Ask Korea Law

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[Q&A: Labor Law] I Work for Korean Branch of U.S. Company. My Employment Contract Provides U.S Law Shall Apply and Severance Pay Is Not Granted. Can I Still Get a Severance Pay Pursuant to Korean Labor Laws?

Question) I am an American citizen working in South Korea.  Originally I was working for a U.S. company incorporated in the state of New York, but 3 year ago I was seconded to the Korean branch of my U.S. company, and have been working for the branch until now.  When I was seconded, my new employment contract provided that the New York state law shall apply to my employment relation in Korea.  Now, my employment contract is expiring and I would like to know whether I am entitled to the severance pay under the Korean labor law.  I know my employment contract and my company’s policy do not provide the right to severance pay.  But, as I have been working in Korea for 3 years, I am wondering if the statutory rights of severance pay under the Korean labor law could be given to me.

Answer) The answer is Yes.  You are entitled to the severance pay under the Korean labor laws.  (check here as to how the the severance pay under Korean law is recognized and operates)  This answer could be accepted quite surprising considering the fact that the parties had previously agreed (i) the Korean labor should not apply and (ii) the severance pay should not be awarded.  How come the Korean labor law intervenes in the parties’ employment relation which is seemingly irrelevant to the Korean law implications other than the fact that work place of the employee is in Korea?  The answer lies in the provisions of Private International Act of Korea which provide the general principles for the choice of law in Korea.

When a legal relation has certain foreign elements, the court must decide which jurisdiction’s law shall apply to interpret that legal relation.  In Korea, the Private International Act provides the general rules and principles for the governing laws of the various types of legal relations.  Specifically, the Act provides that if the employer and employee agree to their own choice of law, the employment contract is governed by the law chosen by the parties.  But, this does not mean the parties can freely determine which law and regulations apply to their employment relation.  It is true in Korea that the party autonomy is a general principle of governing laws, but party autonomy is subject to limits imposed by the overriding public policy and mandatory rules.  Accordingly, Continue reading


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Attorney Wonil Chung Successfully Obtained a Supreme Court’s Ruling in a High-Profile Overture Sponsored Links Case Reinforcing Unrestricted Access to Internet Network

그림 2In April 2013, attorney Mr. Wonil Chung successfully obtained a Supreme Court’s ruling which overturned lower court’s decision in connection with the sponsored links, Internet keyword advertising services, operated by Overture Services Inc., a wholly-owned U.S. subsidiary of Yahoo! Inc.  Before this ruling from the Supreme Court of South Korea, there had been an increased controversy over whether Overture system user’s deployment of an automated program to access to the sponsored links could fall into a crime causing a harm to the Internet network system.  In this case, attorney Mr. Chung argued before the Supreme Court of South Korea that it cannot constitute a statutory crime, otherwise the result would be an over-reaching of Korean criminal statute and cause an excessive chilling effect on the free access to the Internet.  Responding to Mr. Chung’s arguments, the Supreme Court of South Korea held that it does not constitute a statutory crime of interference with stable operation of the Internet network.  With its ruling, the Court struck down the prosecutor’s attempt of excessive criminalization and reinforced online service user’s

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Does Korean Court issue a Provisional Attachment Order in Support of the Proceedings in the Merit in Foreign Courts?

Let’s assume you file an action for a money judgment in the US court or any jurisdiction other than South Korea, and the defendant has significant assets located in South Korea. In that case, you might need to consider putting a provisional attachment on those assets in order to prevent the defendant from hiding or liquidating the assets to render the judgement ineffectual. Then this situation entails the following question: can a plaintiff in a foreign proceeding apply for a provisional attachment to the Korean court, while pursuing the proceeding in the merit in foreign jurisdiction?

