[2] Requirements for the application of the legal principle of denial or abuse of legal personality in relation to the parent company and the subsidiary company

[3] Where a claim infringement by a third party constitutes a tort, and the criteria for determining its illegality

[4] The case holding that, in case where, while a subsidiary was paying the principal and interest under a credit loan agreement to the opposite contractual party by withdrawing a loan from a financial institution under the parent company's payment guarantee and repaying the principal and interest under the credit loan agreement, where a debtor with a subsidiary was suspended from withdrawing the financial institution due to the east Asian economic crisis by the parent company's order due to the defects in the parent company's withdrawal and the repayment of the debt to the opposite contractual party, the parent company's above instruction cannot be deemed unlawful

[2] In order to apply the legal principles on the denial of legal personality or abuse in the relationship between the parent company and the subsidiary, it is insufficient for the parent company to have a strong control over the subsidiary as a result of exercising shareholder's right by holding all shares of the subsidiary company and exercising shareholder's right. The subsidiary is to lose its own independent intention or existence and exercise complete control so that the parent company can operate the subsidiary as part of its own business. ② The assets and business of the parent company and external corporate transactions between the subsidiary company and the subsidiary are not clearly distinguished and both are combined. ③ The accounts between the parent company and the subsidiary are not separate, and the shareholders' general meeting and the board of directors are neglected. ④ The subsidiary's capital is considerably insufficient in light of the nature and scale of the business. ⑤ The subsidiary's capital is abused as a means to avoid legal application to the parent company, and thus, it is difficult to recognize the exception to the principle of limited liability because it constitutes the denial or abuse of legal personality of the subsidiary company in question, and thus, it is clear that the subsidiary company's illegal or unlawful purpose is against the other company's interest or its own business, or its unlawful or unlawful purpose.

[3] In general, an exclusive effect of a claim is denied, and a claim has been infringed by a third party as it is permitted between creditors and between creditors and a third party. It does not immediately constitute a tort on the sole basis of the fact that a claim has been infringed by a third party, and only if there are special circumstances where a third party knowingly committed an unlawful act, such as a violation of laws and regulations or good morals or social order, etc., by being aware of the fact that it harms a creditor, tort may be established. The illegality of a claim infringement shall be determined specifically and individually by taking into account the content of the claim infringed, the form of the infringement, the intent of the infringer, and the existence of the intent or the year of the infringement, etc., but the determination shall be made by taking into account the need

[4] The case holding that, in case where a subsidiary's actual debtor with respect to a subsidiary was suspended from withdrawing from the above financial institution due to a defect in the parent company's declaration of deferment of payment due to the economic crisis in the East Asian region and thus suspended the repayment of debt to the other party, the parent company's above instruction cannot be deemed unlawful, and thus, it does not constitute a claim infringement by a third party

2. The costs of lawsuit shall be borne by the Plaintiff.

[Reasons for Recognition: Facts without any dispute, Gap evidence 1, 2, Gap evidence 31-1 through 9, Gap evidence 32-34, Eul evidence 1, 2, 4, 17, 18, and 22; the testimony under this subparagraph and the purport of whole pleadings]

(a)KPI is a subsidiary of the Philippines established by the Defendant with the approval of the Committee on Securities and Exchange of the Philippines on December 7, 1994, with 100% investment of 100% (not less than KRW 1.6 billion capital).

