The appeal is dismissed.

The costs of appeal are assessed against the Intervenor, and the remainder is assessed against the Defendant.

The grounds of appeal are examined.

1. Judgment on the Defendant’s grounds of appeal

A. Whether a guarantor may set-off against the principal obligor pursuant to Article 434 of the Civil Act after the commencement of rehabilitation procedures (1) Article 434 of the Civil Act provides that “A guarantor may set-off against the obligee by set-off against the principal obligor’s claim” as the title “a guarantor and the principal obligor’s right to set-off.”

This provision allows the guarantor to oppose the creditor to the right of set-off of the principal debtor in order to protect the guarantor and to make simple settlement of legal relations.

Article 56(1)1 of the former Framework Act on the Construction Industry (amended by Act No. 10719, May 24, 201; hereinafter “Framework Act on the Construction Industry”) provides that Article 56(1)1 of the same Act provides that a mutual aid association member’s contractual guarantee necessary to engage in construction business shall be determined, and that Article 56(2)2 of the Enforcement Decree of the same Act provides that a mutual aid association guarantees the performance of its contractual guarantee, with regard to the performance of contracted construction works

Accordingly, Article 1(1) of the terms and conditions of the instant guarantee agreement provides, “The Construction Guarantee Association shall pay to the other party (a guarantor) obligations due to the contractor’s failure to perform contractual obligations, such as construction works on the front side, and pay them in accordance with the terms and conditions stated in this guarantee agreement and the terms and conditions,” and Article 3(1) of the same Act provides, “The guarantee amount to be paid to the partnership shall be within the scope of the amount guaranteed under this guarantee agreement or the relevant Acts and subordinate statutes, and the guarantee creditor shall be confiscated or forfeited: Provided, That where the principal contract, etc. does not include any clause to confiscate or revert the guarantee amount, the guarantee creditor shall be the actual amount out of the amount claimed by the guarantee creditor within the scope

As above, Article 56 (1) 1 of the Framework Act on the Construction Industry and Enforcement Decree of the same Act.