[1] The meaning of "material relations" under Article 2 (1) of the Act on Private International Law and the standard for determining such "material relations"

[2] Whether the provisions under the jurisdiction of the Civil Procedure Act act as the most important standard for determining international jurisdiction (affirmative)

[3] Grounds for considering the special jurisdiction in international jurisdiction / Whether the jurisdiction of the court of the Republic of Korea can be recognized in a case where the defendant's property is located in the Republic of Korea at the time the plaintiff files a lawsuit

[4] Standard for determining predictability in international jurisdiction / Where a corporate defendant engages in business activities with its main office or place of business in the Republic of Korea, whether it can be easily predicted that the lawsuit against the defendant in the Republic of Korea is instituted against the defendant (affirmative)

[5] Whether international jurisdiction may exist concurrently (affirmative)

[6] In a case where Gap corporation et al. entered into a goods supply contract with Byung corporation established under the Chinese law and supplied Byung corporation with goods, and thereafter failed to receive part of the goods price, and filed a lawsuit with the Korean court claiming that Eul corporation shall be jointly and severally liable for the unpaid goods price obligation, the case holding that the above lawsuit has substantial relations with the Republic of Korea in light of all the circumstances

[1] Article 2(1) of the Private International Act provides, “Where a party or a case in dispute is substantially related to the Republic of Korea, the court has the international jurisdiction. In this case, in determining the existence or absence of substantial relation, the court shall comply with reasonable principles consistent with the ideology of allocation of international jurisdiction.” The term “actual relation” refers to the relation to the party or the case in dispute to the extent that it justify the exercise of jurisdiction by a court of the Republic of Korea. The determination shall conform to reasonable principles consistent with the ideology of allocation of international jurisdiction, such as equity, propriety of the judgment, prompt and economy, etc. of the parties. Specifically, not only individual interests such as equity, convenience, predictability of the parties, but also interests of the court or the State, such as the appropriateness, prompt and efficient, and effectiveness of the judgment, should also be considered. Whether there is a need to protect any interest among the interests of various national judgments, should be reasonably determined by determining the existence of substantial relation in

[2] Article 2(2) of the Private International Act provides that “The court shall judge whether or not international jurisdiction exists, taking into account the provisions under the jurisdiction of domestic law, and take into account the specificity of international jurisdiction in light of the purport of the provision of paragraph (1),” and presents the provisions under the jurisdiction of domestic law in a specific standard or method of determining the substantive relationship as stipulated in paragraph (1). Therefore, the provisions under the jurisdiction of the Civil Procedure Act serve as the most important standard for determining international jurisdiction. However, since the provisions under the jurisdiction of the Republic of Korea concerning judicial matters established from a domestic point of view, the determination of international jurisdiction is also required to be made in accordance

Article 2 of the Civil Procedure Act provides, “The lawsuit shall be subject to the jurisdiction of the court in the location of the defendant’s general forum,” and Article 5(1) main text of the Civil Procedure Act provides, “The general forum of a corporation, other association or foundation shall be determined at the location of its main office or business office.” This is because allowing the plaintiff to file a lawsuit to a court in which the defendant’s main office or business office is located, to the court in which the defendant’s principal office or business office is located, is consistent with the equity of the parties from the distribution under its jurisdiction. As such, international jurisdiction also

[3] Considering the special jurisdiction in international jurisdiction is to recognize the jurisdiction of the country having substantial relations with the disputed case. As such, Article 11 of the Civil Procedure Act recognizes the special jurisdiction of the place where the property exists in the Republic of Korea at the time when the plaintiff filed a lawsuit against the defendant in the Republic of Korea, if the defendant's property exists in the Republic of Korea at the time of filing a lawsuit against the defendant, it can be immediately executed to obtain a favorable judgment, and thus, the international jurisdiction of the Korean court may be recognized in terms

[4] Determination of predictability ought to be made on the basis of whether the defendant could have reasonably predicted the filing of a lawsuit at the court in the jurisdiction of the jurisdiction because of considerable relations between the defendant and the jurisdiction. If the defendant, a corporation, has its principal office or place of business in the Republic of Korea and conducts business activities, it can be easily predicted that the lawsuit against the defendant is instituted at the Korean court.

