In the dispute over the construction costs of Seoul Subway Line 9, which began with a sinkhole incident, SY Construction's share to be paid to Samsung C&T has increased.
According to the legal community on the 21st, the Seoul High Court Civil Division 7 (Presiding judges Kang Seung-jun, Kim Min-a, and Yang Seok-yong) recently ruled in favor of Samsung C&T in a retrial regarding the claim for joint cost-sharing against SY Construction, ordering SY Construction to pay an additional 12.05 billion won.
This follows the Supreme Court's decision in February to order the payment of the additional amount. Therefore, including the previously confirmed 33.23 billion won, the total compensation SY Construction must pay to Samsung C&T in this dispute amounts to 45.28 billion won.
This lawsuit is related to the construction project of the 1.56 km long section 919 of Subway Line 9 connecting Samjeon-dong and Seokchon Station in Songpa-gu, Seoul, carried out by both companies. The cost-sharing ratio was 54% for Samsung C&T and 40% for SY Construction. The final contract amount was 209.1 billion won, and the actual cost ratio, obtained by dividing the construction cost by the contract amount, was 85.1%. However, construction costs significantly increased when a sinkhole occurred in the construction area in Aug. 2014.
When the actual cost ratio soared to 127%, implying losses, Samsung C&T demanded that SY Construction share the additional construction costs. However, SY Construction refused, leading to a lawsuit in Oct. 2015.
Samsung C&T initially demanded a payment of about 17.2 billion won but raised the claim to over 52.9 billion won during the lawsuit. The first trial ordered SY Construction to pay Samsung C&T 38.17 billion won. However, the second trial reduced SY Construction's liability to 33.23 billion won.
The second trial court accepted SY Construction's 'setoff defense,' which argued that Samsung C&T caused damage by not executing the operating budget with the committee's approval, allowing for the offset of damages and construction cost-sharing claims.
However, in Feb., the Supreme Court sent the case back to the Seoul High Court, instructing SY Construction to pay an additional 12 billion won that had been offset.
The court stated, 'Even if there is a breach of duty by Samsung C&T, it is insufficient to acknowledge that such a breach caused additional joint cost-sharing or increased labor costs for SY Construction,' and did not accept the setoff defense claim.
Furthermore, the court noted, 'Even if the construction costs exceeded the initially planned operating budget, it cannot be concluded that these increased costs would not have occurred if subjected to prior verification by the operating committee,' and stated, 'There is no evidence to acknowledge a substantial causal link between the plaintiff's breach of duty or incomplete performance and the damages claimed by the defendant.'