Aramir GC and Gyeongja Office Struggle Over 'Golf Course Registration Cancellation'

Unfair Legal Battle Over Registration Cancellation
If Lost, Full Loan Principal and Interest Due Immediately
About 300 Golf Course Workers Face Job Loss Crisis

It is a power struggle between Aramir Golf Club (GC) and the Busan-Jinhae Free Economic Zone Authority (FEZA).

This is a view of Aramir Golf Club located in Jedukman, Jinhae, Changwon-si, Gyeongnam.
[Photo by Aramir Golf Club]

The legal dispute began when FEZA notified Aramir GC, a golf course in Ungdong 1 District, Jinhae-gu, Changwon-si, Gyeongnam, of the cancellation of its registration as a sports facility business (golf course business). In response, the operator, Jinhae Ocean Resort, stated, "FEZA's cancellation of the golf course business registration is an abuse and deviation of the authority delegated by the Minister of Culture, Sports and Tourism, turning it into a tool for the lawsuit to cancel the designation of the development project implementer. It is an unfair and illegal disposition," and launched a full-scale legal battle.

FEZA announced on the 16th of last month that it decided to cancel the registration because Jinhae Ocean Resort did not proceed with the remaining projects such as lodging facilities, leisure and cultural facilities, and sports and entertainment facilities besides the golf course development. In response, Jinhae Ocean Resort filed a lawsuit on the 18th of last month at the Busan District Court requesting the cancellation of FEZA's cancellation order, and also applied for a provisional injunction to suspend the execution of the cancellation order until the lawsuit result is out. The Busan District Court initially granted the provisional injunction on the 23rd of last month, temporarily suspending the effect of FEZA's order until September 6.

Jinhae Ocean Resort has been operating Aramir GC, an 18-hole golf course built as part of the Ungdong 1 District development project in September 2018, with temporary use approval before the final inspection. The Ungdong 1 District development project is a project to create leisure and recreational facilities over an area of 2.25 million square meters in the Sudodong area of Jinhae-gu, Changwon-si, from 2008 to 2018. The core plan is for FEZA to lease this land to private investors long-term to build golf courses and lodging facilities (Phase 1), and then develop commercial facilities, leisure and cultural facilities, and a sports park (Phase 2).

In the golf industry, this decision is analyzed as a repercussion of the conflict between FEZA, the licensing authority, and Changwon City, the project implementer, surrounding the Ungdong 1 District project. Changwon City and Gyeongnam Development Corporation were designated as the project implementers for the Ungdong 1 District project. FEZA canceled the designation of the project implementer and revoked permits for land and other matters before the final inspection in March and May last year, citing reasons such as failure to complete development within the project period. However, Changwon City filed two lawsuits (first trial) against this, and Jinhae Ocean Resort is participating as an auxiliary party in the lawsuit regarding the cancellation of the project implementer designation, which is currently ongoing.

Jinhae Ocean Resort’s Aramir GC is a public 18-hole golf course. Jinhae Ocean Resort stated, "We have all the essential sports, safety, and management facilities required for a golf course business under the Enforcement Rules of the Physical Fitness Facilities Act, including an 18-hole golf course, clubhouse, tee house, and management building." Based on the Supreme Court’s provisional injunction granting suspension of the cancellation of the development project implementer designation, Jinhae Ocean Resort pointed out that "the current disposition, which was carried out as a follow-up measure assuming the validity of the cancellation of the development project implementer designation, is unfair."

If the designation of the development project implementer is canceled, Jinhae Ocean Resort must repay the entire principal and interest of loans contracted with financial institutions for funding the Ungdong 1 District development project in a lump sum. Jinhae Ocean Resort appealed, saying, "More than 300 golf course workers could lose their jobs," and "The public interest gained from this disposition is negligible, but the damage to the operator and golf course employees will be enormous."