B.Plipine Tlelephthon Co., Ltd. (hereinafter referred to as "PT&T" under its abbreviationd name) had obtained a license for the intra-city telephone service from the Republic of the Philippines around 1995 and has been conducting the Mean Telecommunication Expansion Project that expands approximately 300,000 lines of telecommunication in line with the Republic of Korea Government. However, in relation to the supply of telecommunication cables among the above Project, the Plaintiff, the Korea Electric Cable Co., Ltd. (hereinafter referred to as "Tihan Eleccre Co. Ltd.") and the KTPI entered into a cable supply contract in total two times on October 4, 1995 and January 15, 1997 as follows (hereinafter referred to as "the instant cable supply contract"):

(c)In other words, the Plaintiff and Korea Electric Cable (hereinafter referred to as the “Plaintiff, etc.”) shall manufacture and supply telecommunication cables equivalent to USD 13,411,979.91 ($ 5,380,315.33 + contract price of 8,031,64.58 on January 15, 1997) to the Plaintiff and Korea Electric Cable (hereinafter referred to as the “Plaintiff, etc.”) in total to PT&T; it shall be 13,41,979.91 U.S. dollars (hereinafter referred to as the same as that of each bill of lading supplied); however, in relation to the payment of the supply price, 20% of the supply price shall be directly paid to the Plaintiff, etc.; and 80% of the remainder shall be paid automatically from the Plaintiff in lieu of the amount of each bill of lading payment; by concluding a separate agreement between the Plaintiff and the amount of each PT&T loan transaction;

D. Under the instant cable supply contract, KTPP concluded a total of 10,729,583.92 dollars (4,304,252.26 dollars on October 5, 1995) between the Plaintiff on October 5, 1995 and January 15, 1997, with the limit of 6,425,31.6 dollars on January 15, 1997, interest rate (Libor) between London Bank plus 1.20% on interest rate (Libor) plus 6% on interest rate. The repayment date was set as the installment repayment terms of 3 years grace and 2 years grace, and the repayment date was set as the repayment terms of 10,729,583.92 dollars (hereinafter “the instant credit loan agreement”) and the repayment terms received from the Plaintiff in installments and 3 years grace agreement.

E.In order to raise funds under the instant cable supply contract and credit loan contract, KTPP entered into a credit transaction agreement with the Czemanan Bank under the guarantee of the defendant on July 24, 1996, with a limit of 40,000 dollars, and then withdrawn the loans under the said credit transaction agreement (hereinafter referred to as the "TPI") and paid the principal and interest of the loans under the said credit transaction agreement. On June 30, 1998, KTPP declared the delayed payment of PT&T around the wave under the East Asia Asian Economic Crisis (SIF). < Amended by Presidential Decree No. 15083, Jun. 30, 1998>

F.In this regard, the Defendant directed KTPP to prohibit the withdrawal of the above physical loan, thereby suspending the payment of the principal and interest of the loan under the credit loan agreement of this case to the Plaintiff from that time, and suspending the supply of the remaining cables to the Plaintiff, etc.

G. On December 18, 1998, the Plaintiff terminated the credit loan agreement of this case on the ground of loss of interest due to delay in payment of interest to KTPP. Cable supplied by the Plaintiff et al. to PT&T is equivalent to USD 11,197,327.87. As of December 18, 1998, the sum of the principal and interest of the loan, which is not repaid to the Plaintiff by KTPP as of December 18, 1998, USD 924,629.43 ($ 8,995,12.30, 929, 507.13).

2. The plaintiff's assertion

The plaintiff asserts that the borrower under the credit loan contract of this case is the defendant, and KTPP merely entered into the above contract as the defendant's representative, and the defendant is responsible for paying the principal and interest of the loan in accordance with the credit loan contract of this case.

In addition, the plaintiff as the ancillary cause of this case: ① the defendant's refusal to pay the principal and interest under the credit loan agreement of this case on the ground that it is clearly against the good faith principle to prohibit the withdrawal of physical loan loan from the KTPP bank, and ② the defendant's refusal to pay the principal and interest under the credit loan agreement of this case on the ground that it is against the good faith principle; ② the defendant, at the time of the credit loan agreement of this case, delivered internal documents to the plaintiff that the defendant would guarantee the payment of the loan to the KTPP bank; at least, it should be deemed that the plaintiff would not make the plaintiff withdraw physical loan and pay the principal and interest under the credit loan agreement of this case, or that the defendant would not prohibit the withdrawal of physical loan; ② the defendant's refusal to pay the principal and interest under the credit loan agreement of this case on the ground that it is against the good faith principle that the defendant's refusal to pay the principal and interest of the loan of this case on the ground that it constitutes a violation of the defendant's order to suspend the payment of the loan of this case.

