[1] The validity of a judgment rendered by the court by proceeding the litigation procedures as they were in a state where the receiver’s lawsuit was not pending, without knowing either party’s decision on commencement of rehabilitation procedures during the lawsuit period

[2] The case holding that the above judgment was erroneous in the same manner as the case where Gap was not duly represented by an agent, in a case where the court below rendered a judgment by proceeding with litigation proceedings without knowing the decision on commencement of rehabilitation procedures, where Gap, a party Gap, was decided to commence rehabilitation procedures, but the court below did not know the fact that the decision on commencement of rehabilitation procedures was made, but the court below did not proceed with

[1] In light of the purport and contents, etc. of Articles 59(1) and 33 of the Debtor Rehabilitation and Bankruptcy Act, Article 247(1) and (2) of the Civil Procedure Act, where one party during the proceeding was rendered a decision of commencement of rehabilitation procedures as stipulated under Article 49 of the Debtor Rehabilitation and Bankruptcy Act with respect to one party during the proceeding. However, if the court rendered a decision by proceeding the proceedings without knowledge of the decision of commencement of rehabilitation procedures while the administrator’s lawsuit is not in progress, the said decision is erroneous in the same manner as the case where the administrator, who will take over the proceedings by either party’s decision of commencement of rehabilitation procedures, was tried and sentenced in a state where it is impossible for the administrator to conduct legal proceedings by means of a decision of commencement of rehabilitation procedures

[2] The case holding that in a case where the court below rendered a judgment by proceeding with litigation procedures as it did not take place, such as Eul, who was a joint manager of Gap company, while the lawsuit was pending, the court held that the court below erred by misapprehending the legal principles as to Gap company's decision on commencement of rehabilitation procedures, since the joint manager who is to take over the litigation procedures cannot take place under the law, was tried and sentenced under the circumstance that the joint manager who is to take over the litigation procedures cannot take place under the law and was not represented legally by an agent

[1] Articles 33, 49, and 59(1) of the Debtor Rehabilitation and Bankruptcy Act; Article 247 of the Civil Procedure Act / [2] Articles 33, 49, and 59(1) of the Debtor Rehabilitation and Bankruptcy Act; Article 247 of the Civil Procedure Act

[1] Supreme Court Decision 94Da24121 delivered on February 9, 1996 (Gong1996Sang, 865)

Daegu General Construction Co., Ltd. (Attorney Kim Jin-young, Counsel for the defendant-appellant)

Defendant 1 and one other, who are joint management by the rehabilitation company South Young-gu Construction Corporation, a lawsuit taking over the lawsuit of the Southern Construction Corporation

Seoul High Court Decision 2010Na120502 decided June 8, 2011

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

Article 59(1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “the Act”) provides that “when a decision to commence a rehabilitation procedure is made, the proceedings relating to the debtor’s property shall be interrupted.” Article 33 of the Act provides that “If there is no provision in this Act concerning the rehabilitation procedures, the Civil Procedure Act shall apply mutatis mutandis.” Article 247(1) of the Civil Procedure Act provides that “The declaration of a judgment may be made even during the suspension of the proceedings.” Article 247(2) of the same Act provides that “The interruption or suspension of the proceedings shall stop the progress of the period, and the entire period shall continue from the time when the takeover of the proceedings is notified or when the proceedings are resumed.”

In light of the purport, contents, etc. of the above provisions, a decision to commence rehabilitation procedures under Article 49 of the Act was rendered against one of the parties during the proceeding. However, if a court rendered a judgment by proceeding the proceedings without knowledge of the decision to commence rehabilitation procedures, as they were in a state where the administrator was unable to take over the proceedings under the law due to a decision to commence rehabilitation procedures of one of the parties, the judgment was deliberated and sentenced in a state where the administrator cannot take over the proceedings under the law, and thus, there is an error of law as to the same case where the proceedings were not lawfully represented by an agent (see Supreme Court Decision 94Da24121, Feb. 9, 196, etc.).

According to the records, on May 12, 201, prior to the closing of the argument of the court below, the judgment of the court below was rendered on May 12, 201, which dismissed the appeal filed by the Nam Young Construction on May 12, 201. The judgment of the court below was delivered to the legal representative of Nam Young Construction, who was the defendant of the court below on June 27, 201, to the effect that the decision of the court below was made on June 27, 2011, and the defendants did not know of the decision of the commencement of the rehabilitation procedure and did not know the fact that the lawsuit acceptance of the defendants, who were joint management of Nam Young Construction, did not take place, and filed a petition for appeal against the whole judgment of the court below on July 27, 2011, and that the court below did not dispute the decision of commencement of the rehabilitation procedure on May 25, 201.

Examining the above facts in light of the legal principles as seen earlier, the judgment of the court below is erroneous in the misapprehension of the legal principles as to the interruption of litigation procedures, since the Defendants, who will take over the litigation procedures due to the decision of commencement of rehabilitation procedures for the construction in the Republic of Korea, were tried and sentenced to litigation under the condition that they cannot perform legal acts, and thus, the same applies to the case where they were not lawfully

Therefore, without examining the remaining grounds of appeal by the Defendants, 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 Park Si-hwan (Presiding Justice)