs and Startups’s first confirmation and second confirmation are acts directly affecting citizens’ rights and obligations, which constitute administrative dispositions subject to appeal litigation. The Plaintiffs legally filed the instant lawsuit seeking revocation against Defendant SMEs and Startups, which is the subject of each of the above dispositions, and thus, Defendant SMEs and Startups’s defense is without merit.

4) In the case of the first confirmation disposition in this case, as to the defense that there is no interest in the lawsuit due to the expiration of the validity period of the confirmation

A) Summary of the defense

The effective period of each of the instant first confirmation dispositions is until March 31, 2014. The effect of the restriction on bidding by the first verification disposition is maintained until March 31, 2014, and there is no schedule of competitive bidding until March 31, 2014, even if there is a schedule of competitive bidding, a considerable period is required for the allocation and supply of the bid volume. At that time, the effective period of the first verification disposition of this case is expired. Accordingly, as long as the effective period has already expired, the Plaintiffs have no interest in filing a lawsuit seeking the revocation of the first verification disposition of this case.

B) Determination

(1) At the time of filing a lawsuit, when an administrative disposition subject to cancellation becomes invalid due to the lapse of the period, that is, when the effect of the administrative disposition subject to sanctions becomes extinct due to the lapse of the period, the validity period of the administrative disposition itself, and the lapse of a specific period, etc., where it is deemed impossible to restore the original state even if the disposition is revoked due to the same cause as that of the relevant administrative disposition, it shall be deemed that there is a legal interest to seek revocation of the relevant disposition still in terms of ensuring the legality of the administrative disposition, judicial control thereof, expansion of citizens’ rights, etc. (see, e.g., Supreme Court en banc Decision 2006Du19297, Jul. 19, 2007).

(2) Since the validity period of each of the instant first measure is as seen earlier until March 31, 2014, the validity period of each of the instant first measure is already expired, and accordingly, the validity of the first measure of confirmation is also deemed to have expired. However, in order to participate in competitive tendering procedures ordered by public institutions after the expiration of the above validity period, the Plaintiffs must obtain a small and medium enterprise confirmation from the Minister of SMEs and Startups at all times, and the Defendant SMEs and Startups is highly likely to repeat the same disposition against the Plaintiff’s application for the issuance of a small and medium enterprise confirmation, and thus, it is necessary to clarify the legal issues in which the illegality of the first measure of this case is verified or unclear, and therefore, the Plaintiffs still have the legal interest to seek the revocation of the said disposition.

(3) Ultimately, Defendant SMEs and Startups’s defense is without merit.

5) A defense that a lawsuit to add a claim for revocation of the second verification disposition of the instant case is unlawful.

A) Summary of the defense

The second disposition of this case constitutes a new issuance based on an independent review, so long as the revocation claim of the first disposition of this case is unlawful due to the extinction of its validity term, the part seeking the revocation of the second disposition of this case does not meet the requirements for the alteration of lawsuit, and thus, is unlawful.

B) Determination

Since the period of validity of the first and second dispositions is set respectively, each of the above dispositions is bound to be a separate one different from that of the above dispositions. However, there is no evidence to deem that each of the above dispositions is identical to the other party and the grounds for the second dispositions of this case, and that the first and second dispositions of this case were conducted on the basis of the materials attached to the application form for the issuance of a new confirmation, there is no evidence to support it, but rather there is no separate application form for the issuance of a new confirmation, and the issuance of a new confirmation document seems to be made repeatedly and formally). Each of the above dispositions can be deemed to be the same as the other parts except the validity period. While the lawsuit seeking the cancellation of the first dispositions of this case is pending, the second dispositions was issued on the same ground as the expiration date of the validity period of the above dispositions, and it would rather be contrary to the economy of litigation. In view of the fact that the second dispositions of this case are likely to cause a substantial change in the plaintiffs' claims to revoke the second dispositions of this case, and there is no substantial change in litigation procedures.

It is reasonable to see that it is.