3. Determination

A. Whether the Defendant is a borrower under the credit loan agreement of this case

(1) Details of the credit loan agreement of this case

The Plaintiff asserted that the Defendant is a borrower as a party under the instant credit loan agreement, and that KTPP is merely an agent of the Defendant, and cited the instant credit loan agreement (Evidence Nos. 1 and 2) and the confirmation attached thereto and the Defendant’s internal approval documents as one of the grounds therefor. As such, the relevant parts of the instant credit loan agreement and the documents attached thereto are extracted.

Article 1 (Definitions) (15)

“Certificate” confirms that, as a certificate provided by KTPP to the Plaintiff, KTPP is a subsidiary of the Defendant holding all shares, and that KTPP obtained all necessary consent, approval, permission, etc. from the government authorities and the Defendant in connection with this contract.

("Letter of Confirmation" shall mean a letter of confirmation to be given by the Borrower to the Lender confirming that it is a wholly-owned subsidiary of Korea Telecom and that it has obtained all necessary consents, approvals, permission and other analogous permits thereto with and from any governmental authorities and Korea Telecom in relation hereto.)

(2) Article 5 (Security) (1)

확인서；KTPI는 이 사건 신용대출계약에 따른 효력발생일 이전에 KTPI가 적법하게 작성한 확인서를 원고에게 제출하여야 한다.

(3) Paragraph (2) of Article 7 (Statement and Guarantee by KTPP)

The defendant maintains dominance in relation to KTPP.

(4) Paragraph (8) 2 of Article 8 (Additional Documents)

KTPP must provide the Plaintiff with all documents, such as a copy of the defendant's approval in connection with the credit loan contract and cable supply contract of this case.

(5) Paragraph (1) 9 shall apply to Article 10 (Grounds for Default)

Where the Defendant loses control over KTPP;

(6) Separatement documents (Written Confirmation, Leadings)

KTPP, which is the signatory of the above certification, is confirmed and proved by this certification that it is a subsidiary of the defendant who currently holds all shares of the defendant.

이 이 이 이이 이 이이 이 이 이이 이이 이이 이이 이 이이 이이 이이 이이 이이 이이 이이 이이 이이 이이 이이 이이 이이 이 이이 이 이이 이 이이 이이 이 이이 이 이이 이 이이 이 이 이 이 이

KTPP confirms and certifies that the defendant has been duly authorized to enter into and implement the cable supply contract of this case and the agreements related thereto. Accordingly, the approval is accompanied.

(The undersigned hereby also confirms and certifies that the Borrower has been duly authorized by Korea Telecom to carry-out and perform the project contemplated under the Supply Contract for Optical Fiber Cable and Copper Cable dated October 4, 1995 and related agreements thereof, the notice of approval of which is attached hereto.)

In the case of KTPP, it is clearly pointed out that (b) the authorization attached to the credit loan agreement of this case is consistent with the truth, (c) the authorization is a true copy of the original, and (d) the right, authority and qualification to make the credit loan agreement of this case, and (d) the validity and validity of all necessary consent, permission, authorization and approval from the government authorities with respect to the validity and feasibility of the credit loan agreement of this case.

(The undersigned hereby represents and warrants that ... (중략) ... (b) the notice of approval attached hereto is true and correct copy of the original, (c) it has all legal rights, power and authority to execute the Contract and to perform its obligations thereunder, and (d) the undersigned has obtained all necessary consents, licenses, approvals, and authorizations and registrations or declarations, with any governmental authority required in connection with the validity and enforceability of the Contract and the same are in full force and effect.)

