Spain Co., Ltd. (Attorney Yu Sung-sung et al., Counsel for the defendant-appellant)

Korea

June 12, 2009

1. The defendant shall pay to the plaintiff 340,209,140 won with 5% interest per annum from September 16, 2008 to July 10, 2009, and 20% interest per annum from the next day to the day of full payment.

2. The plaintiff's remaining claims are dismissed.

3. One-half of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

4. Paragraph 1 can be provisionally executed.

The defendant shall pay to the plaintiff 709,673,431 won with 20% interest per annum from the day following the delivery of a copy of the complaint of this case to the day of complete payment.

1. Basic facts

The following facts do not conflict between the parties, or can be acknowledged by taking into account the whole purport of the pleadings in each entry in Gap evidence 1 through Gap evidence 3-4, Gap evidence 10-3, Gap evidence 12, Gap evidence 14, Gap evidence 18, Gap evidence 19, Gap evidence 21, Eul evidence 1 through Eul evidence 11, Eul evidence 15-1, and Eul evidence 15-1.

A. On May 8, 2001, the Ministry of Science and Technology selected a two-way Heavy Industries Co., Ltd. (hereinafter “dual Industries”) as a research and development institution of a propelling machine (development period: from September 8, 2001 to July 2006; the budget: KRW 5.488 billion (Government KRW 3.98 billion; 1.5 billion).

B. In the event that the development of the promotion period of the two industries was delayed, the head of the Ministry of National Defense, as part of the methods of funding through the introduction of technology, instead of domestic development, notified the Plaintiff and the two industries of August 21, 2004 to prepare a production plan for the introduction of technology through prior negotiations with overseas production companies and submit it to the Navy by applying the said guidelines with the documents stating that “the detailed guidelines for the negotiation on the introduction of technology for the introduction of technology during the period of 506 project implementation”.

C. According to the above guidelines, with respect to the KSWA and the ○○○○○○ model of Sweden, the two industries are going to negotiate with the LIPS model of French LIPS and Dogna, △△, ○○○○.

D. On February 4, 2005, the Plaintiff and the two industries participated in the bidding after preparing, submitting, and obtaining approval for the production plan for the introduction of technology. On February 4, 2005, the Plaintiff and the two industries concluded an agreement for the introduction of technology with the French LIPS company to purchase high speed 1 (PKX; hereinafter “high speed 1”).

E. On February 21, 2005, the Plaintiff requested the Ministry of National Defense to designate an inspector as a defense material, but the Ministry of National Defense, the Ministry of National Defense, as a technology development task at the present time on May 11, 2005, is under the development of two industries with the aim of completing test and evaluation on July 1, 2006, and thus, it was refused the Plaintiff’s request on the ground that there was a lack of need to designate a defense material from 2nds to 2nds of high speed (the contract period between 2-5 and 2nds of September 2007) in consideration of the manufacturing potential of other companies.

F. The Plaintiff requested a review of the re-designation of defense materials on June 15, 2005. On August 10, 2005, the Minister of National Defense decided that the designation of defense materials is necessary for the stable procurement of costs and subsequent military support since it does not have the possibility of manufacturing other companies and the possibility of complete distribution up to 2 to 5 high speed companies scheduled to implement the contract on August 10, 2007. However, the Minister of National Defense notified the Plaintiff on August 10, 2005 of the designation of defense materials as follows.

- Designated defense materials

The plaintiff general (only 1 to 4), who is a general plaintiff, to promote a problem at the top speed of the general naval vessel, classified as the name of the equipment in the detailed field of the vote contained in the main text.

G. On August 23, 2005, the Minister of Commerce, Industry and Energy designated a unit of defense industry (hereinafter “instant defense industry contractor”). On August 23, 2005, the Minister of Commerce, Industry and Energy added the items to the Plaintiff (hereinafter “instant defense industry contractor”).

H. The Ministry of National Defense entered into a purchase agreement on September 2, 2005 between the Plaintiff and the Plaintiff as a defense industry supplies, on September 2, 2005, with the Plaintiff’s warranty promotion machine designated as a defense industry supplies.

