[1] The meaning, requirements, and scope of the arbitration agreement

[2] Whether Article 36 of the former Framework Act on the Construction Industry and Article 16 of the former Fair Transactions in Subcontracting Act stipulate that the payment of a subcontract amount exceeding the original contract amount shall be prohibited (negative)

[1] An arbitration agreement to which the Arbitration Act applies refers to an agreement between the parties to settle all or part of a dispute that has already occurred or may arise in the future through arbitration, regardless of whether it is a contractual dispute. Thus, inasmuch as there is an express declaration of intent to settle a future dispute through arbitration, it shall meet the requirements of effective arbitration agreement even if it does not specify the arbitration institution, governing law, or place of arbitration. In addition, in a case where such arbitration agreement is deemed to exist, it shall be reasonable to deem that all disputes arising from a specific legal relationship between the parties are resolved through arbitration, unless there are special circumstances.

[2] Article 36 of the former Framework Act on the Construction Industry (amended by Act No. 7306 of Dec. 31, 2004) and Article 16 of the former Fair Transactions in Subcontracting Act (amended by Act No. 7488 of Mar. 31, 2005) are regulations for the protection of subcontractors, and do not purport to prohibit the determination of subcontract amount exceeding the original contract amount and the payment thereof itself.

[1] Article 3 subparagraph 2 of the Arbitration Act / [2] Article 36 of the former Framework Act on the Construction Industry (amended by Act No. 7306 of Dec. 31, 2004), Article 16 of the former Fair Transactions in Subcontracting Act (amended by Act No. 7488 of Mar. 31, 2005)

Hanjin Industries Co., Ltd. (Law Firm Squa, Attorneys Park Han-chul et al., Counsel for the plaintiff-appellant)

Han Man-hwan Co., Ltd. (Attorneys Kim Jong- full-time et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Na74424 delivered on October 28, 2005

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

The grounds of appeal are examined.

1. An arbitration agreement to which the Arbitration Act applies refers to an agreement between the parties to settle all or part of a dispute that has already occurred or may arise in the future through arbitration, regardless of whether it is a contractual dispute (Article 3 subparagraph 2 of the Arbitration Act), so long as there is an express declaration of intent to settle a future dispute through arbitration, the requirement as an effective arbitration agreement shall be satisfied, even if it does not specify the arbitration institution, governing law or place of arbitration. In addition, where such arbitration agreement is deemed to exist, it is reasonable to deem that all disputes arising from a specific legal relationship between the parties are to be settled by arbitration, unless there are special circumstances.

Examining the reasoning of the judgment below in light of the above legal principles and records, although the court below was somewhat inappropriate in its reasoning, it is just in its conclusion that the arbitral award of this case contains no evidence to acknowledge that there was an agreement on the unit price among the elements for calculating the contract price as stated in the judgment at the time of the arbitration agreement of this case, and further, Article 4 of the agreement of this case provides that "the third party shall be subject to arbitration immediately in the event that the contents of the agreement are not fulfilled," which is the subject of the arbitration agreement of this case under the premise that Article 4 of the agreement of this case constitutes an effective arbitration agreement to which the Arbitration Act applies, i.e., the right to decide on the claim for construction price under the same agreement itself, which is the subject of the arbitration agreement of this case, is the arbitral tribunal of this case, and the fact that the arbitral award of this case contains any dispute not subject to arbitration agreement or any matter beyond the scope of the arbitration agreement [the requirements under Article 36 (2)

2. Article 36 of the Framework Act on the Construction Industry (amended by Act No. 7306 of Dec. 31, 2004) and Article 16 of the Fair Transactions in Subcontracting Act (amended by Act No. 7488 of Mar. 31, 2005) are regulations for the protection of subcontractors, and do not directly prohibit the payment of subcontracting amount exceeding the original contract amount and the payment thereof. In the same purport, the judgment of the court below that the enforcement of the arbitral award in this case does not violate the good morals and other social order of the Republic of Korea is just, and there is no error in the misapprehension of legal principles as to the interpretation of the above two provisions, as otherwise alleged in the ground of appeal.

3. Examining the reasoning of the judgment below in light of the records, it is reasonable to view that the court below has equally given the Plaintiff an opportunity to present opinions and data related to the second appraisal procedure conducted in the arbitral proceedings in this case. In addition, the plaintiff's assertion of illegality of the arbitral award in this case as to the result of the second appraisal and the amount of recognition of the arbitral award in this case believed to be excessive is nothing more than the result of the appraisal and the fact that it cannot be deemed that the arbitral proceedings in this case violated the Arbitration Act, and there is no error of law such as incomplete hearing as otherwise alleged in the

4. 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 Hwang-sik (Presiding Justice)