The above defense by the defendant is without merit.

B. Judgment on the merits

1) Determination on the assertion that Article 8-2(1)2 of the Act on the Development of Market Support is unconstitutional

A) Summary of the plaintiffs' assertion

Article 8-2 (1) 2 of the Act on the Development of Agricultural and Fishing Villages (hereinafter referred to as the "Act") determines whether to restrict participation in bidding depending on whether it is in a dominant or subordinate relationship with a large enterprise. However, this is in violation of the principle of prohibition of comprehensive delegation because all contents are delegated to Presidential Decree without embodying the meaning of a substantial control. subsidiary, and are in violation of the Constitution. Therefore, the Act is null and void, and the first confirmation and second confirmation and second confirmation based on the invalid provision are also illegal. Therefore, all of them should be revoked.

B) Determination

(1) Article 75 of the Constitution provides that "The President may issue Presidential Decrees with regard to matters delegated by the Act and matters necessary for enforcing the Act." At the same time, the Constitution provides for the constitutional basis of delegated legislation, which is to prevent arbitrary interpretation and enforcement of the Act by administrative power, to achieve the principles of parliamentary legislation and the rule of law, and "the specific scope of the Act" refers to "the purpose of determining the specific scope of the Act is to prevent arbitrary interpretation and enforcement of the Act and to achieve the rule of law," and "the basic matters of the Act, which are already prescribed by Presidential Decree and other subordinate Acts and subordinate statutes, such as Presidential Decree, are specific and clearly prescribed, so any person, who can at least be able to predict the outline of the Act, which shall be prescribed by Presidential Decree, etc. (see, e.g., Constitutional Court Decision 2011Hun-Ga19, 2012Hun-Ba12, 2012Hun-Ba98, 2013Hun-Ba11, 2010).

(2) In light of the following circumstances, considering the structure and contents of the Act on the Development of Market Support, the instant legal provision took a legislative method that provides for the contents of the relevant lecture and provides for partial supplement by the Presidential Decree, and thus, it seems that the instant legal provision can be predicted through the legal provision of this case. Thus, the instant legal provision does not violate Article 75 of the Constitution or violates the principle of clarity of the law.

(A) The instant legal provision was newly enacted on June 1, 2012 by Act No. 11462, pursuant to the Act on the Development of Agricultural and Fishing Villages (amended by Act No. 11462, Jun. 1, 2012). The purpose is to promote fair competition by restricting participation in the competitive bidding between small and medium enterprises and small and medium enterprises with the same type of business as, and by restricting participation in the competitive bidding between small and medium enterprises for the fair competition between small and medium enterprises. However, the types and forms of participation in the competitive bidding between large and medium enterprises which are detrimental to the fair competitive bidding between small and medium enterprises. As such, it is difficult or inappropriate to specifically treat certain small and medium enterprises as, in order to achieve such legislative purpose, based on the overall state of the nation’s economy, it should be different depending on the actual state and status of specific enterprises, and it is impossible

(B) Meanwhile, Article 7(1) of the Act on the Development of Market Support provides that “The head of a public institution shall conclude a procurement contract for competing products through restricted competition for only small and medium enterprises or designated competitive bidding among small and medium enterprises,” which restricts only small and medium enterprises to participate in competitive bidding among small and medium enterprises, and restricts a large enterprise or a small and medium enterprise that can be deemed a large enterprise to participate in competitive bidding among small and medium enterprises for fair competition among small and medium enterprises.”

(C) The instant statutory provisions clearly stipulate the requirements that the relevant small and medium enterprise should engage in the same kind of business as, and have a parent-subsidiary relationship with, the relevant large enterprise in order to flexibly cope with the changing economic situation and administrative demand. However, the instant statutory provisions delegate only the criteria for determining parent-subsidiary relationship to the president in order to flexibly cope with the changing economic situation and administrative demand.

