2017 Gohap 54185 Penalty, etc.

Mez General Financial Securities Corporation

1. Both village and village housing association;

2. A stock company:

September 21, 2017

November 9, 2017

1. The plaintiff's claims against the defendants are all dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendants jointly and severally pay to the Plaintiff 320,000,000 won and 160,000,000 won among them, the amount calculated by applying the rate of 19% per annum from November 19, 2016 to the date of full payment, and from December 1, 2016 to the date of full payment to the date of full payment.

1. Basic facts

A. (1) On September 7, 2016, the Plaintiff and the Defendants entered into a financial advisory agreement (hereinafter referred to as “the instant financial advisory agreement”) with respect to the business of the branch housing association (hereinafter referred to as “the instant business”) in progress in the 105-dong, Seo-gu, Seo-gu, Gwangju (hereinafter referred to as “the instant business”), stating that the Plaintiff provided financial advisory services to the Defendants and the Defendants shall pay financial advisory fees to the Plaintiff.

(2) The main contents of the instant financial advisory agreement are as follows.

(1) Article 3 (No. 1) of the Financial Advisory Agreement (No. 1) provides the Defendants with financial advice services for the period of time after the lapse of the contract. (2) The term “financial consulting services” refers to the financial consulting services for the procurement of approximately 16 billion won and the services incidental thereto, and the Defendants accept and recognize that the financial consulting services may be changed in the course of the deliberation of the Plaintiff or lender. (1) The Defendants are not able to provide the Defendants with financial advice services for the financing of the necessary funds without their prior written consent or sign contracts. (2) If the Defendants raise funds or carry out financial consulting services for the financing of the funds for the financing of the funds in question without their consent, the Defendants are not obliged to pay the funds for the financing of the funds in question to the Plaintiff on the first day after the lapse of the contract. (3) In the event that the Defendants are unable to provide financial advice services for the financing of the funds in question without their consent, the Defendants shall be liable to pay the funds in addition to the amount of the funds in question to the Plaintiff within 1).

2. Terms and conditions of loan 1: 16 billion won: The period of loan 2.3 months from the date of first withdrawal : The participating institution: plaintiff 4) conditions of participation: The detailed matters are in accordance with the conditions of approval by the Board of Review at present 5): This case shall remain effective for a month from the date of approval.

C. Around November 1, 2016, Defendant A case, Co., Ltd. notified the Plaintiff that “The Defendant entered into the instant loan agreement with the MG Saemaul Fund on October 25, 2016, and thus, it cannot enter into a loan agreement with the Plaintiff.”

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 4, and 5, the purport of the whole pleadings

2. The parties' assertion

A. The plaintiff

The Defendants violated Articles 7 and 14(2) of the instant Financial Advisory Agreement by concluding a loan agreement with another financial institution without the Plaintiff’s consent.

Therefore, the Defendants are jointly and severally liable to pay to the Plaintiff the penalty of KRW 160,000,000 and penalty of KRW 160,000,000,000,000 as well as damages for delay as stipulated in the financial advisory agreement of this case.

B. The Defendants

The purpose of the instant financial advisory agreement is to act as a broker, practically prohibited by law. Moreover, the instant financial advisory agreement under Article 7 of the instant financial advisory agreement violates the freedom of contract and its content is against public order and good morals, so it is null and void. The instant financial advisory agreement under Article 14(2) of the instant financial advisory agreement is also against the Defendants’ public order and good morals, and thus null and void as it is manifestly unfair to the Defendants.

3. Determination

As to whether the penalty agreement under Article 7 and Article 14 (2) of the Financial Advisory Agreement is null and void in breach of good morals and other social order.

A. Article 23(1)5 of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) provides that an enterpriser’s trade under a condition that unfairly restricts the other party’s business activities, which is likely to impede fair trade (Article 23(1)5). In a case where an enterpriser, who intends to realize such an act by taking advantage of his/her position and obtains unfair benefit and can be assessed as imposing excessive benefit or other unfair burden on the other party, is deemed to be null and void as a juristic act contrary to good morals and other social order (see, e.g., Supreme Court Decision 2017Da229048, Sept. 7, 2017).

