[1] The meaning of "unfair profit" and "fair price" under Article 95 subparagraph 1 of the Framework Act on the Construction Industry

[2] The meaning of “tender” under Article 95 subparag. 3 of the Framework Act on the Construction Industry (i.e., the same concept as “tenders” under the Criminal Act) and whether a person who interferes with another constructor’s bidding under the same provision includes a person who interferes with bidding by affecting another constructor’s bidding decision, etc. likely to participate in bidding (affirmative)

[3] Whether a crime of violation of Article 95 subparag. 3 of the Framework Act on the Construction Industry is a dangerous crime (affirmative), and whether the actual result of interference with another constructor's bidding in order to establish the above crime should occur (negative)

[4] Whether a corporation extinguished through a merger succeeds to a corporation surviving a merger, which is subject to joint penal provisions for an unlawful act committed by employees, etc. (negative)

[1] Article 95 subparag. 1 of the Framework Act on the Construction Industry / [2] Articles 1 and 95 of the Framework Act on the Construction Industry, Article 315 of the Criminal Act / [3] Article 95 subparag. 3 of the Framework Act on the Construction Industry, Article 315 of the Criminal Act / [4] Article 328(1)2

[1] Supreme Court Decision 99Do2309 decided Oct. 12, 199 (Gong1999Ha, 2379) / [2] Supreme Court Decision 2001Do2423 decided Nov. 30, 2001 (Gong2002Sang, 240) Supreme Court Decision 2013Do696 decided Oct. 17, 2013 / [4] Supreme Court Decision 2005Do4471 decided Aug. 23, 2007 (Gong2007Ha, 1494) Supreme Court Decision 2008Do7012 decided Dec. 24, 2009

Defendant 1 and seven others

Defendants

Law Firm LLC et al. and 3 others

Seoul High Court Decision 2014No669 decided August 21, 2015

All appeals by Defendant 1, Defendant 2, Defendant 4, Defendant 5, Defendant 6, Defendant 7, Defendant 8, and Defendant 8 are dismissed. The indictment against Defendant 3 is dismissed. The indictment against Defendant 3 is dismissed. Of the judgment of the first instance, the “○○○○○○” among the indication of Defendant, Defendant indication, order, and reasoning of the judgment of the court of first instance, shall be corrected to “Defendant 5 Stock Company.”

1. Judgment on Defendant 2’s ground of appeal

Article 95 Subparag. 1 of the Framework Act on the Construction Industry punishs persons who bid at a manipulated price in collusion with each other for the purpose of acquiring unjust profits or interfering with fair price determination in a construction project. Here, “unfair profits” or “fair price” are premised on the successful bid price determined through free competitive bidding while not engaging in collusion among construction business operators, and where a successful bid price determined through such free competitive bidding is awarded at a price higher than such “fair price” through such collaborative act, it shall be interpreted that the difference is “unfair profits” (see, e.g., Supreme Court Decisions 9Do2309, Oct. 12, 199; 2001Do4631, Feb. 22, 2002).

Examining the reasoning of the judgment below in light of the above legal principles, the court below is just in finding Defendant 2 guilty of all violation of Article 95 subparag. 1 of the Framework Act on the Construction Industry concerning the extension of the drainage of the mouth river mouth and the tender of the Boan Multipurpose Dam construction among the facts charged in this case against the defendant 2, and there is no error of law by misapprehending the legal principles as to Article 95 of the Framework Act on the Construction Industry, contrary to what is alleged in

In addition, according to Article 383 subparagraph 4 of the Criminal Procedure Act, only in cases where death penalty, life imprisonment, or imprisonment or imprisonment without prison labor for not less than ten years has been imposed, an appeal on the grounds of unfair sentencing is permitted. Thus, in this case where Defendant 2 Co., Ltd. was sentenced to a more minor sentence, the argument that the amount of punishment

2. Judgment on Defendant 4’s ground of appeal

Article 95 of the Framework Act on the Construction Industry provides that a person who commits an act falling under any of the following subparagraphs in a tender for a construction work shall be punished by imprisonment for not more than five years or by a fine not exceeding 50,000 won, and subparagraph 3 provides that "a person who interferes with tenders by other constructors by deceptive schemes, force or other means." In full view of the purpose of the Framework Act on the Construction Industry for promoting the proper execution of construction works and the legislative purport under which the above penal provision is established, this is to specially punish constructors who interfere with bidding process in a tender for a construction work except for the reasons stipulated in subparagraphs 1 and 2 of the same Article, and thus, the special provisions for interference with bidding under Article 315 of the Criminal Act include a special provision for punishment of constructors who interfere with bidding process in a construction work, and thus, the concept of "tender act" under Article 95 subparagraph 3 of the Framework Act on the Construction Industry is likely to interfere with bidding process in a way that interferes with tenders by other constructors (see, e.g., Supreme Court Decision 2013Do16360.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and evidence duly admitted, although 8 companies, etc., including Defendant 4, etc., were partly inappropriate in the reasoning of the judgment below, the judgment below is just in holding that the act of having a competitor submit revised design drawings in the bidding procedure to realize the distribution of the construction section, thereby obstructing other construction companies from participating in the act of distributing construction section, thereby constituting a violation of Article 95 subparag. 3 of the Framework Act on the Construction Industry. In so doing, contrary to what is alleged in the grounds of appeal, the court below did not err by misapprehending the legal principles on the constituent elements of the crime of violating Article 95 subparag. 3 of the Framework Act on the Construction Industry, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

