The Housing Redevelopment and Improvement Project Association, in the form of competitive bidding, passed a resolution to select a contractor at the general meeting, but it violates the purport of the resolution to determine a contractor through competitive bidding under Article 11 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, such as the case where the partnership or bidder committed an unlawful act in the process of selecting the contractor and the result of the resolution

Articles 11(1) and 84-3 subparag. 1 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 11690, Mar. 23, 2013)

Supreme Court Decision 2013Da50466 Decided August 29, 2016 (Gong2016Ha, 1489)

Plaintiff 1 and one other

offset2 District Housing Redevelopment and Improvement Project Association

NAS Construction Co., Ltd and one other (Attorneys Kim Jong-hwan et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2012Na60703 decided April 11, 2013

All appeals are dismissed. The costs of appeal are assessed against the Defendant joining the Defendant.

1. We examine the Defendant’s Intervenor’s Intervenor’s ground of appeal

(1) Article 11(1) main text of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 11690, Mar. 23, 2013; hereinafter “former Act”) provides that “A housing redevelopment project cooperative shall select a constructor or registered business operator as a contractor by means of competitive bidding determined by the Minister of Land, Transport and Maritime Affairs at a general meeting after obtaining authorization to establish the association.” The legislative purpose of this provision is to enhance transparency in the process of selecting a contractor and to prevent disputes among its members. Article 13(3) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 11690, Mar. 23, 2013; hereinafter “instant public announcement”) enacted by the Minister of Land, Transport and Maritime Affairs upon delegation of the foregoing provision provides that “No related person, such as a constructor, etc., shall provide individual public relations to its members, or a rearrangement project management contractor, etc., with goods, money, or property benefits.”

In full view of the legislative purport of Article 11 of the former Act and Article 13(3) of the same Act and the contents of Article 84-3 subparag. 1 of the former Act, even if a union or tendering company has made a resolution to select a contractor in a competitive bidding in a formal manner, it did not comply with the procedures or prohibitions prescribed by the Urban Improvement Act or the articles of association in the process of selecting a contractor and provided members with money and valuables to purchase “written consent to select a contractor”. Such unlawful act is deemed to have affected the result of the general meeting resolution regarding the selection of a contractor. Thus, if it violates the purport of the company to determine a contractor through competitive bidding under Article 11 of the former Act, it shall not be deemed that such resolution was made in accordance with Article 11 of the former Act, and thus, it shall be deemed null and void.

(2) On June 2010, the lower court determined that ① the Intervenor’s Intervenor’s Intervenor (hereinafter referred to as the “ Intervenors”) offered 300 to 400 members of the Defendant Union on Saturdays and Sundays as follows: (a) provided individual publicity that options applied to the above model juries or beer expansion should be applied to the apartment of the Defendant Union; (b) provided gifts, such as singpers and coffees and smells; (c) provided 10 to 20 to 3 to 20 to 1 to 20 to 3 to 20 to 3 to 20 to 3 to 1 to 20 to 20 to 20 to 3 to 20 to 3 to 20 to 20 to 3 to 20 to 3 to 1 to 3 to 2 to 3 to 3 to 2 to 3 to 1 to 2 to 3 to 2 to 3 to 3 to 2 to 3 to 2 to 3 to 2 to 3 to 1 to 2 to 3 to 2 to 2 to 3 to 2 to 2 to 3 to 2 to 2 to 3 to 2 to 2 to 3 to 2 to 3 to 2 to 3 to 2 to 2 to 2 to 2 to 2 to 3 to 2 to 2 to 2 to 2 to 2 to 3 to be selected members.

Examining the record in accordance with the aforementioned legal doctrine, the lower court’s determination is justifiable. In so doing, it did not err by misapprehending the legal doctrine on the lawful requirements for the selection of a contractor

2. We examine the appeal by the Defendant Samsung C&T Co., Ltd.

Although the Defendant’s Intervenor also filed an appeal, the Defendant did not submit the appellate brief within the submission period, and did not state the grounds for objection in the petition of appeal.

3. Conclusion

Therefore, all appeals are 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 Lee Sang-hoon (Presiding Justice)