This case concerns an administrative dispute in which a subcontract participation restriction was imposed by the Ministry of Land, Infrastructure and Transport following an administrative fine for violation of foreign employment restrictions.

ONE Law Firm represented the plaintiff in administrative litigation and successfully obtained a stay of execution (injunctive relief) against the subcontract participation restriction.
As a result, the plaintiff preserved its eligibility to participate in tenders related to the Third New Town development projects.

Subcontract participation restrictions have a broader scope of sanction than ordinary bidding restrictions, as they apply not only to public procurement projects but also to projects where the prime contractor is a public entity.
Despite this expansive impact, the court granted a full stay of execution, thereby securing the plaintiff’s opportunity to bid on Third New Town construction projects.
 

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Key Legal Issues

• Potential violations of the Administrative Procedures Act
• Unlawfulness of the uniform sanction standards set forth in Article 33(2) of the Enforcement Decree of the Framework Act on the Construction Industry
• Whether the administrative authority abused or exceeded its discretion by imposing a mechanical sanction without considering specific circumstances, including:
  • the background of the violation
  • degree of culpability
  • mitigating factors

 

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Legal Strategy

 

• Demonstrated irreparable harm and urgency, emphasizing that exclusion from Third New Town tenders would result in non-recoverable damage
• Substantiated structural labor shortages endemic to the reinforced concrete construction industry
• Argued that the Ministry imposed sanctions on dozens of companies without prior notice, in violation of the Administrative Procedures Act
• Challenged the constitutionality and legality of the relevant provisions of the Enforcement Decree forming the basis of the sanction

 

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Court Decision
 

Under the Enforcement Decree of the Framework Act on the Construction Industry, duplicate violations of foreign employment restrictions automatically trigger subcontract participation restrictions.

Currently, more than 85% of the top 50 reinforced concrete construction firms have received identical sanctions, rendering their participation in Third New Town tenders uncertain.

In this case, however, the court ordered that the subcontract participation restriction be suspended until two months after the date of the first‑instance judgment on the merits, thereby preserving the plaintiff’s eligibility to participate in Third New Town bidding procedures.
 

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Significance of the Decision

 

Third New Town construction projects represent the largest construction procurement opportunities in 2026.

While multiple identical sanctions are currently under challenge in pending substantive litigation, this injunction decision carries particular legal and practical importance, as it directly addresses the immediate exclusion risk faced by construction companies.

This successful outcome has significant ripple effects across the construction industry, providing a critical precedent for companies subject to similar sanctions and reinforcing judicial scrutiny over rigid, uniform administrative enforcement.