2016Guhap24046 Action for nullification of the termination of the concession agreement

A Stock Company

Busan Metropolitan City Mayor 1)

April 13, 2017

June 1, 2017

1. On August 10, 2016, the Defendant confirmed that the Defendant’s expression of intent to terminate a concession agreement on the redevelopment of the BY Stach Stak Stak Stak Stak Stak Stak St Stak Stak Stak St

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Basic facts

A. Conclusion, etc. of concession agreement between the Plaintiff and the Defendant

1) On March 31, 2008, Hyundai Industrial Development Co., Ltd. (tentatively named "Co., Ltd."), a consortium comprised of seven companies, such as Gyeongnam Bank, Gyeongnam Bank, Busan Bank, etc., proposed a public-private partnership agreement to the Defendant on March 31, 2008, under Article 9 of the former Act on Public-Private Partnerships in Infrastructure (amended by Act No. 10983, Aug. 4, 201; hereinafter referred to as the "Private Investment Act"), the Defendant selected a joint-private partnership agreement with the Defendant on Oct. 28, 2010, to build and operate sports facilities, hotels, and navigations, etc. (hereinafter referred to as the "instant project"), but the project implementer would vest the above facilities in Busan Metropolitan City, and the project implementer would have the right to manage and operate the infrastructure for 30 years [BTO (BTO-Trfr-O-O). 2] The Defendant first designated the instant joint-private partnership agreement with the Defendant (hereinafter referred to 2014.

Article 3 (Definitions of Terms)

1. Unless otherwise provided for in this Convention, the definitions of terms used in this Convention shall be as follows:

38. Appendix: Annexed documents to this Convention, such as cases of consultation between the competent authority and the concessionaire derived in the course of negotiations for the conclusion of this Convention, evidentiary materials, drawings and specifications, and financial models.

Article 8 (Duties of Project Implementer)

(3) Unless otherwise specified in this Convention, the project implementer shall revise the terms and conditions of loans or conditional loan agreements presented by creditor financial institutions, etc. at the time of submission of the project plan to the loan agreement until the application for approval of the implementation plan is filed

(4) Except as otherwise provided for in this Convention, a project operator shall, in principle, carry out the project at his own risk and expense under this Convention.

Article 17 (Design, Authorization, Permission, etc.)

(1) When a project implementer applies for the approval of an implementation plan, he/she shall perform and submit a shop design for the project facilities, including the matters conferred on the terms of the third party proposal announcement (including a written response, etc.), the project plan and this Convention, relevant Acts and subordinate statutes, and Appendix. In addition, the project implementer shall select a designer under the Construction Technology Management Act and have the designer perform the design supervision of the shop design. Provided, That the project plan shall apply only to cases where the project plan is applied as a supplementary project plan to implement

(2) If various authorization, permission, etc. and consultation are required in the execution of working plans (including modification thereof) under paragraph (1), the project executor shall handle them through consultation with the competent authority for his/her own responsibility and expenses.

Article 18 (Approval of Implementation Plans)

(1) The project executor shall file an application with the competent authority for approval of the implementation plan under Article 16 of the Enforcement Decree of the Act on Private Participation in Infrastructure (hereinafter referred to as the "Private Investment Act") within one year from the date this Convention is concluded: Provided, That where the competent authority deems it inevitable, the period may be extended only once within the limit of one year.

(2) Upon receipt of an application for approval of an implementation plan under paragraph (1), the competent authority shall verify whether the agreement between the parties to the agreement has been reflected in this Convention and, except in extenuating circumstances, notify the project implementer of the approval of the implementation plan under paragraph (1) within three months from the date of the application for approval of the implementation plan,

(3) Where the competent authority finds, as a result of reviewing the details of an application filed by the concessionaire for the approval of the implementation plan, that the agreement between the parties to the agreement has not been reflected in the agreement, it may request the concessionaire to revise the details of the application, and the concessionaire shall apply for the approval of the implementation plan within 60 days from the date of receipt of the request for correction with his/her responsibility and expenses: Provided,

(4) If a project implementer violates the provisions of paragraphs (1) through (3) due to a cause attributable to the project implementer, the designation of the project implementer may be revoked, and the project implementer shall not be liable for any funds raised or any expenses invested by it.

