In the short-term export insurance contract for export transactions by the method of letters of credit, the meaning of the "Refusal or default of payment of the other party to the export contract" as credit risk under the Short-term Export Insurance Terms (=Refusal or default of payment by the bank

According to Article 3 (4) of the Short-term Export Insurance Clause, where export transactions by the L/C method are covered by short-term export insurance, the bank responsible for payment shall be deemed to be the other party to the L/C export contract. In the event that export transactions are covered by short-term export insurance with the payment of the price by the L/C method, in principle, the bank for issuing the L/C shall be deemed to be the party to the export contract. Accordingly, in the short-term export insurance contract for export transactions by the L/C method, the bank for issuing the L/C shall, in principle, be established by the bank for issuing the L/C with the credibility and capability in paying the price. Accordingly, in the short-term export insurance contract for the short-term export transactions by the L/C method, the premium rate for export transactions by the L/C method shall be set at less than the case of export transactions by the L/C method.

Article 3 of the Export Insurance Act, Articles 3 and 4 subparagraph 2 (b) of the Short-term Export Insurance Terms and Conditions

Plaintiff (Attorney Jae-shan et al., Counsel for the plaintiff-appellant)

The Korea Export Insurance Corporation (Attorney Kim Sung-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2001Na1906 delivered on August 21, 2001

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

1. Summary of the judgment below

A. The lower court, based on its evidence, recognizes the following facts.

(1) The Plaintiff’s tin trade entered into a short-term export insurance contract with the Defendant in exporting it to the Giangsu Gaseas Gr. Ltd (hereinafter “Grad”) by means of credit settlement. Article 4 Subparag. 2 of the said insurance contract provides that “The policyholder exports goods under an export contract but suffers from impossibility of payment due to any of the following causes,” thereby compensating the Defendant for the losses incurred by the policyholder in exporting the goods under the export contract, which may be incurred due to the impossibility of payment due to the reasons falling under any of the following subparagraphs. - Credit risk - (b) providing that “the refusal of payment or insolvency of the other party to the export contract” shall compensate for the credit risk arising from export:

(2) On July 22, 1999 according to the export and import contract with the Pacific Trade Party, the L/C was issued to the Chinese bank with the beneficiary as a tin trade. While the documents required for the request for the L/C were stipulated as the certificate of inspection signed by Nonparty 1, the Chinese bank revised the terms and conditions to the Plaintiff on August 28, 1999, which was the date when the Plaintiff was loaded and sent all the above goods, and then notified the Plaintiff again with the original certificate of inspection signed by Nonparty 1, the representative of the Uh who is consistent with the signature kept by the issuing bank.

(3) On August 31, 1999 and September 3, 1999, when the Plaintiff sent and proposed the documents related to the letter of credit to the Chinese bank, which is the issuing bank of the letter of credit, the Plaintiff: (a) as to the above certificate of inspection, Nonparty 2 sent the letter of credit to Nonparty 2, who is one of the most important parties, by facsimileed the above export; (b) the Plaintiff again delivered it to the foreign exchange bank; and (c) the foreign exchange bank sent it to the Chinese bank with the letter of credit; (d) the copy itself did not indicate that the signature of the author was not re-signed; and (e) there was no other indication that the Chinese bank refused the payment of the letter of credit on the ground that the representative of the number of copies of the above certificate of inspection was not signed, and that it was presented by facsimile, not by the original copy, but by facsimile. However, the Plaintiff failed to supplement it within the supplement period due to the rejection of the original certificate of inspection as to the import.

(4) Meanwhile, around November 25, 1999, the Plaintiff directly sent the Plaintiff’s employees to China to obtain the original copy of the inspection certificate, and demanded the said import to the said original inspection certificate. However, the said import is paid the original processing fee to the Plaintiff’s employee from his superior officer who actually arranged for the export of the instant goods in the middle of the middle, and unless the said money was paid, the Plaintiff refused to issue the original copy of the inspection certificate to the Plaintiff, and failed to supplement the said defect, which became the ground for the refusal of payment on the letter of credit by the Chinese bank.

B. Based on the above facts, the court below rejected the defendant's defense that the insurance accident of this case was caused by the policyholder's intentional or negligent act, barring special circumstances, on the premise that the defendant was liable to pay the insurance proceeds to the plaintiff according to the insurance contract of this case, and that the defendant's failure to receive the export proceeds due to the plaintiff's failure to present the original copy of the inspection certificate to the L/C issuing bank as a result of the plaintiff's intentional or negligent act is attributable to the plaintiff's intentional or negligent act. Thus, it cannot be viewed that the plaintiff's loss was caused by the plaintiff's intentional or negligent act, and otherwise, there is no evidence to prove that the insurance accident of this case was caused by the plaintiff's intentional or negligent act.

2. However, we cannot accept the above judgment of the court below.

In light of the records, "limit on acceptance" in Article 3 (4) of the Short-term Export Insurance Clause of this case (Definitions-General Export Transactions, etc.) of the Short-term Export Insurance Clause of this case means the limit to which a policyholder and the other party to a specific export contract (the bank responsible for payment in the L/C transaction, and the importer in the L/C transaction; hereinafter the same shall apply) can be covered in connection with export transactions, and in principle, the L/C issuing bank, the company responsible for payment, if export transactions by the L/C method of this case are covered for short-term export insurance, shall be deemed to be "the other party to the export contract". If export transactions, the price of which is settled by the L/C method of this case, are covered by short-term export insurance, the bank shall, in principle, settle the export transaction with the L/C issuing bank, and therefore, in the short-term export insurance contract by the L/C method, the insurance premium rate for export insurance contract of this case shall be determined at the time of non-issuance of the L/C of this case.

Nevertheless, the court below recognized the occurrence of an insurance accident just by the fact that the issuing bank did not pay the letter of credit. This is erroneous in the misapprehension of legal principles as to risks guaranteed in a short-term export insurance contract, or by misunderstanding facts against the rules of evidence, which affected the conclusion of the judgment. The ground of appeal pointing this out has merit.

3. Therefore, without further proceeding to decide on the Defendant’s remaining grounds of appeal, the part against the Defendant is reversed, and that part of 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 Cho Cho-Un (Presiding Justice)