[5] International jurisdiction is not exclusive jurisdiction, but it may exist concurrently. The jurisdiction of the Republic of Korea court shall not be readily denied on the sole basis of the fact that courts of other countries are more convenient than the Republic of Korea court in terms of geography, language, communication convenience, application and interpretation of law, etc.

[6] The case holding that, in case where Gap corporation et al. entered into a contract for goods supply with Byung corporation established under the Chinese law and supplied goods to Byung corporation, and claimed that Eul corporation shall be jointly and severally liable for the unpaid goods payment obligation, and that Eul corporation shall be jointly and severally liable for the unpaid goods payment obligation, the case holding that since Eul corporation's general forum is located in the Republic of Korea and Eul corporation conducts its business activities in the Republic of Korea, it cannot be viewed that the Chinese court is disadvantageous to the Chinese court in carrying out the above lawsuit, and that Gap corporation et al. expressed the intent that Eul corporation would have itself decided at the Korean court when considering the geographical and verbal disadvantage in relation to the implementation of the lawsuit, this intention of Eul corporation et al. should be respected, and it is difficult to view that Eul corporation's principal shareholder Eul corporation's principal office in the Republic of Korea where Eul corporation did not properly perform the goods payment obligation, and that Eul corporation's assets in the Republic of Korea is not related to Eul corporation's right to prompt remedy of rights and the governing law of the court of the Republic of Korea.

[1] Article 2(1) of the Private International Act / [2] Article 2 of the Private International Act, Articles 2 and 5(1) of the Civil Procedure Act / [3] Article 2 of the Private International Act, Article 11 of the Civil Procedure Act / [4] Article 2(1) of the Private International Act / [5] Article 2(1) of the Private International Act / [6] Article 2 of the Private International Act, Articles 2

[1] Supreme Court Decision 2002Da59788 Decided January 27, 2005 (Gong2005Sang, 294) Supreme Court Decision 2017Meu12552 Decided February 4, 2021 (Gong2021Sang, 512) / [1] [2/3/4/5] Supreme Court Decision 2016Da33752 Decided June 13, 2019 (Gong2019Ha, 1357)

Gangwon-si Plast Plast Co., Ltd. and 3 others (Law Firm Gyeong, Attorneys Yang Soo-ok et al., Counsel for the plaintiff-appellant)

Korea-U.S. Unemployment Co., Ltd. (Law Firm LLC, Attorneys Kim Dog-ro et al., Counsel for the defendant

Busan High Court Decision 2017Na58451 decided April 12, 2018

The judgment of the court of first instance is reversed, and the case is remanded to Busan District Court Dong Branch.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Standard of determining international jurisdiction

Article 2(1) of the Private International Act provides, “In cases where a party or a disputed case is substantially related to the Republic of Korea, the court has the international jurisdiction in question. In this case, the court shall comply with reasonable principles consistent with the ideology of allocation of international jurisdiction in determining the existence or absence of substantial relation.” The term “actual relation” means that the party or the disputed case is related to the party, to the extent that it justify the exercise of jurisdiction by a court of the Republic of Korea. In determining this, reasonable principles consistent with the ideology of allocation of international jurisdiction, such as equity, propriety, speed and economy of the party, shall be complied with. Specifically, as well as personal interests, such as equity, convenience, predictability of the party, and appropriateness, speed and efficiency of the judgment, and effectiveness of the judgment, as well as the interests of the court or the State, such as the appropriateness, effectiveness, etc. of the judgment. Whether there is a need to protect any of the interests of various national jurisdiction should be reasonably determined based on individual cases (see Supreme Court Decisions 2002Da59788, Jan. 27, 2005; 2013Meu2526, Jun. 2137, 2019).

