[according to the law of authority] 53. If you've been notified of the return of the R&D grant

*This content was translated by AI.

Start-ups that have carried out business with government R&D subsidies often receive a "return" notice that was suddenly sent to the registration one day.

Restrictions on participation 3 to 5 years, full recovery of subsidies. One notice shakes the company's entire future. In particular, for startups, government subsidies often account for a large portion of operating funds, so one redemption disposition may actually lead to the process of closing the business. But should we accept this redemption disposition as it is? In conclusion, that is not necessarily the case. In fact, there are several cases in which the court canceled or found the redemption disposition to be invalid.

You have to think about who disposed of it first

The first thing to check in the redemption disposition is the subject of the disposition authority. According to the basic principle of administrative law, only authoritative institutions prescribed by laws and regulations can make effective dispositions. If you miss this, the disposition itself will collapse.

In the ruling of the Busan High Court, the governing body notified startups of "the cancellation of the agreement, the full recovery of the subsidy of about 19.7 million won, and the restriction on participation for five years." However, the court considered that the authority belongs to the Entrepreneurship Promotion Agency, a dedicated agency, not the governing agency. There was no information in the notification that the Entrepreneurship Promotion Agency exercised its authority or that the agency was represented. In the end, it was judged invalid due to the disposition of an unauthorized person.

The ruling of the Daejeon District Court is in the same context. In the name of the head of the Information and Communication Technology Promotion Center, a three-year restriction on participation and about 690 million won was imposed, and the court judged that the authority to restrict participation and recover is the authority of the minister under the law, and that the administrative rule of notification alone cannot be considered to delegate the disposition authority to the head of the agency in charge. Furthermore, it was difficult to conclude that the results of the appraisal were duplicated or plagiarized, so the entire disposition was eventually canceled.

"Convention-based measures" may not be an administrative measure

In the case of a start-up support project implemented by the Entrepreneurship Promotion Agency, the court considers the nature of the support agreement as a contract under public law. In a ruling by the Seoul Administrative Court, the court ruled that the recovery and participation restrictions of the Entrepreneurship Promotion Agency were not administrative measures. This is because there is no prestigious regulation on the recovery or participation restrictions in the Small and Medium Business Startup Support Act, and there is no legal basis for compulsory collection even if the plaintiff does not return the recovery money. The effect of the measure is determined entirely by the content of the agreement.

The reason this distinction is important is that the form of litigation is completely different. If it is an administrative disposition, it is a revocation lawsuit, and if it is a contract under public law, it is a party. If you choose the wrong type of lawsuit, you will be dismissed without a judgment on the original matter. In fact, even in the above case, the plaintiff's request for cancellation was dismissed, and the hearing on the main issue was conducted only in the preliminary lawsuit of the parties. The same law was applied to other Seoul Administrative Court rulings. If you get the first step of the litigation strategy wrong, you will only waste time and money.

We can argue about the appropriateness of the redemption amount

The Supreme Court ruling ruled on important principles. If the redemption disposition is a discretionary act, if a deviation or abuse of discretion is recognized, the court should cancel the entire disposition, not just the excess, leaving only the appropriate amount. This means that the entire disposition can be reversed just by proving that the amount of redemption is excessive.

The appropriation of specific funds is dangerous

In the case of the Seoul High Court, the use of labor costs outside of use was recognized just by temporarily diverting them for other purposes. The court's position was that even if labor costs were paid normally after the fact, it was only a post-mortem assessment. The amount of money for which the purpose is specified is judged as strict as that. In the case of the Daejeon District Court, the submission of false evidence was recognized, and the full recovery and participation restriction were maintained for three years. In the end, it is an area where conclusions are divided depending on the issue.

Time goes by from the moment the notice of redemption is received. Whether there are procedural defects such as the legality of the disposition authority, the legal nature of the agreement and the type of litigation accordingly, the validity of calculating the amount of redemption, and the opportunity to submit opinions. These four things need to be reviewed quickly. If a flaw is found in either one, there is room for the disposition to be canceled or judged invalid. However, the legal basis, the structure of the agreement, and the facts of each case are all different. Even for the same startup promotion agency project, the conclusion may vary depending on detailed guidelines or agreement provisions. It is an area that requires a precise analysis based on specific facts rather than a hasty judgment, so it is better to consult with an expert.

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*This content was translated by AI.