Hanwha Ocean will receive hundreds of millions of won from the government due to delays in submarine deliveries. The Supreme Court has ruled in favor of Hanwha Ocean, confirming that the state must return the funds.
According to Yonhap News on July 6, the Supreme Court's third division, led by Justice Lee Suk-yeon, upheld a lower court's ruling that ordered the government to pay Hanwha Ocean 22.67 billion won and delay damages in a lawsuit filed by the company.
The dismissal of the appeal indicates that the Supreme Court found no significant legal misunderstanding in the lower court's ruling.
This dispute originated from a contract signed in 2010 with the Defense Acquisition Program Administration for the construction of the Jangbogo-Ⅱ submarine No. 6. At that time, Hanwha Ocean was to deliver the submarine by November 2016, but the actual delivery occurred about eight months late, in July 2017.
The Defense Acquisition Program Administration reported a 237-day delay in delivery and calculated a penalty of 42.8 billion won. Subsequently, Hanwha Ocean paid approximately 30.8 billion won, excluding about 12 billion won that the government had not paid.
Hanwha Ocean argued that the delays were due to adverse weather, lack of support from the Defense Acquisition Program Administration, and defective government-supplied materials, asserting that it should not bear full responsibility for the delays.
The Defense Acquisition Program Administration acknowledged responsibility for 45 days of the delay, refunding 8.1 billion won plus interest, but maintained that Hanwha Ocean was responsible for the remaining 192 days.
In response, Hanwha Ocean filed a lawsuit, claiming that a significant portion of the delays was due to the Defense Acquisition Program Administration's actions.
The first trial determined that Hanwha Ocean should be liable for penalties equivalent to 63 days, amounting to about 8.5 billion won. The appellate court later adjusted the amount to 22.67 billion won. The government appealed, but the Supreme Court rejected the appeal, finalizing the ruling.
* This article has been translated by AI.
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