Lawsuit for the buyout price of facilities after termination of a highway rest area public-private investment agreement

A private operator running a highway rest area under a public-private investment project terminated the project agreement after accumulating operating losses, and then sued the Korea Expressway Corporation for payment of the buyout price for the rest area buildings and ancillary facilities.

In an earlier lawsuit, a judgment in the operator's favor for part of the buyout price had become final, but the dispute continued over payment of the remaining buyout price and late-payment damages.

Attorney Jaehoon Lee represented the private operator in the lawsuit for the buyout price from the first instance through the appeal to the Supreme Court of Korea, and also defended against a separate lawsuit brought by the Korea Expressway Corporation seeking delivery of the rest area facilities.

The key issues were a public institution's obligation to take over the facilities when a public-private investment agreement is terminated early, the standard for calculating the buyout price, and the acquisition cost of the facilities and the method of depreciation.

In particular, the questions included whether taxes and charges such as value-added tax and acquisition tax should be included in the buyout price, whether the obligation to deliver the facilities and the obligation to pay the buyout price were to be performed concurrently, when late-payment damages began to accrue, and the evidentiary weight of the earlier final judgment.

The parties also disputed whether the operator was obliged to comply with the public institution's separate demand for delivery of the facilities while the appeal to the Supreme Court over payment of the buyout price was still pending.

Attorney Lee analyzed the public-private investment agreement, the project prospectus, records relating to the construction and operation of the rest area, and the earlier final judgment, and litigated the Korea Expressway Corporation's obligation to take over the facilities and its liability to pay the buyout price.

He reviewed the acquisition cost and depreciation method for the rest area buildings and ancillary facilities, analyzed corporate accounting standards and the relevant tax laws, and presented arguments on the calculation of the buyout price and whether taxes and charges should be included.

He also handled the appeal to the Supreme Court of Korea, focusing on the legal principles governing the evidentiary weight of the earlier final judgment, the concurrent performance of the obligation to deliver the facilities and the obligation to pay the buyout price, the degree of tender of performance required, and late-payment damages.

In addition, in the separate lawsuit brought by the Korea Expressway Corporation for delivery of the facilities, he argued the client's position based on whether the obligation to pay the buyout price had been performed and on the status of the related appeal to the Supreme Court.