[2] The method to determine whether a transaction constitutes a transaction under substantially favorable terms where the normal interest rate of the transaction between the support entity and the support entity cannot be specified in detail

[3] In a case where the Fair Trade Commission imposed corrective orders and penalty surcharges on the Plaintiff’s act of taking over the BB gradeless private equity bonds 50 billion won at the maturity of two years and six months, and 5.86% per annum, on the ground that the transaction constitutes an “transaction under substantially favorable terms” under Article 23(1)7 of the former Monopoly Regulation and Fair Trade Act and constitutes an act of unfair support, the case affirming the judgment below holding that the said transaction constitutes an “transaction under substantially favorable terms”

[4] Whether the act of assistance between the parent company and the parent company is subject to Article 23(1)7 of the former Monopoly Regulation and Fair Trade Act (affirmative)

[5] Criteria to determine whether the act of assistance by the support entity to the support entity is improper

[6] The person who bears the burden of proving the existence of a normal interest rate under the premise of determining whether a financial transaction between the applicant and the applicant constitutes a transaction under substantially favorable terms (=the Fair Trade Commission)

[7] Whether “providing excessive economic benefits by offering or trading at a low scale” constitutes “transaction under substantially favorable conditions” under Article 23(1)7 of the former Monopoly Regulation and Fair Trade Act (affirmative), and the standard for determining whether to provide excessive economic benefits through a trade with a significant scale

1. Plaintiff’s ground of appeal

A. Part on the claim for revocation of the corrective order

1) As to grounds of appeal Nos. 1 and 2

In determining whether a transaction constitutes a significantly favorable condition under Article 23(1)7 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7315, Dec. 31, 2004; hereinafter “the Act”), not only difference between benefit and benefit in return, but also considering comprehensively the economic benefit arising from the scale of assistance and the frequency of assistance, the timing of assistance, the economic situation at the time of assistance, etc. at the time of assistance. The normal interest rate, which serves as the basis for determining whether an benefit and benefit in return are substantially favorable, is determined based on the same or similar transaction between the applicant and the applicant in terms of the same or similar transaction between the applicant and the applicant in terms of the same or similar circumstances, such as the rate of interest to be applied when an independent transaction between the applicant and the applicant in question is performed, or between the applicant and the applicant in terms of the same or similar transaction between the applicant and the applicant in terms of the rate of interest and the period, type, and scale, and credit conditions applied to the transaction between the applicant and the applicant in question and the applicant in terms of assistance.

According to the reasoning of the judgment below, the court below acknowledged the following facts based on the adopted evidence: on March 30, 204, the Plaintiff issued BB gradeless private equity bonds 50 billion won at 2 years and June, and 5.86% per annum (3 months after maturity) issued by Ga Capital Co., Ltd. (hereinafter “IB gradeless private equity bonds”); on April 8, 2004, 67 billion won after the date of acquiring the above private equity bonds; on April 8, 2004, 190 won, 8.0% per annum, and BB gradeless bonds (hereinafter “this case’s public equity bonds”), and determined that the Plaintiff and IB gradeless bonds were significantly less than the normal rate of return than the Plaintiff and IB gradeless bonds issued by the Plaintiff, even if the terms and conditions of the Plaintiff and IB gradeless bonds were significantly lower than the terms and conditions of the instant public equity bonds in terms of the maximum trading interest rate of 10 percent per annum.

In light of the above legal principles and records, the above judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to the elements for establishment of unfair assistance or normal interest rate under Article 23 (1) 7 of the Act as alleged in the ground of appeal.

2) As to the third ground for appeal

Even if the parent company owns a majority of the shares, both parties are legally separate transactional entities. Since the concept of "specially related parties or other companies" under Article 23 (1) 7 of the Act, which provides the objects of unfair support, does not explicitly exclude the subsidiary from the support entity, there is no express provision excluding the subsidiary from the support entity, the support act between the parent company and the subsidiary is subject to the regulation under Article 23 (1) 7 of the Act (see Supreme Court Decision 2004Du11268, Dec. 7, 2006, etc.).

Examining the reasoning of the judgment below in light of the above legal principles and records, since the plaintiff is a controlling shareholder who owns most of the shares of Gag Capital, as long as the plaintiff is an independent transaction entity legally separate, as seen earlier, the plaintiff's act of providing funds through the first transaction of Gag Capital constitutes an act of improper assistance in violation of Article 23 (1) 7 of the Act, and there is no error in the misapprehension of legal principles as to the elements for establishing the act of improper assistance under Article 23 (1) 7 of the Act as alleged in the ground of appeal.

3) As to the fourth ground for appeal

A) In determining whether an act of assistance is improper, the determination shall be based on whether the act of assistance is likely to undermine fair trade by comprehensively taking into account the relationship between the support entity and the support entity, the purpose and intent of the support, the structure and characteristics of the market to which the support entity belongs, the scale and duration of the support, restrictions on competition in the market to which the support entity belongs, and the effect of concentration of economic power, etc. (see Supreme Court Decision 2004Du7610, Jan. 25, 2007, etc.).

B) According to the reasoning of the judgment below, the court below determined that the defendant's above review guidelines cannot be applied to the first transaction of the plaintiff and Busan Capital, on the ground that even according to the provisions of the Financial Holding Companies Act related to the Financial Holding Companies Act, the plaintiff cannot be deemed as a complete holding company under the same Act, since the plaintiff cannot be deemed as a complete holding company under the same Act, since the plaintiff and Busan Capital Capital are not a complete subsidiary under the same Act, in accordance with the "Review Guidelines for Unfair Support" enacted and operated by the defendant for the purpose of establishing detailed review standards for unfair support activities.

