[1] Legislative intent and purpose of Article 4(2)7 of the Fair Transactions in Subcontracting Act

[2] The meaning of "justifiable cause" in order to avoid the existence of an act of determining unfair subcontract consideration under Article 4 (2) 7 of the Fair Transactions in Subcontracting Act and the issue of whether the person is responsible for assertion and certification thereof (=the original business operator) and the standard for determining the amount of unfair subcontract consideration

[3] 토목건축공사업을 영위하는 갑 주식회사가 하도급계약을 체결하면서 최저 입찰가를 제시한 업체를 낙찰자로 선정하지 않고 그 업체를 포함하여 상위 2개 업체를 대상으로 재입찰을 하여 그 중 더 낮은 가격을 제시한 업체를 낙찰자로 선정한 행위에 대하여 공정거래위원회가 하도급거래 공정화에 관한 법률 제4조 제2항 제7호 에 해당한다고 보아 시정명령 및 과징금 납부명령을 한 사안에서, 위 행위가 ‘부당한’ 하도급대금 결정행위에 해당한다고 본 원심판단을 정당하다고 한 사례

[1] Article 4(2)7 of the Fair Transactions in Subcontracting Act provides that "an act of a principal contractor falling under an act of determining a subcontract price at a price lower than the lowest tender price without justifiable grounds when concluding a subcontract through competitive bidding shall be deemed to be an act of determining an unfair subcontract price." The legislative intent and purpose of Article 4(2)7 of the Fair Transactions in Subcontracting Act is to effectively cope with unfair trade practices that determine a subcontract price at an unfair lower price and to establish a fair order in subcontract transactions, by deeming it an act of determining an unfair subcontract price

[2] The phrase “justifiable cause” to justify the determination of a subcontract price at a lower price than the lowest bid price, such as an act of determining unfair subcontract price as stipulated in Article 4(2)7 of the Fair Transactions in Subcontracting Act, refers to an objective and reasonable reason to justify the determination of a subcontract price at a lower price than the minimum bid price, such as the construction site conditions, reasons not attributable to the principal contractor, or reasons attributable to the subcontractor, and the principal contractor must assert and prove such reasons and determine individual and specific from the perspective of establishing a fair order in subcontract transactions.

[3] 토목건축공사업을 영위하는 갑 주식회사가 하도급계약을 체결하면서 최저 입찰가를 제시한 업체를 낙찰자로 선정하지 않고 그 업체를 포함하여 상위 2～3개 업체를 대상으로 재입찰을 하여 그 중 더 낮은 가격을 제시한 업체를 낙찰자로 선정한 행위에 대하여 공정거래위원회가 하도급거래 공정화에 관한 법률(이하 ‘하도급법’이라고 한다) 제4조 제2항 제7호 에 해당한다고 보아 시정명령 및 과징금 납부명령을 한 사안에서, 위 조항에서 정한 ‘하도급대금의 결정행위’에는 재입찰에 의한 경우도 포함되고, 갑 회사가 외주비를 절감하기 위해 자체 편성한 계획공사원가의 96%를 예정가격으로 정한 후 최초 입찰에서 최저가로 입찰한 금액이 예정가격을 초과한다는 이유로 입찰 참여업체에 사전에 알리지 않고 재입찰을 한 것은 갑의 내부적 사정에 불과하여 하도급대금을 최저가 입찰금액보다 낮게 결정할 객관적이고 합리적인 사유라고 보기 어려운 점, 정당한 사유 없이 최저가로 입찰한 금액보다 낮은 금액으로 하도급대금을 결정하는 행위에 해당하면 일반적으로 지급되는 대가보다 현저하게 낮은 수준으로 하도급대금을 결정하였는지를 별도로 따질 필요 없이 부당한 하도급대금의 결정으로 보아야 하는 점 등을 종합해 볼 때, 위 행위가 하도급법 제4조 제2항 제7호 에서 정한 ‘부당한’ 하도급대금 결정행위에 해당한다고 본 원심판단을 정당하다고 한 사례.

[1] Article 4 (2) 7 of the Fair Transactions in Subcontracting Act / [2] Article 4 (2) 7 of the Fair Transactions in Subcontracting Act / [3] Article 4 (2) 7 of the Fair Transactions in Subcontracting Act

KS Construction Co., Ltd. (Attorneys Son Ji-yol et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Law Firm Bag, Attorney Ahn Byung-jin, Counsel for defendant-appellant)

Seoul High Court Decision 2010Nu42562 decided August 25, 2011

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 4(1) of the Fair Transactions in Subcontracting Act (hereinafter “subcontract Act”) provides that “When a prime contractor entrusts a subcontractor with the manufacture, etc., the prime contractor shall not force the subcontractor to determine the subcontract price at a remarkably lower level than the price that is generally paid for the same or similar manufacture, etc. of the object (hereinafter “determination of the unreasonable subcontract price”) or to accept the subcontract.” Article 4(2)7 of the Subcontract Act provides that “When concluding a subcontract through competitive bidding, the prime contractor’s act constituting an act of determining the subcontract price at a lower price than the lowest bid price without justifiable grounds shall be deemed to be an act of determining the subcontract price by determining the unfair subcontract price.” Article 30(1)1 of the Subcontract Act provides that a prime contractor shall be punished by a fine if he/she violates this provision. Article 4(2)7 of the Subcontract Act provides that the prime contractor shall be deemed an act of determining the unfair subcontract price in cases of an act prescribed by the said provision, he/she shall be deemed an act of determining the unfair subcontract price and shall effectively cope with the legislative intent and purpose of establishing the order of the subcontract.