(D) Article 8-2(1) of the Act on the Development of Market Support provides that "restrictions on participation in competitive bidding by small and medium enterprises which are in a relationship with large enterprises or parent-subsidiary relationship for "fair competition in competitive bidding" shall be limited. In light of this, it can be predicted that through the legal provision of this case, the major principles to be supplemented by the Presidential Decree will be sufficient to harm "fair competition in competitive bidding" to the extent that "small and medium enterprises in a relationship with large enterprises are subject to restriction on participation in competitive bidding."

(E) In addition, Article 2 subparag. 1 of the Act on Support of Development of Agricultural and Fishing Villages stipulates that a small and medium enterprise owner shall be a small and medium enterprise owner under Article 2 of the Framework Act on Small and Medium Enterprises or a small and medium enterprise cooperative under Article 3 of the Small and Medium Enterprise Cooperatives Act. Meanwhile, Article 2 of the Framework Act on Small and Medium Enterprises sets out the scope of a small and medium enterprise owner in detail, while Article 3-2 of the Enforcement Decree of the same Act provides for the meaning and criteria of control or subsidiary relationship of a related enterprise. According to the structure and content of the relevant statutes

2) Determination as to the assertion that Article 9-3 subparag. 2(c) of the Enforcement Decree of the Act on the Development of Market Support is unconstitutional

A) Summary of the plaintiffs' assertion

Article 9-3 subparag. 2 (c) of the Enforcement Decree of the Act on the Development of Agricultural and Fishing Villages (hereinafter “Enforcement Decree of this case”) provides for the index of parent-subsidiary relationship in cases where a large enterprise lends assets or guarantees debts corresponding to the amount exceeding the total number of shares issued or total amount invested by the small and medium enterprise. However, even in cases where a large enterprise leases assets from a large enterprise and assets of the same amount from other small and medium enterprises or from other small and medium enterprises that do not do so, the Enforcement Decree of this case violates the right to equality of the Plaintiffs by discriminating between the small and medium enterprise exceeding the total number of shares issued or total amount invested by the large enterprise and small and medium enterprises that do not have any substantial difference between the total number of shares issued or total amount invested by the large enterprise and the small and medium enterprise that is short of the total amount invested by the large enterprise without reasonable grounds. (2) Even if the company

In addition, the enforcement decree of this case also violates the Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises (hereinafter referred to as the "Mutual Cooperation Promotion Act") that promotes human and material cooperation between large enterprises and small-medium enterprises.

Therefore, the enforcement decree of this case is null and void, and the first confirmation disposition and the second confirmation disposition based on the invalid provision are also illegal, so all of them must be revoked.

B) Determination

(1) Article 8-2(1)2 of the former Act on the Development of Agricultural and Fishing Villages provides that the Enforcement Decree of the instant case, which is the basis of the first and second confirmation disposition, shall be unconstitutional due to infringing the Plaintiffs’ freedom of business, shall be combined with Article 8-2(1)2 of the former Act, to restrict the Defendant Administrator of the Public Procurement Service from participating in competitive bidding between small and medium enterprises where a small and medium enterprise borrows assets equivalent to the amount exceeding the total number of issued stocks or total amount of investment from a large enterprise, and accordingly, there is room to restrict the Plaintiffs’ freedom of business. However, the Enforcement Decree of the instant case complies with the excessive prohibition principle under Article 37(2) of the Constitution.

(A) In light of the importance of a small and medium enterprise’s national economy, our Constitution stipulated the protection and fostering of small and medium enterprises as a State’s task (see Article 123(3)). Accordingly, the Framework Act on Small and Medium Enterprises imposes an obligation to establish and implement small and medium business policies in the government, etc. for the purpose of supporting creative and independent growth of small and medium enterprises, improving the industrial structure, and developing the national economy in a balanced manner (see Articles 1 and 3, etc.)

