The costs of appeal are assessed against the defendant.

1. The argument in the grounds of appeal is that the principal obligation was reduced in an arbitral award between the Plaintiff and the Plaintiff and the instant principal obligor B (hereinafter “B”), and that the Defendant’s defense of simultaneous performance was accepted. Therefore, the lower court should reduce the Defendant’s guarantee obligation, the guarantor, and accept the Defendant’s defense of simultaneous performance in accordance with the principle of non-performance of the guaranteed obligation and the principle of the defense of the principal obligor by the guarantor. However, the lower court erred in its judgment.

2. However, in a lawsuit between a creditor and the principal debtor, even where the judgment in favor of the principal debtor has become final and conclusive in whole or in part as to the existence or scope of the principal obligation, the res judicata of the judgment does not affect the guarantor. Therefore, notwithstanding the principle of non-performance of the guaranteed obligation, the guarantor cannot refuse the performance of his surety obligation by invoked the judgment in favor

3. In light of the above legal principles, even if the Defendant, the principal obligor, has asserted that B’s obligation was reduced in the arbitral award or that B had a right to defense of simultaneous performance, the res judicata of the arbitral award between the Plaintiff and B, does not affect the Defendant. Thus, the lower court’s judgment is not bound by res judicata of the arbitral award when determining the above assertion.

Therefore, even if the court below rejected the defendant's defense of simultaneous performance without reducing the defendant's guarantee obligation unlike the arbitral award, it cannot be said that the judgment below erred by misapprehending the legal principles on the defense of simultaneous performance, the non-existence of the guaranteed obligation, and the defense of the principal obligor of the surety, by omitting the judgment of the defendant's assertion in violation of logical and empirical rules.

4. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.