Plaintiff 1 and 6 (Law Firm Aju, Attorneys Lee Jae-gu et al., Counsel for the plaintiff-appellant)

Original City Mayor (Attorney Kim Jong-hwan, Counsel for the plaintiff-appellant)

may 23, 2007

Chuncheon District Court Decision 2005Guhap2627 Decided October 26, 2006

1. Revocation of a judgment of the first instance;

2. All plaintiffs' claims are dismissed.

3. The costs of the lawsuit are assessed against the Plaintiffs.

1. Purport of claim

The defendant's disposition of dismissal of unjust enterprisers against the plaintiffs on December 16, 2005 shall be revoked in entirety.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiffs are companies mainly engaged in the business of collecting and transporting food wastes from detached houses and small-scale restaurants (less than 100С) in the prime city with the permission for the business of collecting and transporting domestic wastes from the Defendant in the prime city. At the time of 2005, 18 companies that obtained the permission for the business of collecting and transporting domestic wastes from the Defendant were located in the prime city. Among them, 17 companies, including the Plaintiffs, belong to the Korea Waste Disposal Business Association (hereinafter “Waste Business Association”). (hereinafter “Waste Business Association member companies,” and its representative director or representative members are “member companies”).

B. On December 30, 2004, the Won-si concluded a contract for the collection and transportation of food waste in multi-family housing with the non-party 3 limited partnership company (hereinafter "non-party 3 company"). However, when the non-party 3 company's violation of the Wastes Control Act was discovered, the defendant ordered the non-party 3 company to suspend its business for five months as of May 1, 2005.

C. Accordingly, on April 2, 2005, the Defendant issued an electronic bidding notice on April 7, 2005 by dividing the original city into four regions: (a), (b), (c), and (d) to select an enterprise that is obligated to conclude a unit price contract for food waste collection and transportation; (b) on April 13, 2005, the Defendant conducted a bidding from the 7th to the 13th day of the following month; (c) on April 13, 2005, the second bidding was conducted on the 14th to the 19th day of the following month; (d) on two occasions, the 'A' area was submitted only by Plaintiff 3 limited partnership companies (hereinafter “Plaintiff 3”).

D. The representatives of members of the Korea Waste Association, including the plaintiffs, were convicted of interference with the bidding (205 high-class 496) or of a fine by summary order (205 high-class 4154) due to the fact that the representative of the members of the Korea Waste Association, who were ordered by the original state, failed to participate in the bidding in a way that they did not participate in a negotiated contract for the collection and transportation of food waste and the open competitive bidding for unit price contract, and agreed to mutually distribute the profit by concluding a negotiated contract under favorable conditions to the business enterprises, etc., and caused a fair bidding by failing to participate in the competitive bidding as above, and the judgment and summary order became final and conclusive as they are.

E. Accordingly, on December 16, 2005, the defendant applied Article 27 of the Act on Contracts to Which the Government is a Party (amended by Act No. 7722 of Dec. 14, 2005; hereinafter the same shall apply), Article 76 (1) 12 of the Enforcement Decree of the Act (amended by Presidential Decree No. 19483 of May 25, 2006), Article 76 (1) [Attachment 2] subparagraph 1 of the Enforcement Rule of the same Act, and Article 76 (1) [Attachment 2] subparagraph 1 of the Enforcement Rule of the same Act to "Plaintiff 1 Company (hereinafter "Plaintiff 1 Company"), Plaintiff 2 Co., Ltd. (hereinafter "Plaintiff 2 Company"), Plaintiff 3, Plaintiff 4 Limited Partnership (hereinafter "Plaintiff 5 Company"), Plaintiff 5 Limited Partnership (hereinafter "Plaintiff 6 Limited Partnership Company"), and Plaintiff 6 (hereinafter "Plaintiff 6 Limited Partnership") to each of the following dispositions.