(B) The open competitive bid system between small and medium entrepreneurs is to secure markets for small and medium enterprise products and to induce the enhancement of competitiveness among small and medium enterprise owners by having only small and medium enterprise owners participate in the public procurement market, and at the same time to prevent establishment of disguised small and medium enterprise enterprises. Of note, it is an important public interest to protect the improvement of competitiveness of small and medium enterprises and the rationalization of

(C) Article 8-2(1)2 of the former Act on the Development of Agricultural and Fishing Villages limits the participation of small and medium enterprises in competitive bidding in large enterprises. Generally, a dominant or subordinate relationship between companies can be determined on the basis of whether a company is in a position that may have an influence on the ownership or management of the relevant company. In other words, the Supreme Court Order 2014HunBa419 Decided December 29, 2016 (see, e.g., Constitutional Court Order 2014HunBa419 Decided December 29, 2016). In other words, the term “controlling or subordinate relationship between a large enterprise and a small and medium enterprise” means a case where a large enterprise is likely to interfere with fair competition in competitive bidding by taking into account various factors, such as human and material relations between the enterprises, business relations between the enterprises, the current status of the relevant market, and the abnormal relationship between the small and medium enterprise and the small enterprise.

(D) The instant provision was introduced to ensure fair competition in competitive bidding between small and medium entrepreneurs by preventing a large enterprise with competitiveness similar to a large enterprise from entering the competitive bidding market between small and medium entrepreneurs through the aforementioned means, as many cases arise through the method of lending assets equivalent to the amount exceeding the total number of outstanding stocks issued or total amount invested by the small and medium enterprises.

(E) Small and medium enterprises participating in competitive tendering process open only to small and medium enterprises shall have facilities to directly produce and provide competitive products (Article 9(1) of the Enforcement Decree of the Sales Market Support Act). However, among small and medium enterprises, if a small enterprise borrows assets equivalent to the amount exceeding its total number of outstanding stocks or total amount of investment from a large enterprise, it can be easily satisfied the above requirements, and accordingly, it is highly likely that it will depend on, control, and subordinate to a large enterprise. Furthermore, the competitive tendering process open only to small and medium enterprises may be invalidated by causing unfair outcomes that considerably reduce the opportunity for other small and medium enterprises to receive orders. Therefore, regardless of whether to pay reasonable rents, restricting participation in competitive tendering process open only to small and medium enterprises which are controlled or subordinate to a large enterprise can be one of the appropriate means to achieve the above legislative purpose.

(F) Even if a small and medium enterprise falls under Article 8-2 (1) of the Enforcement Decree of the instant case, the relevant small and medium enterprise is not allowed to participate only in the competitive bidding ordered by the head of the public institution, and there is no obstacle to the public sector procurement contracts or private sector’s private economic activities. Furthermore, the relevant small and medium enterprise is also allowed to participate in competitive bidding between small and medium entrepreneurs by securing financial soundness by increasing total number of outstanding shares or total amount of investment, etc. Furthermore, it is also possible to participate in competitive bidding between small and medium entrepreneurs by exceeding the restriction of the Enforcement Decree of the instant case. In addition, the instant provisions are limited to the small and medium enterprise operating the same kind of business as large enterprises (see Article 8-2 (1) 2 of the former Act on the Support of Development of Agricultural and Fishing Villages).

(2) The enforcement decree of this case prohibits a person from arbitrarily treating the same in essence as that of the right to equality of the Plaintiffs by infringing on the right to equality of the Plaintiffs, and the principle of equality based on Article 11(1) of the Constitution. It means that not only when applying statutes but also when enacting laws, unreasonable discrimination shall not be treated (see, e.g., Supreme Court en banc Decision 2005Du14417, Oct. 29, 2007).

The provision of the Enforcement Decree of this case, unlike the small and medium enterprises that did not receive assets from the large enterprises, or leased assets equivalent to the amount that does not exceed the total number of issued stocks or total amount of investment from the large enterprises, is to treat them differently from the small and medium enterprises that received assets from the large enterprises, and therefore, it cannot be deemed that the Plaintiffs’ equal rights are arbitrarily infringed.

