[1] Whether a director may convene a board of directors based on the provisions of the articles of incorporation or the Civil Act in a case where a director who has the power of representation refuses to convene a board of directors with the requirement of another director, even though a director who has the power of representation requests a meeting of the board of directors to comply with such requirement (affirmative)

[2] In a case where a director who does not reach a majority of a corporation under the Civil Act calls a board of directors on the basis of a special provision of the articles of incorporation, or a majority of directors calls a board of directors on the basis of Article 58(2) of the Civil Act, whether it may convene a board of directors without obtaining the permission of the court (affirmative), and whether the court has a legal basis for permitting

[3] Whether Article 70(3) of the Civil Act, which provides that an extraordinary general meeting may be convened with the permission of the court, may be applied mutatis mutandis to the convening of the board of directors of a corporation under the Civil Act (negative

[1] Article 58(1) of the Civil Act provides that a director shall execute the affairs of a corporation under the Civil Act, and Article 58(2) of the same Act provides that where there are several directors, a majority of the directors shall be determined in the articles of incorporation, and where there exist other provisions, the said provisions shall apply. Therefore, even though a majority of the directors may convene a board of directors only with a representative director in the articles of incorporation of a corporation under the Civil Act, this is merely a case where a director has the representative authority to convene a board of directors. Therefore, even if the articles of incorporation provides that a director who has the representative authority to convene a board of directors requests the convocation of a board of directors by meeting the requirements for other directors, if a director refuses to convene a board of directors with a legitimate authority to convene a board of directors, the provisions for convening a board of directors may not apply. In this case, a director may convene

[2] The board of directors, which is not an essential institution for a corporation under the Civil Act, shall be convened by a director with the authority to execute its affairs. Thus, a director who does not reach the majority cannot convene a board of directors against Article 58(2) of the Civil Act, barring special circumstances. On the other hand, where a director who calls a board of directors based on special provisions of the articles of incorporation or a majority of directors calls a board of directors pursuant to Article 58(2) of the Civil Act, he/she may convene a board of directors based on his/her inherent authority to execute affairs without the permission of the court. The court has no legal basis to permit the convocation of a board of directors under the Civil Act,

[3] Article 70(3) of the Civil Act provides that a minority member of an incorporated association who meets the requirements for a director to convene an extraordinary general meeting may convene an extraordinary general meeting with the permission of the court where a director fails to take the procedure for the convocation of the general meeting within two weeks is required to ensure the effective purport of the law recognizing the right of convening the extraordinary general meeting of the minority member in a guardianship position in a case where a member, who is the highest decision-making body of an incorporated association, demands the holding of a meeting to determine the highest decision-making body upon meeting certain requirements based on the membership rights, even though the member, who is the highest decision-making body of the incorporated association, fails to take the procedure. Therefore, the foregoing provision differs from the composition and operation principles of the above provision and the necessity of the court to participate in the general general meeting

[1] Article 58 of the Civil Act / [2] Article 58 of the Civil Act / [3] Article 70 (2) and (3) of the Civil Act

Applicant 1 and one other

Ulsan City Park, a foundation;

Ulsan District Court Order 2017Bu109 dated July 20, 2017

The order of the court below shall be reversed. The application for permission to convene the temporary board of directors in this case shall be dismissed.

The grounds of special appeal are examined.

1. Article 58(1) of the Civil Act provides that the performance of affairs of a corporation shall be made by directors under the Civil Act, and Article 58(2) of the same Act provides that if there are two or more directors, a majority of the directors shall be determined by the articles of incorporation in cases where there are two or more directors, and the said provisions shall apply. Therefore, even if the articles of incorporation stipulate that only a director who has the representative authority may convene a board of directors, this is merely a case where a majority of the directors may have the representative authority convene a board of directors. Therefore, even if the articles of incorporation provides that a director who has the representative authority to convene a board of directors requests the convocation of a board of directors by meeting the requirements for other directors, if the director refuses to convene a meeting of a board of directors with the representative authority, a provision for convening a board of directors may not apply. In such cases, a director may convene

A director, who is not an essential institution of a juristic person, shall convene a board of directors in violation of Article 58(2) of the Civil Act, barring special circumstances. On the other hand, where a director who does not reach the majority conveness a board of directors pursuant to a special provision of the articles of incorporation, or where a majority of directors convenes a board of directors pursuant to Article 58(2) of the Civil Act, he/she may convene a board of directors based on his/her inherent right to execute affairs without obtaining permission from the court. The court has no legal basis to permit the convocation of a board of directors under the Civil Act, but if a dispute arises on the validity of a resolution of the board of directors, it can only determine

Meanwhile, Article 70(3) of the Civil Act provides that a minority member of an incorporated association may convene an extraordinary general meeting with the permission of a court where a director fails to take the procedure for the convocation of an extraordinary general meeting within two weeks, even though a member of the board of directors, who is the highest deliberative body of an incorporated association, demands the holding of a meeting to determine the highest deliberative body’s intent by meeting certain requirements based on his/her employees’ rights, the court shall ensure the effectiveness of the law recognizing the right to convene the extraordinary general meeting in a guardianship position where the director, who is the executive body, fails to take the procedure. Therefore, the foregoing provision differs from its structure and principle of operation, and the court may not apply mutatis mutandis to the convocation of the board of directors, which is the executive body of a corporate entity, under the Civil Act, where the composition

2. Article 27 (4) of the articles of incorporation of the principal of the case provides that "at least 1/3 of the directors with representative authority shall convene a board of directors within 14 days from the time the auditor requests a meeting with a joint signature, stating the agenda for the meeting of the board of directors, and at least 1/3 of the directors with representative authority shall call a temporary board of directors within 14 days from the time the applicant requests a meeting of the board of directors with a joint signature, and the applicant requested a temporary board of directors who are not the applicant with representative authority to convene a temporary board of directors as an agenda item for the removal and appointment of officers, but the applicant was not

3. Examining in light of the legal principles as seen earlier, even if the director with the representative authority did not comply with the request of other directors to convene a temporary board, Article 27(4) of the Articles of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of the case, only the director with the representative authority can convene a board of directors, and the director of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of

4. Therefore, the order of the court below shall be reversed, and this case is sufficient to be directly tried by the court, and therefore, it shall be self-reader in accordance with Article 437 of the Civil Procedure Act. The application for permission to convene a temporary board of directors in this case is unlawful as seen above. Therefore, it is so decided as per Disposition by the assent of all participating

Justices Park Jung-hwa (Presiding Justice)