In light of the above legal principles, the above judgment of the court below is just and acceptable, and contrary to this part of the grounds of appeal, there were no errors in the misapprehension of legal principles as to the illegality of the act of improper assistance.

C) According to the reasoning of the lower judgment, the lower court determined that the Plaintiff’s act of support through the first transaction in this case might hinder fair trade, such as that the Plaintiff’s act of support might hinder fair trade, and that the Plaintiff’s act of support could not be deemed as a public interest that could deny the above fair trade under consideration of the following: (a) the Plaintiff’s act of support could hinder fair trade, including, but not limited to, the restriction on competition in the relevant market of the Capital Capital and the concentration of economic power; and (b) the Plaintiff’s act of support could not be deemed as a public interest that could deny the above fair trade undermining fair trade under the Plaintiff’s aforementioned act of support.

In light of the above legal principles and records, the above determination by the court below is just and acceptable, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the illegality of the act of improper assistance.

B. The part on the claim to revoke the penalty surcharge payment order (ground of appeal No. 5)

Since an appeal is seeking revocation or alteration of a judgment disadvantageous to himself/herself in favor of himself/herself, the appeal of appeal against the original judgment in favor of him/her shall not be permitted as there is no benefit in filing an appeal (see, e.g., Supreme Court Decisions 93Nu8108, Jan. 11, 1994; 98Du5903, Sept. 8, 2000); on the other hand, whether the judgment is disadvantageous to the appellant shall be determined as a matter of principle on the basis of the text of the judgment; if the appellant has accepted and won the appeal, there is no benefit in filing an appeal even if there is an appeal (see, e.g., Supreme Court Decisions 86Nu233, Apr. 14, 1987; 2008Du21058, Mar. 26, 2009).

However, according to the records, even though the plaintiff won all the claim seeking revocation of the penalty surcharge payment order at the court below, it is obvious that the plaintiff filed an appeal on the ground that it is unreasonable in the judgment, so this part of the appeal by the plaintiff is unlawful in the interest of the appeal, and it cannot be dismissed.

2. As to the Defendant’s ground of appeal

A. As to the first ground for appeal

In order to determine whether there is a significant difference between the interest rate actually applied to financial transactions between the support entity and the support entity, it should first be determined from what is the normal interest rate. The burden of proving the existence of such normal interest rate is the Fair Trade Commission claiming legality of disposition, such as a corrective order (see Supreme Court Decision 2006Du8792, Jun. 26, 2008).

According to the reasoning of the judgment below, the court below, based on the adopted evidence, found facts as stated in its reasoning, and determined as follows: between August 27, 2004 and March 18, 2005, the Plaintiff’s return on issuance of the public-private partnership bonds of this case with a significant difference in maturity with the above public-private partnership bonds cannot be deemed as a normal interest rate; the Plaintiff’s additional data were not presented to the Korea Securities Dealers Association (“Korea Securities Dealers Association”) for the total amount of KRW 300 billion issued over six occasions (50 billion per each time), interest rate of KRW 4.79 through 5.81% per annum (3 months later), maturity 2 through 3 years, and BB-class non-private partnership bonds (hereinafter “this case’s 2 through 7 transactions”); and there was no evidence to view that there was no other reasonable rate of return on bonds of this case between 2 and 37 years, and there was no evidence to view that the Defendant’s additional disclosure of the rate of return on bonds bonds of financial institutions B and B-B.

In light of the above legal principles and records, the above judgment of the court below is just and acceptable, and there is no error of law such as misunderstanding of legal principles as to the elements for establishing an act of improper assistance under Article 23 (1) 7 of the Act as alleged in the ground of appeal.

B. Regarding ground of appeal No. 2

Article 23(1)7 of the Act provides that an act of assisting a specially related person or other company is an act of assisting a person with a special interest or other company by providing or trading at significantly low or high prices, or providing or trading at substantial economic benefits. Article 36(1) [Attachment 1] 10 of the Enforcement Decree of the Act provides that an act of assisting a person with a special interest or other company is an act of assisting a person with a special interest or other company. The conditions of a transaction include the quality, contents, size, quantity, number of transactions, timing of transactions, conditions of delivery, payment, terms and conditions of payment, guarantee, etc. of the goods or services traded, and such transaction does not vary with those of funds, assets, and human resources transaction. From a realistic point of view, the scale of transaction can be deemed to be included in the terms of transaction, and thus, it can be deemed that an act of assisting a person with a special interest or other company is significantly favorable to ensure considerable liquidity in light of the total liquidity, and thus, it can be determined that an act of assisting a person with excessive economic benefits can be determined as an act of assistance under 70.

According to the reasoning of the judgment below, the court below, after compiling the adopted evidence, found facts as stated in its reasoning, and determined that there was no other evidence to deem that the transactions in subparagraphs 2 through 7 of this case were transactions on significantly favorable terms, even if considering the scale of transactions in subparagraphs 2 through 7 of this case.

In light of the above legal principles and records, the above judgment of the court below is just and acceptable, and there is no error of law such as misunderstanding of legal principles as to the elements for establishing an act of improper assistance under Article 23 (1) 7 of the Act as alleged in the ground of appeal.

3. Conclusion

Therefore, among the plaintiff's appeal, the part concerning the claim to revoke the penalty surcharge order is dismissed. The remaining grounds of appeal by the plaintiff and the appeal by the defendant are all dismissed. The costs of appeal are assessed against each appellant. It is so decided as per Disposition by the assent of all participating Justices

Justices Park Si-hwan (Presiding Justice)