7. Added documents (a letter of approval, No.)

The defendant's internal confirmation document that includes the defendant's request for payment guarantee that KTPP requires the defendant to obtain a loan of USD 47 million from local financial institutions of the Philippines for the purpose of securing funds for investment in performing the contract of the instant cable supply contract and credit loan contract.

(2) Determination:

On the other hand, the part of the credit loan contract of this case as claimed by the plaintiff and the documents attached thereto are merely confirming that KTPP obtained comprehensive approval from the defendant in carrying out the business under the credit loan contract of this case and cable supply contract of this case as the defendant's subsidiary company (it is natural that the defendant can control the business activities, etc. of KTPP, which is the subsidiary company of this case). The defendant is the party to the credit loan contract of this case, and the defendant bears the responsibility as the party to the credit loan contract of this case, and KTPP is not merely a defendant's agent, and it is not meaningful that the part of the credit loan contract of this case and the documents attached thereto are insufficient to recognize the plaintiff's assertion (other insufficient evidence: evidence No. 3-1, 2, evidence No. 5-1, 5-5, A6, 25 through 28). There is no other evidence to acknowledge this differently.

Rather, considering the overall purport of the arguments as to the defendant's testimony under Gap 1, Eul 2, 22, 31 through 43, Gap 1, 21, 32, and 33's evidence, and the witness testimony, the plaintiff was clearly indicated as the defendant's legal act under the credit loan contract of this case (Evidence 1 and 2) and its conclusion was made between the defendant and the defendant's representative director who did not participate in the above contract, and the defendant's request for the above credit loan of this case was clearly indicated as the defendant's 1, 4, 22, 31 to 43, and the defendant's request for the above credit loan of this case and the defendant's testimony under the above 1, 1, 21, 32, and 33, and 1, 2, 2, 3, as the defendant's agent for the above credit loan contract of this case, and 3, as the defendant's agent for the defendant's credit service contract of this case.

(3) Conclusion

Considering the above facts comprehensively, it is reasonable to view that the borrower of the credit loan contract of this case is not the defendant but KTPP. Thus, the plaintiff's assertion that the defendant is responsible for paying the principal and interest of the loan of this case on the premise that the borrower is the borrower of the credit loan contract of this case is not proper.

B. Whether it constitutes the denial or abuse of corporate personality

(1) General theory

In general, in a case where a company has the external form of a juristic person, but it merely takes the form of a juristic person, and in substance, it is merely a private enterprise of another person behind the corporate personality or used without permission for the purpose of avoiding the application of the laws against the person behind the corporate personality, the denial of the responsibility of the person behind the corporate entity by asserting that even if the act of the company is an act of the company, it shall be attributed only to the company on the ground that the person behind the corporate personality is separate, and its legal effect is attributed to the company, shall not be permitted against the justice and equity as an abuse of the corporate personality in violation of the principle of trust and good faith, and therefore, the company as well as the person behind the corporate entity shall be held liable for the act of the company (see Supreme Court Decision 97Da21604, Jan. 19, 201).

In particular, in order to apply the doctrine of denial of legal personality and abuse in the relationship between the parent company and the subsidiary, it is insufficient for the parent company to have a strong control over the subsidiary as a result of the parent company's exercise of shareholder's right by holding all shares of the subsidiary and its exercise of shareholder's right. The subsidiary is to lose its own own intention or existence and exercise full control so that the parent company can operate the subsidiary as a part of its own business. ② The subsidiary is not clearly distinguishable from the property, business and external business transactions between the parent company and the subsidiary, and both are combined. ③ The accounts between the parent company and the subsidiary are not separated from the ones between the parent company and the subsidiary, and the corporate law procedures such as the board of directors are neglected. ④ The amount of the subsidiary's capital is considerably insufficient in light of the nature and scale of its business. ⑤ The subsidiary's capital is abused as a means to avoid the application of the law to the parent

