At a time when Chinese and South Korean shipbuilders are dividing up global ship orders, the financial report of French GTT, which occupies the "hegemon" position of the liquefied natural gas (LNG) carrier market, can be described as "daily profit". Due to GTT's technological advantages, Korean shipyards have to pay GTT about 5% of the price of the cargo tank manufacturing technology royalty for each LNG carrier ship. For South Korean shipbuilders, which dominate the field of LNG carrier construction, it is imperative to develop domestic LNG cargo tank technology in order to save shipbuilding costs.
Trying the water of Korean-made LNG liquid cargo tank technology, problems continued
At the beginning of the 21st century, as Chinese shipbuilders seized the global newbuilding market share and broke the technological monopoly of GTT with a "low-price offensive", South Korea listed the development of the first generation of Korean-type LNG liquid cargo tank technology ("KC-1") as a national priority project in 2004 to ensure the market competitiveness of the Korean shipbuilding industry, which was designed by Korea Natural Gas Corporation (KOGAS), which has onshore LNG tank technology. 
SK SPICA".
In 2018, the "KC-1" technology was applied for the first time to two 17 ships built by Samsung Heavy IndustriesThe 40,000 cubic meter large LNG carriers "SK Serenity" and "SK SPICA" were delivered to the shipowner SK Shipping in February and March 2018, respectively. However, due to flaws in the design of the tanks, both vessels were never put into operation, meaning that the shipowner and shipyard faced losses. From delivery in 2018 to October 2022, the two ships have suffered from natural gas leakage, cracks, and ice formation on the outer walls of the cabin, and have undergone four repairs at a cost of about 100 billion won.
In 2019, Samsung Heavy Industries, SK Shipping, and Kogas began filing lawsuits over the design, construction, and operation of LNG vessels. Samsung Heavy Industries claimed 80.1 billion won (about 4 yuan) from Kogas for ship repair costs3.6 billion yuan), SK Shipping claimed 115.8 billion won (about 6 yuan) from Kogas for non-operating losses300 million yuan). In response, Kogas entrusted the Korean law firm Sunyul and Yulchon to claim 169 from SK Shipping700 million won (about 92.32 million yuan), saying that it had a loss in replacing ships.
SK SPICA" is equipped with the "KC-1" cargo tank.
After nearly three years of litigation, the 46th Civil Division of the Seoul** District Court in South Korea ruled in October 2023 that KOGAS should pay 115.4 billion won (about 6 yuan) to SK Shipping2.8 billion yuan), and paid 72.6 billion won to Samsung Heavy Industries, which is about 3 yuan$9.5 billion);Kogas's claim was dismissed and the design was found to be flawed. The results showed that SK Shipping received almost the full amount of its claim, which, if substantiated, would be the largest damages lawsuit ever filed by a company against a public institution in South Korea
*HWAWOO Law Firm of SK Shipping said, "This is the first groundbreaking ruling by the court on the scope and content of the technology developer's duty of care in relation to LNG cargo tank technology. This means that the court ruled that the basic designer of any product is also liable for illegal acts against third parties (e.g. shipowners who are not direct contractors) in areas where the Product Liability Act does not apply. ”
Design flaws are difficult to define, and simulation is the final word
SK Shipping claimed that the failure of the two LNG vessels to be put into service was solely due to a flaw in the design of the cargo tank. Because Samsung Heavy Industries built the cargo tank according to this design, the outer wall of the tank was frozen, making the ship inoperable. Icing is when the temperature of a part of the hull falls below the minimum allowable temperature set by the International Maritime Organization. In the worst-case scenario, when the ship's steel plate cracks due to icing, the LNG will quickly evaporate at an extremely low temperature of minus 162°C, causing a large-scale ** accident. In response, Kogas argued that the icing was not caused by improper design, but was based on a construction defect and that Samsung Heavy Industries was partly responsible. A lawyer at Hwawoo Law Firm explained to the court that there was a discrepancy between the design of the GTT cargo tank, which had been recognized in the industry for safety, and the design of the Kogas, and that this difference had led to icing. The LNG cargo tank is equipped with a multi-layer heat insulation film, and in the case of GTT technology, the gap between the heat insulation film itself or the heat insulation film is minimized, while the "KC-1" liquid cargo tank is not designed to fill the corresponding gap. According to domestic and foreign shipbuilding industry experts commissioned by the law firm for analysis, the gaps cause low-temperature nitrogen to circulate in the cargo hold, resulting in freezing.
As the court in charge of this case deals mainly with various civil cases, it is not an IP court that deals exclusively with technical issues. Therefore, in the course of the defense, the lawyers of Hwawoo Law Firm presented and simulated the relevant content to the court in the form of PPT, including ** and 3D simulation of the structure of the cargo tank and the cause of icing**.
Counter the claim that "there is no need to stop operations" with "disaster is possible".
After a series of defenses, the court generally accepted SK Shipping's argument, holding that "Kogas was obliged to develop defect-free technology to ensure the basic safety of the KC-1 liquid cargo tank, but it was negligent in this point, resulting in defects such as icing". Lawyers at Hwawoo Law Firm said Kogas did not use CFD (computational fluid dynamics, a method of simulating dynamic motion in computers) when designing the cargo tank using the new method, nor did it conduct enough CMT (closed simulation tests). Kogas said that despite the completion of testing, there is no guarantee that defects will be found.
In response, SK Shipping's defense attorney again used GTT as an example to refute the fact that GTT had discovered icing through CMT while developing a new type of cargo tank technology, and then announced that it would suspend development and resume it after the problem was fixed. As a result, the court ruled that "the fact that Kogas did not anticipate the possibility of freezing due to the flow of nitrogen at all must be attributed to the company." ”
Kogas argued that "even the presence of defects such as icing does not necessarily mean that SK Shipping should suspend operations", an argument that was rejected by the court. The court upheld Hwawoo Law Firm's assertion that "even a single freezing could lead to an entire ship**, with catastrophic consequences." In the aftermath of the Sewol incident in South Korea, the judiciary tended to take a strict view of the safety obligations associated with the operation of the ship, which also had some impact on the ruling.
In November, Kogas appealed the case, so the ruling is not yet final. But according to the analysis of Hwawoo Law FirmThis case may set a precedent for a national project dispute led by a public institution in South Korea。"We always believed that we should not be solely responsible, but the court ruled that the company should be fully responsible because it completed the basic design and led the development," said a Kogas official. This could set a precedent for similar disputes in the future.
It is worth mentioning that although the Korean KC-1 cargo tank is in deep prison, South Korea is focusing on promoting the domestic second-generation LNG cargo tank technology ("KC-2"), and will focus on improving the defects of "KC-1". On May 10 this year, South Korea's first LNG bunkering vessel equipped with domestically produced "KC-2" LNG liquid cargo tank technology, the Blue Whale, was named. Compared to the first-generation Korean cargo tank technology "KC-1", the "KC-2" not only has enhanced thermal insulation, but also is easier to install, reducing the evaporation rate of LNG and further improving economy.