A pedestrian walks with an umbrella along Gyeongui Line Forest Park in Mapo-gu, Seoul. [Yonhap]
A pedestrian walks with an umbrella along Gyeongui Line Forest Park in Mapo-gu, Seoul. [Yonhap]

The Seoul Metropolitan Government has lost its final appeal in a lawsuit seeking to cancel 42 billion won ($29.7 million) in compensation fees levied by Korea National Railway, a Ministry of Land, Infrastructure and Transport affiliate, over the city's use of land beneath Gyeongui Line Forest Park.

The Supreme Court's Second Division, presided over by Justice Eom Sang-pil, confirmed Wednesday the appellate court's ruling against Seoul, upholding the full 42.1 billion won in compensation fees that Korea National Railway had imposed on the city.

The court said the appellate ruling contained no legal error in finding that Seoul could not be considered to hold a legal right to occupy and use the above-ground site free of charge under the agreement, nor to hold a legal status justifying such occupation and use while the park facilities remained in place.

Gyeongui Line Forest Park is a roughly 6.3-kilometer green corridor built on the above-ground portion of the underground Gyeongui Line, stretching from Hyochang Park Station to Gajeong Station. The stretch near Hongik University Station has become one of Seoul's most popular urban parks and is nicknamed "Yontral Park" — a portmanteau evoking New York's Central Park.

According to the court, Seoul and Korea National Railway signed an agreement in December 2010 to develop the above-ground rail corridor into a park. The agreement called for the railway body to "cooperate on site use" and for both parties to consult on handling the land as national property in connection with the park's development and operation. Korea National Railway subsequently granted Seoul free use of the state-owned land for five years starting in July 2011.

The dispute arose when relevant regulations changed after the two sides signed the agreement. An April 2011 revision to the enforcement decree of the State Property Act introduced a requirement that local governments seeking a fee waiver on state property must submit an acquisition plan, and capped free-use permits at one year.

As its initial free-use permit neared expiration, Seoul applied to renew it for another five years, from July 2016 to July 2021. Korea National Railway, however, granted only a one-year extension — through July 2017 — rather than the five years Seoul had requested.

Seoul had already completed construction of Gyeongui Line Forest Park at a cost of 35.8 billion won, but Korea National Railway notified the city that it could no longer extend the free-use permit. The railway body said that while a fee waiver for local governments had been possible when the original agreement was signed, the amended enforcement decree required that future use be handled on a paid basis.

Seoul nonetheless continued operating the park and using the state-owned land after July 2017. In November 2020, Korea National Railway charged the city 15.7 billion won in compensation fees, asserting that Seoul had unlawfully occupied the site from July 2017 through the end of 2019. The railway body then levied additional fees of 7.7 billion won for 2020, 8.8 billion won for 2021 and 9.8 billion won for 2022, bringing the total to 42.1 billion won.

Seoul filed suit to cancel the fees, arguing it had the right to use the Gyeongui Line site free of charge under its agreement with Korea National Railway. The city said it had invested 35.8 billion won to build the park in reliance on that agreement, and that imposing compensation fees after the fact violated the principle of protection of legitimate expectations.

The trial court sided with Seoul. It found that the city held a legal status under the agreement justifying its occupation and use of the above-ground site for the management and operation of the park, making the compensation fee impositions unlawful. The court also said it was difficult to conclude that the amended enforcement decree applied to the case as written.

The appellate court reached the opposite conclusion, dismissing Seoul's claims and ruling that the city owed the compensation fees. The court said the text of the agreement contained no provision for free use of the above-ground site, and that the evidence Seoul presented was insufficient to establish that Korea National Railway had given the city reason to believe the land would be provided at no cost. The court also rejected Seoul's argument that the enforcement decree provision was invalid.

A Supreme Court official said the court has developed its jurisprudence on the concept of "legal status justifying occupation and use" in connection with compensation fee impositions under the State Property Act, and that Wednesday's ruling reaffirmed existing legal principles by accepting the appellate court's judgment on those grounds.


yg@heraldcorp.com