Suwon Investment Co., Ltd. (Attorneys Lee Jae-red et al., Counsel for the defendant-appellant)

Busan Metropolitan City Mayor (Law Firm Sejong, Attorneys Cho Jae-ho et al., Counsel for the plaintiff-appellant)

May 23, 2014

1. On August 26, 2013, the Defendant’s revocation of an order of supervision for the correction of the structure of funds to the Plaintiff for the settlement of accounts and tunnels for private investment projects.

2. The costs of the lawsuit are assessed against the defendant.

3.The effect of the supervisory order described in paragraph (1) shall be suspended until this judgment becomes final and conclusive.

The same shall apply to the order.

1. Details of the disposition;

A. Status of the parties

1) The account settlement tunnel private investment project (hereinafter “instant project”) is a project that constructs and operates a four-line tunnel that connects the Busan and Busan urban center by “BTO (BTO)” under Article 4 subparag. 1 of the Act on Private Participation in Infrastructure (hereinafter “Private Investment Act”) to “the ownership of the relevant infrastructure belongs to the State or a local government upon the completion of the construction of the infrastructure, and the project implementer recognizes the project implementer’s right to manage and operate the infrastructure for a certain period of time.”

2) The Plaintiff (a trade name at the time of its establishment was “the Maqui Korean Infrastructure Truck,” but was changed to a “Water Settlement Investment Co., Ltd.” on May 31, 2005; hereinafter “Plaintiff”) was a corporation established on June 4, 2001 by Malaysia to acquire the right to manage and operate a water settlement tunnel, which is a corporation, and the Defendant is the competent authority of the instant business.

(b) Succession to the status of a party to the first concession agreement and concession agreement;

1) On July 7, 199, the Han-gu Construction Co., Ltd. and the half-do corporation established on July 7, 199 were designated as the project implementer of the instant project, and entered into the concession agreement with Busan Metropolitan City on December 22, 199 (No. 16-1; hereinafter “the concession agreement of this case”) and started the operation of the water settlement tunnel from December 2, 2001 after constructing the water settlement tunnel.

2) On July 10, 2001, the Plaintiff entered into a contract with a corporation taking over management and operation rights of a water settlement tunnel, related assets and rights at KRW 93.7 billion. On May 16, 2002, the Plaintiff acquired assets and rights related to the instant business from a corporation taking over accounts settlement tunnels. Busan Metropolitan City approved the transfer and acquisition of management rights of the above water settlement tunnels on May 10, 2002.

3) On June 21, 2001, the Plaintiff borrowed approximately KRW 73 billion from the national bank, etc. at a floating rate on June 21, 2001. On May 16, 2002, the Plaintiff issued subordinated bonds with KRW 12 million to the fund D (Macquar Glbal Inc. Ltd., hereinafter referred to as “MGIF C&D”) with the fund C and Macquar global infrastructure trucked on May 16, 2002.

4) On January 21, 2005, Maqui Infrastructure Infrastructure Investment Company entered into a stock acquisition agreement which takes over 100% of the Plaintiff’s stocks held by MKH on February 16, 2005, and entered into a senior loan agreement between the Plaintiff and the Plaintiff, thereby lending approximately KRW 72 billion to the Plaintiff at a fixed rate of 8.5% per annum, thereby allowing the Plaintiff to repay the total amount of senior loan to the existing national bank, etc., and ② concluding a subordinated loan agreement, and accordingly, lending approximately KRW 19.2 billion to the Plaintiff at an interest rate of 20% per annum, thereby enabling the Plaintiff to repay the total amount of subordinate bonds issued by the existing MGIF C&D.

C. The defendant's disposition of this case

1) In around 2009, Busan Metropolitan City proposed negotiations related to the instant concession agreement with the Plaintiff on the following issues: ① tax rate adjustment following the amendment of the Corporate Tax Act; ② minimum import guarantee rate adjustment; ③ adjustment of the rate of inflation at the time of toll adjustment; ④ adjustment of actual yield adjustment; ④ transfer and acquisition of the fisheries tunnel; ⑤ transfer and acquisition of the fisheries tunnel; and ④ entry into the funds re-financing-related provisions; and accordingly, the Plaintiff and Busan Metropolitan City conducted negotiations on the said matters, including negotiations on May 7, 2009 and the second negotiation on November 16, 2009, but did not reach agreement.

