The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. The key issue of this case is that the Plaintiff filed a lawsuit against the Defendant seeking confirmation of non-existence of debt related to the D system supply contract concluded by the Plaintiff and the Defendant (hereinafter “instant supply contract”).

The key issue of the instant case is whether the instant supply contract concluded by the Plaintiff and the Defendant’s representative director jointly constitutes “self-transaction of directors” under Article 398 of the former Commercial Act (amended by Act No. 10600, Apr. 14, 2011; hereinafter “former Commercial Act”); whether the instant supply contract was lawfully rescinded due to the Defendant’s nonperformance of obligation; and whether the Plaintiff’s claim against the Plaintiff violated the good faith principle or exempted the Defendant from liability.

2. Whether the instant supply contract is null and void because it constitutes a director’s own transaction

A. Article 398 of the former Commercial Act provides, “The director may engage in a transaction with the company on his or her own account or a third party’s account only with the approval of the board of directors. In this case, Article 124 of the Civil Act shall not apply.”

However, even if the act of assuming debt by the company constitutes an act of self-trade of directors under Article 398 of the former Commercial Act and approval by the board of directors is required, since the purpose of the above provision is to prevent the company and its shareholders from causing unexpected damages, if all the shareholders already consented to the act of assuming debt, the company shall not avoid its liability for

Supreme Court Decision 2002Da20544 Decided July 12, 2002 see, e.g., Supreme Court Decision 2002Da20544, Apr. 14, 2011, which is amended by Act No. 10600, Apr. 15, 201, which is applied from the first transaction concluded from April 15, 201, Article 398 of the current Commercial Act is Article 542-8(2)6 of the Commercial Act