[1] The case holding that it is null and void for a housing reconstruction project association to postpone the deadline for bidding by a resolution of the urgent board of directors on the grounds that there is no bidder by the deadline for bidding during the bidding process for selecting a contractor

[2] Criteria to determine the "fairness" of the bidding procedure for the selection of a contractor for a housing reconstruction project

[3] The case holding that since a housing reconstruction project association's failure to submit a "certificate of compliance with public relations guidelines" and thus, granting a certain enterprise qualified to participate in a tender by amending the tender participation rules after the bidding is completed, it becomes invalid for only a certain enterprise to participate in a tender ex post facto invalid, the fairness of the tender, as well as the legality of the relevant regulations, is invalid

[1] In a case where the Housing Reconstruction Project Association postponed the deadline for bidding pursuant to the urgent resolution of the board of directors on the ground that there is no bidder under the bidding conditions until the deadline for bidding during the bidding process for the selection of a contractor, it is reasonable to view that the authority to postpone the deadline for bidding under the provisions of the articles of association of the said Association is not to be held by the executives including the partnership head who is only the executive organ or the board of directors, but to the board of representatives which is the decision-making authority, since it is invalid to determine the deadline for bidding only by the resolution of the board of directors without the prior resolution of the board of representatives, and from the substantial and substantial aspect of the substance, the "where the bidding is not conducted on the designated date due to other unavoidable reasons" stipulated in the tender participation guidelines, which is the direct basis of the decision to postpone the deadline for bidding, refers to the special circumstances where the participating company was not able to give the opportunity for bidding, or due to any other similar reason, and thus, it shall not be deemed that the said deadline for delay is null and void.

[2] In light of the purpose of a housing reconstruction project aimed at improving the residential environment and improving the housing quality of members’ residential stability and housing by promoting a fair and transparent reconstruction project, the “project executor selection procedure” is the core of the housing reconstruction project, and its core is that there are many interested parties surrounding the project, as well as that, in the event that the housing reconstruction project is delayed or unsatisfyed due to unfair acts in the process, damage must ultimately be returned to the members of the association. Therefore, a strict compliance with the relevant laws and regulations premised on fairness and appropriateness is required in proceeding the “project executor selection procedure.” In addition, in the tendering procedure for the selection of a contractor, the “fairness” should be determined on the basis of whether at least the same criteria are applied to the bid participant and the opportunity to participate in the

[3] In a case where a housing reconstruction and improvement project association failed to submit a written commitment to comply with the guidelines for public relations activities by the deadline for submission during the tendering process for the selection of a contractor and thereby granted the qualifications for participation in tendering ex post by holding a board of representatives and amending the provision on participation in tendering on “the deadline for submission of a written commitment to comply with the guidelines for public relations activities,” the case holding that the fairness of bidding and the legality of the relevant provision are also violated and invalid since it becomes invalid since it becomes invalid for the subsequent amendment of the relevant ex post facto provisions to make invalid participation in tendering, from among the site site representatives, only the above specific enterprises are granted the qualifications for participation in tendering after the completion of tendering without any prior notification on the amendment of the provision on participation in tendering procedures, and thus, it cannot be deemed that the information on participation in tendering and the opportunity for participation is fairly granted to other enterprises

[1] Article 11 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [2] Article 11 of the Act on the Maintenance and Improvement of Urban Areas and Residential Environment

[Plaintiff-Appellant] Plaintiff 1 and 17 others (Law Firm Square, Attorneys Seo-Jon et al., Counsel for plaintiff-appellant-appellant)

Seoul High Court Decision 201Na14466 delivered on May 1, 201

1. Subject to the condition that the obligees deposit gold detention (800,000,000) as a guarantee for the debtor or submit a payment guarantee entrustment contract contract with the same amount as the insured amount:

The debtor shall not hold an extraordinary general meeting on July 3, 2010 for the resolution of the "tender guide for the selection of the work executor and the case of delegation of the conclusion of the contract (the case referred to in subparagraph 5)" and "the case of the selection of the work executor (the case referred to in subparagraph 7)" at the Chungcheong sports center.

2. The execution officer shall publicly announce the purport of the said order in the proper manner.

3. The costs of lawsuit shall be borne by the obligor;

The same shall apply to the order except as a condition for the provision of security.

1. Facts of vindication;

According to the purport of the entire record and examination based on the data submitted by July 2, 2010 after the filing of the application on June 24, 2010, the following facts are substantiated.

