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(Photo=HMM) |
[Alpha Biz= Reporter Kim Minyoung] Korea Gas Corporation (KOGAS) has ultimately lost a lawsuit over the settlement of the liquefied natural gas (LNG) transportation business it was conducting with HMM and Hyundai LNG Shipping.
According to the shipping and legal industries on the 18th, the Supreme Court's Civil Division 1 (Presiding Judge Oh Kyung-mi at the time) dismissed KOGAS's appeal without trial last October. KOGAS had filed the lawsuit claiming it suffered damages amounting to 9.8 billion won due to the two companies' failure to inform them about the settlement payment.
HMM, under the name Hyundai Merchant Marine at the time, had been transporting LNG for KOGAS since 1994, and sold its LNG dedicated shipping business to Hyundai LNG Shipping in June 2014. In November of the same year, HMM transferred 4.9 billion won to Hyundai LNG Shipping for docking and maintenance costs (periodic inspections of the transferred vessels) under the transfer contract.
HMM and KOGAS had been settling payments by paying provisional freight charges and then reconciling the actual expenses the following year. However, unaware of HMM's payment for docking and maintenance, KOGAS paid HMM the settlement amount for the first half of 2014 and Hyundai LNG Shipping the amount, including docking and maintenance costs, for the second half of 2014. When KOGAS notified HMM in December 2015 to return the settlement amount for the first half of 2014, HMM refused, stating the obligation to return the settlement amount had transferred to Hyundai LNG Shipping.
KOGAS only applied for arbitration with the Korean Commercial Arbitration Board (KCAB) in March 2018. In December of the following year, the KCAB dismissed KOGAS's arbitration request, stating, "Although the right could have been exercised since the settlement closing date in August 2015, the statutory period had expired." KOGAS then filed a lawsuit to annul this decision but was dismissed in both the first and second trials.
The second trial also pointed out KOGAS's negligence. The appellate court noted, "It can be considered that HMM notified KOGAS of the settlement payment, including the docking and maintenance costs, through the refusal letter. It was KOGAS's fault for not properly reviewing the letter's content or relevant commercial law."
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
