Ask Korea Law

Published by Chung & Partners


Leave a comment

[Q&A] Leaking Employer’s Confidential Information and Employment Termination : What Is Confidential Information under Korean Law?

“Hello, I am a U.S. citizen working for a Korean listed company.  Recently my company sent me a dismissal notice saying I had breached the employment contract by leaking their confidential information.  Informations at issue are a set of sale/purchase statements of the company.  I downloaded those informations from the company’s server to my personal email account.  But, there has been no warning mark of confidentiality.  My other colleagues have a free access too, and the information sometimes was provided to our suppliers.  Did I really breach the confidentiality of my Korean employer?”  

Leaking employer’s confidential information could result in a termination of the employment contract.  The legal issue, however, still remain whether or not the information can be regarded as a confidential information.

Most employers in Korea have their own rules of employment which state what is a confidential information.  And even an employment contract could list a set of confidential informations which the employee should not disclose to 3rd parties.  But, defining what is a confidential information is a matter of law and, therefore, the Korean court does not always follow the definition which an employer had been set in their internal documents.

The Korean court has well-established precedent that the confidential information should be Continue reading


Leave a comment

Classifying a Foreign Incorporated Corporation as a Domestic Corporation for Korean Tax Purposes: “Actual Business Management Place” Rule

그림 67When a foreign incorporated company does a business in Korea, it is very fundamental to determine whether the company is a domestic or a foreign corporation for Korean tax purposes.  A major difference in tax liability is that, in principle, a foreign corporation is liable for taxes only on the incomes generated in Korea rather than a worldwide income.

In this regard, the Corporate Tax Ac of Korea(“CTA”) defines a “domestic corporation” as a corporation with its headquarter, main office, or actual business management place located in Korea, and a “foreign corporation” as an organization which has its head office or principal place of business in a foreign country.  What makes distinguishing domestic corporation for a foreign corporation under CTA difficult and challenging is the meaning and application of the term of “actual business management place” set forth in CTA.  For example, in a case decided by the Supreme Court of South Korea in 2016, a Singapore incorporated company had challenged the Korean tax authority’s decision that its actual business management place was in Korea.

The Singapore company had a wide variety of international business portfolio and among them was a trading foreign issued corporate bonds including a Korean corporate bond.  The Korean tax authority decided that the company’s actual business management had taken place in Korea after finding the facts that the company had a liaison office in Korea, one of the directors was residing in Korea and financial documents relating to the Korean business was stored and managed in Korea.  And this Continue reading


1 Comment

[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


Leave a comment

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 right of free and unrestricted access to the Continue reading


Leave a comment

[Q&A: Family Law] What Legal Rights Do I Have under the De Facto Marriage in Korea? – Introduction to How the Korean Law Treats De Facto Marriage and Its Resolution

Question) I am a US citizen and have been living with my Korean boy friend for about 3 years in South Korea.  We loved each other and agreed to marry, but we were so busy to have the legal process timely done and most importantly we found no need to do that.  We’ve just thought each other as husband and wife and so do our friends and families. While living together, he ran an Internet business and made a quite large profits from there.  I took care of every housework and sometimes I helped his business work, too. But, recently I found he had cheated on me. I was so shocked and got separated from him.  My concern is whether I have any right to the assets accumulated during our cohabitation, like a property division right between divorcing couple.

Answer) Under Korean law, in order to establish the marital relationship, the parties must report their marriage to the government.  Just having a wedding ceremony is not enough.  If the parties live together considering themselves each other’s spouse without reporting the marriage, it is called a de facto marriage.  A de facto marriage is not a legal marriage.  Thus it is not entitled to the same level of legal protection as the legal marriage.  But, when it comes to the resolution of the de facto marriage relationship, the Korean law applies almost identical protection to the parties.

First, the Korean law grants the right of property division to each party of the de facto marriage.  Each party is entitled to the share of the assets acquired during the relationship pursuant to his or her contribution.  Even if the party is solely responsible for the relationship breakdown, the person is still entitled to.  Second, a party can seek a consolation money against the other party, if the other party is solely responsible for the relationship breakdown.  The amount the party can seek is decided by various Continue reading


1 Comment

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


Leave a comment

Is Australian Court’s Money Judgment Enforceable in South Korea?

법원마크A while ago, we posted an article about the recognition and enforcement of foreign judgment in Korea. One of the hurdles in getting foreign judgment recognized in Korea is to find whether there exists a reciprocity in relation to the enforcement of foreign judgments between the two jurisdictions, i.e. Korea and foreign country where the judgment was issued. Korean court reviews this issue on case by case basis.  If the court finds that the foreign jurisdiction’s requirements for the recognition of Korean judgment are similar or not more difficult to be met than the requirements under the Korean law, the court declares the existence of reciprocity.  This does not require an actual precedence in the foreign court that a Korean court judgment was recognized.  It just means a reasonable possibility that the Korean judgment would be recognized in that foreign jurisdiction. The Korean courts have so far recognized the reciprocity with, among others, California(USA), New York(USA), Texas(USA), Washington(USA), China, Japan and Canada.  Then how about Australia?

Back in 1987, the Supreme Court of South Korea rejected the recognition of a judgment from the court of New South Wales, Australia on the ground that there was no reciprocity between the two jurisdictions.  At that time, Korean court found that the New South Wales law required the Australian court to review the merit of the foreign judgment in order to recognize it.  This was a serious conflict and deviation from the Korean legal stance that the courts should not consider whether the foreign judgment is substantially correct when granting the recognition of a foreign judgment. With this great discrepancy, the Korean court came to rule that the requirement for the recognition of foreign judgment under New South Wales law was much difficult to be met than the Korean law, and, therefore, the reciprocity was not established.

It should be, however, noted that this ruling was rendered before Australia enacted the Foreign Judgments Act 1991 whereby South Korea was identified as one of the countries with which Australia has a reciprocity.  Under this new act, Continue reading

Follow

Get every new post delivered to your Inbox.

Join 59 other followers