[Ground of Recognition] Facts without dispute, Gap evidence 1 to 6, evidence 1 to 2-1 to 5, evidence 22-1 to 3, evidence 22-2, 3, Eul evidence 1, 2, evidence 3-11 to 27, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The plaintiffs asserts to the following purport:

(1) On March 16, 2005, Nonparty 4, who is a public official in charge of environmental protection and public official, ordered Nonparty 1, the representative director of Plaintiff 1 and Plaintiff 2, to take a disposition of business suspension against the non-party 3, who vicariously performed the collection and transportation of food waste in the original city, and accordingly, planned to enter into an agency contract for the collection and transportation of food waste in multi-family housing by means of a private contract with the Waste Association. Thus, the non-party 4, who is the public official in charge of environmental protection

(2) Accordingly, Nonparty 1 completed the preparation to conclude a negotiated contract, such as purchasing a food waste transport vehicle, in consultation with the representatives of members of the Korea Waste Association. However, the first week seeks to enter into an agency contract for collecting and transporting food waste through competitive bidding, and accordingly, demanded the public official in charge of the first week to continue to enter into an agency contract under a negotiated contract as agreed by the public official in charge of the first week. Upon the public announcement of competitive bidding, the first week did not participate in competitive bidding in consultation with

(3) As above, the representatives of member companies of the Waste Association agreed to purchase a vehicle, etc. to prepare for a contract for vicarious execution by a negotiated contract, but the original market price was a contract for vicarious execution by competitive bidding, not a contract for vicarious execution by a negotiated contract, and did not participate in the competitive bidding, and the competitive bidding was not conducted by collusion with the purpose of a negotiated contract by failing to participate in the competitive bidding. Thus, there is no fact that the public official in charge interferes with the bidding or interferes with the participation in the bidding by leading or collusioning the bidding.

Therefore, there was no interference with bidding under Article 76(1)12 of the Enforcement Decree of the Act, which the Defendant initially used as the ground for disposition, and the Defendant did not constitute a collusion for the successful bid of a specific person under Article 76(1)7 of the Enforcement Decree of the Act, which is the ground for disposition claiming the change during the pending litigation, on the ground that there was an error in the statement of the original reason for disposition, and thus, the instant disposition was unlawful.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(1) Nonparty 1 is the joint representative director of Plaintiff 1, the joint representative director of Plaintiff 2, and the president of the Waste Association. Nonparty 5 is the representative of Plaintiff 3, the actual operator of Plaintiff 4, and the vice president of the Waste Association. Nonparty 6 is the representative of Plaintiff 5 and the secretary general of the Waste Association, and Nonparty 7 is the representative of Plaintiff 6 and the secretary general of the Waste Association.

(2) From around 2002, in concluding a contract for the collection and transportation of daily waste subject to the volume-based waste system, the prime city concluded the waste association as a joint supply and demand organization with a negotiated contract. On November 18, 2004, the Ministry of Environment established guidelines for the permission for the disposal of the waste disposal business, as a matter of principle, concluded the contract for the collection and transportation of daily waste through competitive bidding, but the contract for the vicarious execution was changed exceptionally so that it can be concluded by a negotiated contract, the employee in charge of prime city, who did not know it, concluded the contract for the vicarious execution of the collection and transportation of daily waste by means of a negotiated contract with the Plaintiff company representing the waste association on December 29, 2004, and the independent house and small restaurant (less than 1

(3) On January 1, 2005, Nonparty 1: (a) concluded an agreement with the light specialty center which produces garbage transport vehicles, etc. on the exclusive purchase agreement to refrain from selling the said vehicles except for Plaintiff 1; (b) submitted a written petition to the prime viewing on February 7, 2005 for the illegal facts of Nonparty 3; and (c) delegated the waiver of the said quantity and the right to allocate the quantity from the representative of the members on February 28, 2005 for the quantity of multi-family housing waste disposed of by Nonparty 3; and (d) received a written confirmation of confirmation from 16 members to collect the total amount of KRW 13,000,000 from each of the members of the Association; and (e) agreed to purchase and transport the said vehicles for multi-family housing as necessary for collecting and transporting food waste.

(4) The prime city that confirmed the illegality of the non-party 3 company was ordered to suspend the business for five months for the non-party 3 company, and newly set up a policy to select the company in charge of collecting and transporting food waste by means of open bidding in accordance with the revised rules of the Ministry of Environment. However, in the event of the suspension of business against the suspension of business for the non-party 3 company, it was likely that the non-party 3 company might cause a disturbance in food waste if the non-party 3 company suspends its collection and transportation before it was equipped with a new collection and transportation system.