A. Status of the parties

The debtor is the housing reconstruction and rearrangement project association established for reconstruction of 5,930 households located in Gangdong-gu, Gangdong-gu, Seoul, 170-1,516,676m2, and the creditors are the co-members of the debtor.

B. Relevant provisions

Maintenance and Improvement of Urban Areas

Article 11 (Selection, etc. of Constructors)

(1) An association shall select a constructor or registered business operator as a contractor by means of competitive bidding determined by the Minister of Land, Transport and Maritime Affairs at the general meeting of associations after obtaining authorization to establish an association under Article 16: Provided, That a rearrangement project smaller than the scale prescribed by Presidential Decree may be selected at the general

Standards for selecting constructors for rearrangement projects (No. 2009-550 announced by the Ministry of Land, Transport and Maritime Affairs)

Article 3 (Application of Standards)

Matters not determined by these standards shall be governed by the articles of association, etc., and the detailed methods and procedures not determined by the articles of association, etc. shall be governed by the resolution of the board of representatives (where there is no board of representatives,

Article 5 (Method of Tender)

Where a cooperative intends to select a work executor, it shall do so by competitive bidding, and it may place a restriction or designation on qualifications of a constructor, etc. to a competitive bidding: Provided, That where a bid is not conducted three times or more due to reasons such as failure, etc., a negotiated contract may be made through a resolution by the general meeting, and where a rearrangement project smaller than the scale prescribed in Article 19-2 of the Enforcement Decree of the Act on the Maintenance

The debtor's articles of incorporation

Article 12 (Selection of Work Executor and Contract)

(1) A cooperative shall select a contractor according to the criteria for selection of constructors publicly notified pursuant to Article 11 (2) of the Act after obtaining authorization for project implementation.

Article 25 (Matters for Resolution of Board of Representatives)

(1) The board of representatives shall decide the following matters:

3. Prior deliberation on the agenda of a general meeting and matters delegated by a general meeting;

Article 27 (Establishment of Board of Directors)

(1) Each cooperative shall have a president and directors' meeting comprised of directors to execute its affairs.

Article 28 (Affairs of Board of Directors) The board of directors shall conduct the following affairs:

1. Matters concerning the execution of budgets and ordinary affairs of the association;

2. Matters concerning the deliberation and decision on the agenda of the general meeting and the board of representatives;

3. Matters concerning the establishment of, and the preparation of amendments to, the internal regulations of the association, including business regulations;

4. Other necessary matters concerning the operation of the association and the execution of its projects.

Provisions on bid participation in the tender guidelines for the selection of a debtor's contractor (as of May 25, 2010)

Article 4 (Qualification Standards for Participation in Tender)

The qualification standards for participation in bidding shall comply with all of the following matters:

2. Conditions, documents, and business entities fully paying tender bonds set forth by the association before the deadline for bidding;

Article 6 (Formation and Check of Tender, and Keeping and Opening of Proposal for Project Participation)

(2) In any of the following cases upon completion of tender documents and examination of submitted documents, a re-tender shall be conducted by a resolution of the board of representatives:

(b) Where it is determined that the enterprise participating in the bidding as a result of the conclusion of the bidding has a difficulty in fair competitive bidding, and that continuing the bidding is disadvantageous to the partnership or its members and is likely to cause damage or injury;

(c) Where either party participating in a tender does not actively engage in public relations activities, etc. after the conclusion of the tender and actually appears in the behavior of waiver of the tender, or where it becomes impossible for either party to participate in the tender

(3) A project participation proposal received shall be opened in the presence of one person related to tendering for each company, one executive officer of the cooperative, executive officer of the rearrangement project management company, executive officer or employee of the rearrangement project management company, or one video camera at the time of the closing of the tender, and all the matters shall be recorded with a video recording device immediately: Provided, That if it is deemed impossible to open the project participation proposal on the day of the closing of the tender due to

Article 9 (Invalidation of Participation in Project)

(1) At least one bidder falling under any of the following subparagraphs shall be deprived of qualifications for tender and nullify participation in the project, and the bidder shall not raise any objection to the decision of the cooperative:

4. 입찰자들이 사전에 담합하거나 타 입찰자의 경쟁참가를 방해하거나 또는 조합의 업무 집행을 방해한 입찰자

6. Where the site site consultation committee violates the provisions on bid participation and any conditions presented by the Cooperative.

17. Where he/she participates in a tender without complying with Article 11 (2);

(4) The proposal for project participation by any bidder who has violated the provisions of the preceding three paragraphs shall be treated as null and void, and Article 16 (1) shall apply mutatis mutandis where the effective bidder, excluding any tenderer who has been treated as null and void, is less than two.