(A) Small and medium enterprises falling under Article 1 of the Enforcement Decree of the instant case and other non-small and medium enterprises are meaningful in terms of financial soundness. Small and medium enterprises that have leased assets equivalent to the amount exceeding the total number of issued stocks or total amount of investment from large enterprises are highly likely to have economic, de facto control or subordinate relationship with large and medium enterprises, as the size of assets leased from large enterprises is large compared to their size

(B) In particular, K production business, in which the Plaintiffs are employed, falls under the equipment industry that requires a large amount of initial investment costs for installing production facilities. In such circumstances, when a small or medium enterprise borrows assets equivalent to the amount exceeding its total number of outstanding stocks or total amount of investment from a large enterprise, it can easily satisfy the requirements for facilities to directly produce and provide competing products, and in substance, it has the superior competitiveness compared to other small or medium enterprises by using the assets of the large enterprise as they are and having the capabilities similar to the large enterprise. As such, the physical foundation of the business is entirely dependent on the relationship of lending assets with the large enterprise, and thus, it can be deemed that there exists a reasonable reason to treat the small or medium enterprise differently from other small or medium enterprises

(C) Administrative legislators have certain discretion to determine whether to treat a small or medium enterprise as an enterprise in a dominant or subordinate relationship with a large enterprise within the scope of delegation, taking into account various factors, such as material relevance, human relations, and the entrustment of business with large enterprises and small or medium enterprises.

It is difficult to view that the standard of the provision of the Enforcement Decree of this case clearly deviates from the scope of discretion permissible under the Constitution because it is considerably unreasonable.

(3) Whether the enforcement decree of the instant case violates the Collaborative Cooperation Promotion Act

(A) According to Article 1 of the Collaborative Cooperation Promotion Act, the purpose of the Collaborative Cooperation Promotion Act is to enhance the competitiveness of large enterprises and small-medium enterprises by consolidating win-win cooperation between large enterprises and small-medium enterprises and achieve their shared growth by resolving the polarization between large enterprises and small-medium enterprises. According to Article 2 Subparag. 3 of the same Act, win-win cooperation refers to joint activities aimed at enhancing their mutual interests in the fields of technology, human resources, funds, purchase, marketing, etc. between large enterprises and small-medium enterprises, or between commissioning enterprises and commissioned enterprises and commissioned enterprises.

(B) On the other hand, the legal provision of this case limits participation in the competitive bidding of small and medium enterprises with the same kind of business as large enterprises in the competitive bidding of small and medium enterprises and limits the participation of small and medium enterprises in the competitive bidding of small and medium enterprises with a dominant or subordinate relationship, and the Enforcement Decree of this case, which is delegated by the above provision, sets the "where a large enterprise lends assets or guarantees debts equivalent to the amount exceeding its total number of stocks issued or total amount of investment in a small and medium enterprise" as an index of a dominant or subordinate relationship. It aims

(C) As can be seen, the Promotion of Collaborative Cooperation is aimed at promoting mutual benefits through collaborative cooperation on the premise that a large enterprise is divided into a large enterprise and a small-medium enterprise. It is difficult to view the instant Enforcement Decree provision to prevent the most large enterprise from participating in competitive bidding between small and medium enterprises and preventing acts that undermine fair competition. Rather, the instant Enforcement Decree provision guarantees fair competition between small and medium enterprises through the instant Enforcement Decree provision, thereby enhancing the competitiveness of small and medium enterprises. Furthermore, the instant Enforcement Decree provision is consistent with the legislative purpose of the Promotion of Collaborative Cooperation Act.

3) Sub-determination

Therefore, the plaintiffs' claims against the defendant Minister of SMEs and Startups on the premise that the legal provisions of this case and the Enforcement Decree provisions of this case are null and void cannot be accepted without further review.

