Ssangyong Construction won a contract for the construction of KT's new headquarters in Pangyo for 96.7 billion won in 2020 and completed the work in April last year. It appears that conflicts with KT will enter a long-term phase.
According to Ssangyong Construction, the 27th Civil Division of the Seoul Central District Court referred the lawsuit between KT and Ssangyong Construction to mediation procedures on July 30. Following the mediation sessions held on Nov. 5 and Dec. 17, KT expressed a lack of intent to mediate, resulting in the mediation committee's failure to reach an agreement.
In addition, since June, KT Estate and Hanshin Engineering & Construction have also engaged in legal disputes, suggesting that the litigation between KT and the construction company is set to expand.
Earlier, KT filed a lawsuit against Ssangyong Construction in May, indicating a lack of willingness to negotiate over the construction cost dispute. As a result, the Ministry of Land, Infrastructure and Transport's construction dispute resolution process, which had been ongoing for about seven months, was suspended.
In response, Ssangyong Construction filed a counterclaim for additional construction payments due to the debt confirmation lawsuit initiated by KT in June.
Ssangyong Construction won a contract for the construction of KT's new headquarters in Pangyo for 96.7 billion won in 2020 and completed the work in April last year.
A spokesperson for Ssangyong Construction said, "At the time of the contract, due to unforeseen circumstances such as the COVID-19 pandemic and the Russia-Ukraine war, the prices of materials, labor, and logistics surged to unprecedented levels, leading to repeated demands for an additional construction cost of 17.1 billion won." They added, "KT has rejected this on the grounds of the 'exclusion of price fluctuation special clause.'"
The crux of this dispute is the validity of the 'exclusion of price fluctuation special clause' contained in the contract. This clause states that the contract amount will not be adjusted even if there are price fluctuations after the construction begins. Previously, a Supreme Court ruling in 2017 acknowledged the validity of such clauses in public works; however, the Supreme Court ruled in April that the 'exclusion of price fluctuation special clause' was invalid in a lawsuit between a church in Busan and a construction company.
A spokesperson for Ssangyong Construction noted, "After KT rejected the Ministry of Land, Infrastructure and Transport's construction dispute resolution committee and two mediation recommendations from the court, it became clear that they have no will to negotiate or cooperate with the construction company. We will actively participate in the upcoming litigation and respond firmly."
A spokesperson for KT said, "It is true that mediation has not been established" and added, "We intend to seek legal judgment through the court."