Main Issues
[1] In a case where a violation under Articles 13 and 16 of the former Fair Transactions in Subcontracting Act was committed, but the result of the violation did not exist any longer, whether a corrective order under Article 25 (1) of the same Act can be issued (negative)
[2] In a case where the Fair Trade Commission issues a corrective order to the principal contractor on the ground that the principal contractor’s payment of the subcontract price agreed upon as the completion of the construction entrusted to the subcontractor, but the failure to pay the increased portion on the ground of price fluctuation constitutes a violation of Articles 13 and 16 of the former Fair Transactions in Subcontracting Act, the case holding that the court below erred by misapprehending the legal principles that the said corrective order was lawful
Summary of Judgment
[1] Article 25(1) of the former Fair Transactions in Subcontracting Act (amended by Act No. 9085, Mar. 28, 2008) provides that the Fair Trade Commission may recommend or order the principal contractor who has violated Articles 13 and 16 of the same Act to pay subcontract consideration, to discontinue the act of violation, and to take other measures necessary for correcting the act of violation. Unlike the provisions of Articles 13 and 16 of the same Act, the above Act provides that a penalty surcharge shall be imposed (Article 25-3(1)), and criminal punishment shall be imposed (Article 30(2)2) against the non-performance of the corrective order on the ground of the violation (Article 30(2)2 of the same Act), and the strict interpretation of the regulations on sanctions against infringement of interest shall not be deemed to have been ordered if the result of the violation is no longer available.
[2] In a case where the Fair Trade Commission issues a corrective order to the principal contractor on the ground that failure to pay an increase adjustment due to price fluctuation among the subcontract price agreed upon by the principal contractor for the completion of subcontracted construction entrusted to a subcontractor, constitutes a violation of Articles 13 and 16 of the former Fair Transactions in Subcontracting Act, the case holding that it is unlawful for the Fair Trade Commission to issue a corrective order to the principal contractor to the effect that the principal contractor should not resume the above act even if there is no longer any result of the above violation after completion of subcontracted construction, even though the principal contractor completed the payment of the remainder of the subcontract price and interest thereon, after completion of subcontracted construction.
[Reference Provisions]
[1] Articles 13, 16, and 25(1) of the former Fair Transactions in Subcontracting Act (amended by Act No. 9085 of March 28, 2008) / [2] Articles 13, 16, and 25(1) of the former Fair Transactions in Subcontracting Act (amended by Act No. 9085 of March 28, 2008)
Reference Cases
[1] Supreme Court Decision 2001Du3099 Decided November 26, 2002 (Gong2003Sang, 232) Supreme Court Decision 2009Du11843 Decided January 14, 2010 (Gong2010Sang, 339)
Plaintiff-Appellant
Plaintiff (Law Firm Chungcheong, Attorneys Shin Young-soo et al., Counsel for the plaintiff-appellant)
Defendant-Appellee
Fair Trade Commission (Law Firm Apex et al., Counsel for the defendant-appellant)
Judgment of the lower court
Seoul High Court Decision 2008Nu8316 decided October 8, 2008
Text
The judgment below is reversed and the case is remanded to Seoul High Court.
Reasons
The grounds of appeal are examined.
1. Article 25(1) of the Fair Transactions in Subcontracting Act (amended by Act No. 9085, Mar. 28, 2008; hereinafter “subcontract”) provides that the Fair Trade Commission may recommend or order the principal contractor who has violated Articles 13 and 16 of the Subcontract Act to pay the subcontract price, to discontinue the act of violation, and to take other measures necessary for the correction of the act of violation. Unlike the provisions of Articles 13 and 16 of the Subcontract Act, where the Subcontract Act imposes a penalty surcharge on the principal contractor of the act of violation (Article 25-3(1)) and criminal punishment (Article 30(1)), the Fair Transactions in Subcontracting Act provides that criminal punishment shall be imposed on the non-performance of the order of correction on the ground of the violation (Article 30(2)2 of the Subcontract Act) and the strict interpretation of the regulations on sanctions against infringement of interest, the Fair Trade Commission shall be deemed to have no more than 100,000Du13681, Feb. 19, 2007).
2. The court below held to the purport that the corrective order of this case was legitimate, since it appears that the plaintiff is likely to repeat or repeat the same type of violation under Article 25 (1) of the Subcontract Act, even in the case of a corrective order under the same Article of the Subcontract Act, and the same type of act likely to repeat in the near future may be ordered not only to stop the violation, but also to repeat the same act. In full view of the fact that the subcontractor, the principal contractor, entrusted the construction of the subcontractor to the non-party corporation, which is the subcontractor, paid almost around that time the subcontract price for the first agreed upon after the completion of all of the subcontract works in early 2007, the increased adjustment on the ground of price fluctuation, which is only several months, and that the contract with the subcontractor, which is identical to the subcontract of this case, would continue to be concluded in the future with the large number of sewage suppliers in the case of the plaintiff engaging
3. However, we cannot accept the above decision of the court below.
Even according to the reasoning of the judgment below, the subcontract of this case was completed at the beginning of 2007, and the plaintiff reached a settlement agreement with the non-party corporation on August 27, 2007 and completed payment of the subcontract price and interest thereon at issue in the corrective order of this case, and it is unlawful in light of the above legal principles to order the defendant's corrective order of this case to order the plaintiff on February 19, 2008 that the act of each violation of this case should not be re-scheduled.
Nevertheless, the lower court determined otherwise that the instant corrective order was lawful. In so doing, the lower court erred by misapprehending the legal doctrine on the corrective order pursuant to Article 25(1) of the Subcontract Act.
4. Conclusion
Therefore, without examining the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.
Justices Lee Hong-hoon (Presiding Justice)