(a)a construction of the column for the full credit guarantee agreement drawn up by the Credit Guarantee Fund, stating that “The guarantee limit under this letter shall be in operation including the balance of guarantee under the Gu newsletter”;

(b) Whether a bank of trade financing should preferentially appropriate the bill of exchange issued by an importer as an addressee for the relevant guaranteed loan (affirmative)

(c) Whether the bank's act not preferentially appropriated for the guaranteed loan as the discount of notes under Paragraph (b) above after the decision on commencing a company reorganization procedure has violated the terms and conditions of credit guarantee in relation to the Credit Guarantee Fund (negative)

A. In setting a certain guarantee limit and guarantee period of the Credit Guarantee Fund and guaranteeing repayment and repayment obligations to the bank that the company receives a loan from the bank under the standards for export performance, it shall be interpreted as a guarantee liability only to the remainder of the credit guarantee amount obtained by deducting the remaining amount of guarantee obligations to be borne by the Credit Guarantee Fund in accordance with the Gu newsletter certificate from the guarantee limit under the above credit guarantee certificate under the above credit guarantee certificate, if the credit guarantee fund contains the phrase “if the guarantee limit under this guarantee is in operation including the balance of guarantee under the Gu newsletter certificate under 88-14, 88-310, and 88-358,” and the phrase “if the credit guarantee fund bears a guarantee liability to the bank in accordance with the Gu newsletter certificate issued by the Credit Guarantee Fund for the company prior to the credit guarantee certificate under the above credit guarantee certificate, it shall be interpreted as a guarantee liability.”

B. If a guarantee loan under the proviso of Article 8(1) of the Credit Guarantee Terms and Conditions is a trade financing (in particular, an export performance standard financing), the term "relevant Export Daejeon" refers to a bill of exchange issued by a financial beneficiary to an importer and issued to a discount bank for the shipment of exported goods with the bill of exchange and then received a discount of the bill of exchange for export, regardless of whether trade financing or credit financing is trade financing or export performance financing from the bank. In the event that the financial beneficiary completes and exports the goods by using the money borrowed from the bank, an export performance financing, regardless of whether it is trade financing or credit financing, it shall be appropriated first for the relevant guarantee loan with the discount of the bill of exchange in accordance with the proviso of Article 8(1) of the Credit Guarantee Terms and Conditions.

C. Upon the commencement of the company reorganization procedure, the request for discount of bills by the company is an act to extinguish the company's obligations within the scope of preferential appropriation for the guaranteed loan under Paragraph (1) of Article 78 of the Company Reorganization Act, which is an act to extinguish the company's obligations as a result within the scope of preferential appropriation for the guaranteed loan under Paragraph (2) above, and the bank's preferential appropriation act also becomes null and void. Therefore, it cannot be said that the bank violated the terms and conditions of credit guarantee in relation to the credit guarantee fund because

(a)b)Article 28(a) of the Credit Guarantee Fund Act; Article 105(b) of the Civil Code; Article 476(c) of the Company Reorganization Act, Section 1 of Article 78 of the Company Reorganization Act;

[Defendant-Appellee] Korea Industrial Bank of Korea

Attorney Lee Jae-ho, Counsel for the Korea Credit Guarantee Fund

Seoul High Court Decision 91Na59432 delivered on September 18, 1992

All appeals are dismissed.

The costs of appeal shall be assessed against each appellant.

(1) We examine the Plaintiff’s grounds of appeal.

As duly determined by the court below, in guaranteeing the repayment of principal and interest to the plaintiff who is owed by the non-party company with a loan extended by the non-party company from the plaintiff under the export performance standard loan with a certain guarantee limit and guarantee period, the court below is just in its purport that if the defendant has stated in the full credit guarantee column that "the guarantee limit under this guarantee is in operation including the balance of the guarantee under the former guarantee under 8-14, 88-310, and 88-358," the above phrase "if the defendant bears the guarantee liability beyond the credit guarantee limit assessed against the non-party company, it shall not be the case where the defendant bears the guarantee liability for the plaintiff with the old guarantee issued by the defendant on behalf of the non-party company prior to the credit guarantee form of this case, the defendant shall be liable for the guarantee only to the remainder which remains after deducting the remaining amount of the guarantee obligation to be borne by the defendant under the former guarantee certificate from the guarantee limit under the credit guarantee form of this case." Thus, there is no error in the misapprehension of legal principles and experience.

