Background
When completion of a new factory ran 101 days past the agreed date, our client (the project owner) claimed approximately KRW 300 million in liquidated damages for delay from the contractor. At the same time, our client was entangled in the question of payments the contractor owed its subcontractors. Changchun represented the owner (the plaintiff).
The Issue — The Basis for Delay Damages, and the Entangled Subcontract Payments
The key questions were ① whether delay damages should be calculated on the basis of the total contract price even though the contract price had been formally reduced when the contractor changed midway (Supreme Court 2018Da281371, among others), and ② how to resolve our client's exposure on the subcontract payments.
How Changchun Helped
Changchun (attorney Donghwan Shin) argued the basis for calculating delay damages forcefully while steering the mediation toward negotiations that would deliver our client substantive benefit.
Outcome
Mediation was reached, under which the contractor took responsibility for paying the subcontract sums on our client's project site (including approximately KRW 110 million subject to a direct payment request) and abandoned its claim for the price of separate works. Our client resolved its exposure and the dispute over the subcontract payments in a single stroke and closed the matter.
A judgment is not the only answer. Where interests run in several directions at once, mediation can deliver a conclusion that is substantively favorable to the client. (Outcomes may differ depending on the facts of each matter.)