2) From August 23, 2010 to November 5, 2009, the Board of Audit and Inspection conducted an audit of total 16 sewage terminal treatment facilities, including 29 public-private partnership projects, such as Incheon International Airport Expressway, Songdo and Man-do, and Busan and Youngdo, where the Government pays compensation to private investors due to the low actual demand among the public-private partnership projects operated by the Board of Audit and Inspection from August 23, 201 to November 2009. The instant project was also included in the subject of audit and inspection. The Board of Audit and Inspection, which audited the instant project, notified Busan Metropolitan City of the following audit results:

1. The concession agreement was calculated based on the financial model that applied the equity capital and ratio of other persons to financing, interest rate of other persons, corporate tax, etc. at the time of conclusion of the agreement, and thus, additional profit would have accrued to investors due to the reduction of corporate tax and early distribution effect, etc. Therefore, it is reasonable to share the profits by reducing the minimum operating revenue through the concession agreement regarding the voluntary financing of build-transfer-lease projects. According to the revised basic plan on June 3, 2004 (Public Notice of the former Ministry of Planning and Security No. 2004-7, Article 27 through 30 of the current Basic Plan No. 20, supra, Article 60 of the concession agreement) and the proposed plan on reducing the operating revenue of new government-transfer-lease projects under Article 50,00,000,000,000,000,000,000,000,000,000,000,000,000.

3) On August 26, 2013, the Defendant issued an order to change the financial structure of the Plaintiff as of the end of 2012 to increase its own financial burden despite the Plaintiff’s duty to faithfully operate the settlement tunnel, and to revise the financial structure in the direction of increasing its own financial burden (hereinafter “instant disposition”). As of the end of 2012, the debt ratio has reached 907%, and if such situation continues, it is likely to cause problems in road management, which are public infrastructure, due to the impossibility of normal operation of the settlement tunnel, which is the infrastructure. Accordingly, pursuant to Article 45 of the Private Investment Act and Article 35 subparag. 1 of the Enforcement Decree of the same Act, the Defendant ordered the Plaintiff to change the capital into the financial model of the concession agreement within 90 billion won, and to correct each financial structure within 4.46 billion won as of the end of 2012 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 2, 4 through 7, 14, Eul evidence 16, 18, 19, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

1) Non-existence of the duty to maintain funds

The Plaintiff’s financial structure is of the nature to be determined based on the Plaintiff’s autonomous judgment and operational ability. The instant concession agreement does not have any provision on the Plaintiff’s duty to maintain the financial structure, and the structure of funds included in the brine formula regarding the calculation of tolls under the said convention is limited to the family value, and the decrease in equity capital and the increase in borrowings therefrom are only general characteristics in private investment projects. Therefore, the instant concession agreement cannot be deemed to have the duty to maintain the financial structure of the Plaintiff under the said agreement. Accordingly, the instant disposition based on this premise is unlawful.

(ii) the requirements of supervisory orders and deviations from limits;

Even if the Plaintiff bears the duty to maintain funds in accordance with the instant concession agreement, the Busan Metropolitan City can take follow-up measures in accordance with the concession agreement in the position of the contracting parties, and the circumstance that the Plaintiff’s debt ratio is somewhat high does not constitute “where necessary for the normal operation of facilities,” which is the requirement for issuing a supervisory order under Article 45 of the Public-Private Partnerships Act, and the change of the Plaintiff’s financial structure would seriously undermine the Plaintiff’s free management activities, which are the project implementer.

3) Violation of the principle of clarity.

The instant disposition violates the principle of clarity because it is unclear whether the Plaintiff’s shareholder and creditor are changed, whether additional investment should be made, and whether the loan interest rate should be restored to the original state.

4) Lack of feasibility

The restoration of the financial structure of the plaintiff includes the increase of capital, so it is impossible for the plaintiff to implement it without the cooperation of the Maqui Infrastructure Investment Company, a corporation separate from the plaintiff.

5) Violation of the duty to establish and publicly announce the disposition standards

In accordance with Article 20 (1) of the Administrative Procedures Act, the defendant should have established and publicly announced the disposition standard of supervisory order under Article 45 of the Act on Private Participation in accordance with Article 20 (1).

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) The main contents of the instant concession agreement concluded on December 22, 1999 by the Suwon District Co., Ltd. and Busan Metropolitan City are as follows.

