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 to the Seoul Family Court, alleging the Korean court should have not issued the order as the proceeding on the merits was not based in South Korea. The Court, however, dismissed the objection and held that the provisional attachment was duly issued. The court reasoned, among others, as the foreign judgement can be recognized and enforced in Korean legal system when it complies with the statutory requirements under the Civl Procedure Act and Code of Civil Execution, it cannot find any reason to treat the foreign proceedings on the merit differently from the domestic one.
The interesting part of this ruling is the court did not require the plaintiff to prove the possibility whether the foreign judgment to be obtained meets the statutory requirements for the recognition and enforcement of foreign judgment under Korean law. The court held that, as the provisional attachment is considered and issued in mere preliminary stage of the litigation, it is unreasonable to require the plaintiff to prove the possibility of recognition of the judgment which is not initiated or just in pending. The court said this issue shall be reviewed at the stage when the plaintiff files an application for the execution judgment to enforce the foreign judgment in Korea. If the Korean court finds the foreign conclusive judgment does not meet the statutory requirements of enforcement, then the previously issued provisional attachment order shall become void along with the application for the execution judgment denied.
If you have any question about provisional attachment or any other preliminary remedies in South Korea, please send your inquiry to Mr. Wonil Chung by clicking here.
© 2013 Wonil Chung. All rights reserved.
Because of the generality of this update, the information provided herein may or may not reflect the most current legal development at the time of view, nor is it applicable in all situations nor should be acted upon without specific legal advice based on particular situations.