[1] The method of determining whether a limitation on participation in bidding by a public corporation or quasi-governmental institution is an administrative disposition based on a contract based on the statute

[2] The purport of Article 39(2) of the Act on the Management of Public Institutions, and whether the said provision applies only to unlawful acts against public corporations and quasi-governmental institutions (affirmative)

[1] In a case where a public corporation or quasi-governmental institution can impose a limitation on qualification for participation in bidding on the basis of statutes or a contract, it is a matter of interpretation of intent in principle whether a limitation on qualification for participation in bidding against a contracting party is an administrative disposition based on statutes or exercise of rights based on a contract. In this case, the objective and comprehensive review of the document notified by the public corporation or quasi-governmental institution to the contracting party and the process up to the relevant measure should be determined. Nevertheless, in a case where it is still unclear whether a public corporation or quasi-governmental institution takes a limitation on qualification for participation in bidding as an administrative disposition based on statutes or a limitation on qualification for participation in bidding as a contract based on a contract, it is reasonable to determine it

[2] Article 39(2) of the Act on the Management of Public Institutions excludes unjust enterprisers who committed acts that public corporations and quasi-governmental institutions are obviously likely to undermine fair competition or appropriate performance of contracts from bidding for a certain period of time in the future, and is also a provision to achieve the general preventive purpose of protecting public contracts, as well as to impose sanctions on unjust enterprisers. Therefore, it is reasonable to interpret that unjust acts subject to the above provision is limited to acts against public corporations and quasi-governmental institutions.

[1] Article 39(2) of the Act on the Management of Public Institutions; Article 15 of the Rules on Contract Affairs of Public Corporations and Quasi-Governmental Institutions; Article 27 of the Act on Contracts to Which the State is a Party; Article 76 of the Enforcement Decree of the Act on Contracts to which the State is a Party; Article 2(1)1 of the Administrative Litigation Act / [2] Article 39(2) of the Act

Two Industries Co., Ltd. (Attorney profit-type et al., Counsel for the defendant-appellant)

Korea hydroelectric Power Co., Ltd. (Law Firm LLC, Attorneys Jeong Jong-soo et al., Counsel for the defendant-appellant)

Daegu High Court Decision 2015Nu6041 decided January 15, 2016

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. As to the grounds of appeal on the subject matter of an appeal litigation

A. In a case where a public corporation or quasi-governmental institution can impose a limitation on qualification for participation in bidding on the basis of statutes or a contract, it is a matter of interpretation of intent in principle whether a limitation on qualification for participation in bidding against a contracting party is an administrative disposition based on statutes or exercise of rights based on a contract. In this case, it should be determined by considering the content of a document notified by a public corporation or quasi-governmental institution to the contracting party and the process up to the relevant measure objectively and comprehensively. Nevertheless, if it is still unclear whether a public corporation or quasi-governmental institution takes a limitation on qualification for participation in bidding as an administrative disposition based on statutes or a limitation on qualification for participation in bidding as a contract based on a contract is still unclear, it is reasonable to

B. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following circumstances.

(1) The Defendant stated in the “prior notice of a disposition related to a sanction against unjust enterprisers,” which sent to the Plaintiff prior to taking a measure to restrict participation in bidding, that it is a plan to restrict participation in bidding pursuant to Article 39 of the Act on the Operation of Public Institutions (hereinafter “Public Institutions Operation Act”) pursuant to the Administrative Procedures Act. The attached “prior notice of Disposition” also stated, based on the legal basis, Article 39 of the Public Institutions Operation Act and the provisions of the contract

(2) The Defendant, while taking measures to restrict participation in bidding, issued a document stating that “the notice of restriction on participation in bidding by unjust enterprisers” to the Plaintiff. The document stating that “the limitation on participation in bidding by unjust enterprisers is determined and known as follows in accordance with Article 39 of the Act on the Management of Public Institutions, Article 15 of the Rules on Contracts of Public Corporations and Quasi-Governmental Institutions, and Article 76 of the Enforcement Decree of the Act on Contracts to Which the State is a Party, and the procedure for filing an objection to the disposition also is known and known.”