The non-party 4, who was a public official in charge of environmental protection and public official in the original city, was to enter into a temporary agency contract with the Waste Association before the new system was established by open bidding. On March 16, 2005, the non-party 5, 6, and 7, who was a usual relative at the waste association office, and even if the public bidding was conducted by the non-party 5, 6, and 7 at the waste association office on March 16, 2005, the waste association will be awarded a successful bid. However, the non-party 3 will not be bound to take a form of open bidding for the counter-party 3, etc., so it would be possible to enter into a contract with the waste association to prevent the potential food waste disturbance in the blank period following open bidding. The non-party 5, etc., who was the president, did not respond to the open bid by asserting that the non-party 1 would not respond to the open bid.

In the process of Nonparty 1’s talking and talking with Nonparty 1 who was immediately next to the office, Nonparty 4 strongly argued that Nonparty 1 would enter into an open bid by means of a free contract, and it is unlikely that Nonparty 1 would not cooperate with a temporary agency contract, as well as interfere with an open bid, and thus, it is anticipated to suspend Nonparty 3’s business as of April 1, 2005 without any agreement that the public tender will be conducted. However, if the waste association did not prepare for the first time, it would cause a disturbance of food waste. Accordingly, it is said that the food waste collection and transportation contract of multi-family housing will be secured by securing three vehicles and street cleaners for the transportation of food waste of multi-family housing, and it is said that the agency contract for food waste collection and transportation of multi-family housing was concluded by a free contract with the waste association.

(5) As agreed already with the representatives of members, Nonparty 1, who believed that such a negotiated contract will be concluded, concluded a joint supply and demand contract or a contract for the collection and transportation of food waste in multi-family housing, with the transfer of KRW 13,000,000, total amount of KRW 221,000,000 from the representatives of members for the purchase of three transport vehicles necessary for the collection and transportation of food waste in multi-family housing. On March 18, 2005, the representatives of members including Nonparty 1, including Nonparty 1, agreed that the joint supply and demand contract or the Plaintiff 3 company will enter into a contract for the vicarious execution as the representative of 17 companies to jointly bear the expenses incurred in the collection and transportation of food waste and to share the profits jointly with 17 companies.

(6) However, on March 29, 2005, the prime city notified that it will not enter into a contract for collecting and transporting food waste of multi-family housing through a competitive bidding rather than a private contract. At that time, Nonparty 1, who was aware of the fact of the open bid, strongly demanded the public officials of the prime city including Nonparty 4, who thought that he belonged to the public tender, to enter into a private contract. On April 7, 2005, at the meeting of the representatives of the member companies of the Korea Waste Association, he led to the agreement that he will not participate in the open competitive bidding for collecting and transporting food waste of multi-family housing of which the prime city ordered to enter into a private contract, and Nonparty 9 expressed that he will not enter into the contract even if the bid was awarded, and thereafter, Nonparty 1, who was led by the public tender, did not comply with all with the request of the Plaintiff Association to enter into a private contract at the time of the successful bidding.

[Ground of Recognition] A without dispute, Gap evidence 5, 6, 9, 10, 15-1 through 15, 16, 17-3, Gap evidence 21-1 through 9, 29-2 through 16, 32-1 through 5, 42, 46-2, 5, 6, 53-1 through 9, Eul evidence 3-3, 5, 9 through 60, respectively, the purport of the whole pleadings, and the purport of the whole pleadings

D. Determination

(1) Whether the grounds for the disposition are permitted

While the lawsuit in this case is pending, the defendant's act of obstructing the bidding by leading or collusioning the collusion with the public official under Article 76 (1) 12 of the Enforcement Decree of the Act, which is the original disposition, was caused by error in the legal interpretation by the public official in charge. The plaintiffs' act of failing to participate in the bidding in the bidding in the manner of not participating in the bidding to be negotiated contract in the bidding in this case constitutes "a person who has conspired for a specific person's successful bid" under Article 76 (1) 7 of the Act, and the reason for the disposition

In an appeal litigation seeking the cancellation of an administrative disposition, the agency may add or modify other reasons to the extent that the original reason and basic factual relations are identical to those of the original disposition, and the existence of the basic factual relations in this context shall be determined based on whether the social factual relations are identical in the basic point of view (see Supreme Court Decision 2003Du8395, Dec. 11, 2003). Thus, the defendant's act of falling under "a person who has led or conspired to interfere with bidding" under Article 76 (1) 12 of the Enforcement Decree of the Act, which is the ground of the original disposition in this case, constitutes "a person who has led or interfered with bidding" under Article 76 (1) 7 of the Enforcement Decree of the Act, which is the ground of the original disposition in this case, is only different from the legal evaluation of the same act, and it shall be identical with the basic factual relations. Thus, the change (Correction

