1. Case Overview
a. Party represented by Barun Law:
A state-owned energy corporation (Defendant)

b. Background of the case:
The plaintiff, a heat producer, entered into a "Sewage Heat Utilization District Heating Supply Project" implementation agreement with a local government and subsequently signed a heat supply contract with the defendant to supply heat energy and receive payment.

c. Litigation
Due to water quality issues, the plaintiff was unable to operate the facilities normally, resulting in a suspension of heat supply and failure to meet the standard heat supply volume. Consequently, the defendant deducted a portion of the heat payment in accordance with the contract.

The plaintiff argued that the supply suspension was caused by a force majeure event as defined under the agreements and that, in such cases, both the obligation to supply heat and the application of the heat payment adjustment clause should be waived. The plaintiff thus claimed the full amount of the heat payment from the defendant.

2. Judgment
Seoul Central District Court Decision No. 2023Gahap77007, dated March 21, 2025 (Plaintiff's claim dismissed in full).

3. Grounds for the Judgment
While the court acknowledged that the suspension of heat supply was indeed due to a force majeure event, it ruled in favor of the defendant based on the following reasoning:
1. Under the heat supply contract, heat payments must still be adjusted (deducted) even if supply shortfalls result from force majeure.
2. The clause related to adjustment of standard heat trading volumes does not grant either party unilateral authority or obligation to adjust volumes.
3. Even though the project follows a BTO (Build-Transfer-Operate) model, the contents of the specific heat supply contract take precedence over the BTO standard agreement. Moreover, neither the standard BTO agreement nor the project's implementation agreement allocates all risk from force majeure to the government authority.
4. There was no fault attributable to the defendant or the supervisory authority regarding the force majeure incident.
5. The heat supply contract and implementation agreement do not impose all risk of force majeure events solely on the plaintiff.
Accordingly, the court ruled that the heat payment should be adjusted (deducted) in proportion to the shortfall in heat supply.

4. Our Arguments and Role
We systematically interpreted the heat supply contract, the implementation agreement, the project's risk allocation structure, and the pricing/payment mechanism. We convincingly argued that even in cases involving force majeure, the contract mandates payment adjustment proportional to the supply shortfall. The court accepted all of our arguments and dismissed the plaintiff's claim in its entirety.

5. Significance of the Judgment
This ruling reaffirms that in BTO-type projects, the allocation of risk due to force majeure must be interpreted based on the specific implementation and contractual agreements. It serves as a valuable precedent for interpreting risk responsibilities between parties in similar infrastructure or energy-related projects involving force majeure events.