I. On May 25, 2006, the Administrator of the Defense Acquisition Program Administration determined as performance satisfaction as a result of the technical test and evaluation of the two industrial complexes developed as a technology development task for both civilian and military purposes.

j. On August 2006, the Board of Audit and Inspection issued a request to the Administrator of the Defense Acquisition Program Administration to revoke the designation of defense materials for the promotion machine in the future and to review the designation of defense materials after determining the military suitability of the promotion machine for both civilian and military purposes, on the ground that "the Korea Coast Guard should add performance testing to the demonstration equipment without any particular reason to the Administrator of the Defense Acquisition Program Administration."

On September 27, 2006, the Defense Acquisition Program Administration, which promoted the two industries, is a product under the development process in which the performance has not been verified, and the current state is recognized to be easy to procure from more than two enterprises and to guarantee quality" under Article 48 (3) 1 of the Defense Acquisition Program Act (hereinafter referred to as the "Act"), so if the defense materials are revoked as requested by the Board of Audit and Inspection, it is unlikely that the cancellation of the defense materials is directly connected to the cancellation of the defense contractor, and that there would be a concern that the failure to file a serious civil petition and administrative affairs would be increased, and the review of the Board of Audit and Inspection was requested.

C. On June 29, 2007, the Administrator of the Defense Acquisition Program Administration revoked the designation of defense materials as defense materials based on Article 48 (3) 1 of the Act on October 2, 2007, based on the consultation with the Minister of Commerce, Industry and Energy, on the following: (a) as a result of the examination of land operation in the two mountain Heavy Industries promotion system, which was developed as a technology development task for both civilian and military purposes; (b) revoked the request for reexamination of the Board of Audit and Inspection on July 13, 2007; and (c) notified the Plaintiff.

(l) On October 16, 2007, the Minister of Commerce, Industry and Energy (amended and enforced by Act No. 8867 of Feb. 29, 2008, the Ministry of Knowledge Economy succeeded to the affairs provided for in Article 32 (1) of the Government Organization Act as the amendment and implemented by Act No. 8867 of Feb. 29, 2008) notified the Plaintiff that the designation of a defense industry enterprise for the pertinent item is revoked.

(m) On December 26, 2007, the Defense Acquisition Program Administration entered into a purchase contract with two to five high speed companies with two-five high speed companies.

2. Related statutes;

It is as shown in the attached Table related statutes.

3. Determination as to liability for damages

A. Whether the revocation of designation of defense materials is illegal

(1) Article 48(3)1 of the Act provides that the designation of a defense material may be revoked when it is recognized that it can be procured from more than one enterprise and that the quality can be guaranteed. Thus, this paper examines whether the revocation of the designation of a defense material of this case satisfies the requirements for revocation of the above provision.

The system for promotion of the two industries in the two industries is subject to provisional military use assessment as a result of the land operation test, but the provisional military use assessment is "where the long time is required through development and design of ships, etc. and the final production is completed, the provisional military use assessment can not be said to guarantee the quality of the propellers of the two industries in the two industries only by the evaluation of the use of the provisional military. In addition, it cannot be said that the procurement is easy only by the accumulated technologies of the two industries in the two industries in the development stage.

Article 48(3) of the Criminal Procedure Act, even though the Defendant did not meet the requirements for revocation under Article 48(3), it is unlawful to revoke the designation of the defense materials of this case, even though the Defendant did not meet the requirements for revocation under Article 48(3) of the same Act, in view of the fact that the Defendant did not actually have the possibility of manufacturing other companies and the possibility of complete loading.

B. Occurrence of liability for damages

(1) On the ground that any administrative disposition is unlawful, it cannot be readily determined that the act constitutes a tort on the ground of a public official’s intentional or negligent act. However, in a case where a public official in charge of the administrative disposition’s duty of care is generally recognized as having lost objective legitimacy, it is reasonable to deem that the public official satisfied the requirements for State liability under Article 2 of the State Compensation Act in the event that the administrative disposition is deemed to have lost objective legitimacy. In such a case, whether the administrative disposition has lost objective legitimacy should be determined on the basis of whether there exists a substantial reason to assume the responsibility for compensating for damages to the State or the local government by taking into account all the circumstances, including the type and nature of gains of infringement, the form and cause of the administrative disposition being infringed, the victim’s involvement in the issuance of the administrative disposition, and the degree of damage (see Supreme Court Decision 9Da70600, May 12, 200

In full view of the following circumstances revealed in light of the facts admitted Doz., the defendant was aware that the revocation of the designation of the defense materials of this case was illegal or could have sufficiently known.

