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 (more…)
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 With no reason, Korean supplier suddenly refused to sell the goods and rescinded the contract.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…)
According to the Korean Commercial Act, a transaction between a director and a company shall acquire an approval by the board of directors(Article 398 of the Commercial Act). This is for the purpose of preventing the director from using his status in engaging in a transaction of the company leading to promoting his or a third party’s interest and causing damages to the company and its shareholders.
Here comes the question: if the general meeting of shareholders adopts a resolution ratifying an interest-conflicting transaction which had not yet been approved by the board of directors, the transaction can be validated ex post facto?
The Supreme Court denied it in its Decision 2005Da4284 Delivered on May 10, 2007.
In this case, Mr. Choi Soon Young, who at that time served as the representative director of Daehan Life Insurance Co., Ltd(the plaintiff) and the president of the Shindonga Educational Institute(the defendant), had donated about 18,000,000 USD to the defendant on behalf of the plaintiff company.
The Supreme Court held that “unless there are special circumstances where there should be the consent of all shareholders or that the approval is stipulated in the articles of incorporation as the right of the shareholders’ meeting, the approval of an interest-conflicting transaction between a director and the company shall be deemed to be subject to an arbitrary decision by the board of directors, so if an interest-conflicting (more…)