Whether Article 399(1) of the Commercial Act applies the business judgment rule in cases where a director causes a loss to the company due to a violation of the laws and regulations (negative), and the meaning of “Acts and subordinate statutes” in this case

If a director commits an act in violation of Acts and subordinate statutes in performing his/her duties, such act itself constitutes a default on the company, and thus, it cannot be exempted from liability for damages to the company. With respect to an act in violation of the above Acts and subordinate statutes, there is no room to apply the business judgment rule that can be considered in cases where a director is liable for damages caused by a director's breach of the duty of care of a good manager in performing his/her duties. Provided, That the term "Acts" referred to as an act in violation of the Acts and subordinate statutes refers to Acts and subordinate statutes, i.e., Presidential Decree, Ordinance of the Prime Minister, Ordinance of the Ministry, and Ministerial Ordinance, etc., within a general sense, the merchant bank business management guidelines, guidelines for dealing with foreign currency funds, guidelines for foreign exchange and

Article 399(1) of the Commercial Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jae-soo et al., Counsel for plaintiff-appellant)

Korea Deposit Insurance Corporation (Law Firm, Attorneys Park Dong-dong et al., Counsel for the plaintiff-appellant)

Defendant 1 and 13 others (Law Firm Taeyang, Attorneys Lee In-hee et al., Counsel for the defendant-appellant)

Daegu High Court Decision 2004Na378, 385 decided July 2, 2004

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

1. As to the misconception of facts or incomplete hearing due to the violation of the rules of evidence

A. An executive officer of a financial institution is obligated to perform his/her duties as an executive officer because he/she has faithfully performed his/her duties with respect to the financial institution. Where a financial institution is liable for damages due to negligence in performing its duties related to a loan against an executive officer, it cannot be readily concluded that the judgment of the executive officer who issued the decision on the loan was in breach of his/her duty of care or duty of loyalty with due care as a good executive officer. However, when the business judgment pertaining to a loan is conducted, a reasonable financial institution’s executive officer did not examine the loan in good faith for the maximum benefit of the company in accordance with appropriate procedures with reasonable information, or if the decision-making process and contents are considerably unreasonable, the business judgment of the executive officer goes beyond the permissible scope of discretion, and cannot be said to have fulfilled his/her duty of due care or duty of loyalty with the company. Therefore, whether the loan decision-making by an executive officer was within the permissible scope of business judgment as above, whether he/she neglected his/her duties in good faith or in breach of its duty of care as a good executive officer, and whether it would normally be 20.

B. In light of the records, the court below's determination that the defendants' act was within the scope of discretion permitted for business judgment by integrating the facts in the judgment of the court below with respect to individual loans and purchase of foreign currency claims of this case is reasonable, and there is no violation of the rules of evidence or incomplete deliberation.

2. As to the misapprehension of legal principles in the grounds of appeal

A. If a director commits an act in violation of the laws and regulations in performing his duties, such act itself constitutes a default on the company, so as to cause damage to the company, barring any special circumstance, the director shall not be exempted from liability for damages, and the business judgment rule that can be considered in cases where a director is liable for damages due to a breach of the duty of a good manager in performing his duties with respect to an act in violation of the above laws and regulations is not applicable. It is so argued in the

B. However, the term "law" refers to a law in general sense, i.e., Presidential Decree, Ordinance of the Prime Minister, Ordinance of the Ministry of Government Administration and Home Affairs, and Ordinance of the Ministry of Government Administration and Home Affairs, and in this case, the business operation guidelines of merchant banks, guidelines for dealing with foreign currency funds, the official document of authorization for foreign exchange and foreign exchange transaction, foreign exchange management regulations, foreign exchange internal review regulations, and Yong-Nam-Nam's internal review regulations, etc., which the plaintiff is in his own interest, do not fall

C. In addition, according to the records, with respect to individual acts alleged by the plaintiff as a violation of law, the court below did not have any evidence to acknowledge the violation (the part on the part on the part on the part on the part on the part on the part on which the court below took part in the construction of Sungwon, Bossung, Bossung Development, Bosong, and Newsry Construction) or the part on the part on the part on the part on the part on the part on which the court below erred by denying the defendants' liability for damages on the grounds that there is no evidence to acknowledge the violation (the part on the part on the part on the part on the part on the part on the part on the part on the part on the part on the part on which the court below took part in the violation of law, and the exception provisions do not constitute the violation on the part on the part on the part on the part on the part on the extension of credit limit against the U.S., the part on the purchase

3. Conclusion

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.

Justices Ahn Dai-hee (Presiding Justice)