Pakistan Holdings (Law Firm Sejong et al., Counsel for the defendant-appellant-appellee)

DPS Korea Co., Ltd. (Law Firm Sluri, Attorneys Kim new-min et al., Counsel for the plaintiff-appellant)

March 25, 2016

1. As to the case of arbitration of the International Arbitration Committee in Ireland between the Plaintiff and the Defendant, the Nonparty is entitled to compulsory execution based on the arbitral award in the attached Form No. 1206, August 7, 2014 by the Nonparty.

2. The costs of the lawsuit are assessed against the defendant.

3. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Facts of recognition;

A. Status of the parties

The plaintiff is a juristic person established under the laws in Ireland for the purpose of providing housing settlement services to the resident and corporate consulting services to the resident, and the defendant is a juristic person established under the laws in Korea for the purpose of providing the resident consulting services to a foreign company (the trade name of the defendant was changed into the defendant on June 2, 2008 to the Ss. S. S. Co., Ltd. and the defendant on April 15, 2013 respectively).

(b) Contract between the original and the Defendant and the arbitration clause;

On March 18, 2008, the Plaintiff entered into a franchise agreement with the Defendant and the Plaintiff, the main contents of which provide the Defendant with a franchise and a franchise store operation right, and the contract contains the following provisions in relation to dispute resolution:

Except for exceptional disputes as defined below, where a claim, dispute or claim is brought in Schedule 15.16 (Dispute Settlement) (a) contained in the Schedule 15.16 (Dispute Settlement), the representatives of the Parties shall consult by face-to-face or other method similar thereto within 30 days of receipt by the other Party of written notice of the proposal. If a claim, dispute or dispute is not brought to the extent satisfactory to the Parties within 90 days of receipt of the written notice, either Party may proceed with the terms and conditions set forth in Section 15.16 (b) of this Agreement. (b) The Parties shall take precedence over any dispute or claim arising in connection with the conclusion, interpretation, implementation, non-performance, termination or invalidation of this Agreement or any proceedings arising under Section 15.16 (a) of this Agreement, which is not brought to the Parties and the Parties, within the scope of 30 days of the date of receipt by the other Party of the written notice of the proposal.

C. The instant arbitral proceedings

1) The Plaintiff and the Defendant caused a dispute over the fee to be paid by the Defendant to the Plaintiff, and the Plaintiff and the Defendant discussed the appropriate fee through e-mail from January 2013 to April 2013, but failed to reach an agreement.

2) On July 7, 2013, the Plaintiff filed an application for arbitration with the District of THE CHTS CHTSD INSITUTRUTRS (hereinafter “CCITRB”) located in Ireland’s Bluish.

3) On August 2013, 2013, the Director of the Bank of Ireland appointed the Nonparty as an arbitrator.

4) On October 18, 2013, the arbitrator, by e-mail, proposed to hold a preliminary hosting on October 29, 2013 at his own office located in Ireland, with the notice that he/she was appointed and accepted as an arbitrator by the head of CIARB Syland branch pursuant to Article 15.16 of the CIAR franchise agreement among the plaintiff and the defendant, and requested confirmation as to whether he/she has an objection to the extension of the preliminary hosting date on November 5, 2013 at the Plaintiff’s request.

5) On October 25, 2013 and October 29, 2013, the Defendant sent to the arbitrator a written statement, evidence and data instead, and, if necessary, sent an e-mail to the Defendant that the arbitrator would submit the written statement, evidence and data. On November 12, 2013, the arbitrator extended the preliminary strawing schedule to November 4, 2013 and notified the Defendant of it on November 5, 2013.

6) On November 12, 2013, an arbitrator held preliminary hostings at an office located in Ireland, and only the Plaintiff’s agent was present and the Defendant was not present. In preliminary hosting, an arbitrator revealed that the law applicable to the substance of the dispute is Grand Law, and the procedure should be followed by the ICC rules, and determined to proceed with the instant arbitral proceeding by submitting a document and oral pleading on November 12, 2013, and the date of trial was set provisionally to proceed with the instant arbitral proceeding on April 14, 2014, and the date of trial was set for temporary consultation and exchanged and notified the original and the Defendant thereof.

