Plaintiff (Law Firm Chungcheong, Attorneys Choi Ho-young et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Noh Byung-hee, Counsel for defendant-appellant)

September 3, 2008

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The defendant's corrective order stated in attached Form 1 against the plaintiff on February 19, 2008 shall be revoked.

1. Details of the corrective order;

A. Status of the plaintiff, etc.

The plaintiff is a large enterprise owner operating general construction business, and non-party 1 corporation is a small and medium enterprise owner as stipulated in Article 2 (1) of the Framework Act on Small and Medium Enterprises, and is engaged in a specialized construction business. The plaintiff is entrusted with construction to non-party 1 corporation as seen below b. Thus, the plaintiff is a principal contractor under Article 2 (2) 1 of the former Fair Transactions in Subcontracting Act (amended by Act No. 8539, Jul. 19, 2007; hereinafter "subcontract"), and the non-party 1 corporation is a subcontractor under Article 2 (3) of the Subcontract Act.

(b) Details of construction entrustment;

The Plaintiff entered into a subcontract (hereinafter “instant subcontract”) with respect to the construction of reinforced concrete (hereinafter “instant subcontracted construction”) among the new construction of construction of construction facilities for safe performance of railroads (hereinafter “instant new construction”) with Nonparty 1 Co., Ltd. as follows:

Details of the subcontract

(unit: Won and value added tax shall be included)

Among the construction works of the king Railroad Safety Performance Research Facilities for the initial change of the contract price for the attached construction work date included in the main sentence, the original change of the contract price for the attached construction work date included in the main sentence, the reinforced concrete construction work on November 13, 2005 through November 10, 2005 and July 13, 2007 through July 10, 2007 and July 13, 2007.

C. The plaintiff's act

(1) An act of not adjusting subcontract consideration due to price fluctuations;

In relation to the instant new construction project on September 18, 2006, the Plaintiff increased the construction amount of 361,982,000 won from the ordering person for the reason of price fluctuation, but did not adjust the subcontract price to the non-party 1 corporation by October 18, 2006, which is the 30th day from that date.

(2) unpaid additional amounts and overdue interest due to price fluctuations;

On September 18, 2006, the Plaintiff increased KRW 361,982,00 from the ordering person for the instant new construction project due to price fluctuation, and received KRW 298,00,000 among them from September 29, 2006 to June 21, 2007. However, the Plaintiff did not pay KRW 22,128,000, which is the amount corresponding to the instant subcontracted project among the said KRW 298,00,000, to Nonparty 1 corporation, within 15 days from the date of receipt, and did not pay any interest for delay thereafter.

C. The defendant's corrective order

The Defendant issued a corrective order on February 19, 2008, No. 2008-52, and Paragraph (1) of the same Article, on the ground that the act constitutes a violation of Article 16(1) and Paragraph (2) of the Subcontract Act, and Article 16(3) and Paragraph (2) of the same Article, and Paragraph (2) of the same Article, on the ground that the act constitutes a violation of Article 13(3) and Paragraph (7) of the Subcontract Act (hereinafter “instant corrective order”).

[Ground of recognition] Facts without dispute, Gap evidence 1-1, 2, Gap evidence 2, Gap evidence 3-1 to 7, Eul evidence 1 and 2, and the purport of the whole pleadings

2. Whether the corrective order is lawful;

A. The plaintiff's assertion

(1) Agreement on the settlement of lump sum ex post facto accounts

The Plaintiff and Nonparty 1 Co., Ltd. agreed to adjust the subcontract price for the price for price fluctuations at the time of the conclusion of the instant subcontract after the settlement of the final construction cost between the Plaintiff and the ordering person. Therefore, the Plaintiff cannot be deemed to have violated Article 13(3) and (7), and Article 16(1) and (2) of the Subcontract Act.

(2) The illegality of the corrective order ordering the prevention of recurrence

Article 25(1) of the Subcontract Act provides that a person who has violated a contract may recommend or order measures necessary to correct the violation. Thus, if the result of the violation does not exist any longer, a corrective order may not be issued for the prevention of the recurrence of such violation. However, since the Plaintiff entered into a settlement agreement with the non-party 1 corporation on August 27, 2007 and paid both the subcontract price at issue and the interest thereon, the corrective order of this case issued by the Defendant on February 19, 2008 is unlawful.