The answer is yes.  The Korean court grants and issues a provisional attachment order per the foreign creditor’s application in support of proceedings which have been or are to be commenced in a place outside of South Korea. It does not require the substantive proceedings are to be connected to South Korea. Further, it does not require the defendant to be the resident of South Korea. It just suffices only if the assets are located in South Korea. That said, for example, the US creditor pursuing an action in New York may apply to the court of South Korea for a freezing order on defendant’s bank account in Korean banks to restraint the defendant from dealing with, or disposing of, the funds.

In this regard, There was a case in Korean court where the provisional attachment order against the Korean stocks was issued by the Seoul Family Court as the security for a judgment soon to be obtained in the court of Virginia, USA. The defendant in the US proceeding, which was a divorce case where the plaintiff seek $6,700,000USD for her share of property division, filed an objection Continue reading


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Is Defaulting Korean Supplier Liable for the Foreign Distributor’s Damages and Loss of Profits Resulting from the Failure of 3rd Party Reseller Deal?

그림 2A distributor from the U.S. entered into a distributorship contract with Korean supplier (exporter) for certain goods.  Of course, the U.S. distributor was thinking to resell the goods in U.S. market for a markup. But the problem broke up after the contract was duly singed and executed.  With no reason, Korean supplier suddenly refused to sell the goods and rescinded the contract.  Due to this unexpected turmoil by the foreign supplier, the U.S. distributor could not properly perform the reselling deals with the local warehouse stores, which the distributor had thought very lucrative. There would be no doubt that the act of Korean distributor constitutes a breach of distributorship agreement. But, the U.S. distributor did not pay anything, yet.  The only loss they encountered was they lost a good deal with 3rd party by reason of the Korean supplier’s breach of contract.  Now, the U.S. distributor tries to recover damages and loss of profits from the supplier in Korea which they suffered from the failure of the reselling deal with the local warehouse stores.  In this case, can the U.S. distributor prevail in Korean court and under Korean law?

The key legal issue would be whether the Korean supplier knew of the fact that the distributor had completed their negotiation with 3rd party for the resale agreement.  According to the ruling from the Supreme Court of South Korea, if the supplier knew of the fact, the supplier is liable for the distributor’s loss relating to failure or non-performance of the resale agreement with 3rd party.  By contrast, Continue reading


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Recognition and Enforcement of Foreign Judgments in South Korea

Let’s say you obtained damages recovery judgment from a U.S. court against a Korean residing in the states.  But soon after your excitement for the winning judgment, you found he has no assets in the states to fulfill your judgment.  This could also happen in a litigation between U.S. citizens in a U.S. court where the losing defendant moved to South Korea and there are no assets left in the U.S.  You might have spent quite large amount of legal fees to win the judgment already, but you think your judgment is now in great peril to be useless.  This horrible situation might frustrate you.

But, don’t worry too much.  You can enforce your duly obtained U.S judgment in Korea.  If you are sure the defendant has enough assets to cover your claims in the judgment and your legal fees, you are encouraged to file for an enforcement order for foreign judgment to a Korean court.

According to Article 218 of Civil Procedure Act of South Korea, a final and conclusive judgement by a foreign court shall be recognized and enforceable in Korea, when all the following requirements are met:

  1. the foreign court which issued the judgment had a jurisdiction over the case consistent with the principles of jurisdiction under Korean law and relevant international treaty;
  2. the defeated party received, in a timely manner, a service of complaint and summons by lawful method excluding a service by public notice, or that she responded to the lawsuit Continue reading


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Provisional Attachment of Assets under Korean Law – How to Secure Your Monetary Claim in Korea

Let’s assume a creditor has a monetary claim against a debtor in Korea but the debtor refuses to pay it.  The creditor would proceed to file a lawsuit to get a judgment to collect his claim.  Unfortunately, however, the chances are that, knowing the complaint was filed, the debtor would try to conceal or transfer his assets to evade from the judgment to be made later.  This shows why provisional attachment is highly required to secure the judgment to be obtained.