① The Plaintiff already entered into a contract with the Defendant on the designation of the defense materials of this case with respect to 1-4, and thereafter, entered into a unitnet implementation project, such as entering into a French LIPS company and technology introduction contract, for the supply, maintenance, and repair of a set of 1 boxes, and the implementation of the project up to 4 services following the designation of the defense materials of this case. Thus, it is obvious that the Plaintiff would incur damages if the designation of the defense materials of this case and the designation of the defense contractor of this case are

② Although it was possible to utilize a driving machine for both civilian and military purposes within a reasonable scope, the Defendant’s revocation of the designation of the defense materials of this case does not amount to the degree of illegality.

③ The revocation of the designation of defense materials of this case is merely based on the request of the Board of Audit and Inspection to determine the internal process of handling defense materials of the Defendant, not due to the Plaintiff’

④ In making a request for a review on the recommendation for correction by the Board of Audit and Inspection, the Defendant was likely to cause influence to the Plaintiff’s civil petition filing and administration.

Secondly, the defendant's revocation of the designation of defense materials of this case and revocation of the designation of defense contractor of this case shall lose objective legitimacy as a performance of official duties and thereby constitute a tort. Thus, the defendant shall be liable to compensate for damages suffered by the plaintiff due to

4. Scope of loss;

A. The plaintiff's assertion

In accordance with the detailed negotiation guidelines, etc. of the Ministry of National Defense, the Plaintiff trusted that the production plan for the production of the product for the nine parts will be conducted in the future, and the Plaintiff has completed the consultation with the Defendant in the course of participating in the bidding on one occasion. However, the Defendant agreed to preserve the remainder of the non-reconvening cost by concluding a follow-up contract with the Plaintiff, and the Plaintiff reflected the costs of non-revening in the first 1/9 divided into 1/9 at the Defendant’s request. Accordingly, the Defendant must compensate the Plaintiff for the remainder of the non-revening cost.

(b) Markets:

(1) There is no evidence to acknowledge the Plaintiff’s assertion that the Defendant promised to conclude the contract with the Plaintiff on the remaining eight parts.

Rather, comprehensively taking account of the evidence Nos. 1 and 2-2, the above detailed negotiation guidelines, etc.: ① require a tender proposal; ② The plaintiff shall be designated as defense materials for the contracted goods prior to the conclusion of this contract (Article 51(1) of the Special Conditions for Goods Purchase Contract); and the plaintiff shall withhold the conclusion of this contract if it is not designated as defense materials; and the plaintiff shall not raise any civil or criminal objection (Article 51(2) of the Special Conditions for Goods Purchase Contract). In addition, in the event of the completion of the development of technology development period for both civilian and military purposes, it is inevitable for the defendant to preferentially load the technology development goods for both civilian and military purposes in accordance with Article 14 of the Act on the Promotion of Technology Development for Joint Military Use, and thus, the fact that the plaintiff restricted the designation of defense materials up to four times that it is impossible to load the goods for both civilian and military purposes.

D. In light of the above, the defendant's detailed negotiation guidelines alone cannot be deemed to have promised to enter into a contract on the whole nine parts of the plaintiff and the two industries. ② The plaintiff, even though the defendant knew that it could not enter into a subsequent contract, unless it is designated as defense materials for the remaining five industries, he shall not enter into a contract on the first half of the half of the half of the plaintiff's tort. In full view of the fact that the plaintiff, while entering into a contract on the first half of the half of the plaintiff's tort, he shall be deemed to have agreed to receive only 1/9 of

In full view of evidence Nos. 19 through 21, evidence Nos. 24-1 through 3, and evidence Nos. 24-1 through 3, one of the non-refinite cost is 55,890, one of the multiple-confinite design cost is 2,222, and one of the multiple-confinent design cost is 6,111. Thus, the amount of damages that the Defendant is liable to compensate the Plaintiff is 340,209,140 [3 x 64,223 x 5,223 x 2,222 x 6,11 x 11 x 7,655.7) as of June 12, 209, which is the closing date of the pleadings of this case].

If so, the defendant is obligated to pay to the plaintiff 340,209,140 won and damages for delay at each rate of 5% per annum under the Civil Act from September 16, 2008 to July 10, 2009, which is the day following the delivery date of a copy of the complaint of this case, and 20% per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the next day to the day of full payment.

5. Conclusion

The plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claim is dismissed as it is without merit. It is so decided as per Disposition.

Judges Park Jong-young (Presiding Judge)