4. Determination on the claim against the Defendant’s Administrator of the Supply Administration

A. Determination as to this safety defense

1) As to the defense that the instant notice is not a disposition subject to appeal litigation

A) Summary of this defense

The instant notification that the Administrator of the Public Procurement Service suspends the allocation of government-funded K quantity to the Plaintiffs on February 4, 2014 is not a disposition that restricts the Plaintiff’s participation in competitive bidding, but a disposition that continues to maintain the measures of suspending the allocation of government-funded K quantity on December 19, 2013 pursuant to Article 4-3(1)1 of the Additional Conditions for Goods Purchase Contracts (see the foregoing 1-f.3). Accordingly, the instant notification does not constitute an administrative disposition that is subject to appeal litigation.

B) Determination

In full view of the following circumstances, Defendant Administrator’s notice of this case is an act of subsequent execution based on the instant confirmation disposition of the Minister of SMEs and Startups and Article 8-2(1) of the former Act on the Development of Agricultural and Fishing Villages, based on these legal principles, and the structure and contents of the relevant provisions such as the Act on the Development of Agricultural and Fishing Villages, which serve as the basis for Defendant Administrator’s notification, and the Enforcement Decree of the same Act, and the announcement of the instant tender and the additional special conditions, and the overall purport of the pleading in each of the items as stated in the evidence Nos. 14 and No. 14 and No. 2, and it directly affects the rights and obligations of the plaintiffs, who are the other party. Thus, Defendant Administrator’s notice of this case is an exercise of governmental authority as an enforcement of the Act on the specific facts conducted by Defendant Administrator’s Public Procurement Service, which is an administrative agency, and thus, is subject to appeal litigation (hereinafter

(1) Article 8-2(1) of the Act on the Support of Market Development provides that "the head of a public institution shall restrict the participation of a person who operates a small or medium enterprise falling under any of the following subparagraphs for fair competition of competitive tendering process open only to small and medium enterprises," and the subject of the disposition of restriction on participation in competitive tendering process is "the head of a public institution identical to the defendant Administrator of the Public Procurement Service." The defendant finally judged that the plaintiffs are in a parent-subsidiary relationship with the large enterprise, and

(2) According to the instant notification, the Plaintiffs cannot be allocated volume until they obtain eligibility to participate in competitive tendering process open only to small and medium entrepreneurs pursuant to Article 8-2(1) of the former Act and Article 9-3 of the Enforcement Decree of the same Act. This constitutes a legal disadvantage that directly affects the Plaintiffs’ rights and obligations.

(3) Although the Administrator of the Public Procurement Service made the instant notification on the grounds of additional special conditions, the additional special conditions mean confirming the contents of Article 8-2(1) of the former Act on the Development of Agricultural and Fishing Villages and Article 9-3 of the Enforcement Decree of the same Act. The instant notification constitutes subsequent enforcement with the main points to ensure that the allocation of quantities is suspended accordingly. Therefore, it is difficult to regard the instant notification as measures taken in pure private economic status, and rather, it is reasonable to deem that the Defendant Public Procurement Service was a measure taken in a superior position to achieve the administrative purpose called the realization of public interest.

(4) The Defendant Administrator of the Public Procurement Service did not use the expression "disposition" at the time of the instant notice, and did not provide guidance on the method of appeal, such as administrative litigation, and thus, it is difficult to deem the instant notice to have been in an external form of administrative disposition. However, prior to the instant notice, the Defendant Administrator notified in advance that "the person falling under Article 8-2 (1) of the Sales and Support Act is unable to participate in the instant tender, and if confirmed as the pertinent company after the conclusion of the contract, the contract is terminated and the amount already allocated is no error in recovering." The instant notice aims to suspend the allocation of quantity because the Plaintiffs are subject to restriction on participation in bidding pursuant to Article 8-2 (1) of the former Act on the Promotion of Development and Support of Agricultural Markets. The Plaintiffs also recognized the instant notice as an administrative disposition and filed an appeal litigation thereon. In this regard, the instant notice can be deemed to have taken the appearance of administrative disposition.

