1. Hyundai Industrial Development Co., Ltd. and 2. Ilsung Construction Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Lee Dong-hwan et al., Counsel for the defendant-appellant)

1. Seoul Special Metropolitan City (Law Firm, Attorneys principal-soo et al., Counsel for the plaintiff-appellant) and 2. Korea;

November 10, 2016

1. Defendant Seoul Special Metropolitan City pays to Plaintiff Hyundai Industrial Development Co., Ltd. 1,019,761,295 won, and 170,019,705 won to Plaintiff Ilsung Construction Co., Ltd., and 3.51% per annum from March 8, 2016 to June 22, 2016, and 15% per annum from the following day to the date of full payment.

2. The plaintiffs' claims against the defendant Republic of Korea are all dismissed.

3. Of the costs of lawsuit, the part arising between the plaintiffs and the defendant Seoul Special Metropolitan City shall be borne by the defendant, and the part arising between the plaintiffs and the defendant Republic of Korea shall

4. Paragraph 1 can be provisionally executed.

The primary purport of the claim is as stated in paragraph (1).

Preliminary claim: Defendant Republic of Korea pays to Plaintiff Hyundai Industrial Development Co., Ltd. 1,019,761,295 won, and 170,019,705 won to Plaintiff Ilsung Construction Co., Ltd., as well as 3.51% per annum from March 8, 2016 to the service date of a copy of the complaint of this case, and 15% per annum from the following day to the day of full payment.

1. Basic facts

A. Defendant Seoul Special Metropolitan City (hereinafter “Defendant Seoul Special Metropolitan City”) requested Defendant Republic of Korea to conclude a contract for the construction work of Seoul subway Line 9 and 916 construction work (hereinafter “instant construction work”). The Defendant Republic of Korea, on December 18, 2007, made a public announcement of tender of the instant construction work in the method of design and construction package tender (hereinafter “instant public announcement of tender”).

The title of the construction site on January 2, 1, 2, and 1.3: The title of the Seoul Urban Railroad Construction Headquarters 1.3: The title of the construction site on January 4, 201: The construction site: The design period from Samsungdong apartment-dong, Samsungdong, Samsungdong, 1.6: the site site for basic design: 90 days from the date of notification of the selection of the person qualified for the design: the basic design: the 90 days from the date of notification of the designation of the person qualified for the design: the total construction 1,140m, the 810m, the 2.1m, the 2.1m of the bidding and the 2.1m of the contract method under Chapter 6 of the Enforcement Decree of the Act on Contracts to which the State is a Party (hereinafter referred to as the “State Contract Act”): The national pension premium calculation method should be included in the national pension premium calculation method each year under Article 6 of the Enforcement Decree of the Framework Act on the Construction Industry.

B. The Plaintiffs and Gyeongnam-si Co., Ltd. (hereinafter “Gyeongnam-si”), Hywon-si Inc. (hereinafter “Gyeongnam-si”), Samwon-do Comprehensive Certified architect Office, Samsung Engineering Co., Ltd., Co., Ltd., Down Engineering Co., Ltd., Co., Ltd., Ltd. (hereinafter “Plaintiff Hyundai Industrial Development”) participated in the bidding of the instant construction project by organizing a joint supply and demand company (hereinafter “instant joint supply and demand company”) representing the Plaintiff Hyundai Industrial Development Co., Ltd. (hereinafter “the instant joint supply and demand company”). On April 7, 2015, Gyeongnam-si was decided to commence the rehabilitation procedure on April 7, 2015 with the Seoul Central District Court No. 2015hap1070, Jul. 7, 2015; and thereafter withdrawn from the instant joint supply and demand company at that time after obtaining the permission to terminate the instant construction contract from the above court).

C. The instant joint contractor entered into a contract with the Defendant Republic of Korea (the Government Procurement Service) on the instant construction project, and entered into a contract with the Defendant Seoul Special Metropolitan City ( its affiliated agency: the Seoul Special Metropolitan City Urban Infrastructure Headquarters) on the additional contract for the construction of facilities (hereinafter collectively referred to as the “instant construction contract”). The details of the initial contract and the six-time additional contract for the construction of facilities are as follows:

On May 30, 2008, the main contract date (amended) specified in the table classification contract in the main sentence: The total period of construction: 135,658,00,000 won for the commencement date of construction: June 2, 2008; the contract amount on September 30, 2015 for the additional contract for the construction of facilities six times for the total construction period of June 2, 2008: 159,748,00,000 won for the completion date of construction of facilities: September 30, 2015