(3) In addition, the main text of the above document states that "Article 26 (1) of the Contract Regulations, Article 97 (1) 8 of the Enforcement Rule of the Contract Regulations, Article 97 (1) 10 (b) of the Enforcement Rule of the Contract Regulations, and subparagraph 10 (b) of attached Table 2, "Korea-U.S. 6 months." On the other hand, regarding the method of filing an administrative appeal, "An administrative appeal may be filed or filed within the prescribed period pursuant to Article 27 of the Administrative Appeals Act or Article 20 of the Administrative Litigation Act. The exclusion period for filing an administrative appeal and filing an administrative litigation shall be as follows. (1) The administrative appeal shall not be filed within 90 days from the date on which the administrative litigation, etc. is known (in the case of 180 days after the date on which the disposition is made): It shall not be filed within 90 days from the date on which the administrative litigation, etc. is known (in the case of an administrative

C. Examining the above circumstances in light of the legal principles as seen earlier, it is reasonable to view the Defendant’s restriction on participation in bidding as an administrative disposition based on Article 39(2) of the Public Institutions Operation Act, not based on the contract. The reasons are as follows.

(1) Each document notified by the Defendant to the Plaintiff is mixed with the content premised on the fact that the pertinent measure is a contract, and the content premised on the fact that it is an administrative disposition, so it is difficult to clearly understand the nature and grounds of

(2) Even if examining all processes up to the measure in question, it is still unclear whether the Defendant selects any means and takes a limitation on participation in bidding.

(3) The Defendant proceeded with the procedure for limiting participation in bidding pursuant to the Administrative Procedures Act, and ordered the Plaintiff to file an administrative appeal or lawsuit pursuant to the Administrative Appeals Act or the Administrative Litigation Act within a given period as the method of filing an appeal against a limitation on participation in bidding.

(4) Therefore, in such circumstances, it is difficult to expect that the Plaintiff, despite the Defendant’s above notification, was aware that the limitation of participation in bidding was not an administrative disposition, but an exercise of rights based on a contract to dispute in civil procedure

D. In the same purport, the judgment of the court below that rejected the Defendant’s defense of safety by deeming that the Defendant’s limitation of participation in bidding constitutes an administrative disposition is justifiable, and contrary to what is alleged in the grounds of appeal, the court below did not err by misapprehending

2. As to the ground of appeal on the ground of disposition

A. Article 39(2) of the Act on the Management of Public Institutions provides that a public corporation or quasi-governmental institution shall exclude an improper businessman from a tender for a certain period of time in the future, in which the public corporation or quasi-governmental institution committed an act that is obviously likely to undermine fair competition or appropriate performance of a contract. The purpose of the general prevention of the protection of public contracts is to achieve the general purpose of protecting public contracts, and to impose sanctions on the improper businessman. Therefore, it is reasonable to interpret that the improper act subject to

B. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following circumstances.

(1) The Plaintiff entered into a contract with the Defendant for the supply of nuclear power plants, and supplied the Defendant with parts of power generation facilities, such as piping materials, V, and sprink, from June 27, 2008 to August 16, 2010, submitted 33 copies of the altered test report relating to the above parts on several occasions.

(2) At the time, the Defendant was designated as a market-type public corporation on January 24, 201, when he was in the position of public corporation and quasi-governmental institution under the Public Agency Operation Act except for public corporation and quasi-governmental institution.

(3) On April 15, 2014, the Defendant rendered a disposition to restrict the qualification to participate in the instant bidding against the Plaintiff on the ground that the Plaintiff constitutes “a person who forges or alters documents relating to bidding or contract or who submits false documents.”

C. Examining these circumstances in light of the legal principles as seen earlier, since the Plaintiff was merely the Defendant at the time of submitting the test report to the Defendant, the said submission does not constitute an illegal act against a public corporation or quasi-government institution. Therefore, the disposition imposing restrictions on the qualification to participate in the instant bidding did not meet the sanctions against the restriction on qualification to participate in the bidding under Article 39(2)

D. On the premise that the Plaintiff’s submission of the test report is subject to Article 39(2) of the Act on the Management of Public Institutions, the lower court’s determination on whether the above act would prejudice fair competition or appropriate implementation of the contract is justifiable, but the lower court’s determination that the restriction on participation in the bidding of this case was unlawful is just, and the lower court’s above error did not affect the conclusion of the judgment

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim So-young (Presiding Justice)