Article 2(2) of the Private International Act provides that “The court shall determine the existence of international jurisdiction, taking into account the provisions of domestic law’s jurisdiction, and shall consider the special nature of international jurisdiction in light of the purport of the provision of paragraph(1).” Therefore, the provisions of the Civil Procedure Act governing jurisdiction shall serve as the most important standard or method of determining the substantive relationship as provided in paragraph(1). However, given that the provisions concerning the judicial authority established from a domestic point of view, in determining the international jurisdiction, the provisions of the Civil Procedure Act serve as a standard for determining the international jurisdiction. However, in cases where it is necessary to revise and apply in line with the ideology of allocation of international jurisdiction, considering the special nature of international jurisdiction (see Supreme Court Decision

Article 2 of the Civil Procedure Act provides, “The lawsuit shall be subject to the jurisdiction of the court in the location of the defendant’s general forum.” Article 5(1) of the Civil Procedure Act provides, “The general forum of a corporation, other association or foundation shall be determined at the location of its principal office or business office.” This is because allowing the plaintiff to bring a lawsuit to the court in which the defendant’s principal office or business office is located is consistent with the fairness of the parties in the distribution under its jurisdiction. As such, international jurisdiction also serves as an important element for consideration of business relations. In the meantime, considering international jurisdiction, taking into account the special jurisdiction is to recognize the State’s jurisdiction that is substantially related to the disputed case. As the special jurisdiction of the place of property under Article 11 of the Civil Procedure Act is recognized, if the plaintiff files a lawsuit against the defendant in the Republic of Korea at the time of filing a lawsuit against the defendant at the time of filing a lawsuit, the judgment may be executed immediately and the judgment may be invalidated in terms of the party’s remedy or effectiveness of judgment.

Furthermore, predictability should be determined on the basis of whether the defendant could have reasonably predicted the filing of a lawsuit at the court in the jurisdiction of the jurisdiction because of considerable relations between the defendant and the jurisdiction. If a corporate defendant has its principal office or place of business in the Republic of Korea and conducts business activities, it can be easily predicted that the lawsuit against the defendant is instituted at the court of the Republic of Korea.

International jurisdiction is not exclusive jurisdiction, but it may exist concurrently. The jurisdiction of the Republic of Korea court shall not be readily denied on the sole basis of the fact that courts of other countries are more convenient than the Republic of Korea court in terms of geography, language, communication convenience, application and interpretation of law (see Supreme Court Decision 2016Da33752, supra).

2. Facts

The facts according to the judgment of the court of first instance cited by the court below are as follows.

A. The plaintiffs are Chinese companies whose head office is located in the People's Republic of China (hereinafter "China"), and the defendant is the Korean company that has its head office in Busan Metropolitan City Busan Metropolitan City in Korea.

B. On September 29, 2000, the Defendant invested USD 500,000, and established in China the Jindo Electronic Limited Corporation (hereinafter “Kindo Electronic”) in accordance with Chinese law, and currently holds 100% of the shares of Jindo Electronics.

C. The Plaintiffs asserted that they should be jointly and severally liable for the obligation to pay the unpaid goods pursuant to the Chinese Company Act (hereinafter “the People’s Republic of China Act”), and that the Defendant filed a lawsuit against the Defendant seeking the payment of the goods with a Korean court in the Republic of Korea. The Defendant asserts that the instant lawsuit is unlawful because it has no international jurisdiction in the Republic of Korea court.

3. Appropriateness of the lower judgment

A. The lower court denied the international jurisdiction of the Republic of Korea court on the instant case for the following reasons.

The instant case is held jointly and severally liable pursuant to the Chinese Company Act on the ground that the Plaintiffs failed to receive the price even though they supplied goods according to each of the instant goods supply contracts entered into with the J.S. and the Defendant. Therefore, the primary dispute is the existence and amount of the unpaid obligation to the Plaintiffs of J.S. and U.S.

The Plaintiffs as the parties to each of the goods supply contracts of this case and the Han-Shan Electronic are both China and China, whose main office is China, and the conclusion of the contract, supply of goods, and payment of the price, etc. were conducted in China. The relevant documents are all in China and most of the important evidence methods necessary for deliberation are in China, and it is difficult to recognize a special adjudication under the Civil Procedure Act of the Republic of Korea. Considering these circumstances, it is difficult to recognize that the Plaintiffs, the parties to the dispute of this case, and the Han-S

It may infringe upon the predictability of the parties' jurisdiction to recognize international jurisdiction in a Korean court on the sole basis of the contingency that the shareholders of the limited and US electronic company are companies of the Republic of Korea and their principal offices exist in the Republic of Korea with respect to disputes arising from a commodity supply contract between the plaintiffs without substantial relations with the Republic of Korea and the limited and US electronic company.