D. The Plaintiffs completed the instant construction on September 30, 2015, and entered into an additional contract for facility construction with the Defendant Seoul Special Metropolitan City (six times a comprehensive revision). During the process of concluding the contract, the Defendant Seoul Special Metropolitan City had to reduce the contract amount by ex post payment of national health insurance premiums and national pension premiums (hereinafter “health insurance premiums, etc.”) to the Plaintiffs. The said additional contract was concluded with KRW 159,748,00,000 (the contract amount shall be reduced by KRW 1,189,781,00 due to ex post payment of health insurance premiums, etc.).

E. On September 30, 2015, Plaintiff Hyundai Industrial Development sent to Defendant Seoul Metropolitan Government an official document stating that the ex post facto settlement of the above content is unreasonable.

The title contained in the main sentence is the National Health Insurance Premium and the National Pension Premium Settlement. 2. A business instruction was issued to submit an opinion on the settlement of national health insurance premium and national pension premium when the modification of the construction work in the Seoul subway 9 Stage 2, 916 Section. 3. A business instruction was made to submit a report on the settlement of national health insurance premium and national pension premium. 4. Nevertheless, under the situation that the opinion on the current site related to the settlement of insurance premium is not reflected in the opinion on the current site, it was constantly avoided that the current site is not a site subject to the settlement, and the current site opinion was presented to the ordering office.

F. The main contents of the contract for a package deal project and alternative construction project (general team-2350, Jun. 30, 2006; hereinafter “Special Conditions for Contract for a package deal project and alternative construction project”), the general conditions of the contract for construction (hereinafter “General Conditions for Contract for Construction Project”) and the subscription for a construction project (hereinafter “General Conditions for Contract for Construction Project”) under the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 2085, Dec. 29, 200; hereinafter “former Enforcement Decree of the Framework Act on the Construction Industry”) and the main contents of the contract for a package deal project and alternative construction project, which are the contents of the instant contract for construction project, are as follows: (a) the Enforcement Decree of the Act on Contracts to Which the State applying the instant contract for construction project is a Party; (b) the government tender and contract enforcement guidelines (amended by Presidential Decree No. 2004-159-10, Oct. 12, 2007; 2007).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 10 (including each number in case of additional number), Gap evidence Nos. 14, Eul evidence Nos. 3, 4, Eul evidence No. 1, and the purport of the whole pleadings

2. The parties' assertion

A. Summary of the plaintiffs' assertion

Article 93 of the government tender and contract execution standards provides that with respect to contracts that are subject to ex post settlement of health insurance premiums, etc., a public official in charge of contracts shall specify the same details in the public announcement of tender, etc. so that persons intending to participate in the tender may know the relevant contents. Since the public announcement of tender in this case does not specify the ex post settlement of health insurance premiums, etc., the defendant Seoul Metropolitan Government shall not make ex post settlement of health insurance premiums, etc., but paid the price for construction by ex post

Therefore, Defendant Seoul Special Metropolitan City is primarily obligated to pay KRW 1,189,781,00 equivalent to the amount that Defendant Republic of Korea has reduced to the Plaintiffs’ health insurance premiums, etc. according to the Plaintiffs’ share of joint contractors.

B. Summary of defendant Seoul Metropolitan Government's assertion

1) At the time of the conclusion of the instant construction contract, Defendant Seoul Special Metropolitan City ex post facto settled the instant construction contract amount pursuant to Article 22(5) of the Framework Act on the Construction Industry and Article 26-2(2) and (3) of the Enforcement Decree of the Framework Act on the Construction Industry, which had been amended and implemented at the time of the conclusion of the instant construction contract. As such,

2) Article 93 of the government tender and contract execution standards asserted by the Plaintiffs merely provides for “responsibilities of contracting officers”. Thus, even if there is a violation of the above provision, such circumstance does not serve as an element that makes it impossible to ex post facto settlement of health insurance premiums, etc.

3) The purpose of the social insurance premium settlement system is to prevent unfair use of social insurance premiums for the purpose other than the original purpose by including the calculation sheet and the health insurance premiums that the construction contractor, etc. pays on the premise of the worker’s subscription to the social insurance. Therefore, it is unreasonable to seek payment from Defendant Seoul Special Metropolitan City solely on the ground that the health insurance premiums, etc. for which the plaintiffs have not actually paid are included in the calculation sheet.