Article 53 (Principles of Risk Distribution)

(1) Any risks arising or likely to arise in connection with the business of this project shall be borne by a responsible party to such risks.

(2) In the case of any danger caused by force majeure, the primary and primary insurance shall be treated as related insurance, and each share of insurance shall be determined in accordance with this Convention with respect to any portion not treated by insurance.

(3) In determining the risk sharing ratio according to the nature of each cause pursuant to paragraph (2), it shall be based on whether the occurrence of the cause is adjacent to the conduct, authority, and scope of control of any of the parties to the agreement.

Article 54 (Grounds for Disqualification and Handling of Project Operators) The following reasons are not limited to the reasons attributable to the Project Operators in the interpretation of this Convention:

1. Where the concessionaire has seriously violated matters provided for in this Convention, Acts and subordinate statutes, etc. or has violated the disposition or order of the competent authority under Article 46 of the Private Investment Act;

7. Where an application for approval of an implementation plan is not filed within the period specified in Article 18 (1), Article 59 (Termination of an Convention upon Termination).

(1) Upon occurrence of any cause attributable to the concessionaire prescribed in Article 54, the competent authority may terminate this Agreement and cancel the designation of the concessionaire or take other necessary measures, such as cancellation of management and operation rights, by giving written notification to the concessionaire under this Article.

(5) Where any cause for termination of an agreement under this Article occurs, the party concerned with the right to terminate the agreement (hereinafter referred to as the "right to terminate the agreement") shall request the other party to recover the cause for termination or consult for the recovery of the cause in writing within a fixed period not exceeding 90 days from the occurrence of the cause for termination (hereinafter referred to as "the recovery period"). Where the cause is not cured within the recovery period or the agreement for recovery is not reached, the right to terminate the agreement may notify the other party of the termination in writing, and the termination shall become effective by arrival of notice of termination.

1. This Convention may be amended or supplemented only by a written agreement signed (or signed and sealed) by the parties to the Convention.

(2) Notwithstanding paragraph (1), with respect to items that shall be determined after the conclusion of this Convention, the amendment of this Convention shall be deemed to have been made in accordance with the agreed figures, even if the parties to the Convention have not concluded a separate amendment agreement, with respect to such items.

(4) Parties to the Convention shall, in determining whether to amend or modify the Convention, take into account the intent of the Public-Private Partnerships Act, whether business profitability is secured through the projects under this Convention, and whether the principle of risk allocation between the parties to the Convention as provided for in this Convention, after the conclusion of this Convention, of all other circumstances after the conclusion of this Convention,

5. If it is objectively deemed that maintaining this Convention as it is, during the project period, is objectively unfair due to the enactment, amendment, government policies related to projects, price and interest fluctuation, etc. of Acts and subordinate statutes, etc., or if necessary for the smooth operation of the project or the enhancement of profitability, etc., this Convention may be adjusted or amended through consultation.

3) On April 23, 2014, in order to carry out the instant business, companies constituting a consortium (tentative name) A Co., Ltd. established the Plaintiff on April 23, 2014 in accordance with Article 14 of the Private Investment Act, and the Plaintiff succeeded to the legal status of “A Co., Ltd. (tentative name)” and “Plaintiff, regardless of whether before and after the Plaintiff’s establishment,” respectively.

(b) Litigation in relation to the hotel site;

1) As part of the instant project, the Plaintiff filed an application for the cancellation of prohibited acts and facilities in the school environmental sanitation and cleanup zone pursuant to the proviso of Article 6(1) of the School Health Act in order to construct 15 stories above ground, total floor area 24,618.17m, and 325 guest rooms on the 2,162.789m2 among Busan Metropolitan City Shipping Daegu D, which was part of the instant project, with the head of the Busan Metropolitan Office of Education (hereinafter referred to as the "head of the Busan Office of Education"). However, the said head of the District Office of Education rejected the said application after deliberation by the School Environmental Sanitation and Cleanup Committee on June 6, 2014. The Plaintiff filed a lawsuit against the head of the District Office of Education for Maritime Transportation (this Court Decision 2014Guhap22657), but the Plaintiff’s claim was dismissed on April 23, 2015. The Plaintiff filed an appeal against this decision, which became final and conclusive.

