The costs of appeal are assessed against the Plaintiff.

1. As to the ground of appeal No. 1, the English legal set-off system has an ordinary set-off (e.g., legal set-off) and an equitable set-off (e.g., the common law set-off). Among them, the common law set-off is mitigated in comparison with the equitable set-off under the law, such as not requiring the relation between the two claims, but it is interpreted that the common law set-off has the procedural legal character that can only be exercised as a defense of lawsuit.

However, the English common law set-off also has the nature of substantive law in that both claims are extinguished on the equal amount by exercising the right of set-off. Therefore, the requirements and effects of set-off can be applied as the governing law.

For the reasons indicated in its holding, the lower court determined that, on the grounds indicated in its reasoning, both the automatic claim and the passive claim asserted by the Defendant as the counterclaim occurred in the time charter with the English law as the governing law, set-off, in principle, shall be governed by the governing law of the claim itself, and set-off under the English common law as the governing law

The judgment below

Examining the reasoning in light of the aforementioned legal doctrine and the evidence duly admitted, the lower court did not err in its judgment by misapprehending the legal doctrine on the governing law regarding the requirements for offsetting, contrary to what is alleged in the grounds of appeal.

2. On the grounds of appeal Nos. 2 through 5, in light of the purpose and function of the offset system, the interests of the relevant parties in cases where an obligor’s claims are seized, etc., the garnishee, who is subject to a seizure order or provisional seizure order under the Civil Execution Act (hereinafter referred to as “order of seizure”) has a counterclaim against the obligor.