7) The Plaintiff submitted a written application on December 3, 2013, and the Defendant submitted a written reply and counterclaim on December 20, 2013. On February 3, 2014, the Plaintiff submitted a written notification on the details of the Plaintiff’s detailed statement on February 11, 2014.

8) On April 14, 2014, when the Plaintiff’s agent requests the change of the date set provisionally as of April 14, 2014, the Defendant sent an e-mail to the arbitrator who wishes to proceed on April 14, 2014, which was originally scheduled as of April 14, 201. On April 12, 2014, the Plaintiff’s agent sent an e-mail to the Defendant as to whether it is possible to change the date from July 7, 2014 to July 11, 2014; the Defendant sent the Defendant’s e-mail to the arbitrator who wishes to attend the e-mail with the date set as of April 15, 2014, and presented the Defendant’s e-mail to the Defendant’s e-mail to the effect that the Plaintiff will attend the e-mail without presenting the Plaintiff’s e-mail to the Defendant’s e-mail to the Defendant’s e-mail.

9) On August 7, 2014, an arbitrator accepted the Plaintiff’s assertion and made an arbitral award (hereinafter “instant arbitral award”). The reason for the decision is that “the respondent (Defendant) submitted the rebuttal document on October 20, 2013 or around that time, and this is a denial that entails a counterclaim seeking damages for various reasons,” and does not include a detailed determination as to the non-indicted Defendant’s assertion.

(d) Application of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the "New York Convention");

1) On February 8, 1973, Korea has entered into and ratified the New York Convention under the declaration of reservation that only the arbitral awards made within the territory of another signatory country shall apply to disputes concerning commercial relations under the laws of the Republic of Korea, and the Convention was effective as the Treaty No. 471 of May 9, 1973.

2) Ireland, in which the instant arbitral award was rendered, is a member state of the New York Convention.

(e)ICC Arbitration Rules;

The ICC Arbitration Rules relating to the instant case are as follows:

1. A person wishing to conduct arbitration under the Arbitration Rules of Article 4. 1. A request for arbitration under the Arbitration Rules shall be submitted to the Secretariat through an office described in the internal rules. The Secretariat shall notify the Claimant and the Respondent of the receipt and receipt date of the request. Article 6. The parties agree that the arbitration shall be managed by the arbitration court. Article 12. 1. The number of arbitrators of the Tribunal shall be resolved by a sole arbitrator or by three arbitrators. 2. If the parties fail to agree on the number of arbitrators, the arbitration court shall appoint a sole arbitrator unless the dispute is deemed reasonable; hereinafter the same shall apply) the appointment and confirmation of the arbitrator. The parties shall not be present at the hearing or by any other party’s capacity to conduct the arbitration under the Arbitration Rules and other arbitration rules. The parties shall not be present at the hearing or by any other party’s own meeting and, if so, be present at the hearing or by any other party’s own meeting. The parties shall be present at the hearing and any other party’s own capacity to conduct the arbitration without any reasonable reason.

【Ground of recognition】 The fact that there has been no dispute, entry of Gap 1 through 16 (including branch numbers in case of additional number), each entry of Eul 1 through 5, and the purport of whole pleadings

2. Determination on the cause of the claim

The dispute subject to the arbitral award of this case is a dispute concerning commercial relations under the Commercial Code of the Republic of Korea. Since Ireland, in which the arbitral award of this case was rendered, is a party to the New York Convention, the New York Convention applies to the recognition and enforcement of the arbitral award of this case.

