[1] Criteria for determining whether a specific arbitration clause is effective as an arbitration agreement

[2] Whether it is effective as an arbitration agreement under the so-called selective arbitration clause, which provides the method of dispute resolution or mediation (affirmative with limitation)

[1] The arbitration agreement becomes effective when the parties concerned agree in writing to settle all or part of a dispute which has already occurred or may future in connection with a legal relationship under private law by arbitration instead of a court decision. Thus, in order to see that a specific arbitration clause is effective as an arbitration agreement, it shall be determined by taking full account of specific circumstances, such as the relevant arbitration clause, the content of the relevant arbitration clause, the circumstances leading up to the parties' establishment of the arbitration clause, etc., based on the concept of arbitration as provided by the Arbitration Act

[2] The so-called selective arbitration clause, which provides that "a party to a contract selects a party to an arbitration procedure other than an arbitration and requests the other party to resolve the dispute according to the procedure, and the other party without any particular objection, shall be deemed to be effective as an arbitration agreement only when the other party has actively asserted the non-existence of an arbitration agreement and opposed to the resolution by arbitration in the response to a claim for arbitration by a party to the claim, the other party shall not be deemed to be effective as an arbitration agreement in case where the other party has actively asserted the non-existence of an arbitration agreement in the response to the claim for arbitration and opposed to the resolution by arbitration.

[1] Article 3 subparagraphs 1 and 2 of the Arbitration Act, Articles 8 and 9 (1) of the Arbitration Act / [2] Article 3 subparagraphs 1 and 2 of the Arbitration Act, Articles 8 and 9 (1) of the Arbitration Act

[1] [2] Supreme Court Decision 2003Da318 decided Aug. 22, 2003 (Gong2003Ha, 1916)

The Korea Rail Network Authority (Attorney Han-chul, Counsel for defendant-appellant)

Two Industrial Development Co., Ltd. and two others (Law Firm Rate, Attorneys Shin Sung-si et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2003Na66693 delivered on July 2, 2004

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

Article 3 subparag. 1 of the Arbitration Act provides that "Arbitration" refers to the procedure to resolve a dispute under private law, not by a court's decision, but by an arbitrator's decision. Article 3 subparag. 2 of the Arbitration Act provides that "Arbitration agreement" refers to an agreement between the parties, regardless of whether it is a dispute under private law or not, which has already occurred or may occur in the future, through arbitration. Article 8(1) of the Arbitration Act provides that an arbitration agreement may be in the form of an independent agreement or an arbitration clause in the form of an arbitration clause. Article 8(2) of the Arbitration Act provides that an arbitration agreement shall be in writing. Article 9(1) of the Arbitration Act provides that where a lawsuit is instituted against a dispute which is the subject of an arbitration agreement, the court shall reject the lawsuit if the defendant raises a defense against the existence of the arbitration agreement, but it shall not apply where the arbitration agreement is non-existent, invalidated, or is not able to be implemented, but it shall be determined in the form of arbitration agreement or in writing 200 (see Article 208(3) of the Arbitration agreement.

In light of the records, Article 50 (1) of the General Conditions of Contracts which form a part of the contract of this case provides that "any dispute arising between the parties to the contract during the execution of the contract shall be settled by consultation." Paragraph (2) provides that "if an agreement under paragraph (1) is not reached within 30 days from the date the dispute occurred, it shall be settled as provided in the following subparagraphs." Paragraph (1) provides that "in the case of an objection to the mediation under subparagraph 1, it shall be done by the mediation committee, etc. established under the provisions of relevant Acts or by the arbitration agency under the Arbitration Act." Paragraph (2) provides that "in the case of an objection to the mediation under subparagraph 1, it shall be decided by the court having jurisdiction over the location of the Korea High-Speed Construction Authority (hereinafter referred to as the "Construction Authority")" in the above mediation procedures, which is not a party to the construction agreement of this case, the construction agreement of this case and the parties to the construction agreement shall not be deemed to have been concluded by the Korea High-Speed Construction Corporation (hereinafter referred to as "the parties to the construction agreement").

The judgment of the court below to the same purport is just, and there are no errors in the misapprehension of facts against the rules of evidence or in the misapprehension of legal principles as to the arbitration agreement, as alleged in the grounds of appeal.

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Hong-hoon (Presiding Justice)