Provisional attachment is a judicial measure available to anyone who has a monetary claim to lock down certain assets to keep the debtor from selling or giving them away until the court issues a judgment on the merit. The creditor can, and usually does, seek a provisional remedy before she files a complaint on the merit.  So, this is a very powerful weapon for the creditor.  For example, as many Korean creditors do, if the creditor succeeds in putting a provisional attachment on the debtor’s bank account, the debtor would not be able to use the money and could face several penalties regarding its banking/financing transactions with the bank.  This could heavily deteriorate the ability for a small com­pany to con­duct business, which makes the debtor Continue reading


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Introduction to the Deportation or Removal Order and How to Appeal the Order in Korea

그림 2In South Korea, the immigration office may remove or deport from South Korea any person who breached the Immigration Control Act(“ICA”) of South Korea.  Any person who is released after receiving a sentence of imprisonment without prison labor or heavier punishment may be deported by the deportation order as well.

When the immigration officer reasonably finds a foreigner falling under the requirements for the deportation and risk of her running away, the officer can detain the person with approval from the head of immigration office.  The duration of detention cannot exceed 10 days, which can be renewed up to 10 more days.  During this detention, the officer interviews and decides whether to deport the individual or not.

When the immigration officer decides to deport a foreigner, the officer shall deliver the deportation order to the foreigner and immediately take action to make the person leave South Korea.  But, when the individual files a claim for refugee protection, the deportation order cannot be executed until the refugee claim is decided by the Korean authority.

Then, can you appeal the deportation order issued by the Korean immigration office?  Yes, you can.  There are two possible ways to stop the deportation.  First, Continue reading


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[Q&A] Can an Employer Ban Its Employee from Having an Additional Job under Korean Labor Law?

Basically Korean labor Law doesn’t regulate employee’s having concurrent and/or additional job.  However, most employment agreements(EA) prohibit employees from having additional jobs.  So there have been many cases where employers fire employees based on his or her breach of prohibition of additional job clause in EA.

In this regard, the court’s standpoint is that as having additional job is a matter of privacy Continue reading


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HSBC, “No More Bid for Korean Bank”

It is reported that Mr. Matthew Deakin, the president of the HSBC Korea, said on last Wednesday that HSBC Holdings Plc had no plan to acquire a local Korean bank for now.  Last year, HSBC walked away from the deal with the Lone Star, a U.S. private equity fund, which provided HSBC the right to buy 51 percent stake of Korea Exchange Bank due to the global financial crisis and continued legal disputes surrounding the 2003 purchase of the bank by Lone Star Funds. (Here is a related previous post)

Things have changed.  The Seoul Central District Court in last November ruled the purchase legal, and as the financial markets are now stabilizing.  But Mr. Deakin, at the press conference which took place for the purpose of introducing the bank’s new Emerging Markets Index, said “right now, we have no interest in any acquisition of Korean banks”.

Here is a related news article.


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[Q&A] Employee’s Act of Adultery and Its Legal Implication to the Employer under Korean Law

We’ve been asked about a criminal charge against an adultery under Korean criminal law quite often.  Foreign employees in Korean should be cautious that adultery is a crime under Korean law.  Here is a real example of such a case where a foreign officer committed an adultery and the company(employer)’s legal concern made them ask for some legal consultation to our law firm regarding the adultery law and criminal law process in Korea.

Q) Mr. XX, who is a head director of our company, committed an adultery and was charged by the Korean prosecutor.  He has confessed his guilty and the prosecutor demanded one year’s imprisonment for his crime to the court.  If the court finalizes that Mr. XX is guilty, does that mean Mr. XX will be imprisonment for one year or lesser?

A) Finding guilty does not always mean Mr. XX will be imprisoned.  The Court may SUSPEND the imprisonment for certain years even though Mr. XX is guilty.  The Korean Criminal Act provides that a married person who commits adultery shall be punished by imprisonment for not more than two years.  However, the Act also provides the execution of the sentence for an adultery can be Continue reading

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