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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] A legal dispute regarding construction costs between Ssangyong Engineering and KT is set to continue after KT rejected a court recommendation for mediation. This has led to the expectation that the case will move forward in civil litigation.
The dispute centers around the construction cost for KT's Pangyo headquarters, where Ssangyong Engineering requested a 171 billion won increase due to rising construction costs. KT rejected the request, citing a contract clause that excludes price adjustments due to market fluctuations (the "exclusion of price fluctuation clause").
In response, Ssangyong Engineering filed for mediation through the Ministry of Land, Infrastructure, and Transport's Construction Dispute Mediation Committee. However, KT filed a confirmation of non-existence of debt lawsuit against Ssangyong Engineering in May, and Ssangyong counter-sued KT in June for the payment of construction fees, escalating the matter into a full legal battle.
In August, the Seoul Central District Court referred the case to a mediation panel, but KT's refusal to participate in mediation led to the failure of the process. The court held mediation sessions on September 5 and December 5, but both were unsuccessful due to KT's rejection.
This is not the first time KT has been involved in such a dispute. Earlier this year, KT Estate, a KT subsidiary, filed a confirmation of non-existence of debt lawsuit against Hanshin Construction over an additional demand for 140 billion won in construction fees for an office building project in Busan, again invoking the exclusion of price fluctuation clause.
Looking ahead, the exclusion of price fluctuation clause will be a key point of contention in the ongoing litigation, and the outcome may set a significant legal precedent regarding its enforceability in construction cost disputes.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
