Attorney Son Ji-yol, Kim full-time, le-sick, Sick, Sick, Sicker, etc., Counsel for the defendant-appellant

Kim Do-young, Lee Jae-won, Park Jong-chul

Law Firm LLC, Attorney Park Jae-soo

[Defendant-Appellee] The Head of Si/Gun/Gu shall be appointed as the Plaintiff, the Head of Gu, the Head of Si/Gun/Gu

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

A. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following facts.

(1) Around 200, the Defendant and the Company (I; hereinafter referred to as “I”) jointly established the Plaintiff, a corporation specialized in asset-backed securitization, by acquiring 50% shares and bonds issued by the Plaintiff.

(2) On December 19, 200, the Plaintiff entered into a contract with the Defendant and I on December 19, 200 with respect to the payment of dividend, etc. of the shares issued by the Plaintiff (hereinafter referred to as the “instant contract between the shareholders”). Article 10(b) and (c) of the instant contract between the shareholders (hereinafter referred to as the “instant arbitration clause”) of the instant contract between the shareholders were caused by the agreement between the parties to the instant contract between the shareholders, and any dispute, dispute, claim, or claim related to the interpretation or application of the instant contract clause between the shareholders (hereinafter referred to as the “instant arbitration agreement”), if the parties to the instant contract fail to resolve in good faith, such dispute, claim, or claim in accordance with the re-regulation of the International Chamber of Commerce and Industry (hereinafter referred to as the “ICC agreement”).

(3) The contract between the shareholders of this case clearly states that the contract between the shareholders of this case is three multilateral contracts between the plaintiff, the defendant and the I at the end of the contract, and both the plaintiff, the defendant and the I sign the contract at the end of the contract, and the contract between the shareholders and the parties are used separately. In addition, Article 5 of the contract between the shareholders of this case provides for the plaintiff's dividends to the shareholders, and Articles 6 (f) and 2 (e) provide for the issuance of bonds and repayment of loans to the plaintiff's shareholders.

(4) From 2002 to 2003, the Plaintiff acquired K site (hereinafter “instant site”) with KRW 73.7 billion, and delegated the management and sale of the instant site to M&A (hereinafter “M”), and entered into a contract with F Co., Ltd. (hereinafter “F”) on March 29, 2004 to sell the instant site amounting to KRW 135.65 billion (hereinafter “instant sales contract”). The Plaintiff agreed to change the purpose of use so that F may engage in new construction and sale of the instant site.

(5) After the delay in the change of the use of the instant site, the Plaintiff received from F prior to the completion of change of the use of KRW 110 billion out of the purchase price of the instant site from F on November 30, 2004, and transferred the instant site ownership before the completion of change of use, and if the change of use is made, the remainder of the purchase price has been paid, but if the change of use has not been changed, the Plaintiff decided to cancel the instant purchase contract or to grant a repurchase right to F.

(6) On December 1, 2004, the Plaintiff notified the Defendant that it would distribute the instant site purchase price to F, and requested the Defendant to choose one of them by presenting a letter of commitment that the Defendant would return the instant advance payment to F in the event that the Plaintiff would return the purchase price to F in the absence of change of purpose of use, etc. (hereinafter “the instant advance payment”), i.e., (e., (i) to the Defendant after the completion of change of purpose of use, and (ii) to pay the advance payment to the Defendant after the completion of change of purpose of use, and (iii) to the Defendant when the Plaintiff’s reason for return of the purchase price arises.

(7) On December 8, 2004, the Defendant selected a scheme for receiving the instant advance payment and providing the instant undertaking, and the Defendant intended to receive the advance payment KRW 50.2 billion from the Plaintiff on the pretext of the amount of dividends and the principal and interest of bonds. The instant advance payment is financed with the purchase price of the instant land and thus the Plaintiff is required to return the instant advance payment with the cancellation, redemption, etc. of a sales contract, and without any objection, the Defendant sent to the Plaintiff a written statement (hereinafter “instant undertaking”). On December 10, 2004, the Plaintiff paid 50.2 billion won (the dividend 21,404,651,510 + the principal and interest of the instant advance payment 28,795,348,490 won) to the Plaintiff.

(8) On December 28, 2004, when an application for approval of change of use of the instant site was rejected, the Plaintiff acquired the instant site ownership by purchasing F’s shares in M’s name, and M sold F’s shares to R Co., Ltd. on November 1, 2007, thereby disposing of the instant site.

(9) The Plaintiff demanded the Defendant to return 50% of the costs incurred in the course of purchase of F shares and sale of the instant site (hereinafter referred to as “the instant costs”), but the Defendant rejected such demand. On November 2009, the Plaintiff filed an application with the International Chamber of Commerce and Industry (ICC) International Court for arbitration seeking reimbursement of the instant costs pursuant to the instant arbitration clause. On April 18, 2011, the arbitral tribunal rendered an arbitral award that “the Defendant is obligated to pay the instant costs and various incidental costs to the Plaintiff in accordance with the instant promise” (hereinafter referred to as “instant arbitral award”).

B. Furthermore, based on such factual basis, the lower court determined that: (a) the Plaintiff cannot be deemed a party to the instant arbitration clause; (b) the instant dispute, which is a dispute between the Plaintiff and the Defendant regarding the return of advance payment, is not related to the instant agreement between the Plaintiff and the Defendant; and (c) the effect of the instant arbitration clause does not extend to the instant agreement.

C. However, we cannot accept the above determination by the court below for the following reasons.

(1) In light of the fact that the instant contract between the shareholders was concluded between the Plaintiff, the Defendant and I, and that the term “parties” was used separately from the term “shareholders,” barring any special circumstance, it shall be deemed that the term includes three companies signed between the shareholders of this case under the instant contract, barring any special circumstance. The same applies to the instant arbitration clause, which provides for the instant arbitration agreement. Thus, it is reasonable to deem that the Plaintiff is included in the parties to the instant arbitration clause.

(2) The instant promise contains an agreement that the Defendant shall return the instant advance payment, which is to be paid by the Defendant as the name of the principal and interest of the dividend and bonds, i.e., the Plaintiff’s return agreement as the premise for the payment of the instant advance payment. This constitutes a subsequent agreement for the execution of the instant contract, and thus, constitutes a dispute between the Plaintiff and the Defendant, which is a dispute concerning the return of the instant advance payment, not a separate dispute unrelated to the instant contract, but a dispute concerning the application of the instant contract between the shareholders or between the parties to the instant advance payment. On the contrary, it would be reasonable to interpret that the instant dispute between the parties to the instant contract would be resolved as an arbitration, while it would be in conflict with the parties to the instant agreement, to resolve the dispute with all of the parties to the instant advance payment as a means of dispute resolution and all of the instant dispute resolution related to the instant advance payment.

D. Nevertheless, the court below held that the plaintiff cannot be deemed to be a party to the arbitration clause of this case, and the validity of the arbitration clause of this case does not extend to the agreement of this case. As to the dispute of this case, the plaintiff and the defendant did not have an arbitration agreement between the plaintiff and the defendant, or the arbitral award of this case did not fall under the scope of the agreement of this case. Thus, the court below erred by misapprehending the legal principles on the interpretation of the arbitration clause of this case

2. Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok

Justices Kim Jae-han

Chief Justice Kim Jong-il