An appellate court has overturned a lower court’s ruling that upheld Jeju Island government’s decision to revoke a business permit it granted to a Chinese-owned medical center to establish what was to be South Korea’s first commercial, or for-profit, hospital. 

The Gwangju High Court on Wednesday canceled the invalidation of the approval acquired by Greenland Jeju Healthcare Town, a subsidiary of the Shanghai-based Greenland Group, to operate its Greenland International Medical Center in the southern South Korean resort island.  

The earlier decision by the Jeju District Court in October last year ruled in favor of the Jeju Special Self-Governing Provincial Government, saying that the business permit was no longer valid as Greenland Jeju Healthcare Town failed to establish the center within three months of securing the permit as required by law. 

In December 2018, the Greenland Jeju Healthcare Town received conditional approval from Jeju to open the Greenland International Medical Center on the condition that only non-Korean patients would be treated there amid concerns that letting it receive Korean patients would lead to a hike in healthcare costs for the South Korean public. 

Despite the approval, however, the Chinese hospital group did not open the center within three months in an apparent protest over Jeju’s decision to ban them from treating Korean patients and filed suits against the regional government. 

The lower court made a verdict only on the violation of the three-month deadline but deferred its decision on whether the province had the legal right to grant the permit with restrictions on the patients that the center can accept.

The appeals court’s has yet to reveal the full excerpts of its verdict and it remains unclear on what ground it overturned the lower court’s ruling and whether its decision covers what the lower court postponed in its deliberations.