본문내 포함된 표 제1조(목적) 본 협약은 도로법 제34조의 규정에 의거 1995년 5월 22일 ‘비관리청의 도로공사 시행허가’를 득한 ‘수정산터널축조공사’를 사회간접자본시설에 대한 민간투자법 규정에 의한 민간투자사업으로 변경함에 있어, 협약당사자인 부산광역시와 사업시행자간에 필요한 사항에 대하여 협약함을 목적으로 한다. 제3조(사업시행자의 지정) 부산광역시는 본 협약 체결과 동시에 수정산터널 주식회사를 민간투자법 및 같은 법 시행령에 의거한 본 사업의 사업시행자로 지정을 필한 것으로 하고, 사업시행자에게 관리운영권을 설정하여 다음 각 항과 같은 행위를 할 수 있는 자격 및 권한과 권리를 지정, 승인, 설정 및 부여한다.(각 항 생략) 제4조(무상사용) 무상사용기간은 운영개시일로부터 25년간으로 한다. 제5조(제반시설의 귀속) 본 사업에 의한 도로시설의 소유권은 민간투자법 및 본 협약에 따라 공사준공 후 부산광역시에 귀속되며, 운영기간 종료 후 사업시행자는 본 협약에 따른 무상사용권 및 관리운영권을 부산광역시에 이양하여야 한다 제6조(위험부담) 사업시행자는 본 사업을 본 협약에 따라 자신의 위험과 비용으로 수행함을 원칙으로 한다. 제7조(사업시행자의 의무 및 권한) ① 사업시행자는 본 사업과 관련된 제반 법규 및 규정을 준수하고 본 협약을 성실히 이행하여야 하는 책임과 의무를 지며, 본 사업의 시행과 관리운영이 성공적으로 추진되도록 성실히 노력하여야 한다. ② 본 협약 및 민간투자법에서 달리 규정한 경우를 제외하고, 부산광역시는 본 사업기간동안 제3조에서 규정한 사업시행자의 자격 및 권한과 권리를 철회, 취소, 박탈 또는 변경하지 못한다. 제10조(총사업비) 총사업비는 ‘별첨1’에 제시한 1997년 불변가기준 1,393.3억 원으로 한다. 제12조(사업시행자에 대한 지원사항) ① 부산광역시는 사업시행자 및 시공자가 본 도로 및 부속시설의 공사수행에 필요한 인·허가 및 설계변경, 관련 기자재 및 장비의 수입 등 제반 행정절차를 적기에 완료할 수 있도록 협조하며 이를 적극 지원한다. ② 본 협약체결 이후 관련 법령의 변경과 제도개선이 있는 경우 협약당사자간 협의하여 추가협약을 체결하여 이를 반영할 수 있다. ③ 다음 각 호의 1에 해당하는 사유가 발생하는 경우, 부산광역시는 민간투자법 및 자금지원 관련법령에 따라 사업시행자에게 그 발생비용, 손실 또는 부족운영자금에 대하여 보조금을 교부하거나 장기대부를 할 수 있다. 1. 민간투자법 시행령 제37조 각호의 1에 해당하는 경우 2. 부산광역시의 방침 등에 따라 제39조에 의거 조정된 통행료의 일부 또는 전부가 실제로 적용되지 않는 경우 3. 제44조에 의한 협약종료 요건 발생일로부터 실제 부산광역시가 사업시행자에게 같은 조항에 의한 적정 가치를 지급할 때까지 운영자금 부족이 발생하는 경우 ④ 본 연결도로(접속도로, 가야고가, 백양산터널 포함)가 운영개시일 이전에 준공되지 않거나, 운영기간 중 동 연결도로의 파손, 통행중단 및 제한 등으로 인하여 본 사업의 운영에 중대한 지장을 초래하는 경우 부산광역시는 통행료 수입차질액을 보조금으로 교부하거나 이와 상응하는 필요한 조치를 취한다. 제28조(유지관리 및 시설물의 품질 확보) ① 사업시행자는 본 도로의 기능이 유지되도록 전 구간에 대한 유지보수를 하여야 하며, 선량한 관리자로서의 의무를 다하여 공익목적에 맞도록 본 도로를 관리하여야 한다. 제34조(사업수익률) ① 사업기간에 적용할 실질수익률(Project IRR)은 8.28%로 한다. ② 실질수익률 산정시 현금흐름표는 ‘별첨 4’와 같다. 제36조(최초통행료) ① 운영개시년도의 최초통행료는 ‘별첨 3’의 공식을 고려하여 산정하며, 본 도로의 통행료 징수방식 등 제반여건을 감안하여 100원 단위(100원 미만 반올림)로 결정한다. ② 제1항에 의거하여 협약당사자간의 합의에 의해 결정한 차종별 최초통행료는 2001년 기준 소형 900원, 대형 1,400원, 초대형 2,000원으로 한다. ③ 최초통행료는 제1항 및 제2항에 불구하고 총사업비의 변경 등으로 불가피하다고 판단될 경우 차입금 상환기간을 감안하여 부산광역시와 사업시행자의 합의에 의해 변경할 수 있다. 