The Plaintiff submitted a certified copy and translation (Evidence No. 15-2) of the arbitral award as stipulated in Article 4 of the New York Convention, and a certified copy and a translation (Evidence No. 16-1 and 2 of the A) of the contract containing the arbitration clause, and barring special circumstances, the instant arbitral award may be executed in Korea as stipulated by the New York Convention.

3. Judgment on the defendant's assertion

A. The defendant's assertion

The instant arbitral proceedings are nothing more than those unrelated to the arbitration agreement between the Plaintiff and the Defendant, and the composition of the arbitral tribunal and the arbitral proceedings are unlawful. In other words, even though the Plaintiff and the Defendant agreed to resolve the dispute by one or more arbitrators selected in accordance with the ICC Arbitration Rules, regardless of the appointment procedure of the arbitrator under the ICC Arbitration Rules, the head of the CIARB Islands branch appointed the instant arbitrator regardless of the appointment procedure, and the Defendant was excluded from the appointment procedure due to no notification of the arbitrator’s appointment procedure. In addition, the Defendant did not accept a video conference or written deliberation request from the arbitrator, and thus excluded from the preliminary hosting as well as the hearing date.

According to the arbitration agreement between the Plaintiff and the Defendant, the instant arbitral proceedings shall comply with the ICC Arbitration Rules. The Plaintiff did not comply with the ICC Arbitration Rules in all procedures, such as submission of an application, appointment of arbitrators, submission of a summary of entrustment to arbitration, review of arbitral awards, etc. by filing an application for arbitration with the ICC Branch, other than the ICC. The Plaintiff and the Defendant may file an application for arbitration only when they did not reach an agreement after undergoing face-to-face consultation and without undergoing face-to-face consultation. The Plaintiff filed an application for arbitration without undergoing face-to-face consultation.

Furthermore, even though the defendant filed a counterclaim, the arbitrator omitted the statement of grounds for counterclaim in the arbitral award.

뿐만 아니라, 이 사건 중재판정에서 인용된 금액 716,423,00유로는 피고의 연매출이 10억 원 정도임에 비추어 현저하게 과다하고, 특히 위 금액 중 360,000유로는 경업금지의무 및 기타 의무위반으로 인한 손해배상액의 예정인데, 소규모 영세업체인 피고에게는 부당하게 과다하고, 우리 민법상 부당하게 과다한 손해배상액의 경우 법원이 적당히 감액할 수 있는 점( 민법 제938조 제2항 )과 손해의 분담에 있어서 비례의 원칙을 유지하는 우리나라 민사법의 기본 태도를 고려할 때 피고에게 위 손해배상금 전액의 지급을 명하는 것은 우리나라 손해배상법의 기본원칙에 반한다. 또한 이 사건 중재판정은 “미래계약가치(Value of future Contract)", "계약위반에 따른 통상 손해배상액(General Damages for breach of agreement)"이라는 불문명하고 자의적인 항목을 기초로 226,000유로를 피고에게 부담시키고 있는데 그 손해액이 구체적으로 어떻게 산정되었는지에 관하여 설명하고 있지 않는 등 실체적, 절차적인 면에서 우리나라의 공공질서에 반한다.

Ultimately, the arbitral award of this case constitutes a ground for refusal of enforcement of the arbitral award, which falls under Article 5(1)(a), (b) (in the event of infringement of rights to defend), (d) (in the event of appointment of an arbitrator and in the arbitral proceedings), and Article 5(2)(b) (in the event of violation of public order and good morals) of the New York Convention, the enforcement of the arbitral award of this case shall be refused.

B. Determination

1) Whether Article V(1)(a) of the New York Convention is applicable

The plaintiff and the defendant initially decided to resolve the dispute in the event of the above franchise contract. Unlike the agreement, the plaintiff filed an application for arbitration with the ICC branch, as well as the facts acknowledged earlier. However, as long as the plaintiff and the defendant agreed to resolve the dispute by arbitration which is not a contractual lawsuit, it cannot be viewed that the arbitration agreement itself does not exist, regardless of the fact that the application was filed with the parties, and there is no evidence that the above arbitration agreement is null and void.

