Seongnam 'Je1 Gongdan Site Development' Compensation Lawsuit, 2nd Trial Verdict Postponed and Arguments Resumed

[Asia Economy Reporter Kim Hyung-min] The compensation lawsuit related to the development of the Seongnam City 1st Industrial Complex site, which has drawn attention amid allegations of preferential treatment and lobbying in the Daejang-dong development, will postpone the second trial verdict and reopen the hearing.

According to the legal community on the 27th, the Civil Division 2 of Suwon High Court (Chief Judge Hong Dong-gi) recently canceled the verdict scheduled for the 18th of next month regarding the compensation claim lawsuit filed by Shinheung Property Partners Co., Ltd. against Seongnam City, then-Mayor Lee Jae-myung, the Democratic Party presidential candidate, and the former Director of Urban Housing Bureau of Seongnam City, and decided to resume the hearing.

Although the hearing for this case concluded on the 16th of last month, the plaintiff submitted a document submission order application against Seongnam Urban Development Corporation to the court on the 15th and then filed a motion to resume the hearing on the 19th, changing the plan. Since the Daejang-dong allegations intensified from last month, the court appears to have judged that it is necessary to re-examine the case.

Meanwhile, Shinheung Property Partners applied to Seongnam City in May 2010 to be designated as the project implementer for the 'Seongnam Sinheung Urban Development Zone' on the 1st Industrial Complex site in Sinheung-dong, Sujeong-gu, Seongnam City (84,235㎡). However, as then-Mayor Lee was elected, he pledged to fully convert the site into a park, halting all related permits and approvals, and the urban development zone designation was canceled in May 2012.

Subsequently, Seongnam City designated part of the 1st Industrial Complex site (56,022㎡) and the Daejang-dong area as the 'Seongnam Daejang-dong and 1st Industrial Complex Combined Urban Development Zone.' At this time, Hwacheon Daeyu Asset Management was selected as the private developer.

In response, Shinheung, which suffered damages, filed a compensation lawsuit in January 2014 seeking approximately 251.11 billion won. The first trial in February 2019 ruled partially in favor of the plaintiff, ordering Seongnam City to pay 32.5 billion won in damages.