2) As to the defense that there is no interest in legal action against the instant notification disposition

A) Summary of this defense

Even if the Plaintiff’s measure to suspend the allocation of the shares is considered an administrative disposition, there is no legal interest in dispute over this, since the Plaintiff’s measure was not concluded with the Defendant’s Administrator of the Public Procurement Service in the year 2013, and there is no legal interest in dispute. Moreover, as the contract was already invalidated after May 31, 2014, the date of termination of the instant contract, there is no interest in dispute over the illegality of the measure

B) Determination

(1) Although the contract period at the time of the instant notification disposition has already expired, the Defendant Administrator may repeat the disposition for the same reason as before applying the provision of the Enforcement Decree of the instant case to the Plaintiffs in the future. Thus, it constitutes a case where there is a need for explanation of legal issues in which illegality is verified or unclear. Accordingly, the Plaintiffs still have a legal interest to seek revocation of the instant notification disposition.

(2) Even if Plaintiff H did not participate as a member of the Q cooperative at the time of the instant tender, the Administrator of the Public Procurement Service became unable to participate in the competitive bidding conducted by the Defendant H by taking the instant notification disposition against Plaintiff H, thereby affecting Plaintiff H’s rights and obligations. Furthermore, in the future, Defendant Public Procurement Service is likely to repeat the same cause as before by applying the instant provision of the Enforcement Decree to Plaintiff H. Accordingly, Plaintiff H has a legal interest in seeking the revocation of the instant notification disposition.

3) Sub-determination

Ultimately, the defendant's defense of safety by the Administrator of the Public Procurement Service is without merit.

B. Judgment on the merits

1) Summary of the plaintiffs' assertion

The legal provision of this case is unconstitutional and invalid in violation of the principle of prohibition of comprehensive delegation. Since the enforcement decree of this case is unconstitutional by infringing the plaintiffs' equality rights and freedom of business, and is invalid in violation of the Promotion of Collaborative Cooperation and Cooperation Act, the notification disposition of this case based on these provisions is also unlawful.

2) Determination

The legal provisions of this case cannot be deemed to be in violation of the principle of prohibition of comprehensive delegation, and the enforcement decree of this case shall not be deemed to infringe equality rights and freedom of business, or to violate the Collaborative Cooperation Promotion Act, as seen in the above 3-B.1 and 2.

Therefore, the plaintiffs' claims against the defendant under the premise that the legal provision of this case and the Enforcement Decree provision of this case are null and void cannot be accepted without the need for further review.

5. Conclusion

Therefore, all of the plaintiffs' claims against the defendants must be dismissed. Among the part against the defendant Minister of SMEs and Startups of the judgment of the court of first instance, the part concerning the main claim (the claim for revocation of the first disposition of this case) and the part concerning the defendant Administrator of the Public Procurement Service is unfair. However, since the defendants did not appeal against this part, the court of first instance cannot dismiss this part of the claims by cancelling the judgment so that they are disadvantageous to the plaintiffs under the principle of prohibition of disadvantageous alteration, and only the plaintiffs' appeal with no reason is dismissed. The part concerning the conjunctive claim (the claim for revocation of the second disposition of this case) among the part concerning the defendant Minister of SMEs and Startups of the judgment of the court of first instance against the defendant Minister of SMEs and Startups of the judgment of the court of first instance is justified, and therefore

The presiding judge, appointed judge;

Judge Park Jong-soo

Judges Han Young-young

1) (Attachment 1) A claim for cancellation of a disposition made on each date listed in the list (attached Form 2) and a claim for cancellation of a disposition made on each date listed in the list (attached Form 2) is not logically incompatible and thus constitutes a non-petition preliminary consolidation seeking a trial by attaching an order of priority to several claims mutually compatible.

2) In the case of Plaintiff H, the lawsuit in this case was pending on June 29, 2018, merged with S Co., Ltd., and the said S Co., Ltd took over the legal proceedings of H on November 23, 2018, and the said S Co., Ltd. (hereinafter referred to as “Plaintiff H, regardless of whether before or after the said merger.”

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.