Where time is required for inspection or copying of account books, etc. under Article 466(1) of the Commercial Act, or where the above inspection or copying is requested by a judicial court, the period during which the shareholder who requested inspection or copying must meet the requirements for stock ownership under the above provision (=the period prior to or continuously during which the lawsuit required for inspection or copying continues)

Any shareholder who holds shares equivalent to not less than 3/100 of the total number of issued and outstanding shares may request, in writing, the inspection or copying of the account books and documents stating the reasons therefor pursuant to Article 466(1) of the Commercial Act. In cases where time is required for inspection or copying, the shareholder who has requested inspection or copying shall hold shares of not less than 3/100 of the total number of issued and outstanding shares through the preceding period, and in cases of a claim for inspection or copying of the account books, the above requirements for holding shares

Article 466(1) of the Commercial Act

[Judgment of the court below]

C. Chang Transportation Co., Ltd. (Law Firm Western, Attorneys Lee Jae-do et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2015Na2012015 decided November 5, 2015

Of the part against the Defendant of the lower judgment, the part of the claim regarding the documents listed in the separate sheet 3, 4, 7, 9, and 10 is reversed, and that part of the case is remanded to the Seoul High Court. The remaining appeals are dismissed.

The grounds of appeal are examined.

1. As to the claim as to each of the documents listed in the separate sheet 3, 4, 7, 9, and 10

(a) A shareholder who holds no less than 3/100 of the total issued and outstanding shares may request, in writing, the inspection or copying of the account books and documents stating the reasons therefor in accordance with Article 466(1) of the Commercial Act. If time is required for inspection or copying, the shareholder who has requested inspection or copying shall hold not less than 3/10 of the total issued and outstanding shares through the entire period, and where an inspection or copying of the account books is requested by the court, the shareholder who has requested inspection or copying shall meet the requirements for holding the above shares

B. According to the reasoning of the judgment below, the Plaintiff is a shareholder holding 3,00 shares out of the total number of shares issued by the Defendant; ② the Plaintiff requested the Defendant to peruse and copy account books and documents entered in the separate sheet with reasons attached to the Defendant; ③ The Plaintiff’s refusal to do so; ③ the Plaintiff filed the instant lawsuit seeking to peruse and copy account books and documents; and the Defendant may acknowledge that Nonparty 1, a previous shareholder, issued new shares by means of a shareholder allocation and acquired 46,00 shares, and Nonparty 2, a previous shareholder, respectively during the period of the first instance trial. Accordingly, the total number of shares issued by the Defendant became 101,00 shares + 9,000 shares + 46,000 shares + 46,000 shares + 46,000 shares).

C. Examining the above facts in light of the legal principles as seen earlier, the Plaintiff owned 3,00 shares equivalent to 33.33% of the total number of shares issued by the Defendant at the time of filing the instant lawsuit, and held 3/100 or more of the total number of issued and outstanding shares required by Article 466(1) of the Commercial Act, but held 2.97% of the total number of shares issued by the Defendant due to the above issuance of new shares (=3,000 shares ± 101,000 shares ± 101,000 shares) and held less than 3/10 of the total number of issued and outstanding shares. Thus, barring any special circumstance such as the invalidity or absence of the above issuance of new shares, it is reasonable to deem that the Plaintiff was disqualified for a party to seek inspection and copy of the accounting book under Article 466(1) of the Commercial Act.

Nevertheless, without examining these circumstances, the lower court rejected the Defendant’s prior defense on the merits that the Plaintiff lost its standing as a party because the Plaintiff’s shares fall short of 3/100 of the total number of the Defendant’s issued and outstanding shares, thereby adversely affecting the conclusion of the judgment by misapprehending the legal doctrine on the requirements for holding minority shareholders’ shares, and by failing to exhaust all necessary deliberations, thereby failing to exhaust all necessary deliberations.

Therefore, without examining the remaining grounds of appeal, the lower court cannot maintain this part of the grounds of appeal.

2. As to the claim portion concerning each of the documents listed in the separate sheet 2, 5, and 6

The lower court determined that the Plaintiff, a shareholder, can solely file a claim for perusal and copy of this part of the documents pursuant to Articles 396 and 448 of the Commercial Act, and that the Defendant is obligated to allow perusal and copy of the documents as stated in its reasoning, and rejected the Defendant’s defense on the grounds that the evidence submitted by the Defendant alone is insufficient to recognize that the purpose of the Plaintiff’s claim for perusal and copy is unreasonable.

In light of the relevant legal principles and records, the lower court did not err by failing to exhaust all necessary deliberations as alleged in the grounds of appeal and by misapprehending the facts against the rules of evidence.

3. Conclusion

Therefore, the part of the judgment below against the defendant regarding the claim regarding each of the documents listed in the separate sheet 3, 4, 7, 9, and 10 shall be reversed, and this part of the case shall be remanded to the court below for a new trial and determination. The remaining appeal shall be dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench

Justices Park Jung-hwa (Presiding Justice)