Korean Air won a first-instance lawsuit against the Defense Acquisition Program Administration (DAPA), stating it bears no responsibility for the delay in delivering the unmanned aerial vehicle (UAV).
On the 5th, the Seoul Central District Court's Civil Division 23, presided over by Director General Kim Dong-bin, ruled that Korean Air partially won in its lawsuit against the state for a confirmation of non-debt.
The court confirmed, "The plaintiff (Korean Air) has no penalty for delay debt. The defendant (DAPA) must pay the plaintiff approximately 40.4 billion won." The court viewed that DAPA had deducted some of the amount it should pay to Korean Air for the delivery delay and must return that amount.
Korean Air and DAPA signed a contract in December 2015 to supply 16 UAVs worth approximately 254 billion won. The delivery was delayed due to changes in specifications, and DAPA demanded a penalty for delay of 208.1 billion won, claiming that Korean Air was responsible for the delay.
In April 2021, Korean Air filed a lawsuit, asserting that the penalty for delay was unfair. They claimed that the delay in delivering UAVs was due to DAPA unilaterally requesting changes in specifications, which prevented them from proceeding with mass production based on the finalized drawings.
In April of last year, DAPA also filed a compensation claim lawsuit against Korean Air for an amount of 156.3 billion won. This was a counterclaim against Korean Air's confirmation of non-debt lawsuit. The court dismissed the counterclaim, stating, "We reject the defendant's counterclaim," and did not accept DAPA's argument.
Korean Air also won a legal battle against DAPA over delays in delivering the maritime patrol aircraft (P-3C) performance upgrade project. Although Korean Air planned to complete the project by 2016, it was finished about four years late. As a result, DAPA paid Korean Air approximately 72.5 billion won less than the amount originally promised, imposing a sort of compensation for the delay.
Korean Air filed a lawsuit in 2021 demanding payment for the goods. In September last year, the Seoul High Court's Civil Division 17-2 ruled that "DAPA must pay Korean Air approximately 23.3 billion won and delay damages." The first instance had determined that DAPA should pay about 47.3 billion won to Korean Air, with the second instance ordering an additional payment of about 23.3 billion won.
The court stated, "Circumstances caused by force majeure, such as worsening weather, or cases where important government-ordered supplies are delayed and it becomes impossible to proceed with the manufacturing process, all qualify as grounds for exemption from the penalty for delay."