2) On January 2016, the Plaintiff applied for the cancellation of the prohibited acts and facilities in the school environmental sanitation and cleanup zone of the Plaintiff to the head of the Marine Transport Education Center, but the said application was rejected. The process of negotiations for the modification of the instant concession agreement.

1) As a result of the foregoing disapproval disposition at the office of marine transportation training, there were difficulties in implementing the instant project. On October 6, 2015, the Plaintiff submitted a draft concession agreement containing modification design documents, etc. to transfer the existing hotel site to the Defendant outside the school environmental sanitation and cleanup zone. From December 15, 2015, the Plaintiff and the Defendant held a negotiation working meeting on negotiations on a concession agreement and consulted on whether there were problems or safety measures, etc. of the alternative presented by the Plaintiff. On December 22, 2015, the Plaintiff and the Defendant agreed to form a negotiation group at the aforementioned negotiation working meeting.

2) The Plaintiff and the Defendant constituted a negotiating group for the amendment of the instant concession agreement, and the first conference result table of the negotiating group held on January 19, 2016 are as follows:

A person shall be appointed.

3) On March 2, 2016, the Plaintiff submitted to the Defendant design documents, etc. under alternative 2 as set forth at the above negotiation conference (hereinafter referred to as “revision design report”).

4) The Busan Development Institute conducted an analysis and legal review of the eligibility of the private sector of the instant project. As a result, the facilities remaining except for the specialized sports facilities among the instant project facilities are incorporated into the instant ancillary facilities as provided by Article 21 of the Public-Private Partnerships Act, and the said ancillary facilities are also incorporated into the instant ancillary facilities, while the project cost for the ancillary projects exceeds the project cost, and thus, there is a problem of violation of Article 21(13) of the Public-Private Partnerships Act in the event of separation of the ancillary projects. Accordingly

5) After March 11, 2016, the Plaintiff and the Defendant consulted on the structure and nature of the business related to hotels, conventions, etc. at a negotiation conference held on March 11, 2016.

A person shall be appointed.

6) The Plaintiff and the Defendant continued to negotiate for the amendment of the instant concession agreement, but the negotiations on March 18, 2016 were concluded.

D. Application for approval of the Plaintiff’s implementation plan

1) On March 18, 2016, the Plaintiff: (a) classified the hotel and convention facilities into ancillary facilities to the Defendant; and (b) submitted an application for approval of the implementation plan to transfer the location of the hotel to a third party outside school environmental sanitation and cleanup zone.

2) On April 27, 2016, the Defendant sent an official document containing the following contents to the Plaintiff. ① The Defendant did not accept the application as follows: (i) the content of the application for approval of the implementation plan submitted by the Plaintiff on March 18, 2016 was not prepared in accordance with the instant concession agreement concluded on March 19, 2014; and (ii) the school environmental sanitation cleanup committee related to hotel building did not obtain the deliberation; and (iii) did not meet the requirements such as the submission of a loan agreement related to the plan for raising funds required by the time the application for approval of the implementation plan was filed;

(2) Pursuant to Article 13(5) of the Public-Private Partnerships Act, the designation of the concessionaire of the Plaintiff has become null and void. Accordingly, the grounds for termination of the concession agreement under Article 59(1) and (5) of the concession agreement have occurred. (3) In full view of the purport and purpose of the Public-Private Partnerships Act and the concession agreement, the filing of an objection filed by the Plaintiff on March 21, 2016, etc., the term "revision of an application for approval of the implementation plan" under Article 18(3) of the concession agreement or "treatment of the grounds for termination of the concession agreement" under

• The period for submitting an application for approval for implementation plan in accordance with the Private Investment Act and the instant concession agreement, such as obtaining deliberation by the School Environmental Sanitation and Cleanup Committee related to hotel building construction following the instant project implementation and attaching a loan agreement related to the financing plan: Within 60 days from the date on which the request for revision is received pursuant to Article 18(3) of the concession agreement: Within the period for recovery under Article 59(5) of the concession agreement (90 days).

