A 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 With no reason, Korean supplier suddenly refused to sell the goods and rescinded the contract.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, (more…)
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 liability under judgment. This shows why provisional attachment is highly required to secure the judgment effectively.
Read More: Korean Lawyer Explains Debt Collections In South Korea – Overview
Provisional attachment is a judicial measure available to anyone who has a monetary claim to lock down certain assets. It, depending on the type of court order, prevents the debtor from selling assets or enables the creditor to secure his interest in the debtor’s asset regardless of the sale by the debtor, 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 (more…)
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 (more…)
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.
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 (more…)
Recently, Mr. Wonil Chung, a partner at Chung & Partners, has successfully represented NHS, Inc., an internationally renowned U.S. company which sells skateboards, apparel under various trademarked brand worldwide, in policing their trademark in South Korea. NHS, Inc. and its Korean distributor had found that counterfeits of SantaCruz, one of the NHS, Inc.’s premium brand, had been made and sold in numerous online shopping mall sites in Korea. They requested Mr. Wonil Chung to stop them from selling the counterfeits. Mr. Wonil Chung sent cease and desist letters to the online shopping sites which sold the counterfeits, notifying (more…)
Recently there are so many lawsuits being filed against domestic and foreign banks in Korea with regard to the bank’s irresponsible fund sale. The Korean fund buyers are alleging the losses in the funds which are still on-going were caused by the fund-sellers’ not informing sufficient information on the risk and possibilities of losses when they put the money to the funds.
As a matter of law, Korean court has ruled that the banks have legal duties to inform the customer sufficiently of the structure of the investment such as fund or option transaction and the risk of possible losses when they solicit the customers for investments. If they neglect that obligation, it constitutes a breach of contract and (more…)
Recently I got an email question from a foreign teacher working for a Korean private university. He’s wondering why the university is insisting on a retirement pension plan instead of the severance payment.
There is an act called Pension for Private Teachers and Staff Act(PPTSA) in Korea, which regulates severance payment issues in private schools. As a matter of law, PPTSA is applied prior to the GWRBA(Guarantee of Workers’ Retirement Benefits Act) and it allows the private schools to set a retirement pension plan for its employees instead of the severance payment.
With respect to the relationship between the employment contract and the pension plan under PPTSA, Private Universities usually, pursuant to the PPTSA, put the retirement pension clauses, instead of severance payment, in the Rules of Employment(RE) of its own. As a matter of law, the RE is applied to all the workers in the workplace. That means, if there exists (more…)
Recently we got a question from a gentleman asking what the exact meaning of the below, an Internet post he’d found:
“It is possible that as of 2011, what was severance pay will be vested in the country’s pension plan. This means that workers (including teachers, etc.) will no longer receive one month’s pay for every year worked at the end of their contract. The legislation is set to discuss/vote on this in 2009.”
He was worrying that he might lose his right to severance payment under Korean law. But the above article is quite misleading. The severance payment is the property right of workers. It can not be vested to anything without workers’ consent. If the article says the amended law will give the employer or any party but the workers the power to vest the severance payment to the country’s pension plan (or whatever) without workers’ consents, it definitely violates (more…)
Last December 23, the Seoul Central Prosecutors’ Office prosecuted NHN corporation, the operator of Naver (the largest Internet portal in Korea) and Daum Communications Co., the operatot of Daum for copyright infringement.
The prosecutors said two Internet portals have been aiding copyright infringement of their users by ignoring copyright holders(The Korea Music Copyright Association and the Korea Association of Phonogram Producers) request for removing illegal music files on their sites and taking no actions. The prosecutors found 10 millions of uploaded music files (more…)