The method of calculating damages caused by illegal bidding collusion, and whether to adopt any appraisal result among different appraisal results belongs to the discretionary power of the fact-finding court (affirmative in principle)

Damage caused by an illegal bidding collusion refers to the difference between the successful bid price formed by the collusion act and the price formed in the event there was no collusion (hereinafter referred to as “provisional competition price”). Virtual competition price is calculated by the method of excluding only the increase in the price caused by the collusion act while maintaining the other factors for price formation in the pertinent market where the collusion act occurred. It is a virtual price that is not the actual existing price. It is a tentative price, which is a method of comparison with the price before and after the collusion (in the case of the ex post facto comparison method) or the standard market (in the case of the standard market comparison method) or a method of measurement and economics in the relevant case, it is inevitable to presume by adopting the most objective and reasonable method in light of the type of the collusion act, market situation, and the scope of materials available.

When there are several different appraisal results with respect to the same matter, unless there were errors such as appraisal methods against logical and empirical rules or unreasonable, one of them is, in principle, within the discretionary power of the fact-finding court.

Articles 393 and 763 of the Civil Act, Article 202 of the Civil Procedure Act

Supreme Court Decision 2002Da30275 Decided September 24, 2002 (Gong2002Ha, 2532) Supreme Court Decision 2010Da18850 Decided July 28, 201 (Gong2011Ha, 1740)

Korea Electric Power Corporation (Law Firm LLC, Attorneys Kim Nam-nam et al., Counsel for the defendant-appellant)

Han Cable Co., Ltd. and 9 others (Law Firm Square et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2015Na2015960 decided July 7, 2016

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Damage caused by an illegal bidding collusion refers to the difference between the successful bid price formed by the collusion act and the price formed in the event of the absence of the collusion (hereinafter “provisional competition price”). Virtual competition price is calculated by a method of excluding only the increase in price arising from the collusion while maintaining the other factors for price formation in the pertinent market where the collusion act occurred as it is (see, e.g., Supreme Court Decision 2010Da18850, Jul. 28, 201). This is a virtual price that is not the actual existing price. As such, inasmuch as it is a virtual price that is not the actual price, it is reasonable to estimate by adopting the most objective and reasonable method in light of the type of the collusion act, market situation, the scope of data that can be collected, etc. in the pertinent case, among various economic analysis methods, such as the method of comparing the price before and after the collusion (in the case of ex post facto comparison method) or the standard market (in

When there are several different appraisal results with respect to the same matter, unless there is any error that the appraisal method is contrary to logical and empirical rules or unreasonable, the adoption of one appraisal result belongs to the discretionary power of the fact-finding court in principle (see Supreme Court Decision 2002Da30275, Sept. 24, 2002, etc.).

2. A. The reasoning of the lower judgment reveals the following facts.

(1) In order to purchase electric power vessels, the Plaintiff calculated the assessment price based on the production cost by itself, and subsequently conducted a bid. The Defendants, while participating in the Plaintiff’s electric power purchase bid, engaged in collusion between August 1998 and August 200, and September 4, 2007. The Fair Trade Commission issued a corrective order and a penalty surcharge order to the Defendants on May 4, 2012 on the grounds of such collusion.

(2) The appraiser divided the power lines purchased by the Plaintiff into four product groups and calculated the annual average bid price ratio for each product group (the bid price ratio compared to the estimated price). From 2000 to 2006, the average bid price ratio was maintained from 98-99% (average 99.43%) during the collusion period. However, from 200 to 206, the average bid price ratio was 74.75% in 1999, and from 2007, immediately after the collusion was completed, it was reduced to 83.83% in 2007, and it was maintained from 2008 to 201 to 36.98.31% in average during the collusion period, and it was maintained to more than that end after 2012.

B. The lower court acknowledged that the Defendants were liable to compensate the Plaintiff for damages arising from the Defendants’ act of collusion with respect to the purchase contract of electric power lines after October 9, 2002, which was after the period of time when the Plaintiff was the Plaintiff’s expiration of the extinctive prescription. Furthermore, the lower court, on the following grounds, adopted one of the multiple appraisal results on the amount of damages, and limited the Defendants’ liability to 70%

(1) In order to estimate the scope of damages, the following shall be calculated by comparing the prices at the time when there was no collusion for one market and the time when there was no collusion for the purpose of estimating the amount of unfair price discount due to collusion. The amount of damages shall be calculated by estimating the virtual competitive bid bid rate which was formed in the absence of collusion in the event that there was no collusion as soon as possible instead of promptly estimating the virtual competitive price, and by multiplying the difference between the actual bid price and the estimated price.

(2) The appraiser asserts that the annual successful bid rate by product group should be calculated by calculating the average bid price rate by adding a small weight from the average bid price rate by year and the period of collusion, and that it should be included in the competitive period between 1999 and 2014, excluding the period of competition in 1999 and 2007. Since it appears that it is a reasonable analysis method to estimate the virtual competitive successful bid price by equally deeming the annual successful bid rate from 2007 to 201 as the competitive period, the outcome of the appraisal of the amount of damages calculated accordingly is adopted. The detailed reasons are as follows.

(A) If there are all available observation data prior to and after the collusion, it is reasonable to estimate the bid price ratio of the collusion period by comparing both the bid price ratio before and after the termination of collusion, barring special circumstances.

(B) As alleged by the Defendants, even if the bid price rate of 1999 and 2007 was sharply lowered, and the bid participants participated in the bidding in the situation of lack of information immediately after the completion of collusion, it is ordinarily to make a tender in consideration of their respective profitability, etc. As such, the mere circumstance alleged by the Defendants cannot be excluded from the competition period of 199 and 2007.

(C) After the Plaintiff filed a lawsuit for the instant claim for damages on January 20, 2012, the Fair Trade Commission issued a corrective order, etc. to the Defendants, and continued to dispute where the period of competition would be anywhere in accordance with the Before and after the instant lawsuit. Therefore, a tender made after the instant lawsuit was brought, there is a high possibility that participants adjusted the bid price in order to create bid data that could lower the estimated amount of damages in the instant case.

(D) As alleged by the Defendants, it is difficult to view that the outcome of the appraisal by which the amount of damages was estimated according to the bid price ratio calculated from 2008 to 2014 regarding the period of competition as the period of competition is more reliable than that of the appraisal by which the amount of damages was estimated according to the bid price ratio calculated from 2008 to 2011 regarding the period of competition as the period of competition.

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the appraisal method, etc. adopted by the lower court cannot be deemed to have been significantly erroneous in light of the empirical rule or the lack of rationality. In so determining, the lower court did not err by misapprehending the legal doctrine on the calculation of damages and the burden of proof

3. The Defendants’ appeals are without merit, and all of them are dismissed, and the costs of appeal are assessed against the losing parties. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min You-sook (Presiding Justice)