Article 11 (Public Relations of Tenderers and Estimated Enterprises)

(2) A participant who intends to participate in a tendering procedure shall submit to the Cooperative a written oath of observance of public relations guidelines attached to the guidelines for public relations activities conducted by the Cooperative, within seven days from the site site consultation committee.

Article 14 (Cancellation of Tender)

(3) The tender at the time of collusion between bidders shall be revoked.

Article 15 (Postponement of Tender)

(1) The association may postpone the closing date for submission of tender documents listed in the public notice of tender or in the main guidelines in the following cases:

1. Where postponement is deemed inevitable because the details of a request for explanation under Article 24 (2) are important;

2. Where a tender cannot be conducted on a designated date or date due to other unavoidable reasons.

Article 16 (Retenders)

A retender may be conducted in any of the following cases:

(1) Where no bidder exists in accordance with the criteria for selection of constructors of rearrangement projects (amended on August 13, 2009), No. 2009-550 (amended on August 13, 2009) announced by the Ministry of Land, Transport and Maritime Affairs,

Article 24 (Inclusion, etc. in Related Matters)

(2) With respect to any error, omission, interpretation of phrases or other matters for which explanation can be found in the review, etc. of tender documents under paragraph (1), a bidder shall be subject to questioning in writing to the Cooperative by no later than June 4, 2010, and shall not ask questions during the said period. In such cases, the Cooperative shall notify the bidder who asked questions by no later than 17 o'clock (Demand Standard) on June 9, 2010, in writing or in FAX, and if it is deemed difficult to give written notice, it may give such notice by wire, etc.

(c) Details concerning holding an extraordinary general meeting for the selection of a contractor;

1) Bidding process to select a contractor

A) On May 8, 2010, the debtor held an extraordinary general meeting and delegated it to the board of representatives, such as “establishment, amendment, and abolition of the regulations on the operation of an association” and “other matters requiring urgency for the promotion of an association,” etc., and decided to obtain ratification at the next regular meeting after the resolution of the board of representatives.

B) The debtor, on May 18, 2010, announced a public announcement of tender stating ① “tender by general competition” by bidding methods, ② “in accordance with the bidding guidelines distributed by the site site conference on matters related to tendering,” ③ the closing date for bidding registration,” etc. in order to select a contractor for reconstruction of housing units in the village-based apartment reconstruction project, which was established on May 18, 2010.

C) On May 25, 2010, the debtor held the site site consultation committee to select a contractor, and issued a bidding instruction to the 16 enterprises participating therein.

D) On the other hand, only 12 companies among the companies present at the site site conference have submitted a written oath of compliance with the public relations guidelines by June 1, 2010, and the Hanyang Co., Ltd did not submit it.

(ii) the reasons for the extension of the deadline;

A) On June 14, 2010, Hyundai Industrial Development Co., Ltd., Daewoo Construction Co., Ltd., Ltd. requested a debtor to postpone the deadline for tender on the grounds of difficulties in preparing a proposal for business participation and organizing a consortium.

B) The debtor held an emergency board of directors 14:00 on the same day as one hour before the end of the bidding and decided that if there is no company participating in the bidding, it cannot hold an extraordinary meeting listed in the main sentence of paragraph (1). The debtor confirmed the details of the deposit of tender bond by 14:50 on the same day, and notified the said 12 companies of the extension of the closing date of tender by 15:00 on the 17th of the same month, the next day of the bidding should be published in the newspaper.

C) On June 14, 2010, the debtor notified by facsimile that “the deadline for tender shall be postponed by 15:00 on the 17th day of the same month pursuant to Article 15(1) of the Notice of Participation in Tender” only with respect to 12 enterprises which submitted a written pledge of compliance with the Public Relations Guidelines, and on the same day, at around 18:00, the debtor sent to representatives a notice of holding the 10th Congress on the 17th day of the same month by registered mail of the next special class.

D) The debtor, on the 15th of the same month, announced a public announcement of the date of tender for the selection of the contractor on the cultural daily newspaper, but did not enter any changes in the tender guidelines, and (2) revised by facsimile only with respect to the above 12 enterprises, and if a successful bidder is not selected pursuant to Article 8(2), the joint public relations briefing sessions and the general assembly holding expenses are jointly borne by the business entity present at the general meeting. In this case, Article 8(3) and (4) of the same Act is newly established as Paragraph (5) that the "successful bidder" shall be deemed as the "business entity present at the general meeting," and Article 18 of the Sub-paragraph (2) of the same Article shall be replaced by the surety, but it is possible to deposit the tender bond under Article 18 of the Sub-paragraph (5) of the same Article, but it

E) At around 21:30 on the same day, the debtor sent to the representatives a notice of holding the 11th board of representatives’ meeting, including the case of the selection of a general meeting and the case of holding an extraordinary general meeting for the selection of a contractor, by registered mail.