B. However, examining the above facts and records in light of the legal principles as seen earlier, it is sufficient to view the Plaintiffs’ instant lawsuit as having a substantial relation with the Republic of Korea. The reasons are as follows.

In order to recognize the international jurisdiction of the Republic of Korea, there is a substantial relationship between the court of the Republic of Korea and the party to the pertinent lawsuit or the disputed case. The Plaintiffs are seeking the Defendant, the shareholder of the single-person electronic company of the limited amount of the payment of the unpaid goods under the instant goods supply contract, and the location of the Defendant’s general forum lies in the Republic of Korea. Even if the debtor is a Chinese corporation and the place of execution of the goods supply contract is China, the disputes in the instant case and the parties are not irrelevant to the Republic of Korea. In particular, this is all the more so taking into account the Defendant’s convenience in litigation and the guarantee of the right to defense.

Meanwhile, the burden of proving the claim for the payment of goods, which is the case in which the dispute in this case occurred, is the plaintiffs, and even if the defendant needs to collect materials necessary for the defense in China, the defendant is a parent company holding the 100% stake of the 100% ratio of the 100% ratio of the 100% ratio of the 100 ratio of the 100 ratio of the 190 ratio of the 190 ratio of the 190 ratio of the 190 ratio of the 190 ratio of the 190 ratio of the

The Plaintiffs, when proceeding in the Republic of Korea in a lawsuit for the payment of the price for goods arising from the transaction of goods in China, are suffering from geographical and verbal inconvenience in the collection and submission of evidence and the performance of the lawsuit. Nevertheless, the Plaintiffs expressed their intent to have them proceed to a trial in the Republic of Korea upon taking advantage of their geographical and verbal disadvantages in relation to the implementation of the lawsuit, and thus, such intent should also be respected.

The predictability should be determined on the basis of whether the Defendant could have reasonably predicted the filing of a lawsuit at the court in the jurisdiction of the jurisdiction of the competent court. It is difficult to conclude that the Defendant, a single shareholder of the Jin-U.S. electronic system, was unable to predict that, in the event that the Jin-U.S. electronic system fails to properly perform its obligation for the payment of the goods, a lawsuit related to the liability for the payment of the goods by the U.S. electronic system may be filed

In accordance with each of the instant goods supply contracts concluded in China, whether there is an obligation to pay for the unpaid goods to the advanced US and America, and the examination of the amount thereof may be conducted through the investigation of receipts, confirmations, etc., and, if the proof is insufficient, the lawsuit in this case ought to be returned to the disadvantage of the plaintiffs filed with the Korean court. Considering these circumstances, the examination of evidence in this case does not necessarily have to be conducted in China. In a case where the plaintiffs won the Defendant’s property in the Republic of Korea, the recognition of international jurisdiction of the Korean court in terms of the party’s remedy or effectiveness

Furthermore, the Plaintiffs asserted that the governing law applicable to the instant case is China law. However, the question is whether the governing law is appropriate to resolve a dispute in accordance with the order of a country’s substantive law. On the other hand, the issue is whether to recognize jurisdiction in the court of a country in light of the party’s equity, propriety of trial, speediness and economy, etc. regarding a dispute over international jurisdiction, and these two are governed by different ideas. International jurisdiction cannot be determined only in accordance with the governing law. Thus, even if the governing law of the instant legal relationship is Chinese company law, the mere fact that the governing law of the instant legal relationship is the Chinese company law cannot be denied the substantive relationship between the instant lawsuit and the Korean court (see Supreme Court Decision 20

C. Nevertheless, the first instance court and the lower court denied the international jurisdiction of the Republic of Korea court on the grounds that the plaintiffs’ lawsuit in this case was not practically related to the Republic of Korea. The lower court erred by misapprehending the legal doctrine on international jurisdiction, thereby adversely affecting the conclusion of the judgment.

4. Conclusion

The plaintiffs' appeals are with merit and therefore reversed the judgment of the court below. Since this case is sufficient for the Supreme Court to directly judge, the judgment of the court of first instance shall be revoked, and the case shall be remanded to the first instance court for further proceedings consistent with Articles 425 and 418 of the Civil Procedure Act. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won (Presiding Justice)