B. In full view of the purport of the entire pleadings in the statements Nos. 1, 4, 7, 8, and 1 and No. 1, the facts identical to the same can be acknowledged.

(1) According to Article 9 of the instant financial advisory agreement, where the Defendants enter into a loan agreement with the Plaintiff or a lender, they shall pay to the Plaintiff a financial advisory fee of KRW 160 million in return for the financial advisory services. In the event that the contract is terminated without the Plaintiff’s consent during the performance of the business under the instant financial advisory agreement, the Plaintiff may claim remuneration equivalent to the actual cost against the Defendants.

However, pursuant to Article 7(2) of the instant financial advisory agreement, where the Defendants raise funds without the Plaintiff’s consent or carry out financial consulting services through other financial institutions, etc., the Defendants shall pay to the Plaintiff a penalty of KRW 160 million, which is a penalty for negligence. ② According to Article 14(2) of the instant financial advisory agreement, the Defendants notified the Defendants of the internal approval of the loan by the Plaintiff or lender, notwithstanding the fact that the Defendants notified the Defendants of the internal approval of the loan by the Plaintiff or lender, if the Defendants did not enter into the loan contract within one month from the date of the Plaintiff’s notification, KRW 160,

(2) The project cost that the Defendants intended to procure through the instant financial advisory agreement is about 16 billion won. According to the instant financial advisory agreement, the Plaintiff or lender unilaterally set terms and conditions of the loan, such as the lending period and interest rate of 16 billion won, and the Defendants are obliged to accept such terms and conditions.

(3) According to the result of the Plaintiff’s internal approval of the loan notified to the Defendants around October 28, 2016, the Plaintiff shall lend 16 billion won to the Defendant for two months from the date of the first withdrawal, and the detailed matters shall comply with the conditions of approval of the Plaintiff Review Committee.

C. According to the instant financial advisory agreement, the Plaintiff or the lender unilaterally set the terms and conditions of the loan, such as the period of loan and interest rate, while lending approximately 16 billion won to the Defendants. The Defendants are obliged to accept the terms and conditions of the loan. In the event that the Defendants do not conclude a loan contract within one month from the date of notification on the inside approval of the Plaintiff or the lender’s loan, they shall pay KRW 160 million to the Plaintiff as penalty. In addition, where the Defendants carry out loan-related business through other financial institutions, they shall pay KRW 160 million to the Plaintiff as penalty. The instant financial advisory agreement and the penalty agreement under Article 7 and Article 14(2) of the instant financial advisory agreement constitute unfair trade practices that are traded on the terms and conditions of unfairly binding the Defendants’ business activities, and are likely to impede fair trade.

Meanwhile, in a case where the contract is terminated without the Plaintiff’s consent during the course of performing the business under the instant financial advisory agreement, or the Defendants refuse to conclude a loan contract upon the Plaintiff’s or the lender’s notification of the internal approval of the loan, the Plaintiff may claim remuneration equivalent to the actual expenses from the Defendants pursuant to Article 9(4) of

In light of the above circumstances, the penalty agreement under Article 7 and the penalty agreement under Article 14(2) of the Financial Advisory Agreement can be evaluated as a juristic act that obtains unfair benefits by taking advantage of superior status and imposes unfair burdens on the Defendants. Therefore, it is reasonable to deem that compelling the above is contrary to social order as it is not reasonable to deem that it goes against the social order as it is

D. Therefore, since an agreement on penalty for breach of contract under Article 7 and an agreement on penalty for breach of contract under Article 14(2) is null and void as a juristic act against social order under Article 103 of the Civil Act, the Plaintiff’s assertion cannot be accepted.

4. Conclusion

Therefore, the plaintiff's claim against the defendants is dismissed in its entirety as it is without merit. It is so decided as per Disposition.

judges of the presiding judge;

Judges Jeong Young-young

Judges Cho Jae-chul