F) On the 16th of the same month, Hanyang Co., Ltd. notified the obligor of its intent to submit a “written commitment for public relations activities” at the time of a tender, indicating that the tender guideline for the selection of the contractor has been mitigated and the deadline for bid has been postponed.

3) The reasons why the company was selected after the closing of the tender

A) On June 17, 2010, the result of the bidding process for the obligor’s selection of the contractor: ① Hanyang, ② Hanyang, ② Hyundai Industrial Development Co., Ltd., Daewoo Construction, and Barun Construction Co., Ltd. submitted a project participation proposal. Hanyang submitted a written commitment to comply with the public relations guidelines of the obligor as authenticated, and a guaranty insurance policy for 15 billion won as bid bond.

B) The debtor holds the 19:30th 10th 10th 10th 10th 1 of the same day and passed a resolution with the consent of 86 persons present at the 100 representatives to add the following: (i) the deadline for submission of a written pledge to comply with the public relations guidelines stipulated in Article 11 of the Public Relations Act to “the deadline for the tender”; (ii) the tender bond under Article 18 of the Notice for Tender Participation by replacing the tender bond with “the surety bond” but should be deposited in full within three days after the successful bidder is selected as the successful bidder; and (iii) the resolution to add the contents that the joint burden of the company that has presented the joint presentation and the general meeting cost is jointly borne by the general meeting; and (iv) the “case of the completion of the tender” of the two enterprises that have submitted the project proposal was opened after the resolution with the consent of 87 representatives.

C) The debtor held the 19:30 on July 18, 201, the 111th conference (the number of vehicles thereafter changed to the 12th conference), and selected two companies that submitted the project participation proposal as a general meeting sub-convening company (the agenda item 4), and resolved to hold the special meeting for this purpose. On the same day, the debtor announced the convocation of the special meeting for the selection of the work executor (hereinafter “instant general meeting”) including “the bid guide for the selection of the work executor, the conclusion of the contract (the agenda item 5)” and “the case of the selection of the work executor (the agenda item 7)” as the agenda for the same day.

D) While Hanyang Co., Ltd. does not carry out particular publicity activities at present, since around June 25, 2010, the consortium of the Hyundai Business Group used buses for the debtor's union members to carry out individual public relations activities, such as housing exhibition hall viewing, etc. The Gangdong-gu Seoul Metropolitan Government Office notified the debtor of the above public relations activities of the debtor for the purpose of obtaining construction orders from the consortium of the Hyundai Business Group (No. 2009-550 of the Ministry of Land, Transport and Maritime Affairs Notice No. 200 of the Ministry of Land, Transport and Maritime Affairs) as it is in violation of Article 13 of the criteria for the selection of the constructor of the improvement project.

2. Determination

A. Determination on the validity of the decision to postpone the deadline for bidding

Comprehensively taking account of the following circumstances known by the above facts, it is deemed that the debtor's delay of the deadline for tender according to the decision of the emergency board of directors on June 14, 2010 is null and void.

1) First, from a formal and procedural point of view, it is reasonable to view that the authority to determine the postponement of the deadline for bidding under the provisions of the obligor’s articles of incorporation is not limited to the executives, including the president of the obligor who is merely an executive organ, or the board of representatives of the obligor who is a deliberative organ, rather than to the board of directors. Therefore, the determination of the deadline for bidding by the obligor’s

2) Next, in material and material aspects, the phrase “where the obligor fails to conduct a tender at a designated date due to any other unavoidable cause” under Article 15(1)2 of the Guidelines for Participation in Tender, which is the direct basis of the decision to postpone the deadline for bidding, refers to the special circumstance where the participating enterprise could not be practically given an opportunity for bidding due to the circumstances on the part of the partnership, such as interference with bidding and other acts of disturbance, etc., or where it is impossible to actually conduct a tender due to any equivalent cause, and it cannot be deemed that the situation where there is no bidder under the bidding conditions until the deadline for bidding (this reason falls under a “tender” and must undergo a re-tender procedure). Therefore, it is reasonable to deem that the debtor’s decision to postpone the deadline for bidding is null and void

