The final ruling in the lawsuit between the Seoul city government and Korea National Railway over fees for the use of the linear park known as "Yeontral Park" will come on the 12th. Seoul said it trusted the promise of "free use," spent 35.8 billion won to build the park, and has been covering maintenance costs, but if it loses this case, it will have to pay land use fees in addition to hundreds of billions of won in compensation charges.
The Supreme Court's Second Division (Presiding Justice Eom Sang-pil) will hold a sentencing hearing that day for the final appeal in Seoul's suit seeking to cancel the imposition of compensation charges against the railway corporation.
The government began the undergrounding of the Yongsan Line, a rail line connecting Wonhyo-ro in Yongsan District to Yeonnam-dong in Mapo District, in 2005, and the current Gyeongui-Jungang Line was created by linking the Yongsan Station segment to the Jungang Line. Seoul decided to create a park on the ground level where the Yongsan Line tracks had been and signed a business agreement with Korea National Railway in Dec. 2010.
Under this agreement, a 6.3-kilometer-long, 102,716-square-meter site from the Yongsan-gu Culture and Sports Center to Gajwa Station in Mapo District was completed in May 2016 as the "Gyeongui Line Forest Trail Park." The park area around Yeonnam-dong in Mapo District is called "Yeontral Park," after Central Park in New York. Seoul invested 35.8 billion won in construction costs to create this park.
The issue arose after the Enforcement Decree of the State Property Act was revised in 2011. Initially, in Feb. 2011, Seoul applied to the railway corporation for permission to use the ground-level site of the Yongsan Line free of charge, and the railway corporation granted a state property use permit in July of the same year for a period of five years. Then, in July 2016, it approved a renewal setting the free-use period at one year.
This is because, after the project began, the revised Enforcement Decree of the State Property Act limited the conditions under which a local government can use state property free of charge to "within one year, premised on the acquisition of the property." However, the Gyeongui Line Forest Trail has rail facilities (the Gyeongui-Jungang Line) underground, so Seoul cannot acquire the site.
After the free-use permit expired, the railway corporation imposed 42.1 billion won in compensation charges on the grounds that Seoul had occupied the ground-level state property without authorization for the period from July 2017 to Dec. 2022. Including additional compensation charges and arrears through last month, if Seoul ultimately loses, the amount it would have to pay the railway corporation is said to reach the 80-billion-won range.
Seoul filed suit, arguing that imposing compensation charges on the grounds that the Enforcement Decree of the State Property Act was revised violates the principle of protecting legitimate expectations, given that it entered into the agreement trusting Korea National Railway's promise to provide the ground-level Yongsan Line site free of charge and then created the park.
The first trial sided with Seoul. The first-instance court said, "Korea National Railway obtained cooperation on a station area development project while inducing Seoul to proceed with the Gyeongui Line Forest Trail park project on the premise of free use of the ground-level site," and added, "It is difficult to see the Enforcement Decree of the State Property Act as applying to this case as is."
By contrast, the second trial dismissed Seoul's claim and ruled that it must pay compensation charges to the railway corporation. The appellate court said, "The text of the agreement contains no entry regarding free use of the ground-level site," and, "Based solely on the evidence submitted by Seoul, it is insufficient to recognize that Korea National Railway led it to believe the ground-level site would be provided free of charge."
In March, in connection with this case, Seoul proposed institutional improvements, including creating a basis for allowing local governments to use state property free of charge. Under the current Local Government Property Act, the state can use property owned by local governments free of charge for public purposes, but under the State Property Act, local governments must pay fees to use state property, which it argued is unreasonable.