3) On May 19, 2016, the Plaintiff sent an official letter stating that “The Defendant’s request for correction or recovery to the Defendant is not all reasonable.” As such, the Defendant withdrawn an unfair request and actively requested the business operation cycle in accordance with the application for approval of the implementation plan submitted by the Plaintiff, while promoting negotiations for modification of the concession agreement in line with this request.”

E. The defendant's termination notice of the concession agreement

1) On July 6, 2016, the Defendant entered the Plaintiff as “the fact that the Plaintiff failed to comply with the requirements for revision under Article 18(3) of the instant concession agreement, etc., as the cause of the disposition,” and notified the Plaintiff of the revocation of the designation. The Defendant held a hearing against the Plaintiff, 2016, 26, and the Plaintiff.

2) On August 10, 2016, the Defendant notified the Plaintiff on August 10, 2016 that the Plaintiff cancelled the designation of the concessionaire and terminated the concession agreement on the ground that the Defendant failed to perform the Defendant’s remedy and requirements for termination of the concession agreement under Article 59(5) and the Defendant’s application for approval for modification of the implementation plan under Article 18(3) of the concession agreement

[Ground of recognition] Facts without dispute, Gap's statements, Gap's evidence Nos. 1, 6, 7, 9, 11, 17, 19, and 22, the purport of the whole pleadings

2. The plaintiff's assertion and judgment

A. The plaintiff's assertion

1) According to Article 59(1) of the instant concession agreement, where the cause for termination of the said concession agreement is unclear, the said agreement may be terminated by notifying the concessionaire in writing of the occurrence of the cause attributable to the concessionaire as stipulated in Article 54. However, the Defendant’s expression of intent to terminate the said agreement is null and void, since it is unclear that the cause for termination is not specified in the Plaintiff’s notice of termination,

2. Absence of grounds for termination of the concession agreement

An application for approval of an implementation plan submitted by the Plaintiff on March 18, 2016 is prepared by reflecting the agreement between the Plaintiff and the Defendant. That is, the Plaintiff and the Defendant agreed on January 19, 2016, as an alternative 2, to move most of the facilities including hotels to outside the school environmental sanitation and cleanup zone, and the Plaintiff submitted a revised design report to the Defendant on March 2, 2016 pursuant to the above alternative 2, and drafted an application for approval of the implementation plan based on the revised design report. Therefore, it is difficult to deem that the Plaintiff seriously violated Article 18(3) of the Implementation Cooperation Act or that there is any cause attributable to the Plaintiff.

In addition, the Defendant asserts that the construction and operation of hotel and convention facilities should be amended as a supplementary business and did not approve the implementation plan, and the financial institution refuses to conclude a conclusive loan agreement. Since the Plaintiff was unable to submit the above loan agreement due to the Defendant’s request for modification of its unfair business structure, it is difficult to view that the Plaintiff seriously violated Article 8(3) of the concession agreement or that there was any cause attributable to the Plaintiff.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Determination on the assertion that the grounds for termination of the concession agreement are unclear

On August 10, 2016, the Defendant notified the Plaintiff on August 10, 2016 that the Plaintiff would cancel the concession agreement and terminate the concession agreement on the ground that the Defendant failed to perform the Defendant’s request for remedy of the grounds for termination of the agreement under Article 59(5) of the instant concession agreement as well as the Defendant’s request for correction of the application for approval of the implementation plan under Article 18(3) of the said concession agreement was not fulfilled. According to the above facts of recognition, the Defendant specified Article 59(5) as the ground provision for termination at the time of termination of the instant concession agreement, and made it clear that the Plaintiff’s failure to perform all the requirements for correction of the Defendant’s application for approval of the implementation plan or for correction of the grounds for termination of the concession agreement

2) Judgment on the non-existence of grounds for termination of the concession agreement

A) On the premise that the agreement between the parties to the agreement on the application for approval of the implementation plan was reflected, the plaintiff asserted that the defendant prepared an application for approval of the implementation plan on the premise that there was an agreement on the change of the location of hotel and other related facilities (hereinafter referred to as "change of the location of hotel, etc."). On the contrary, the defendant asserted that there was no agreement, and that there was no agreement on the request for revision of the above school environmental sanitation cleanup committee as necessary for the establishment of hotel in the school environmental sanitation and cleanup zone pursuant to the existing concession agreement. Therefore, it is problematic whether the plaintiff and the defendant agreed on the "change of the location