C. Summary of Defendant Republic of Korea’s assertion

Since the Defendant Seoul Metropolitan Government, which is an end-user institution of the instant construction project, is liable to pay the construction cost under the instant construction contract, Defendant Republic of Korea is not liable to pay the construction cost of this case.

3. The subject of the obligation to pay the construction price of this case

The fact that the instant construction contract was concluded between the instant joint contractors and the Defendant Republic of Korea (the Government Procurement Office) is not in dispute between the parties, but in light of the developments and terms and conditions of the instant construction contract concluded by each of the aforementioned evidence, it is reasonable to deem that the Defendant Seoul Government agreed to pay the construction price directly to the instant joint contractors at the time of the conclusion of the instant construction contract, and therefore, only the Defendant Seoul Government bears the obligation to pay the construction price to the instant joint contractors as an end-user of the instant construction project. Accordingly, the Plaintiffs’ claim against the Defendant Republic of Korea is without merit

① Defendant Seoul Special Metropolitan City requested the Administrator of the Public Procurement Service to conclude the instant construction contract under its jurisdiction, and Defendant Republic of Korea concluded the instant joint supply contract with Defendant Seoul Special Metropolitan City with the instant joint supply and demand institution as Defendant Seoul Special Metropolitan City.

② Article 2(1)2 of the Special Conditions for Contracts for Package Projects and Alternative Construction Works incorporated into the instant construction contract provides that “The head of a procuring entity (including a public official entrusted by him/her) shall be deemed a contracting officer, except as otherwise expressly provided for in the foregoing Act, with respect to matters related to the performance of a contract at a construction site, such as deliberation of design documents and related affairs, and the commencement, supervision, subcontract management, subcontract management, and payment, inspection, disaster prevention measures, and management of defects, etc. of construction works,” and Articles 39 through 41 of the General Conditions for Construction Contracts provide that a contracting officer shall pay the other party to the contract the cost of completion, the cost

③ Under these provisions, Defendant Seoul Special Metropolitan City directly paid the Plaintiffs the key cost and the completion cost under the instant construction contract.

④ If the Defendant Republic of Korea stipulated the method of payment by subrogation in concluding a purchase contract between the supplier of the procuring entity upon the request for the purchase of the procuring entity, the above contract is the Defendant and the supplier of the Republic of Korea, and the procuring entity is a “contract for a third party” which is merely the beneficiary of the contract, and thus the party who is the party to the procurement contract bears the obligation to pay the price to the supplier is the Republic of Korea (see, e.g., Supreme Court Decision 2009Da56160, Jan. 28, 2010). However, as seen earlier, the instant construction contract stipulates that the procuring entity is liable

⑤ The instant joint contractors entered into a contract for additional construction works with Defendant Seoul Special Metropolitan City on the modification of the contract for the instant construction works.

4. Determination on the plaintiffs' claims against Defendant Seoul Metropolitan Government

A. In the instant case, the fact that the Defendants did not comply with Article 93 subparag. 1 of the government tender and contract execution standards, which provide that the Defendants shall allow prior access to the tender by stating the matters concerning the ex post facto settlement of health insurance premiums, etc. in the instant public tender notice, etc. is not a dispute between the parties. It is a matter of whether Defendant Seoul Metropolitan Government is legitimate to ex post settlement of the amount of contract of the instant construction contract based on Article 22 of the Framework Act on the Construction Industry and Article 26-2(3) of the Enforcement Decree of the Framework Act on the Construction Industry.

