2015Du48167 Financial subsidies

A Stock Company

Attorney Son Ji-yol, Justice Lee Jae-yol, Justice Kim Jae-hwan, Counsel for the plaintiff-appellant

Korea

Government Law Firm Corporation (Attorney Cho Byung-sik, Counsel for the plaintiff-appellant-appellant)

Man-Gyeong-do)

Seoul High Court Decision 2014Nu56309 Decided June 25, 2015

January 31, 2019

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 and 2

A. According to the facts acknowledged by the court below, Article 38 (3) 1 of the concession agreement of this case amended on November 1, 2006, "A project implementer may request an increase in tolls, extension of the period of free use, or provision of government subsidies where operating expenses have increased due to any of the following reasons during the operation period. If operating expenses have decreased due to subparagraph 3, the Government may request a reduction of tolls and a reduction of the period of free use."

The lower court determined that: (a) in the first sentence of Article 38(3) of the above concession agreement, where operating expenses are reduced due to the reasons under subparagraph 3, “the actual operating expenses for the pertinent year are not the case where the actual operating expenses are reduced or the corporate tax is reduced; and (b) in the interim calculation process of calculating the amount of financial subsidies (subsidies) when selecting the method of reducing the amount of financial subsidies on behalf of “the amount of tolls reduction”, “the adjusted tolls is to be calculated in the interim calculation process of calculating the amount of financial subsidies; and (c) this is not to calculate “the amount of tolls actually collected from the user of the facility” but to calculate “the amount of tolls based on the amount of tolls.”

B. Furthermore, according to the reasoning of the lower judgment, Articles 44(1)4, 44(2), and 45(3) of the instant concession agreement provide that “in the event a cause for the adjustment of tolls under the concession agreement occurs, the amount of the financial support instead of the actual adjustment of tolls shall be adjusted.” According to Article 38(4) of the instant concession agreement, the Government may demand that the concessionaire recover the amount of the operating expense reduction in the event a cause for the reduction of operating expense under the concession agreement occurs. As such, in lieu of the reduction of tolls, the amount of the financial support under the minimum transportation guarantee agreement can be deemed as the same measure as the redemption of the operating expense reduction. Here, the term “Adjustment of tolls” or “financial support” is a measure to offset the economic effect following the reduction of corporate tax rate. Therefore, it is reasonable to deem that the Defendant calculated the adjustment of tolls in this case not to actually apply to the operation of the adjusted tolls, but not to the intermediate calculation process that reflects the effect of the reduction of corporate tax rate reduction.

C. From this point, the lower court did not err by misapprehending the legal doctrine on the interpretation of concession agreements under the Act on Public-Private Partnerships in Infrastructure, contrary to what is alleged in the grounds of appeal, thereby adversely affecting the conclusion of the judgment.

2. As to grounds of appeal Nos. 3 and 4

A. The lower court determined that the Defendant’s calculation of the amount of financial support calculated for the year 2010 on the basis of the “amount of estimated tolls calculated based on the base amount of guarantee under the 2010 base amount based on the 2010 Unexploitable Price, which reflects the effects of the reduction of corporate tax rate, was reasonable and reasonable.

B. In light of the records, although there is a somewhat inappropriate part in the part that cited the judgment of the court of first instance, the court below rejected the Plaintiff’s claim for the payment of the instant financial subsidy for the foregoing reasons, it did not err by misapprehending the legal principles on the interpretation and application of Article 68(1)1 of the concession agreement of this case, or by failing to exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal.

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 Park Jung-hwa

Justices Kim Jong-il

Justices Lee Ki-taik