제39조(통행료의 조정) ① 통행료는 원칙적으로 연1회에 한하여 조정할 수 있으며, 사업시행자는 최초통행료를 기초로 매 회계연도에 대한 통행료를 전년도 물가상승률 등을 반영하여 자율적으로 결정, 부산광역시에 신고한다. 단, 물가상승률 변동 등이 발생하였음에도 불구하고 직전 회계연도에 통행료를 조정하지 않은 경우에는 최종 통행료 조정이 있었던 회계연도 이후의 기간 동안 물가상승률 등을 합산한 범위 내에서 통행료를 결정한다. ⑤ 다음의 사유가 발생하는 경우, 제1항과는 별도로 통행료를 조정하되 인하사유가 발생하는 경우에는 차입금 상환가능성 등을 감안하여 협약당사자간에 협의하여 결정한다. 1. 전년도말 기준으로 전년도의 실제 통행료 수입이 ‘별첨2’에 제시된 불변통행료 수입의 90%에 미달하거나 110%를 초과하는 경우 2. 불가항력 사유 또는 부산광역시의 귀책사유, 기타 사업시행자의 책임 없는 사유로 인하여 사업시행자에게 손실이나 비용 등이 발생한 경우 3. 부산광역시가 민간투자법 제53조, 같은 법 시행령 제37조에 의거하여 재정지원을 하는 경우 ⑥ 통행료 조정 사유가 발생할 경우 부산광역시는 통행료 조정·무상사용기간 조정 및 보조금 교부 또는 장기대부를 협약당사자의 합의하에 선택적으로 또는 병행하여 실시할 수 있다. 제43조(협약종료의 일반적 사유 및 그 효과) ① 본 협약은 본 협약의 규정에 따라 사전 종료되지 아니하는 한, 본 협약 제4조에 규정한 무상사용기간의 만료와 함께 종료한다. 제45조(본 협약 중도해지의 효과) ① 제44조 제1항 제1호 내지 제3호 및 제5호에 의하여 본 협약이 해지되는 경우 부산광역시는 사업시행자와 협의하여 본 도로의 그 해지 당시의 장부가액(관리운영권 + 운영실비비, 공사기간중인 경우는 기성부분 등)에 해당하는 금원을 지급한다. ② 제44조 제1항 제4호, 제2항에 의하여 해지되는 경우 부산광역시는 사업시행자와 협의하여 본 도로의 해지 당시의 장부가액과 제34조의 사업수익률에 따라 산정한 남은 운영기간동안 사업시행자가 얻게 될 이익을 합한 금원을 지급한다. ③ 제1항 내지 제2항의 경우에 각 그 협의개시일로부터 30일 이내에 지급할 금원에 대한 협약당사자간의 합의가 이루어지지 아니하는 때에는, 협약당사자가 지정한 공인회계사에게 그 금원을 산정하도록 한다. 제46조(협약 변경의 통지) 부산광역시는 본 사업기간 중 다음 사항이 변경되는 경우에는 사업시행자로 하여금 그 사유와 변경의 구체적인 내용을 대주단을 대리한 주간사에 통지하도록 한다. 아울러 부산광역시는 자금차입계약의 체결 후 다음 사항을 포함한 본 협약의 내용을 변경하고자 하는 경우에는 사업시행자로 하여금 대주단과 사전 협의하도록 한다. 1. 공사기간 2. 최초통행료 산정 및 통행료 조정기준 3. 총사업비에 관한 사항(항목별 내용, 투입시기, 금액사후정산 사항의 기준금액 및 인정기준) 4. 사업시행자에 대한 출자자 변경 및 증자의 경우 그 납입시기와 납입금액 5. 부산광역시의 지원사항 및 지급보증 관련사항 제51조(분쟁의 해결) ① 협약 당사자는 본 협약으로부터 또는 본 협약과 관련하여 발생하는 이의 또는 분쟁 등을 신의성실의 원칙에 입각한 상호협의에 의하여 해결하도록 노력하기로 한다. ② 제1항에 의한 협의로 해결되지 않는 사항의 경우에는 가급적 대한상사중재위원회 중재규칙에 따른 상사중재에 의하여 해결하도록 노력하되, 민사재판이 불가피할 경우에는 그 합의관할은 부산지방법원으로 한다. 제53조(적용법규) ① 본 협약 및 그에 따라 체결되거나 작성되는 모든 계약서 및 서류는 대한민국 법에 따라 규율되고 해석된다. ② 본 협약에 따로 규정되지 아니한 사항에 대하여는 국가를 당사자로 하는 계약에 관한 법률, 민간투자법 및 같은 법 시행령 등 관계법령과 민간투자사업기본계획 및 시설사업기본계획에 규정된 내용에 따른다. 별첨 3. 수익률 및 사용료의 결정 민간투자사업의 수익률과 사용료는 다음의 공식에 의하여 결정함

