Korea Development Co., Ltd. and two others (Attorney Kang-gu, Counsel for the defendant-appellant)

Environmental Management Corporation

Republic of Korea and one other

March 31, 2009

1. The defendant shall pay to the plaintiffs 338,973,880 won with 6% interest per annum from August 8, 2008 to April 28, 2009 and 20% interest per annum from the next day to the day of complete payment.

2. The plaintiffs' remaining claims are all dismissed.

3. The cost of the lawsuit, including the cost of supplementary participation, 1/10 of them shall be borne by the Plaintiffs, and the remainder by the Defendant, respectively.

4. Paragraph 1 can be provisionally executed.

The defendant shall pay to the plaintiffs 338,973,880 won with 20% interest per annum from the day following the delivery of a copy of the complaint of this case to the day of complete payment.

1. Basic facts

A. On November 29, 2006, the Plaintiffs and four companies, including non-identical Construction Co., Ltd. (hereinafter “non-construction”), jointly entered into a contract for construction works with the Defendant for the construction works for the Han River Basin Improvement Works (hereinafter “instant construction works”) ordered by the Defendant, with respect to the total construction cost of KRW 71,580,223,00, and the construction period from December 5, 2006 to October 4, 2010.

B. At the time of entering into the said construction contract, the Plaintiffs and non-construction entered into a joint supply and demand standard agreement (hereinafter “instant joint supply and demand agreement”) with the following contents, which stipulate the duty of mutual rights and operation of joint projects with regard to joint supply and demand (hereinafter “instant joint supply and demand agreement”).

Article 1 (Purpose)

This Agreement sets out an agreement with the plaintiffs to jointly and severally carry out a joint project for the following construction projects by mobilization of finance, management, technical ability, personnel, and equipment and materials.

1. Name of the project: The Han River System Improvement Project (No. 2-1 Section);

4. Name of the project owner: The Environmental Management Corporation;

Article 3 (Members of Joint Contractor)

(2) The representative of a joint contractor shall be considered and developed for the plaintiff.

(3) The representative shall represent the contracting agency and the third party, and shall have the authority to manage the property of the joint contracting agency and to request the price therefor.

Article 7 (Responsibility)

Members of a joint supply and demand organization shall be jointly and severally liable for the performance of contractual obligations to the project owner.

The members of a joint contractor shall not subcontract part of the joint contract work without the consent of other members.

Article 9 (Receipt of Consideration, etc.)

The payment, etc. for the construction works shall be paid to the following accounts of each member of the joint contractor.

(Account Number omitted)

Article 10 (Ratio of Investment by Members)

(1) The ratio of investment by joint contractors shall be as follows:

1. Consideration and development: 36%;

2. Construction for pairs: 34%;

3. Mobilization and construction: 15 percent.

4. Non-permanent construction: 15%;

§ 10-1. Distribution of profits and losses

Where any profit or loss occurs after a contract for work is implemented, it shall be distributed or shared in accordance with the ratio prescribed in Article 10.

Article 11 (Restrictions on Transfer of Rights and Obligations)

No member shall transfer his/her rights and obligations under this Agreement to a third party.

Article 12 (Measures against Duplicing Withdrawal)

(1) Members of a joint supply and demand organization shall not withdraw from the country by the date of completion of tender or the execution of the contract concerned without the consent of all the ordering person and all the members: Provided, That with respect to any member of a joint supply and demand organization who has received a request for withdrawal from the ordering person due to his failure to perform the contract concerned without any bankruptcy, dissolution, dishonor, or any justifiable reasons

(2) Where part of any partner withdraws, the remaining members shall jointly perform the relevant contract.

(3) In cases falling under paragraph (2), the ratio of investment shall be divided according to the ratio of investment by the remaining members and added to the ratio of Article 10.

Article 13 (Defect Warranty Liability)

If any defect occurs in the construction work concerned after the joint supply and demand company is dissolved, it shall be jointly and severally liable.

C. While implementing the construction project in accordance with the instant construction contract, the Plaintiffs and the instant construction company were employed by 11 or 16 employees each, and the Plaintiff mobilization construction company invested two employees in the instant construction project for six months only for one employee, and as of March 2008, the instant construction project was made up of 13.98%.

D. Under the instant joint supply and demand agreement, the Plaintiffs and non-construction claimed KRW 1,428,00,000 for the payment for completed portion on November 21, 2007 and KRW 3,832,00,000 for completed portion on December 27, 2007, respectively.

E. Before February 4, 2008, the non-construction secedes from the instant joint supply and demand organization, and the Plaintiffs entered into a new joint supply and demand agreement based on the ratio of change in only the Plaintiffs around April 2008, and entered into a new joint supply and demand agreement with the Defendant on April 7, 2008 pursuant to the said agreement.