(2) Appropriateness of the modified disposition cause

The legislative intent of Article 27 (1) of the Act is to restrict participation in bidding for a certain period against a person who has committed an act detrimental to it in order to ensure the fair execution of competition or appropriate performance of contract, and its concrete is a provision of each subparagraph of Article 76 (1) of the Enforcement Decree of the Act. Thus, it is reasonable to respect such legislative intent as possible and to make it consistent (see Supreme Court Decision 99Du3201 delivered on October 13, 200). Thus, it is clear that the act of causing a specific person to enter into a private contract by hindering the establishment of open tendering itself constitutes an act that is likely to interfere with the fair execution of competition or appropriate performance of contract stipulated in the same Act, and on the other hand, it is limited to the case where a specific person is awarded a successful bid in the open tendering procedure, and the act of causing a specific person to enter into a private contract by interfering with the establishment of open tendering itself constitutes an act of causing the specific person to enter into a private contract and thus, it does not constitute an act of causing the specific person to enter into a private contract.

However, as recognized earlier, the representative of member companies, including the plaintiffs, failed to participate in the instant bidding in a manner that does not participate in the instant bidding in order to conclude a free contract under favorable conditions to the business entity after participating in the instant bidding itself, and thus, the Plaintiffs’ above act constitutes “a person who committed collusion for a specific person’s successful bid.”

Therefore, the plaintiffs' assertion that there is no ground for disposition is without merit.

(3) Judgment on the plaintiffs' other arguments

(A) Even if the above grounds for disposition are recognized, the plaintiffs asserted that in this case the oral instruction of the public official in charge of the negotiated contract and the purchase of vehicles is equivalent to the expression of public opinion, and that such a negotiated contract was possible under the State Contracts Act, and that it was consistent with the existing practices, and therefore, it cannot be said that there was a cause attributable to the plaintiffs in trust.

As acknowledged earlier, although Nonparty 4 made a speech and behavior to mislead Nonparty 1 to enter into a private contract before the bid in this case, it is apprehended that Nonparty 1, who is exercising strong influence over the above Association members as the president of the Korea Waste Association, intends to temporarily return to Nonparty 1 by an official document that the public tender would be made. Nonparty 1 and the representatives of member companies, including Nonparty 1, are informed of the fact that the public tender would be made by the public tender. Nonparty 1 and the representatives of members, including Nonparty 1, have been aware of the fact that the measures for the suspension of business of the five-month company against Nonparty 3 have become final and conclusive, in light of the fact that the public tender would be conducted directly from Nonparty 4, the above plaintiffs' assertion is without merit.

(B) In addition, the plaintiffs, in a competitive contract, refer to the conclusion of a contract with a multiple bidders who have participated in the free competition by requiring them to indicate the terms of the contract in writing, and such competitive bidding is established by two or more effective bids. In the case of the bid in this case, only one bidder or one bidder has failed to participate in the bidding, and thus there was no interference with the tender that harms the fairness of the bidding. However, the plaintiff's assertion that there was no valid bid for the purpose of falling under "a person who has participated in collusion for a specific person's successful bid" under Article 76 (1) 7 of the Enforcement Decree of the Act. Thus, the plaintiff's assertion is without merit.

(C) In addition, according to Article 76(4) of the Enforcement Rule of the Act, the plaintiffs may reduce the period of restriction on participation in bidding where there are special reasons to consider minor or other circumstances in restricting participation in bidding. The plaintiffs asserts that the disposition of this case is unlawful because of deviation from and abuse of discretionary authority when considering the reasons why the plaintiffs failed to participate in bidding, the degree of participation in bidding, the necessity of public interest to be achieved by restricting participation in bidding, and the disadvantage that the companies will suffer due to restriction on bidding.

As seen earlier, in full view of the fact that the degree of collusion by the Plaintiffs was planned and continued, and that the Plaintiffs were punished relatively heavy criminally due to the instant act, the instant disposition cannot be deemed an abuse of discretion or a deviation from its limitation, even considering the circumstances asserted by the Plaintiffs.

3. Conclusion

Therefore, the plaintiffs' claims in this case are all dismissed due to the lack of grounds, and since the conclusion of the judgment of the first instance is unfair, the defendant's appeal is accepted and the judgment of the first instance is revoked and the plaintiffs' claims are dismissed. It is so decided as per Disposition.

Judges Cho Jong-jin (Presiding Judge)