However, the exception to the principle of limited liability of a stock company is limited to cases where the corporate body is used for the purpose of the illegal or unlawful purpose, or against the public interest, to justify the unlawful act, or to defend the crime, or to prevent such unlawful act and to protect the crime. As such, ① the other party to the transaction is clearly divided into the parent company and the subsidiary, or ② the other party to the transaction has clearly expressed his/her intent to conduct the transaction with any of the company, or ② the other party to the transaction has been aware of the fact that the capital of the subsidiary that the other party to the transaction is insufficient in light of the risk of the transaction, and ③ the transaction is conducted without any sufficient measure, or ③ there is no apparent unfairness in the transaction between the subsidiary and the other party to the transaction, it shall not be deemed to constitute the denial or abuse of the corporate personality.

(2) In the instant case:

However, in light of the above facts, in the case of this case, the defendant is a domestic corporation, and the organization, assets, accounts, and business affairs of the defendants are clearly divided as its local subsidiary of the Philippines. ② It is difficult to deem that the amount of its capital is considerably insufficient in light of the claims and debts relationship of KTPP under the cable supply contract and credit loan contract of this case as the amount of its capital is about 1.6 billion won, and ③ even though the defendant has a strong governing power with KTPP as a relation with its own stocks, it cannot be deemed that the defendant exercises full governing power with KTPP to the extent that it loses its own intent or existence. ④ In addition, as at the time of entering into the credit loan contract of this case, the plaintiff clearly separates the defendant from the defendant as to the above contract of this case, and the defendant's assertion that the above contract of this case was not sufficient to accept the plaintiff's credit loan contract of this case, and therefore, it cannot be seen that the defendant's repayment guarantee contract of this case was not sufficient to accept the plaintiff's credit loan contract of this case.

C. As to the assertion that the withdrawal agreement was violated

At the time of the instant credit loan agreement, the Defendant, at the time of the instant credit loan agreement, delivered to the Plaintiff a document evidencing that the Defendant would guarantee the payment of the loans to the KTPP to the KTPP bank, and at least agreed not to make the Plaintiff withdraw the physical transfer loan and pay the principal and interest of the loan under the instant credit loan agreement, or to prohibit KTPP from withdrawing the physical transfer loan. Thus, the Defendant’s refusal of the payment of the principal and interest of the loan under the instant credit loan agreement violates the foregoing agreement by prohibiting the withdrawal of the physical transfer loan after the declaration of deferment of payment; however, there is no evidence to acknowledge that the Defendant agreed to the Plaintiff.

Rather, as seen earlier, the above internal resolution documents of the Plaintiff’s assertion are delivered to the Plaintiff, not the Defendant, by KTPP, and can be acknowledged that there was no contact between the Plaintiff and the Defendant in giving and receiving the above internal resolution documents. As such, the Plaintiff’s above assertion that the Defendant gave a contract to the Plaintiff on the premise that the Defendant agreed to do so is no longer reasonable.

(d) Whether it is responsible as an instruction for performance of duties;

The plaintiff asserts that the defendant, as an executive instruction for the KTPP's directors, has suspended the withdrawal of physical loan from the KTPP's CTPP's CTPP's CTPP's CTPP's CTPP's repayment of the principal and interest of loan to the plaintiff, and therefore, he is responsible for paying the principal and interest of loan to the plaintiff in accordance with the provisions of Article 401-2 of the Commercial Act.

In light of the fact that the provisions of Article 401-2 of the Commercial Act were newly established on December 28, 1998 pursuant to the amended Commercial Act (Act No. 5591), which was promulgated and enforced on December 28, 1998, the legislative purport of which is to strengthen the liability of the person who ordered the execution of business, and Article 2 of the Addenda of this Act provides that "this Act shall also apply to the matters arising before this Act enters into force except as otherwise provided in this Act: Provided, That this Act shall not affect the validity that occurred under the previous provision, except as otherwise provided in this Act)", it cannot be deemed that the retroactive effect under the provisions of Article 401-2 of the amended Commercial Act is not applicable to the cases that occurred before the enforcement of the above amended Act (Supreme Court Decision 2001Da37071 Decided January 10, 203).