In light of the following circumstances, it is reasonable to deem that there was an agreement between the Plaintiff and the Defendant on the alternative 2, which is a content of moving most of the locations of facilities including hotels to outside the school environmental sanitation and cleanup zone, without dispute or by comprehensively considering the written evidence Nos. 6, 7, 20, 22, 25, and 16 (including additional numbers), and the overall purport of the pleadings, and that there was an agreement between the Plaintiff and the Defendant on the alternative 2, which is a content of moving most of the facilities including hotels to outside the school environmental sanitation and cleanup zone, and the Plaintiff prepared an application for approval of the implementation plan by reflecting the above agreement. As such, on the contrary premise, the Plaintiff did not reflect the agreement with the Defendant

(1) Among the instant business facilities, hotel facilities were located in school environmental sanitation and cleanup zone, and were in need of the cancellation of facilities within the school environmental sanitation and cleanup zone. However, the head of a maritime education office rejected the Plaintiff’s application for the cancellation of the said cancellation, and the Plaintiff filed an administrative appeal and administrative litigation against the Plaintiff, but the judgment against the Plaintiff was rendered on April 23, 2015, and the dismissal of the appeal was sentenced on December 4, 2015. The Plaintiff filed an application for the cancellation again with the head of the maritime education center, but the head of the maritime education office rejected the designation of the hotel site under the instant concession as of January 15, 2016. If the Plaintiff did not file an application for the approval of the implementation plan by March 18, 2016 pursuant to Article 13(5) of the Private Investment Act, the designation of the project implementer was invalidated. In light of the progress of the lawsuit or the deadline for filing an application for the approval of the Plaintiff’s implementation plan, the existing hotel site was virtually impossible.

(2) To complete the procedure necessary for the change of location, such as hotel deliberation by the Busan Metropolitan City Construction Committee, the Plaintiff and the Defendant first agreed on the change of location, such as hotel, within the time limit for application of the implementation plan. On January 19, 2016, the Plaintiff and the Defendant agreed on two alternatives for the change of location, such as hotel. In other words, pursuant to Article 14(1) and (2) of the Busan Metropolitan City Ordinance on Public-Private Partnership Projects, the negotiation group whose head is the head has the authority to consult with the potential concessionaire about the total operating cost, period of use, and conditions for the implementation of the project. Considering that the above negotiation group’s characteristics differ from the negotiation practice meeting previously conducted, the agreement between the Defendant and the Plaintiff on the change of location, including the above consultation at the first negotiation meeting of the Busan Metropolitan City, was stated as an alternative for the change of location, and that there was no agreement between the representative director and the Plaintiff on the change of location to the Busan Metropolitan City 10th conference.

(3) On March 2, 2016, the Plaintiff prepared and submitted a revised design report to the Defendant in accordance with the alternative 2, and applied for deliberation by the Building Committee on the revised construction plan including the change of the location of hotel, etc. to the Minister of Maritime Affairs and Fisheries on March 3, 2016. On March 3, 2016, the Defendant considered the opinion presented at the time of the deliberation by the Building Committee and the consolidated deliberation on traffic impact assessment on April 2, 2014, and applied for a gold conference by changing the construction plan to a location where a hotel can be constructed without falling under the school environmental sanitation and cleanup zone around the project site and not falling under the school environmental sanitation and cleanup zone around the project site. In order to file a civil petition in our city, the Plaintiff explained that the construction plan will only be implemented as the revised construction plan (a proposal) at the time of dismissal while promoting the interview with the representative of J Apartment apartment and the market, and the project will be implemented by gathering to the maximum extent possible prior to the approval of the residents’ opinions available.

