Fair Trade Commission 'Penalty Points Imposed'... Supreme Court: "Not an Administrative Disposition, No Appeal Lawsuit Allowed"

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that penalty points imposed by the Fair Trade Commission (FTC) do not constitute administrative dispositions subject to appeal lawsuits. An appeal lawsuit is an administrative lawsuit filed when there is an objection to an administrative agency's disposition or decision.

The Supreme Court's 2nd Division (Presiding Justice Min Yoo-sook) announced on the 31st that it upheld the lower court's dismissal of the appeal in the case where Hanwha Systems filed a lawsuit against the FTC to confirm the non-existence of the penalty point imposition.

Hanwha Systems, which performs design, manufacturing, modification, and repair of military supplies, equipment, and parts, merged Hanwha S&C, which integrates, builds, and operates information and communication systems, in 2018. Previously, Hanwha Systems received a total of six corrective measures from the FTC between 2014 and 2017 for violating the Subcontracting Act, and the FTC imposed penalty points related to each corrective measure, with the accumulated penalty points exceeding the standard score at 10.75 points.

In 2019, the FTC decided to request the heads of related administrative agencies to restrict Hanwha Systems' eligibility to participate in bids and to suspend its business operations following the merger with Hanwha S&C. In response, Hanwha Systems filed a lawsuit claiming that the FTC's penalty point imposition was invalid.

The lower court ruled that "the imposition of penalty points does not constitute an administrative disposition subject to appeal lawsuits" and dismissed the lawsuit as inappropriate. The Supreme Court also agreed with the lower court's judgment.

The Supreme Court stated, "(The FTC's) imposition of penalty points is intended to be used as basic data for requests such as restricting bid participation eligibility," and "it is difficult to consider it as an act that directly affects the rights or obligations of a business operator itself, so it does not fall under the 'disposition' subject to appeal lawsuits."