[1] The method of determining whether a limitation on participation in bidding by a public corporation or quasi-governmental institution is an administrative disposition based on a contract based on the statute

[2] Legislative intent of Article 39(2) of the Act on the Management of Public Institutions, and whether a disposition imposing restrictions on qualification of improper enterprisers to participate in bidding under the said provision should be governed by the statutes that were enforced at the time of the fraudulent act (affirmative)

[1] Article 39(2) of the Act on the Management of Public Institutions; Article 15 of the Rules on Contract Affairs of Public Corporations and Quasi-Governmental Institutions; Article 27 of the Act on Contracts to Which the State is a Party; Article 76 of the Enforcement Decree of the Act on Contracts to which the State is a Party; Article 2(1)1 of the Administrative Litigation Act / [2] Article 39(2) of the Act

[1] [2] Supreme Court Decision 2016Du33537 Decided October 25, 2018 (Gong2018Ha, 2254) / [2] Supreme Court Decision 86Nu63 decided January 20, 1987 (Gong1987, 376), Supreme Court Decision 2015Du50474 Decided February 18, 2016 (Gong2016Sang, 435)

Seoul High Court Decision 2001Na14887 decided May 2, 2001

Korea hydroelectric Power Co., Ltd. (Government Law Firm Corporation, Attorneys Cho Min-sik et al., Counsel for the plaintiff-appellant)

Daegu High Court Decision 2015Nu5895 decided January 15, 2016

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

The grounds of appeal are examined.

1. As to the grounds of appeal on the subject matter of an appeal litigation

A. In a case where a public corporation or quasi-governmental institution can impose a limitation on qualification for participation in bidding on the basis of statutes or a contract, whether a limitation on qualification for participation in bidding against a contracting party is an administrative disposition based on statutes or exercise of rights based on a contract is an issue of interpretation of intention in principle. In this case, the objective and comprehensive review of the document notified by the public corporation or quasi-governmental institution to the contracting party and the process up to the relevant measure should be determined. Nevertheless, where it is still unclear whether a public corporation or quasi-governmental institution has taken a limitation on qualification for participation in bidding as an administrative disposition based on statutes or a limitation on qualification for participation in bidding as a contract based on a contract is still unclear, it is reasonable to finally determine it by taking into account the other party’s awareness and predictability of the measure which has a significant interest in the decision on the method of objection (see Supreme Court Decision 201

B. Examining the reasoning of the lower judgment and the following circumstances acknowledged by the record in light of the legal doctrine as seen earlier, it is reasonable to view the Defendant’s restriction on the Defendant’s qualification for participation in bidding as an administrative disposition based on Article 39(2) of the Act on the Management of Public Institutions (hereinafter “Public Institutions Operation Act”)

(1) Before taking measures to restrict participation in bidding, the Defendant issued a document stating the legal basis of Article 39 of the Public Institutions Operation Act and the provision of contractual basis to the Plaintiff, along with the purport that “pre-disposition Notice (Notification of Holding of Hearing)” is a plan to restrict participation in bidding pursuant to Article 16 of the Rules on Contract Affairs of Public Institutions and Quasi-Governmental Institutions, and carried out the procedures, etc. under the Administrative Procedures Act

(2) The Defendant, while taking measures to restrict participation in bidding, stated “Article 26(1) of the Contract Regulations, Article 97(1)8 of the Enforcement Rule of the Contract Regulations, Article 97(1)10(b) of the Enforcement Rule of the Contract Regulations,” and “six months (limited to one sources)” respectively, based on sanctions against the Plaintiff. However, the method of filing an objection was also stated as “six months (limited to six months).”

(3) In addition, the Defendant stated in the notice as follows: “A request for administrative appeal or administrative litigation may be filed within the prescribed period pursuant to Article 27 of the Administrative Appeals Act or Article 20 of the Administrative Litigation Act. The exclusion period for filing administrative appeal or administrative litigation shall be as follows: (i) an administrative litigation is filed within 90 days from the date on which he/she becomes aware of the disposition (the claim is not filed after 180 days from the date on which he/she became aware of the disposition) within 90 days from the date on which he/she becomes aware of the disposition (the claim is not filed after one year from the date on which the disposition, etc. is made).”

(4) Although it is objectively unclear whether the Defendant selected any means among the exercise of rights based on administrative disposition and contract and taken measures to restrict participation in bidding, in light of various circumstances such as the Defendant’s procedural progress and details of notification, it seems difficult to expect that the Plaintiff was not an administrative disposition.

C. In the same purport, the judgment of the court below that rejected the Defendant’s defense of safety by deeming that the Defendant’s limitation of qualification for participation in bidding constitutes an administrative disposition is justifiable. In so doing, contrary to what is alleged in the grounds of appeal, the court

2. As to the ground of appeal on the ground of disposition

A. Article 39(2) of the Act on the Management of Public Institutions provides that a public corporation or quasi-governmental institution excludes an improper businessman who has committed an act that is obviously likely to undermine fair competition or appropriate implementation of a contract from a tender for a certain period in the future, which is intended to achieve a general preventive purpose of protecting public contracts, as well as to impose sanctions on the improper businessman in question. Therefore, in order to impose restrictions on the improper businessman in accordance with Article 39(2) of the Act on the Management of Public Institutions on his/her qualification for participation in bidding, the Act and subordinate statutes that was enforced at the time of the improper act should be governed (see, e.g., Supreme Court Decisions 86Nu63, Jan. 20, 1987; 2015Du50474, Feb. 18, 2016).

B. The lower court acknowledged that the Plaintiff supplied the Defendant with parts of the sea water pumps used by the nuclear power plant, and submitted 11 copies of the test report on the relevant parts on a total of three occasions from April 14, 2004 to June 20, 206, and determined that the instant restriction on the qualification for participation in bidding was unlawful on the grounds that there was no legal basis for the instant restriction on the qualification for participation in bidding, since there was no public institution Operation Act (amended by Act No. 8258, Jan. 19, 2007) or its subordinate regulations (amended by Ordinance No. 586, Nov. 28, 2007).

C. In light of the aforementioned legal principles and records, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the grounds of disposition.

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 Jo Hee-de (Presiding Justice)