On March 17, 2016, the Busan Metropolitan City Construction Committee of the Shipping Daegu deliberated on a conditional deliberation, including the condition that the size of the building (number of floors and area) shall be at least three stories lower than the size of the building, taking into account the fact that the hotel is a profit facility, not a main purpose facility for the instant business. In other words, the defendant sent an opinion on consultation under the premise that the location of the hotel was moved outside the school environmental sanitation and cleanup zone as attached to the revised design report.

(4) The Plaintiff and the Defendant conducted the instant project on the premise that the hotel and convention facilities are ancillary facilities included in the instant project at the time of conclusion of the instant concession agreement. However, on March 2016, the Busan Development Institute examined the eligibility of private citizens in relation to the instant project modification, and it is illegal to consider the construction and operation of hotel and convention facilities as ancillary facilities and include them in the instant project. As such, the Plaintiff and the Defendant presented a review that “the concession agreement should be amended pursuant to the relevant Acts and subordinate statutes separately from the instant project and ancillary facilities.” From March 4, 2016, the Plaintiff and the Defendant discussed in full detail as to whether the said project constitutes ancillary business or ancillary business. In the event that the construction and operation of hotel and convention facilities are deemed ancillary business as prescribed in Article 21 of the Act on Private Participation in the Construction and Operation of Hotel and convention facilities, there is a significant difference between the scope of the project cost, restriction on the size of the facility, land use, the period for free use, and the distribution ratio of business profits.

(5) Until March 18, 2016, the Plaintiff and the Defendant consulted on the amendment of the concession agreement including the nature of the hotel and convention facility construction and operation of the hotel and convention facility. On March 18, 2016, the amendment concession agreement between the Plaintiff and the Defendant was made only on the basis of Article 3 (Handling of Matters Differences between Parties to the instant concession agreement) and the remainder on the basis of the same. In particular, the content of Article 2 (Modification of Design Documents, Financial Models, etc.) of the said amendment agreement is identical to each other. The accompanying documents, such as design documents, financial model, etc., attached to the existing concession agreement are to be changed en bloc to the accompanying documents, such as design documents, financial model, etc., attached to the revised design report. Ultimately, the Plaintiff and the Defendant changed to the revised design report, etc., attached to the instant concession agreement, which was attached to the design documents, etc. submitted by the Plaintiff as a supplement to the instant agreement, but no dispute arises.

(6) The Defendant asserts that the relocation of a hotel is accompanied by a change in construction cost or demand, design drawings, and accompanying documents related thereto, and that the negotiation group meeting on January 19, 2016 only referred to as “to be 2,” but did not fully agree on matters accompanying the relocation of the hotel, and thus, the meeting of the negotiation group cannot be deemed as final agreement. However, even according to the amended concession agreement proposed by the Defendant on March 18, 2016, the report on revised design submitted by the Plaintiff is deemed to include the change in construction cost or demand, design drawings, and accompanying documents related to the relocation of the hotel, such as the hotel, and the documents attached to the revised design report, financial model, etc. submitted by the Plaintiff on March 18, 2016, it is difficult to accept the Defendant’s aforementioned assertion in view of the fact that the documents attached to the instant concession agreement, such as the design documents, financial model, etc., are collectively changed to the accompanying documents submitted by the Plaintiff on the revised design report submitted by the Plaintiff.

(7) In addition, the Defendant asserts that the modification of the concession agreement for the change of the hotel location was not made on the premise that the modification of the concession agreement is necessary for the change of the hotel location. However, the hotel location itself is merely reflected in the drawings and specifications, etc., rather than the content of the concession agreement, as the premise for the conclusion of the concession agreement. If the project cost or the financial mother deteel, etc. are changed as a result of the change of the hotel location, it is difficult to say that the modification of the concession agreement is necessary for the change of the hotel location. In addition, Article 18(2) and (3) of the concession agreement of this case provides that the modification of the contents of the concession agreement may be requested if it is confirmed whether the “the result of the agreement by the parties to the concession” was reflected in the application for the approval of the implementation plan and it is determined that the agreement was not reflected, and it does not necessarily mean that the application for the approval of the implementation plan can be made based on the reflection of the agreement

B) Whether the failure to submit a loan agreement constitutes a violation of the provisions of the concession agreement or the laws and regulations