2) Whether Article V(1)(b) of the New York Convention falls under

A) According to Article 5(1)(b) of the New York Convention, if a party to which an arbitral award is unfavorable fails to obtain proper notice of the appointment of an arbitrator or of the arbitral proceedings or fails to defend for any other reason, the court of enforcement country may refuse the recognition and enforcement of the arbitral award. The purport of this provision is not to refer to all cases where the party’s right of defense is infringed on by the foregoing reason, but to be limited to cases where the degree of infringement of the party’s right of defense is considerably acceptable (Supreme Court Decision 89Meu20252 delivered on April 10, 1990).

In full view of the fact that the Plaintiff’s application for arbitration in the CIARB, the Director of the CIARB designated the arbitrator in the process of the appointment of the arbitrator, the Defendant did not participate in the procedure of the appointment of the arbitrator, the procedure was conducted without involvement of the ICC Arbitration Court or the Secretariat, and the date of preliminary hosting and examination was conducted without participation of the Defendant. However, since the Plaintiff did not participate in the procedure of the appointment of the arbitrator, the appointment of the arbitrator was not made without participation of only one of the parties, and the appointment of the arbitrator was not made, and all of the procedure was notified by the appointed arbitrator, including the designation and change of the date of examination, submission of documents, etc., and the Defendant also participated in the procedure by exchanging opinions or submitting documents with the arbitrator or the Plaintiff by e-mail, etc., it is difficult to view that “the party did not receive proper notification concerning the appointment of the arbitrator or the arbitration procedure, or could not comply with any other reason,” as provided in Article 5(1)(b) of the New York Convention

3) Whether it falls under Article V(1)(d) of the New York Convention

A) Unlike the arbitration agreement between the Plaintiff and the Defendant, the Plaintiff filed an application for arbitration with the Defendant without undergoing face-to-face consultation with the Defendant, and the arbitration procedure was commenced and the arbitrator was appointed. However, it is reasonable to view that the Defendant, in accordance with Article 39 of the ICC Arbitration Rules, gave implied consent to the resolution of dispute in accordance with the above procedure or waiver of the right to raise an objection to the procedure in accordance with Article 39 of the ICC Arbitration Rules, except where the Defendant directly appears on the date of examination, pursuant to the direction and direction of the arbitrator pursuant to the ICC provisions.

In regard to this, the defendant asserts that the above defect is a violation of mandatory provisions or a fundamental and serious procedural defect that can not be cured, and even if so, the defendant did not know the existence of the above procedural defect, and thus does not constitute the waiver or loss of the right to object. However, it is difficult to regard the above defect as a violation of mandatory provisions or a serious procedural defect that could not be cured, and there is no evidence to acknowledge that the defendant did not know the procedural defect.

B) In addition, the arbitrator rejected the Defendant’s assertion that is premised on the Plaintiff’s cause by recognizing the termination of the contract due to the Defendant’s cause attributable to the decision of the arbitral award of this case and ordering the Defendant to pay damages. Thus, this is merely an incomplete entry of the reasons, and it cannot be deemed that there is no entry of the reasons. Thus, it cannot be deemed that it falls under Article 5(1)(d) of the New

4) Whether Article V(2)(b) of the New York Convention falls under

In full view of the fact that damages out of the arbitral award in this case are the amount of damages agreed in advance between the plaintiff and the defendant, and the defendant's breach of duty and the amount of damages, ordering the defendant to pay the arbitral award in this case cannot be deemed as contrary to the good morals and other social order of the Republic of Korea, and there is no

In addition, the circumstances alleged by the Defendant alone are insufficient to recognize the enforcement of the instant arbitral award as contrary to the good morals and other social order of the Republic of Korea, and there is no other evidence to prove otherwise.

4. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition.

[Attachment]

Judges Lee Jin-hee (Presiding Judge)