However, it is evident that the Defendant’s order prohibiting the withdrawal of physical loan to KTPP by the Plaintiff was issued prior to December 28, 1998, the enforcement date of the amended Commercial Act (the time when the Plaintiff terminated the credit loan contract of this case to KTPP). In this case, the provision of Article 401-2 of the above Commercial Act is not applicable. Thus, the Plaintiff’s above assertion premised on the application of the above provision is without merit, without further review.

E. Whether it constitutes an act of infringing a third party’s claim

The plaintiff asserts that the order of the defendant's prohibition of withdrawal of physical loan to KTPP constitutes an act of infringement of a third party's claim by nullifying the payment of principal and interest under the credit loan agreement of this case against the plaintiff of KTPP.

Generally, an exclusive effect of a claim is denied against a claim, and a claim has been infringed by a third party as it is permitted to be free competition between creditors and creditors and a third party. It does not immediately constitute a tort, and only if there are special circumstances where a third party knowingly knows that he/she harms a creditor, such as having committed an unlawful act, such as violating laws and regulations or good morals or social order. The illegality of a claim infringement shall be determined specifically and individually by taking into account the content of the infringing claim, the form of the infringing act, the intent of the infringing person or the existence of the year, etc. However, it shall be determined by comprehensively taking into account the need to guarantee the freedom of transaction, public interest including economic and social policy factors, and the balance of interest between the parties (see Supreme Court Decision 200Da32437, Mar. 14, 2003).

On July 24, 1996, in order to raise funds under the instant cable supply contract and credit loan contract, KTPP entered into a credit transaction agreement with the Bank of Czemanmanan (hereinafter “the Bank”), with the payment guarantee of the Defendant, with a limit of 40,000 dollars, and then withdrawn physical loan according to the said credit transaction agreement and paid interest thereon. However, the PT&T was due to the credit loan agreement of this case. A PT&T was defective on June 30, 1998; the Defendant prevented the withdrawal of the above physical loan to KTPP; and the Defendant ceased the payment of the principal and interest of the loan of this case from the date of the loan agreement of this case to the Plaintiff from the time of the extension of the loan agreement of this case.

In light of the above facts, the defendant's order to prohibit the withdrawal of physical loan to KTPP does not necessarily mean that the defendant's order to prohibit the withdrawal of physical loan to the above physical loan to pay the principal and interest of the loan under the credit loan contract of this case after the withdrawal of the above physical loan loan loan and the repayment of the principal and interest of the loan of this case to the plaintiff, the above physical loan loan shall be repaid after the repayment of the principal and interest of the loan of this case from PT&T; however, the repayment of the above physical loan loan loan shall be substantially difficult due to the declaration of delayed payment; and eventually, the defendant's position is inevitably to protect the interest as a right of indemnity, and it does not necessarily mean that the defendant's order to prohibit the withdrawal of physical loan of this case against KTPP does not violate the law or good morals or social order, and therefore, the plaintiff's above assertion of illegality cannot be acknowledged.

F. Whether it constitutes a fraudulent tort

The Plaintiff asserts that the Defendant’s act of prohibiting the withdrawal of the instant credit loan between the Plaintiff and the KTPP is in conflict with the foregoing prior act, and as a whole, constitutes fraudulent act. The Plaintiff’s conclusion of the instant credit loan agreement with the KTPP is due to the fact that the Defendant had decided to guarantee the payment of the physical loan to the KTPP for the KTPP’s T&T bank.

However, the defendant ordered KTPP to prohibit withdrawal of the above physical loan was an inevitable choice from the standpoint of the guarantor of the payment, and such instruction cannot be deemed unlawful. There is no evidence to acknowledge that the defendant committed a deceptive act against the plaintiff. Thus, the plaintiff's above assertion is without merit.

4. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it appears to be one mother or there is no reason to do so.

Judges Shin Sung-sung (Presiding Judge)