JIPYONG LLC

Jipyong News|News Update

Jipyong represented Busan Metropolitan City Government and Secured Remand from the Supreme Court in Case in Which Appraisal Company Claimed Service Fees

2023.11.02

Jipyong’s Construction & Real Estate Group won a remand from the Supreme Court on behalf of Busan Metropolitan City Government in a case in which an appraisal firm (plaintiff) claimed appraisal fees from Busan Metropolitan City Government (defendant) after performing an appraisal for compensation for loss of fishing rights. 
 
The Busan Metropolitan City Government requested “Company A,” an appraisal company, to carry out appraisal to calculate the amount of compensation for the loss of fishing rights under the Busan Port New Port Dredging Project (Phase 1, Phase 1-2, Phase 2, and Development Phase 2) and the Songdo Dredged Material Dumping Site Seawall Construction Project (hereinafter, each of the five projects above is individually referred to as a “Project”). After completing the appraisal, Company A requested the Busan Metropolitan City Government to pay an appraisal service fee. However, a disagreement arose over the amount of the appraisal fee as Company A requested KRW 2,449,838,600 while the Busan Metropolitan City Government offered to pay KRW 541,636,000.  The reason for the difference in the amount of appraisal service fees claimed by Company A and the Busan Metropolitan City Government was the different interpretation of the "Criteria for Remuneration of Appraisers" (Public Notice of the Ministry of Land, Infrastructure, and Transport, hereinafter referred to as the "Criteria for Remuneration"). The relevant regulations are as follows. 
 
<div style="background:#eeeeee;border:1px solid #cccccc;padding:20px;">Article 11 (Fees for Multiple Properties) ① When the same person requests an appraisal of multiple properties at once, the appraisal fee shall be calculated based on the total amount of the appraised value of all the properties. However, this shall not be the case in any of the following cases: 
 
1. appraisal for compensation pursuant to the Act on Acquisition and Compensation of Land, etc. for Public Utilities: In the case of separate public utilities (including the same public utility, but with different notification dates). 
③ Each mining right, fishing right (including notified fishing and licensed fishing), or goodwill (including loss assessment for abolition or suspension of business) is considered as one right.</div>
 
Appraisal Company A argued that 'the appraisal fee should be calculated for each business in this case, i.e., for each of the five businesses, and summed up' because 'each business in this case is a separate public utility project with different contents such as business location and business implementation period, so the proviso to Article 11(1) 1 of the  Criteria for Remuneration must be applied'. In response, the Busan Metropolitan City argued that 'each of the projects should be calculated for each fishing right in batches' because '▲ each of the projects in this case is organically connected and the scope of fishing damage overlaps to a large extent, and ▲ after all, Appraisal Company A only performed one overall appraisal for fishing rights occurring in substantially the same water area'.  The trial court upheld all of A's claims. 
 
 
Jipyong Construction & Real Estate Group argued that '▲ each project in this case was formally announced as five separate projects, but in reality, the scope of damage to fishing rights is bound to overlap to a large extent, and ▲ analysis and evaluation of the extent to which a particular fishing right is damaged by the five projects (contribution of each project) is an essential task of appraisal for compensation for loss of fishing rights, These tasks were not performed by Appraisal Company A directly, but were outsourced to the University’s Institute of Fisheries Science, and ▲ Article 11(3) of the Criteria for Remuneration provides separate standards for calculating appraisal fees for multiple fishing rights, so there is no room to apply the proviso to Article 11(1) of the Criteria for Remuneration in this case.

Awards & Commissions Jipyong and Duroo were Honored with “Public Interest Award” at the 6th Korea Legal Awards 2023.12.12

Back to List

JIPYONG LLC

Related Practices

Professionals

Related Practices

Professionals

SHARE

Disclaimer

Limited Liabilities