Unless otherwise stipulated in this Convention, Article 8(3) of the instant concession agreement provides that “The concessionaire shall submit to the competent authority a letter of intent for loans or a conditional loan agreement of creditor financial institutions, etc. presented at the time of the submission of the project plan by the time of the application for the approval of the implementation plan until the time of the application for the approval of the implementation plan on March 18, 2016,” and the Plaintiff’s failure to submit the loan agreement to the Defendant by the time of the application for the approval of the implementation plan on March 18, 2016 does not conflict between the parties. However, in light of the following circumstances, the Plaintiff’s failure to submit the loan agreement is difficult to be deemed a serious violation of the concession agreement or a cause attributable to the Plaintiff.

(1) The operating income of hotel and convention facilities accounts for 56.9% of the total operating income of the instant business, and it is inevitable to affect the Plaintiff’s business profit, loan, or repayment schedule, depending on whether such income is deemed an ancillary business or an ancillary business. Therefore, it is impossible for the Plaintiff to enter into a loan agreement with a financial institution in a state where the structure or nature of the said business is not clearly determined. However, it does not appear that there is any cause attributable to the Plaintiff on March 18, 2016 for which the structure or nature of the said business was not determined.

(2) Even after the application for approval of a project implementer’s implementation plan, the competent authority may demand revision or supplementation of the contents of the application, and the pertinent project contents or terms and conditions of the loan are not determined until the competent authority approves the implementation plan. Therefore, it is practically difficult for the project implementer to enter into a conclusive loan agreement with a financial institution before the competent authority approves the implementation plan. As the structure of the above hotel and convention construction and operation project changes, it is difficult for the Plaintiff to submit a financial agreement until the time the application for approval of the implementation plan is filed, and the Defendant also changed to confirm the methods of handling other cases where the agreement was accepted later.

(3) Article 90(2) of the Enforcement Decree of the Public-Private Partnerships Act provides that when a project implementer intends to obtain approval of an implementation plan, he/she shall submit an application for approval of an implementation plan under Article 16 of the Enforcement Decree of the Public-Private Partnerships Act to the competent authority, and the “other matters deemed necessary by the competent authority” under Article 16(1)6 of the Enforcement Decree of the Public-Private Partnerships Act includes the documents on measures to secure financial resources and the agreement on financing, and the detailed provisions thereof are Article 8(3) of the instant concession agreement. The purport of the above provision is to verify the project implementer’s ability to raise funds in order to prevent a private investment project from being broken out due to the shortage of funds. On March 18, 2016, the Plaintiff submitted a conditional loan guarantee to the Defendant at the time of the application for approval of the implementation plan, and the above loan guarantee statement states that “I,” among the total investment funds required for the instant project, guarantee that I will make a loan under the premise of the Plaintiff’s implementation plan and final approval under the internal regulations.

3) Sub-decisions

Thus, the defendant's declaration of termination of the concession agreement of this case against the plaintiff is null and void because there is no ground for termination asserted by the defendant as above.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.

The presiding judge, senior judge and senior judge

Judges 00 Efficacy

Judge Choi Jin-hun

1) In a lawsuit, a party’s authorization is an important matter that is directly connected to the question of party capacity, party standing, etc.

A court which decides to hear shall, ex officio, proceed with the hearing by identifying who is the party to the lawsuit, and at this time the party

any person shall reasonably interpret and confirm the whole purport of the complaint, such as the indication in the complaint, the contents of the claim, and the facts supporting the cause thereof.

The complaint of this case must be indicated in Busan Metropolitan City (see Supreme Court Decision 99Du2017, Nov. 13, 2001). The defendant is indicated in the complaint of this case as " Busan Metropolitan City."

However, the content and factual basis of the claim shall be deemed null and void of the concession agreement concluded between the plaintiff and the defendant.

The parties to the concession agreement are stated as party litigation in public law, and the parties to the concession agreement are the parties to the public-private partnership on infrastructure.

In light of the fact that it is the head of Busan Metropolitan City, the competent authority, pursuant to subparagraph 4 of Article 2, the defendant of this case is not "Seoul Metropolitan City".

Inasmuch as it is reasonable to determine as "the master", the indication of the party shall be corrected at the plaintiff's request.