KT won a construction cost lawsuit against Ssangyong E&C over surging raw material prices stemming from the COVID-19 crisis.
According to legal sources on the 18th, the Seoul Central District Court's Civil Agreement Division 27 ruled for the plaintiff on the 3rd in a lawsuit filed by KT seeking confirmation of the nonexistence of debt against Ssangyong E&C. The court dismissed Ssangyong E&C's countersuit seeking 14.29 billion won from KT.
The dispute began during construction of KT's new Pangyo headquarters, which Ssangyong E&C won in 2020. The final contract price, reflecting design changes, was 87.9 billion won, but as material prices rose with the prolonged pandemic, Ssangyong E&C demanded five rounds of cost increases. When KT refused, both sides filed a suit and a countersuit in 2024.
The key issue was the validity of a special clause that barred contract price adjustments due to price fluctuations. Ssangyong E&C argued it was an unfair provision shifting unforeseeable risks to the contractor, but the court found it was not unilaterally unfavorable because it also excluded reductions from price declines.
The court also considered that Ssangyong E&C is a major builder with the experience and capacity to reduce risk through measures such as advance raw material contracts. It found it hard to conclude that price fluctuation risks were entirely unforeseeable, given that the COVID-19 pandemic was already declared in March 2020, before the bid.
KT said that when the suit was filed, it had made early payments of construction costs at Ssangyong E&C's request, and accepted a 4.55 billion won increase due to design changes and a 100-day extension of the construction period. Including this, it had completed all cost settlements and therefore had no additional payment obligation.
The court noted that nullifying a contract the parties concluded after considering risks, based solely on subsequent circumstances, could undermine the principles of private autonomy and freedom of contract.