A person shall be appointed.

NAi at the time of completion of the facility: NAI at the time of termination of the period of free use, ownership, or operation of the facility (if ownership is a facility permanently reverted to the private sector, the period subject to analysis): Provided, That the amount of the government's financial support shall be excluded from the annual operating expenses: OCR : Annual operating expenses : net profitr due to supplementary projects (CCi), annual operating expenses (OCR), annual operating expenses (OCRi), annual operating expenses (OCR), supplementary projects (OCi), etc. shall be calculated at the 197 irregular price; ○n means the construction period of the facility, and 25 years for free use or use or profit-making (n+1N period).

2) On April 2, 2002, the corporation entered into a concession agreement with Busan Metropolitan City as follows.

Articles 10, 14, 33, and 36 of the Schedule in this case’s concession agreement included in the main text are amended as follows. The total project cost under Article 10 (total Project Costs) shall be KRW 1,280.6 billion based on the 1997 Non-Disciable Price 1,280.60,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,0000,000,000,000,000,000,0000,000,000,000,000,000,000,00,000,00.

3) On May 10, 2002, Busan Metropolitan City approved the acquisition of the Plaintiff’s right to manage and operate a water tunnel and the conditions for approval presented by the Busan Metropolitan City are as follows:

The transferee shall comprehensively succeed to the obligations and rights of the parties under the concession agreement under the concession agreement and implement the provisions of the concession agreement: Provided, That among the obligations of the parties as the concessionaire of a fisheries tunnel, those arising prior to the effective date of transfer are continued to exist in a fisheries tunnel, and those in the status of non-performance or incomplete performance continue to exist in a bilateral construction company and semi-do comprehensive construction contractor. In this regard, a bilateral construction company and semi-do comprehensive construction company shall submit to the Busan Metropolitan City a written pledge to perform it. The fisheries tunnel corporation shall enter into a contract for the maintenance and management of the facilities by the transferee and obtain the approval of the Mayor of Busan Metropolitan City, and the level of services and maintenance and management of the facilities for users shall be identical or improved as before the transfer. The expenses incurred by the transfer, acquisition, and vicarious improvement, etc. of the management and operation rights shall be treated as expenses between the parties to the contract.

4) The result of the change in the financial structure of the Plaintiff’s two times is as follows.

The financial structure of 0.2. 2. 2. 1. 2. 2. 2. 1. 2. 2. 2. 2. 2. 2. 2. 2. 2. 2. 2. 1, 2002 ( February 16, 2005) the 8. 5. 8. 5% 12.7% 7. 7% 74. 7. 7. 7. 7. 7. 7. 7. 7. 7. 8. 5% 7. 8. 5% 7. 8. 5% 7. 8. 4. 95% 1. 8. 2. 4% 92. 4% 5% 8. 192. 4% 5% 8. 4. 8. 4% 5% 2. 8. 1953

5) The Plaintiff’s major contents of financial statements from 2008 to 2012 are as follows.

A person shall be appointed.

[Reasons for Recognition] Unsatisfy, Gap evidence 2, 4, 20, Eul evidence 16, 19, the purport of the whole pleadings

D. Determination

1) Whether the Plaintiff is obligated to maintain the financial structure

In light of the fact that the Defendant ordered the Plaintiff to change the financial structure from the instant disposition to the equity capital and the size of the loan under the financial structure premised on tolls, etc., the instant disposition is premised on the Plaintiff’s duty to maintain the said financial structure in accordance with the instant concession agreement.