Although administrative laws and penal regulations and penal regulations, which are the basis for indivative administrative dispositions, must be strictly interpreted and applied, and they shall not be excessively expanded or analogically interpreted in the direction unfavorable to the applicable party, a teleological interpretation that takes into account the legislative intent and purpose, etc. as long as they do not deviate from the ordinary meaning of the text and text in the interpretation of such laws and regulations does not exclude (see, e.g., Supreme Court Decisions 2006Du11590, Sept. 20, 2007; 2009Do1332, May 13, 2010).

According to the reasoning of the judgment below, the court below determined that the act of re-tender under Article 4 (2) 7 of the Subcontract Act does not limit the form of the act of determining the subcontract price to the case of an additional negotiation, and the act of deciding the subcontract price is included in the case of a re-tender as a successful bidder even though there is an enterprise which has conducted a competitive bidding at a lowest price. If a bidder is selected as a successful bidder at a price lower than the initial lowest bidding price, the amount would be the subcontract price, and it would result in the same effect as determining the subcontract price at a price lower than the initial lowest bidding price by additional negotiation, and it cannot be said that the above method of re-tender is the same as the act of selecting a successful bidder after the revocation of the bidding procedure on the ground that the minimum bid price exceeds the budget of the principal contractor.

Examining the legislative purport and purpose of Article 4(2)7 of the Subcontract Act and the above legal principles and records, the above determination by the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of the legal principles as to the requirements for the application of Article 4(2)7 of the Subcontract Act, or the violation of the precedents.

2. As to the grounds of appeal Nos. 2 and 3

"Justifiable reason" to eliminate the corresponding nature of the act of determining unfair subcontract consideration under Article 4 (2) 7 of the Subcontract Act refers to the objective and reasonable reason to justify the determination of subcontract consideration at a price lower than the lowest tender price, such as the conditions of the construction site, reasons not attributable to the principal contractor, or reasons attributable to the subcontractor, etc., and the principal contractor shall assert and prove such fact and determine it individually and specifically in accordance with the case from the perspective of establishing a fair order of subcontract transactions.

According to the reasoning of the judgment below, the court below acknowledged the following facts: (a) the plaintiff, a principal contractor, failed to select a minimum bidder as a successful bidder on April 18, 2009, on the ground that the minimum bid price exceeds the estimated price of 96% of the planned cost per se, from the tender executed after May 1, 2009 to reduce the cost of outsourcing; and (b) the plaintiff concluded a subcontract for the instant five subcontracted projects through a selective competitive tendering procedure from May 22, 2009 to June 10, 2009; (c) the plaintiff did not first determine the lowest bid price for the first bidding to the highest two or three sub-tenders including that company, but did not first select the lowest bid price for the first bidding to the highest bidder, and concluded the subcontract with the relevant company to conclude the first bidding contract with the contractor; and (d) the plaintiff did not notify the first bidding price or the first bidding price for the bid more than the estimated price.

Furthermore, the lower court determined that the Plaintiff’s act of this case constitutes an unfair act of determining a subcontract price under Article 4(2)7 of the Subcontract Act, based on the following circumstances: (a) the Plaintiff’s act of re-tendering without notifying the bidder in advance on the ground that the amount of the first bidding price exceeds the estimated price after setting 96% of the estimated price in order to reduce the cost of outsourcing; and (b) it is difficult to view that the Plaintiff’s act of disclosing the estimated price before selecting a successful tenderer was an objective and reasonable reason to lower the lowest price than the bid price; and (c) even if the Plaintiff’s act of disclosing the estimated price before selecting a successful tenderer was inappropriate due to collusion or the Plaintiff’s risk of exposure to trade secrets, even after sealing the estimated price in advance, the Plaintiff did not take all such measures; and (d) the Plaintiff’s act of determining a subcontract price at a price lower than the lowest bid price without justifiable grounds should be considered as an act of determining an unfair subcontract price without separately examining whether the subcontract price was determined at a price lower than the generally paid price.

In light of the above legal principles and records, the above fact-finding and determination by the court below are just, and contrary to the logical and empirical rules, the court below did not err by exceeding the bounds of the principle of free evaluation of evidence, or by failing to exhaust all necessary deliberations as to “unfairness” or “justifiable cause” under Article 4(2)7 of the Subcontract Act, or by failing to exhaust all necessary deliberations.

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.

Justices Park Poe-young (Presiding Justice)