나. 위 기초사실에 의하여 알 수 있는 다음과 같은 사정들, 즉 ① 이 사건 공사계약의 내용에 공사입찰유의서, 공사계약 일반조건 등이 포함되는데, 공사입찰유의서 제4조의2는 “계약담당공무원은 입찰공고 등에 정부 입찰ㆍ계약 집행기준 제16장에 정한 건강보험료 등에 관한 내용을 기재하여 입찰에 참가하고자 하는 자가 열람할 수 있도록 하여야 하며, 입찰에 참가하고자 하는 자는 동 내용을 숙지하여야 한다”고 정하고 있으며, 공사계약 일반조건 제40조의2는 “계약담당공무원은 정부 입찰ㆍ계약 집행기준 제93조의 규정에 의하여 건강보험료 등을 사후정산하기로 하는 계약에 대하여는 제39조 및 제40조의 규정에 의한 대가지급 시 정부 입찰ㆍ계약 집행기준 제94조의 규정에 정한 바에 따라 정산하여야 한다”고 정하고 있는바, 건강보험료 등의 사후정산에 관한 정부 입찰ㆍ계약 집행기준은 이 사건 공사계약의 내용으로 편입되었다고 봄이 타당한 점, ② 국가를 당사자로 하는 계약에 관한 법률 시행령 제73조 제2항 은 사후원가검토조건부계약에 관하여 “입찰 전에 계약목적물의 특성ㆍ계약수량 및 이행기간 등을 고려하여 사후원가검토에 필요한 기준 및 절차 등을 정하여야 하며, 이를 입찰에 참가하고자 하는 자가 열람할 수 있도록 하여야 한다”고 정하고 있고, 정부 입찰ㆍ계약 집행기준 제93조는 입찰공고 등에 “건강보험료 등은 시행령 제73조 에 따라 사후정산을 하게 된다는 사항”과 “예정가격 작성 시 계상된 건강보험료 등”을 명시하도록 규정하고 있으며, 정부 입찰ㆍ계약 집행기준 제94조 제2항은 “계약담당공무원은 준공대가의 지급청구를 받은 때에는 하도급공사를 포함하여 당해 공사 전체에 대한 보험료 납부여부를 최종 확인하여야 하며, 이를 확인 후 제93조 제2호에 따라 입찰공고 등에 고지된 건강보험료 등의 범위 내에서 최종 정산하여야 한다”고 정하고 있는바, 계약담당공무원이 위 규정에 따른 건강보험료 등의 사후정산을 할 수 있기 위해서는 입찰공고 등에 이를 명시하는 절차가 선행되어야 한다고 보이는 점, ③ 건설산업기본법 제22조 제5항 은 2007. 5. 17. 법률 제8477호로 개정되어 2008. 1. 1. 시행되었고, 건설산업기본법 시행령 제26조의2 는 2007. 12. 28. 대통령령 제20488호로 개정되어 2008. 1. 1. 시행되었는데, 위와 같이 건설산업기본법과 그 시행령에 건강보험료 등의 사후정산 규정이 신설되기 이전부터 공공계약에 있어서는 건강보험료 등의 사후정산에 관한 근거 및 절차에 관하여 국가를 당사자로 하는 계약에 관한 법률 시행령(1996. 12. 31. 대통령령 15186호로 개정된 것, 1997. 1. 1. 시행) 제73조 , 정부 입찰ㆍ계약 집행기준에 그 근거가 마련되어 있었고, 건설산업기본법 및 그 시행령은 민간 건설공사에서도 건강보험료 등의 사후정산이 가능하도록 하기 위해 도입된 것으로 보이는 점, ④ 건설산업기본법 시행령 제26조의2 제2항 은 ”발주자는 그 건설공사를 도급받은 건설업자가 보험료 등을 납부하였는지 여부에 관하여 확인할 수 있다“고 정하고 있고, 제26조의2 제3항 은 ”발주자는 건설업자가 보험료 등을 납부한 내역을 확인한 결과, 도급금액산출내역서에 명시된 건강보험료 등이 실제로 지출된 보험료보다 많은 경우에는 그 초과하는 금액을 정산할 수 있다“라고 규정하고 있어 위 각 규정은 강행규정이 아닌 임의규정으로 보이는 점 등에 비추어 보면, 정부 입찰ㆍ계약 집행기준이 이 사건 공사계약의 내용으로 편입된 이 사건에 있어서 피고 서울시의 이 사건 공사계약의 계약금액에 대한 건강보험료 등의 사후정산이 가능하기 위해서는 정부 입찰ㆍ계약 집행기준에 따라 피고 대한민국이나 피고 서울시가 건강보험료 등의 사후정산에 관하여 이를 공고하고 입찰참가자로 하여금 열람하도록 하였어야 함에도 이를 이행하지 않았으므로, 피고 서울시가 원고들에게 건강보험료 등을 사후정산한 나머지 금액만을 준공대가로 지급한 것은 부당하다.