(b) Related statutes;

Attached Form 2 shall be as listed in attached Table 2.

C. Determination

(1) Whether there exists an agreement on the settlement of accounts en bloc

In light of the following circumstances acknowledged by Non-Party 1’s testimony (except for the portion that is not believed later) and Non-Party 2’s testimony, Non-Party 1 corporation submitted to the Defendant a written application containing the following: “At the time of submitting a written estimate to the Plaintiff regarding the subcontracted project of this case on July 27, 2007, the Plaintiff intended to equally apply price rates applied by the ordering person, but failed to perform it.” The general conditions of the subcontract of this case include the following: “The construction cost shall be increased even between the Plaintiff and the ordering person, if there is any increase in the construction cost due to price fluctuation, between the Plaintiff and the non-party 1 corporation.” In light of the general conditions of the subcontract of this case, it is difficult to recognize that there was a lack of evidence to acknowledge that there was a lack of evidence between the Plaintiff and the ordering person after the final adjustment of the subcontract price for price fluctuation portion.”

In addition, even if there was a prior agreement between the Plaintiff and the non-party 1 corporation, in light of the fact that Articles 13 and 16 of the Subcontract Act provide that "the subcontractor shall not cooperate with the principal contractor in the principal contractor's violation of this Act" and Article 21 (2) of the Subcontract Act, such circumstance alone does not constitute a violation of the Subcontract Act. Accordingly, the Plaintiff's assertion against this cannot be accepted.

(2) Whether the corrective order ordering the prevention of recurrence is unlawful

Articles 5, 16, 21, and 27 of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) provide that an order for the suspension of a violation, the publication of the fact that a corrective order was issued, and other measures necessary for correction may be issued to a violator enterpriser, etc. In light of the purport of the above provision, it is reasonable to interpret that the contents of the corrective order may not only suspend a violation in the past, but also prohibit the same type of act that may be repeated in the near future (see Supreme Court en banc Decision 2001Du5347, Feb. 20, 2003, etc.).

Meanwhile, as in Article 25(1) of the Subcontract Act, the Fair Trade Commission may recommend or issue a corrective order to an enterpriser who violates the said Act, including payment of subcontract consideration, suspension of violations, and other measures necessary for correcting the said violations. ① The purpose of the Fair Trade Act and the Subcontract Act seems to be different; ② Article 27 of the Subcontract Act provides that the Fair Trade Act shall apply mutatis mutandis to investigation by the Fair Trade Commission, hearing of opinions, deliberation and resolution, and recommendation for correction; ③ Article 27 of the Subcontract Act and Article 55-2 of the Fair Trade Act provide that the Fair Trade Commission’s rules on the operation of meetings and procedure for the case to be applied mutatis mutandis by the Fair Trade Commission (Notice No. 202-8, Aug. 21, 2002) (which provides that the Fair Trade Commission may decide on measures necessary for correction if it considers it necessary for the prevention of violations even if the status of violations has already been terminated at the time of the commencement of an investigation into the Fair Trade Commission.

In this case, in full view of the fact that the subcontract price originally agreed upon after the beginning of around 2007 was almost paid at around that time, the adjusted portion due to price fluctuation was not paid until several months thereafter, and that in the case of the plaintiff who runs a general construction business, it seems that the contract with multiple subcontractors would continue to be entered into in the future with the same contents as the subcontract of this case, the plaintiff is likely to repeat or repeat a violation of the Subcontract Act of the same type as this case in the present or near future. Thus, the corrective order of this case ordering the prohibition of repeated violations of the Subcontract Act of the same type as this case cannot be accepted. Accordingly, the plaintiff's assertion against this is not acceptable.

3. Conclusion

Therefore, the correction order of this case is legitimate, and the plaintiff's claim seeking the revocation is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment 1]

Judges Cho Byung-hee (Presiding Judge)