Suwon Construction Co., Ltd. (Law Firm Grandmark, Attorneys Kim Shin-chul, Counsel for the plaintiff-appellant)

Korea Power and Equipment Construction Financial Cooperative

DaN Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Song Jae-woo et al., Counsel for the defendant-appellant)

August 17, 2011

Seoul Central District Court Decision 2008Gahap24765 Decided January 15, 2010

The plaintiff's appeal is dismissed.

Expenses for appeal shall be borne by the plaintiff.

The judgment of the first instance shall be revoked. The defendant shall pay to the plaintiff 1,533,042,50 won with 20% interest per annum from the day following the delivery of the complaint of this case to the day of complete payment.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation concerning this case is as stated in the reasoning of the judgment of the court of first instance, except for the following additional judgments between the 12th and 15th of the judgment of the court of first instance and the 14th of the judgment of the court of first instance as stated in the following Paragraph (2). As such, this Court’s reasoning is cited in accordance with the main text of

2. Parts to be dried;

A. Of the judgment of the court of first instance, “10,000,000 won (excluding value-added tax; hereinafter the same shall apply)” in the 14th sentence of the second 14th one shall be considered as “11.1 billion won (including value-added tax).”

B. Of the judgment of the first instance court, “12,010,000,000 won” in the fifth 16th 5th 16th son is considered as “13.2 billion won (including value-added tax)”.

(c) Of the judgment of the court of first instance, KRW 15,30,425,00 “B” of KRW 15,330,425,00 (including value-added tax) for 3 pages of the 8th one.

D. Of the judgment of the court of first instance, the 11th one and the 11th one [the grounds for recognition: evidence No. 1 to 5, evidence No. 9 through 20, evidence No. 1 to 31, and the purport of the whole pleadings No. 1 to 31] are as follows: “The grounds for recognition: Evidence No. 1, No. 2, No. 4, 5, 7 through 20, evidence No. 2-14, and No. 4 through 31 (including each number, and the purport of the whole pleadings)” are as follows.

3. Additional determination

The Defendant and the Intervenor asserted, first, that the contract performance bond under each guarantee insurance contract of this case should be deemed as liquidated damages in light of the language and text of the relevant contract between the Plaintiff and the Intervenor, and that, as the Plaintiff renounced its claim against the Intervenor, the Intervenor asserted that the claim of this case seeking the contract performance bond against the Defendant, the insurer of each guarantee insurance contract of this case, on the premise that the Intervenor is liable for damages against the Plaintiff.

Therefore, we examine the above facts based on the above facts. Paragraph (4) of the standard contract of this case provides that the contract deposit shall be deemed as a penalty for breach of contract, and the intervenor shall pay the total amount of the contract deposit to the plaintiff regardless of the fairness rate, and Article 7 Paragraph (6) of the standard subcontract of construction works provides that the plaintiff may also claim against the intervenor for the excess amount if the amount of losses incurred due to the intervenor's failure to perform the contract exceeds the contract deposit. However, the contract of this case can be determined as special conditions, and matters not specified as special conditions are supplemented by the contract terms of the "standard subcontract of construction works" established by the Fair Trade Commission, and the order of its application shall take precedence over the subcontract of this case.

In light of the above contents of the subcontract in this case, inasmuch as the contents of the standard subcontract for construction works, which are merely the supplementary provisions, are specified as a penalty for breach of contract, it cannot be interpreted that the nature of the contract would change beyond the degree of supplementing the contents of the contract as stipulated by the parties’ agreement, and there is no evidence that the contract performance guarantee under the subcontract in this case is an estimate of damages, and the defendant and intervenor’s assertion is without merit (in the case of the Supreme Court judgment cited by the defendant and intervenor, the contents such as Article 7 (6) of the standard subcontract for construction works in this case are included

Therefore, the issue of whether the Defendant, a guarantee insurance company, is liable for the payment of the contract performance bond to the Plaintiff, who is the guarantee insurance creditor, depends on whether the Intervenor’s liability is attributable to the discontinuance of construction as a guarantee insurance policyholder on the ground of the Plaintiff’s unpaid payment of construction

4. Conclusion

Therefore, the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

Judges Lee Ki-taik (Presiding Judge)