C. 1) As to this, Defendant Seoul Special Metropolitan City grants the right to follow-up settlement of health insurance premiums, etc. to the project owner, Defendant Seoul Special Metropolitan City is justified to make follow-up settlement of health insurance premiums, etc. However, in this case where the government tender and contract execution standards, which are the contents of the construction contract in this case, do not comply with the requirements and procedures prescribed in the Framework Act on the Construction Industry and the Enforcement Decree thereof, which are voluntary provisions, do not seem to be capable of follow-up settlement of health insurance premiums, etc.,

2) In addition, Defendant Seoul Metropolitan Government asserts that, on June 29, 2015, in the official text requesting the Plaintiffs to extend the deadline for completion of the instant construction project, Defendant Seoul Metropolitan Government calculated compensation for delay depending on the number of delayed days by setting the remainder other than health insurance premiums, etc. as the target amount. Thus, Defendant Seoul Metropolitan Government asserts that there exists an implied agreement between the Plaintiffs and Defendant Seoul Metropolitan Government on the fact that the instant construction contract is subject to ex post facto settlement

On June 29, 2015, the plaintiffs sent the public notice requesting the extension of the deadline for completion of the construction of this case to the defendant Seoul Metropolitan Government, and the fact that the contract amount is calculated on the basis of the remainder other than health premiums, etc. is calculated on the basis of the calculation of the liquidated damages for delay to be borne by the plaintiffs due to the extension of the deadline for completion of the construction of this case is recognized by the evidence No. 6. On the other hand, the following circumstances, which can be seen by comprehensively considering the overall purport of arguments as to the evidence No. 7, 17, 18, 19, 20, and 200: ① The defendant Seoul Metropolitan Government sent the plaintiffs the health insurance premiums of this case to the plaintiffs before March 2012; the plaintiffs presented the same public notice on the ex post facto settlement of the construction premiums of this case to the supervisor of the construction of this case on July 19, 2012; ② the plaintiff Hyundai Industrial Development had no other reason to recognize that the ex post facto settlement of accounts was unlawful.

D. Therefore, Defendant 2 is obligated to pay KRW 1,189,781,00 to the Plaintiffs according to their respective shares of 1,019,761,295 won (i.e., KRW 189,781,00 x less than KRW 85.71%) to Plaintiff Hyundai Industrial Development; KRW 170,019,705 (=1,89,781,000 x below KRW 189.29% x below KRW 14.29% following the date of completion of the instant construction contract) and KRW 15% of the total supply and demand enterprise’s respective shares of KRW 7.5% of the total amount of KRW 1,50,00 for each of the above 7.5% of the total amount of KRW 1,57,000,000, KRW 16.3% of the total amount of KRW 1,56,016, May 22, 2016.

5. Conclusion

Therefore, the plaintiffs' claims against the defendant Seoul Metropolitan Government are justified, and each claim against the defendant's Republic of Korea is dismissed as it is without merit. It is so decided as per Disposition.

(attached Form omitted)

Judges Maximum Weather (Presiding Judge) Ethical ethical ethic

1) The Plaintiffs entered into a joint supply and demand standard agreement [60% of the Plaintiff Hyundai Industries Development shares, 30% of the shares of Plaintiff Ilsung Construction Co., Ltd. (hereinafter “Plaintiff Ilsung Construction”) and 10% of the shares of Sejongnam Co., Ltd.] on the execution of the instant construction project with Gyeongnam Co., Ltd. separately, the Plaintiffs entered into a joint supply and demand standard agreement with the Plaintiffs and Gyeongnam Co., Ltd. on the method of sharing the performance of construction work in the field of construction.

2) The share ratio of Plaintiff Hyundai Industrial Development in the part of the instant construction work was 60% to 85.71%, and the share ratio of Plaintiff Ilsung Construction was 30% to 14.29%, respectively.

3) The contract amount of the instant contract was included in the national health insurance premiums and national pension premiums of the employees of the instant joint contractors.

4) The Hychia General architectural firm in charge of the design field of the instant construction project, Samchia General architectural firm, Samchia Technology Group, Co., Ltd., Suchia Engineering, Co., Ltd., Co., Ltd., Co., Ltd., Co., Ltd., Co., Ltd., Ltd., and New Engineering Co., Ltd., Co., Ltd.

(5) As to the Plaintiffs’ assertion that the date of payment of the completion of the instant construction works falls on March 7, 2016, Defendant Seoul Metropolitan Government is not explicitly disputed, it is deemed that the Plaintiffs led to confession.

6) According to the statements in Gap evidence 12, it is recognized that the average loan interest rate of the Bank of Korea statistical monthly bulletin around March 2016 exceeds 3.51% per annum.