However, in full view of the facts acknowledged earlier, as well as the evidence set forth above, and the following circumstances revealed by adding up the overall purport of the pleadings, it is difficult to view that the Plaintiff is obliged to maintain the financial structure premised on the calculation of tolls under the instant concession agreement during the operation period of the settlement of accounts and tunnels.

① The instant concession agreement only provides for the calculation of tolls, etc. by presenting a certain financial structure, and does not explicitly stipulate that the concessionaire is obliged to maintain such financial structure.

② Inasmuch as the concessionaire’s equity capital and loan were not procured at the stage of concluding a concession agreement, even if the concession agreement was based on a certain structure, it should be deemed that it only assumes a single fund structure that can be formed by the Plaintiff for the purpose of calculating tolls for the users of facilities in the future. This is more true in light of the fact that even if a concessionaire was not established separately, such as in the case of a public-private partnership project in the Whitesan Industry Tunnels, the equity capital ratio, etc. is based on the premise that the concessionaire arbitrarily assumes the funding structure. In particular, the size of the loan and its interest rate are the nature to be determined according to the terms of the loan agreement when the concessionaire borrows the loan from a financial institution in the future. Thus, insofar as the financial institution participating in the concession agreement or was not involved in the concessionaire’s financing structure, it cannot be deemed that the concessionaire bears the obligation to borrow the loan in the size of the loan

③ In general, revenue from a private investment project leads to the construction cost without any construction cost and the long-term operation period (in the case of the project in this case, approximately 25 years). Therefore, it can be easily anticipated that the financial risk may change rapidly before and after the completion and commencement of construction of a facility subject to a private investment project, and that the financial risk may change depending on changes in the external financial environment and the actual load of the facility during the long-term operation period. In accordance with such changes, it is reasonable to deem that the financial structure of the project implementer (including the size and interest rate of loans) may change depending on such changes. In addition to the matters belonging to the management technique of the project implementer, it is reasonable to determine how to form the financial structure, excluding the minimum equity capital ratio, which shall be explicitly maintained during the construction period and operation period, in consideration of the public nature of the build-transfer project, on the sole basis that the concession agreement without explicit provisions as to the duty to maintain the fund was premised on the structure of tolls, etc. for a long-term operation period.

④ Upon applying for approval for transfer or acquisition of the right to manage and operate a balance tunnel, the Plaintiff and the existing project implementer, submitted to Busan Metropolitan City (Evidence No. 18) the Plaintiff’s financial status (total asset 2,374,926,07 won, equity capital 2,307,448,657 won, paid-in capital 2,739,400,000 won). On May 10, 2002, Busan Metropolitan City granted approval for transfer or acquisition of the Plaintiff’s right to manage and operate the balance tunnel, the Plaintiff and the existing project implementer submitted the above written request for approval for transfer or acquisition of the right to manage and operate the balance tunnel, and approved transfer or acquisition without any question as to the Plaintiff’s financial structure or equity capital ratio.

⑤ The term “profit-transfer-lease (BTO) standard concession agreement prepared by the Public Investment Management Institute on February 2, 2007 provides for the definition of re-financing (Article 3 subparag. 74), procedure (Article 75), and sharing of profits therefrom (Article 76) (Article 76). The provision on re-financing and profit-sharing was introduced in the annual plan in 2004 (Article 2004-7 and No. 10-2 of the Ministry of Planning and Human Resources Planning). In light of the content and amendment of the concession agreement or the basic plan on re-financing, the equity capital ratio that the concessionaire shall maintain during the construction period and operation period is separate (Article 15). In light of the content of the concession agreement on the re-financing or the basic plan on the re-financing, the concessionaire may obtain the minimum equity capital ratio within the scope of maintaining the equity capital ratio, and the project implementer shall be construed to have the minimum obligation to share and re-financing through consultation with the competent authority on the progress and public interest of the build-transfer-lease.