F. Meanwhile, on February 21, 2008, the Intervenor of the Republic of Korea (the director of the Namyang District Tax Office) who is the obligee of the non-construction attached KRW 19,183,410 among the claim for construction price regarding the instant construction against the Defendant of Non-Performing Construction on the ground of default of national taxes in the year 2007, including value-added tax, etc. of Non-Performing Construction. The Intervenor of the Defendant’s Intervenor’s Intervenor attached KRW 19,183,410 from among the claim for construction price regarding the instant construction against the Defendant of Non-Performing Construction, and the seizure and collection notice was served on the Defendant. The Defendant’s Intervenor’s Intervenor’s Intervenor’s Korea Workers’ Compensation and Welfare Service attached KRW 132,35,390 from among the claim for construction price of Non-Performing Construction on July 11, 2008 on the ground

[Ground of recognition] Facts without dispute, Gap evidence 1 to 20 evidence (including each number, hereinafter the same shall apply), Eul evidence 1 to 3, non-party 1's testimony and the purport of whole pleadings

2. The assertion and judgment

A. The parties' assertion

(1) The plaintiffs' assertion

Since a joint supply and demand organization composed of the plaintiffs and non-construction as to the construction project in this case constitutes a partnership under the Civil Act, as long as such joint supply and demand organization enters into the contract for the construction project in this case as a partnership, the claim for the construction work shall be reverted to all members, including the amount equivalent to the share of non-dual construction, and thus, the defendant is obliged to pay the payment for delay and delay damages to the plaintiffs, regardless of the invalid seizure of the creditors of non-dual construction, under the premise that the claim for construction work belongs

(2) Defendant’s assertion

According to the joint supply and demand agreement of this case, the plaintiffs can receive the construction price independently from the defendant (Article 9), joint supply and demand agreement (Article 3-4), and joint supply and demand agreement (Article 3-4), as well as the claim for the construction price of this case for the plaintiffs and non-construction as well as members' work share are designated, are not attributable to the plaintiffs at least to the external relation, but belongs to the division according to their respective ratio, respectively. Thus, the attachment of the claim for the construction price of non-construction is valid.

B. Determination

(1) The nature of the joint contractor for the instant construction

The above facts are as follows: (a) the plaintiffs and non-construction entered into a contract for construction works with the defendant to jointly execute the above construction works by organizing a joint supply and demand organization with respect to the instant construction works; (b) the plaintiffs and non-construction are jointly and severally liable to perform the above construction works regardless of their share ratio in the performance, repair of defects, etc.; (c) the representative of the joint supply and demand organization is determined, and the above representative has the authority to manage the joint supply and demand organization's property or demand for the construction works against the defendant; (d) the ratio of investment is used as the basis for profit or loss distribution after the completion of the instant construction works; (e) the withdrawal of the joint supply and demand organization's membership is limited and the remaining members are jointly and severally liable for the payment of the contract at the time of withdrawal of some members; (e) the above joint supply and demand organization composed of the plaintiffs and non-joint supply and demand organization with respect to the above construction works shall be deemed as partnership under the Civil Act. Accordingly, even if the plaintiffs and non-joint supply and demand organization's claim for construction works in the above portion of construction works shall be deemed as joint construction works (see Supreme Court Decision 29Da69292, etc.

(2) Effect of the attachment of claims by the Intervenor joining the Defendant

As a claim of a cooperative under the Civil Act reverts to all the members of the cooperative, it is impossible to enforce compulsory execution against the claim of the cooperative on the part of one of the members of the cooperative as an executory obligor (see Supreme Court Decision 2000Da68924, Feb. 23, 2001, etc.). Thus, the seizure of the claim above is limited to the property owned by a third party and is null and void as it is subject to the seizure of the claim (In addition, it is difficult to view that the construction of the claim is null and void even after the withdrawal from the joint contractor of this case on Feb. 4, 2008, which is the transfer of the seizure by the defendant's supplementary intervenor, and its share is divided to the plaintiffs, as it is difficult to view that the defendant has the right to claim construction payment against the defendant). Accordingly, the defendant cannot refuse to pay the progress payment of the construction work in this case on the ground of the seizure of the claim null

(3) Sub-decisions

Therefore, the defendant is obligated to pay to the plaintiffs 338,973,80 won of the above progress payment and damages for delay at the rate of 6% per annum under the Commercial Act from August 8, 2008 to April 28, 2009, which is the day following the delivery of a copy of the complaint in this case, and 20% per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the next day to the day of full payment (the plaintiff claimed damages for delay from the day after the delivery of the copy of the complaint in this case to the day of the decision, but it is reasonable for the defendant to resist about the existence and scope of the obligation, and therefore the ratio under the above Act on Special Cases shall not apply to the above period).

3. Conclusion

Therefore, the plaintiffs' claim of this case is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.

Judges Lee Young-jin (Presiding Judge) et al.