(2) We examine the Defendant’s grounds of appeal.

According to the reasoning of the judgment below, the plaintiff's assertion that the non-party 1 was exempted from the loans of this case under the proviso of Article 8 (1) of the above-mentioned Terms and Conditions for the non-party 1 and the non-party 2's loans of this case were not appropriated for the non-party 2's export loan of this case. The non-party 1 and non-party 2's loan of this case's non-party 1 and non-party 3's loan of this case's non-party 1 and non-party 2's loan of this case's non-party 1 and non-party 4's loan of this case's non-party 1 and non-party 4's loan of this case's non-party 2's non-party 1 and non-party 4's loan of this case's non-party 1 and the non-party 1's loan of this case's non-party 1 and non-party 3's loan of this case's non-party 2's loan can be recovered.

According to the records, general export financing rules of the Monetary Board classifys (Article 4) general export financing as funds needed to directly manufacture and process full goods or raw materials for export (production funds), (2) funds required to import raw materials for export in Korea by local letters of credit (import funds for raw materials) and funds needed to purchase export raw materials for export produced in Korea by loan method (Article 5). The above general export financing is classified as credit standard financing based on export letters of credit, etc. held by the company concerned by loan method and performance financing based on the past export performance records of the company concerned (Article 5). The above general export financing is compared to financing prior to shipment after discount of so-called bill of exchange. Furthermore, since guarantee financing loans under the proviso of Article 8 (1) of the above credit guarantee terms are trade financing (in particular, in this case, export financing is not discounted by the bank at discount of export bill, and it is not discounted by the bank at discount of export bill, the above general export financing is not discounted by the bank at discount of export bill and the bill of exchange at discount.

Therefore, the first instance court witness's testimony to the effect that the discount of the above export bill itself is the standard credit financing, appears to have made a statement as to the credit-based financing prior to shipment and the discount of the export bill after shipment, and the fact-finding by the court below, which has taken this fact-finding, seems to have been erroneous. Furthermore, based on such wrong fact-finding, the court below's related export Daejeon as the World Trade Finance Recovery World Trade Co., Ltd. refers to the World Trade Organization where a loan by trade financing was made and the amount of the letter of credit and the amount of the export bill was recovered, and it is not the case where the plaintiff paid the non-party company with the loan by borrowing the export shipping documents such as the letter of credit from the non-party company. It is deemed that the court below erred in the structure and character of trade financing and the interpretation of the proviso of Article 8 (1) of the Credit Guarantee Clause

However, according to the records, the plaintiff made a statement on February 19, 191 in the preparatory document (Records No. 141) of the court of first instance as of the fifth date for pleading, and argued to the effect that the plaintiff's request for discount of the bill of this case becomes subject to avoidance power under the Company Reorganization Act, so it is justifiable that the plaintiff did not preferentially appropriate the loan of this case at discount. Thus, the court below decided that the non-party company's request for commencement of corporate reorganization proceedings was defective in the court on July 9, 1989, notified the defendant of the credit guarantee accident due to the above company's commencement of reorganization proceedings, and that the order for preservation of property was issued to the non-party company on July 15 of the same year and that the order for commencement of corporate reorganization proceedings was rejected on December 20 of the same year on the premise that the plaintiff would not preferentially appropriate the above discount of the bill of this case to the non-party company, which is the creditor of the non-party company, and thus, it cannot be viewed that it would have first appropriated the above guarantee clause of this case.

(3) Therefore, all appeals by the plaintiffs and the defendant are dismissed, and the costs of appeal are assessed against each appellant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Final Young-young (Presiding Justice)