법무법인(유한) 율촌 | Yulchon LLC

Representing Korea Railroad Corp. (“KRC”), Yulchon filed a claim against the Seoul Housing & Communities Corporation (“SHCC”) for approximately KRW 100 billion, which represented SHCC’s share of the 2021 property tax paid by KRC under a business agreement related to the Yongsan Station Area Urban Development Project (the “Project”). Yulchon prevailed at trial level in February 2025. Following the trial court judgment, SHCC paid the court-ordered property tax share and also voluntarily paid its share of property taxes for 2022 and 2023. In total, KRC received approximately KRW 400 billion in SHCC’s property tax share for the periods from 2021 to 2023. Notwithstanding the voluntary payment, SHCC filed an appeal and a petition for review, but both the appellate court and the Supreme Court dismissed the appeal and the petition, thereby finalizing the case in the plaintiff’s favor.

The Project aimed to establish an international business district by developing the area of the Yongsan Rolling Stock Workshop (the “Area”), but the designation of the Area as an “urban development project zone” was delayed. SHCC contended that this delay was attributable to KRC and that KRC should therefore bear full responsibility for the property taxes imposed on the Area before its designation. 

Yulchon conducted a thorough examination of the business agreement between KRC and SHCC and persuasively demonstrated that the delay was not caused by KRC, providing clear explanations of the reasons behind the delay. Furthermore, Yulchon established that, under the terms of the business agreement, KRC and SHCC were obligated to share property taxes on the Area, even if imposed before the designation. Consequently, the trial court ruled in our favor.

Since KRC contributed the Area, valued at several trillion won, to the Project, the property taxes imposed on the Area after the execution of the business agreement should be rightfully shared by KRC and SHCC, as joint implementers of the Project, in proportion to their shareholdings. However, SHCC argued that it was only obligated to share property taxes on the Area arising after its designation as an urban development project zone. Given the substantial property taxes that SHCC refused to pay, if SHCC’s argument had been accepted, significant losses would have incurred to KRC and jeopardized the Project. 

Faced with a potential tax burden of nearly KRW 400 billion, SHCC aggressively responded by making all kinds of distorted and false claims. However, Yulchon successfully defended such claims based on the language of the business agreement, circumstances leading to its execution, agreement structure, comparable cases, and inconsistencies in SHCC’s arguments. 

This case established an important legal precedent concerning the sharing of project costs, including property taxes, in large-scale development projects while showcasing Yulchon’s distinguished capabilities.