B. Determination as to the validity of participation in bidding of Hanyang Co., Ltd.

1) In light of the purpose of a housing reconstruction project aimed at improving the residential environment and improving the housing quality of members’ residential stability and housing by promoting a fair and transparent reconstruction project, the “project executor selection procedure” is the core of the housing reconstruction project, and it is ultimately bound that the damage would be ultimately attributable to the members of the association in the event that the housing reconstruction project is delayed or unsatisfyed due to unfair acts in the process. Therefore, the “fairness” in the tendering procedure for the selection of a contractor is required to comply with the strict relevant laws and regulations premised on fairness and appropriateness in proceeding the “project executor selection procedure.” In addition, it is reasonable to determine the “fairness” in the tendering procedure for the selection of a contractor by applying the same criteria and providing the same information to the bidder at least based on whether the opportunity to participate in the

2) Comprehensively taking account of the following circumstances revealed by the above basic principles, even if the obligor’s decision of postponement of the tender deadline as seen earlier is valid from the beginning or after the date set forth in paragraph (a), the participation in the tender by Hanyang Co., Ltd. in the tender will be null and void as described in Paragraph (b) below.

A) The debtor extended the deadline for bidding and notified it through the public notice of the newspaper. However, the 12 companies (including only one stock company) that actually participated in the 16 companies that actually participated in the 16 companies that submitted a pledge of compliance with the public relations guidelines pursuant to Articles 4 and 9, etc., are merely merely the 12 companies (excluding one stock company) that submitted a written pledge of compliance with the public relations guidelines, and as a result, they notified by facsimile of the amendment of the tender participation regulations regarding “the burden of expenses to hold a tender bond, joint public relations presentation, or general meeting,” along with these circumstances separately. This cannot be readily concluded to be legitimate in a situation where the participation regulations at the time are not modified. However, if the approval is obtained after the process of the board of representatives and the general meeting of the members, 12 companies that actually have the qualifications for participation in bidding

B) On the contrary, Hanyang-yang Co., Ltd.: (a) did not submit a pledge of compliance with the public relations guidelines by June 1, 2010; (b) did not fully notify the obligor of the amendment of the tender participation rules on “the cost of holding the tender bond and the joint public relations briefing session and the general meeting” on the 14th of the same month, but did not notify the obligor of the amendment on the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 10th of the 16th of the 10th of the 10th of the 10th of the 10th of the 10th of the 16th of the 16th of the 16th tender.

C. Sub-decision

1) Ultimately, the Hanyang Co., Ltd., which was presented to the general meeting of the debtor in this case for the selection of the contractor, is null and void because it is not qualified for the participation in the tender, and thus, re-tenders should be conducted pursuant to Articles 9(1)6, 17 and 16(1) of the Debtor's Guidelines for Participation in Tender, and even if it is not so, as seen in the above supporting facts, insofar as it appears that the actual fair competition is not possible as seen in the above supporting facts, it is reasonable to re-tender pursuant to Article 6(2) of the Guidelines for Participation in Tender. Thus, in this case, if a resolution on each agenda mentioned in Paragraph (1) of the Disposition of this case called by the debtor was adopted, it shall be deemed that the resolution constitutes an unlawful and invalid case, and therefore, it is recognized that the creditor's right to preserve the respondent's right to seek

2) Meanwhile, in this case, the necessity of strict determination on “the necessity for preservation” is recognized. However, the validity of each of the items mentioned in Paragraph 1 of this case at the general meeting of this case is not determined depending on whether the resolution is made by absolute majority of the members with respect to each of the items stated in Paragraph 1 of this Article, but it is also recognized that the procedure for selecting the contractor may be somewhat delayed compared to the scheduled schedule of the obligor due to the acceptance of the application in this case, but it is likely that the procedure for selecting the contractor may not be delayed compared to the scheduled schedule of the obligor. However, an important reason why the procedure for selecting the contractor is not fair and reasonable should be the observance of due process based on the premise of fairness and appropriateness. Since the procedure for selecting the contractor is not in compliance with such due process of law, the damage of the obligor and its members that may occur when it is impossible

3. Conclusion

Thus, the obligees' motion of this case shall be accepted for all reasons and it shall be decided as per Disposition.

Judges Lee Sung-chul (Presiding Judge)

1) According to the debtor's assertion, even though the "tender Guideline" is merely an internal and external discretionary provision, this is binding, and thus, a resolution of modification or ratification of the board of representatives is not allowed unlimited discretion, and it is possible to modify it only to the extent that it does not impair the fairness, appropriateness, and legality of the tender, and the resolution of modification or ratification of Article 11 of the tender participation rules among the 10th 10th th th th th th th st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st st