3. Judgment on the grounds of appeal by Defendant 5 and Defendant 7

The argument that the lower court erred by exceeding the inherent limit of sentencing discretion in violation of the principle of equality constitutes an allegation of unfair sentencing. However, under Article 383 Subparag. 4 of the Criminal Procedure Act, only in cases where death penalty, life imprisonment, or imprisonment with or without prison labor for not less than ten years is imposed, an appeal on the grounds of unfair sentencing is allowed. As such, in this case where Defendant 5 and Defendant 7 Co., Ltd. were sentenced to a more minor sentence, the argument that the sentencing of the sentence is unfair

4. Judgment on Defendant 6’s ground of appeal

Examining the reasoning of the lower judgment in light of the relevant legal principles and evidence duly admitted, the lower court is justifiable to have found Defendant 6 Co., Ltd. guilty on the grounds indicated in its reasoning. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the validity of a decision of unconstitutionality, the interpretation of the proviso of Article 98(2) of the Framework Act on the Construction Industry

In addition, according to Article 383 subparagraph 4 of the Criminal Procedure Act, only in cases where death penalty, life imprisonment, or imprisonment or imprisonment without prison labor for not less than ten years has been imposed, an appeal on the grounds of unfair sentencing is allowed. Thus, in this case where Defendant 6 corporation imposed a minor sentence on Defendant 6 corporation, the argument that the amount of punishment is unreasonable

5. Determination on Defendant 1 and Defendant 8’s grounds of appeal

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the evidence duly admitted, the lower court’s conclusion that the instant facts charged against Defendant 1 and Defendant 8 were guilty is justifiable. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the interpretation of Article 95 subparag. 3 of the Framework Act on the Construction Industry, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, thereby adversely affecting the conclusion of the judgment.

Meanwhile, Defendant 8’s legal provision applicable to Defendant 8’s corporation is Article 98(2) of the former Framework Act on the Construction Industry (amended by Act No. 9875 of Dec. 29, 2009), and the Constitutional Court rendered a decision of unconstitutionality as to the above provision. As such, Defendant 8’s allegation in the grounds of appeal that the verdict of not guilty as to the facts charged in this case should be rendered, is not legitimate grounds of appeal since the above Defendant’s ground of appeal or the lower court’s decision did not appear to have been subject to a judgment ex officio. Furthermore, the lower court did not err by misapprehending

6. Determination on the public prosecution against Defendant 3 Stock Company

In the case of a corporate merger, the rights and obligations of the merged company shall be succeeded to all the surviving company due to the merger regardless of the relationship under private law or public law. However, the transfer of a corporation by its nature ought to be excluded from the subject of succession. The punishment of a corporation under joint penal provisions differs from administrative sanctions or civil tort liability as a kind of punishment, and it can be deemed that Article 328 of the Criminal Procedure Act provides for "where a corporate defendant ceases to exist," as the ground for dismissal of public prosecution, is premised on the fact that criminal liability is not succeeded to. In light of the above, under the current law that does not provide for the basis for punishing the corporate abuse of the merger system, etc. or succeeding to criminal liability in the event of abuse of the corporate merger system, etc. by means of the evasion of criminal punishment, the criminal liability of a corporation extinguished by the merger does not, in its nature, be transferred to the surviving corporation due to the merger (see, e.g., Supreme Court Decision 208Do7012, Dec. 24, 2009).

According to the records, Defendant 3 Co., Ltd. (registration No. 1 omitted) was found to have been merged with Nonindicted △△△△△ (registration No. 2 omitted and trade name before the change of registration No. 2 omitted) on September 2, 2015, which was after the decision of the lower court, and no longer continued to exist. Thus, the prosecution against Defendant 3 Co., Ltd is dismissed in accordance with Articles 382 and 328(1)2 of the Criminal Procedure Act.

7. Conclusion

Therefore, all appeals by Defendant 1, Defendant 2, Defendant 4, Defendant 5, Defendant 6, Defendant 7, Defendant 7, and Defendant 8 are dismissed, and the prosecution against Defendant 3 is dismissed. Since it is obvious that “○○○○○○○○” in the judgment of the first instance is a clerical error of “Defendant 5,” the judgment of the court below’s indication, Defendant indication, order, and reasoning is obvious, and thus, it is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)