{"id":142705,"date":"2026-09-04T03:46:16","date_gmt":"2026-09-04T03:46:16","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/142705\/"},"modified":"2026-09-04T03:46:16","modified_gmt":"2026-09-04T03:46:16","slug":"hanwha-ocean-scores-consecutive-wins-in-subcontract-disputes-sheds-stigma-of-price-cutting","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/142705\/","title":{"rendered":"Hanwha Ocean Scores Consecutive Wins in Subcontract Disputes… Sheds Stigma of “Price Cutting”"},"content":{"rendered":"

\n Solid Win in Subcontractors’ Damages Lawsuit
Court: “No Unfair Price Reduction”
Virtually No Additional Compensation Liability Remaining
Victory in Appeal Against Fine as Well
Fine Reduced from 10.8 Billion Won to 1.8 Billion Won\n <\/p>\n

Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) has recorded consecutive wins in a series of legal disputes that began after it was fined more than 10 billion won by the Fair Trade Commission for violations of the Subcontracting Act. Following the administrative litigation in which most of the fine was overturned, Hanwha Ocean also secured victory in a damages lawsuit filed by subcontractors. This outcome is seen as significantly easing the reputational stigma of “subcontract price cutting” the company faced, while also reducing its financial burden.<\/p>\n

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Liquefied natural gas (LNG) carriers are continuously being constructed at the yard dock of Hanwha Ocean Okpo Shipyard in Geoje, Gyeongnam. Photo by Jinhyung Kang<\/p>\n

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According to the legal community on September 4, the Seoul High Court’s Civil Division 20-1 (Presiding Judges Sung Choongyong, Kim Kwan-yong, and Lee Euijeong) ruled last September against three shipbuilding and offshore plant manufacturing subcontractors who had filed a damages claim against Hanwha Ocean, upholding the first trial court’s decision. The panel stated, “There is a lack of objective evidence to conclude that Hanwha Ocean unfairly set the subcontracting price too low or that this caused damage to its subcontractors,” and explained, “Since the lower court’s decision is just, all of the plaintiffs’ claims are dismissed.”<\/p>\n

This case is part of a series of legal disputes that began when the Fair Trade Commission in February 2019 imposed a fine of 10,799,000,000 won on Hanwha Ocean for violating the Subcontracting Act. At the time, the Fair Trade Commission viewed the unit prices for subcontracting, which Hanwha Ocean set from February 2013 to December 2016 during its days as Daewoo Shipbuilding & Marine Engineering based on industry practice, as constituting malicious price cutting. In the shipbuilding industry, subcontracting payments are usually calculated by multiplying work hours by a wage rate. However, the Commission alleged that Hanwha Ocean reduced payments by applying fewer hours than were actually worked. The agency also cited the company’s practice of determining compensation for additional work without adequate consultation as problematic.<\/p>\n

The Fair Trade Commission further found that Hanwha Ocean failed to issue written contracts to its subcontractors when assigning shipbuilding and offshore plant work. The company was also found to have introduced unfair terms, such as not settling payments for additional work within \u00b13% of the total contract amount. Based on these findings, the subcontractors filed lawsuits against Hanwha Ocean in December 2021, each seeking approximately 100 million won in compensation for their losses.<\/p>\n

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However, the court’s judgement differed. The first trial court dismissed the claims, stating it was difficult to conclude that Hanwha Ocean had set subcontract prices unilaterally without agreement from subcontractors. In particular, the court held that the fact that efficiency for revised or additional work was calculated to be lower than for the main construction did not in itself prove that payment was below the customary level. While the court did recognize some violations by Hanwha Ocean, such as failing to issue written contracts and not settling accounts as required by the Subcontracting Act, it found that these infringements did not automatically result in losses for the subcontractors. The appeals court affirmed the original ruling, again siding with Hanwha Ocean.<\/p>\n

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Separately, Hanwha Ocean had also contested the fine of 10,799,000,000 won imposed by the Fair Trade Commission, filing a lawsuit in April 2019 to revoke the payment order\u2014and won. After the Seoul High Court partially ruled against the Commission, the agency appealed, but the Supreme Court dismissed the case in November 2024, finalizing the verdict. In accordance with the Supreme Court\u2019s decision, the Fair Trade Commission recalculated the fine to cover only the offenses of failing to issue or delaying issuance of written documents, reducing the amount to 1,832,000,000 won.<\/p>\n

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This content was produced with the assistance of AI translation services.<\/p>\n

\u00a9 The Asia Business Daily. All rights reserved. Unauthorized AI training and use prohibited.<\/p>\n","protected":false},"excerpt":{"rendered":"Solid Win in Subcontractors’ Damages Lawsuit Court: “No Unfair Price Reduction” Virtually No Additional Compensation Liability Remaining Victory…\n","protected":false},"author":2,"featured_media":142706,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[345],"tags":[479,355,354,373,480,31,154,478,414,481,33,477],"class_list":["post-142705","post","type-post","status-publish","format-standard","has-post-thumbnail","category-hanwha-ocean","tag-economic","tag-hanwha","tag-hanwha-group","tag-hanwha-ocean","tag-issue","tag-korea","tag-news","tag-newspaper","tag-politics","tag-society","tag-south-korea","tag-the-asia-business-daily"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/142705","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=142705"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/142705\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/142706"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=142705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=142705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=142705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}