2) Whether the requirements for supervisory orders are incomplete and exceed the limits

Article 45(1) of the Public-Private Partnerships Act provides that “The competent authority may supervise and supervise affairs related to a public-private partnership project of a concessionaire only to the extent prescribed by the Presidential Decree to the extent that it does not undermine the free management activities of the concessionaire.” Article 35 of the Enforcement Decree of the same Act provides that “Where the competent authority deems it necessary for the prevention of defective construction or the normal operation of facilities,” the requirements for the above supervisory order are prescribed. Therefore, whether the instant disposition satisfies the requirements for supervision under the Public-Private Partnerships Act and complies with the limits thereof shall be determined based on ① whether the instant disposition is necessary for the normal operation of facilities and ② whether the instant disposition was issued to the extent that does not undermine the free management

In full view of the following circumstances that can be seen by comprehensively taking account of the aforementioned facts and the evidence mentioned above and the statement in Eul No. 35’s evidence, it is reasonable to deem that the instant disposition was unlawful since it did not meet the requirements for issuing a supervisory order under Article 45 of the Public-Private Partnerships Act, or exceeded the bounds of the supervisory order.

① The sanction against breach of duty under the concession agreement and the issuance of a supervisory order for the normal operation of a facility ought to be distinguished. Therefore, even if the Plaintiff bears a duty to maintain the financial structure premised on the concession agreement, and breached such duty, the sanction against breach of duty should follow the dispute resolution procedure set forth in the concession agreement of this case (Article 53 of the concession agreement of this case shall take precedence over the resolution by commercial arbitration in accordance with the Arbitration Rules of the Korean Commercial Arbitration Commission (Article 53 of the concession agreement of this case shall take precedence over the resolution by a dispute arising in connection with the Convention, but if the dispute does not occur, the dispute resolution by a lawsuit shall be planned), but if the normal operation of a facility is difficult due to such breach of duty, it shall be deemed that the normal operation of the facility can be promoted through the issuance of a supervisory order.

② As seen earlier, it is difficult to deem that the Plaintiff is obligated to maintain the financial structure under the instant concession agreement. Therefore, the Plaintiff’s current financial structure differs from the financial structure premised on the instant concession agreement cannot be deemed as having difficulty in normal operation of the adjustment tunnel solely on the ground that it differs from the financial structure premised on

③ According to the main contents of the Plaintiff’s financial statements from 2008 to 2012, although the Plaintiff’s financial status was in capital erosion of approximately KRW 15.5 billion in 2008, the Plaintiff’s financial status was resolved in 2011, and the debt ratio was 2,534% in 201, and the debt ratio was reduced to 907% in 2012, the Plaintiff’s financial status was continuously improved by continuously reducing the debt ratio to 907%. Considering the unique characteristics of the Plaintiff’s financial status as the creditor of the first and subsequent loans, it is difficult to readily conclude that the normal operation of the swimming tunnel without changing the Plaintiff’s financial structure at the time of the instant disposition is difficult.

④ As long as the structure of funds by a project implementer does not violate the minimum equity capital ratio necessary for stable operation of build-transfer-lease projects, it is reasonable to deem that it falls under management techniques of the project implementer. Therefore, inasmuch as there are no special circumstances such as violating the minimum equity capital ratio necessary for stable operation of build-transfer-lease projects, ordering the competent authority to change the fund structure of the project implementer into a specific fund structure in the form of a supervisory order ought

⑤ Furthermore, the instant disposition does not coincide with the adjustment of the minimum import guarantee rate, etc. dealt with “public interest” in the previous consultation between the Plaintiff and Busan Metropolitan City or the audit and inspection results by the Board of Audit and Inspection. In other words, even if the Plaintiff’s financial structure is changed as ordered by the instant disposition, the Plaintiff’s financial status is improved (such as seen earlier, difficult to deem that the current financial status of the Plaintiff has deteriorated as soon as it is necessary for the normal operation of facilities), and thereby, does not decrease in the MRG to be paid to the Plaintiff by Busan Metropolitan City or reduce the tolls of the settlement tunnel. Rather, according to the Defendant’s data, it cannot be said that, apart from the point of view of maintaining the rate of business profit 8.28% under the instant concession agreement, if the Plaintiff calculated tolls from the point of view of maintaining the rate of business profit of the Plaintiff’s acquisition of the Plaintiff’s shares, it cannot be said that the Plaintiff’s improvement of the Plaintiff’s financial structure or the Plaintiff’s financial structure, which is a creditor of the instant concession agreement, would not be deemed to constitute the Plaintiff’s interest in the instant agreement or its settlement of funds.

3. Conclusion

Therefore, without examining the remaining arguments of the plaintiff, the plaintiff's claim is justified, and it is decided as per Disposition by the court below to order the suspension of the disposition of this case ex officio.

[Attachment]

Judges Kim Jong-chul (Presiding Judge)