In a case where Party A, who had a bond business in China, entered the Republic of Korea for operating a business in the Republic of Korea, and filed a lawsuit with the Korean court seeking the payment of a loan due to an act of lending money in China against Party B, etc., who had a real estate development business in China, the case holding that the international jurisdiction of the Korean court is recognized

In a case where Party A, who has engaged in a bond business in China, entered the Republic of Korea for a business in the Republic of Korea, and filed a lawsuit against Party B, etc. against Party B, etc. of Chinese nationality, who has engaged in a real estate development project in China, with a Korean court in the Republic of Korea seeking monetary loan, the case holding that the international jurisdiction of the Republic of Korea court is recognized in view of the following: (a) in light of the fact that Party B entered the Republic of Korea and owned real estate and a vehicle located in the Republic of Korea after acquiring them; (b) had a living basis in the Republic of Korea from around that time to the date of filing the lawsuit; (c) Party B had resided in the Republic of Korea for a considerable period of time; and (d) the husband of Party B had lived with Party B and his/her child in the Republic of Korea before departing from China; (d) there is no substantial relation between Party A and the Republic of Korea at the time of filing the lawsuit; and (e) it is difficult to deem Party A and the Republic of Korea had never anticipated to file a lawsuit at a Korean court.

Article 2 of the Private International Act

Plaintiff (Attorney Jeong-dae et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Attorney Go Chang-chul, Counsel for the defendant-appellant)

Jeju District Court Decision 2014Gahap82 Decided November 13, 2014

April 20, 2016

1. Revocation of the first instance judgment.

2. The Defendants jointly and severally pay to the Plaintiff the amount of KRW 906,500,000 and 24% per annum from June 26, 2009 to the date of full payment.

3. All costs of the lawsuit shall be borne by the defendant.

4. Paragraph 2 can be provisionally executed.

The same shall apply to the order.

1. The parties' assertion

A. The plaintiff

1) The Defendants are obligated to pay the Plaintiff the above loan and the damages for delay, even though they borrowed the total of 5,000,000 bills from the Plaintiff from May 24, 2009 to November 25, 201.

2) The Plaintiff borrowed money to the Defendants from time to time in addition to the borrowed money as mentioned in the above paragraph (1). The amount claimed by the Defendants to be repaid is all paid in order to repay the aforementioned separate borrowed money.

B. The Defendants

1) The instant lawsuit is unlawful, since international jurisdiction of the court of the Republic of Korea is not acknowledged.

2) The lending of the 5,000,000 bill to the Defendants is not the Plaintiff but the Nonparty 1, who is engaged in the bond business in China, and the Plaintiff is merely an employee of the bond company operated by Nonparty 1. Furthermore, the Defendants repaid all of the above loans by way of remitting money to the deposit account designated by Nonparty 1.

3) Even if the Defendants lent the above 5,000,000 bill to the Defendants, the Defendants paid the above borrowed money to the Plaintiff, etc. over several times thereafter, thereby repaying the entire borrowed money.

2. Determination as to the defendants' main defense

A. Standard for determining international jurisdiction

Article 2(1) of the Private International Act provides, “The court shall have the international jurisdiction in the case where the party or the disputed case is substantially related to the Republic of Korea. In this case, the court shall comply with reasonable principles consistent with the ideology of allocation of international jurisdiction in determining the existence or absence of substantial relation.” Then, Article 2(2) provides, “the court shall judge the existence or absence of international jurisdiction, taking into account the provisions of the domestic law, and shall take full account of the special nature of international jurisdiction in light of the purport of the provision of paragraph (1).” Thus, international jurisdiction shall be determined in accordance with the basic ideology of ensuring the appropriateness, speed and economy of the parties, as well as personal interests, such as equity, convenience and predictability of the parties to the lawsuit, and the appropriateness, speed and efficiency of the judgment, and effectiveness of the judgment. Specifically, the issue of which interest among these various interests needs to be protected shall be determined reasonably based on the objective criteria for the suspension of law and the substantial relationship between the parties and the disputed case (see, e.g., Supreme Court Decisions 2005Da1751085, May 297108.

B. Facts of recognition

The following facts are not disputed between the parties, or may be acknowledged by comprehensively taking into account the respective entries in Gap's evidence 1 through 7, Gap's evidence 14 through 17, Gap's evidence 29, 31, 32, 37, Gap's evidence 41 through 44, Gap's evidence 46 through 51, Eul's evidence 9 and 10 (including the branches number for which no number is specified; hereinafter the same shall apply) and the whole purport of pleadings:

1) The Plaintiff was a person of Chinese nationality who had resided in the Chinese history and engaged in the bond business, and entered the Republic of Korea around 2014 to operate the business in the Republic of Korea.

2) The Defendants are the married couple of Chinese nationality, who resided in the Chinese solidarity and engaged in real estate development projects.

3) On May 24, 2009 to November 25, 2011, while the Defendants engaged in their business in China, the Plaintiff asserted that the Defendants should repay the above borrowed money since they borrowed a total of KRW 5,00,000 from the Plaintiff four times from May 24, 2009 to November 25, 201, and filed the instant lawsuit against the Defendants at the Jeju District Court of Korea on January 18, 2014.

4) The Defendants’ entry and departure details based on the Republic of Korea from January 1, 2013 to June 30, 2014 are as listed below.

Defendant 1: (a) on March 12, 2013; (b) March 13, 2013; (c) March 13, 2013; and (d) March 17, 2013; (c) March 18, 2013; and (d) March 13, 2013; and (e) March 14, 2013; (c) April 14, 2013; (d) April 14, 2013; and (e) March 13, 2013; (e) April 14, 2013; and (e) April 14, 2013; and (e) March 13, 2015; (e) May 14, 2013;

5) As of the time of filing the instant lawsuit, in the Republic of Korea, as of March 12, 2013, Defendant 1: (a) purchased on March 12, 2013 and completed the registration of ownership transfer on April 8, 2013; (b) Non-Party 3, No. 301, No. 337, No. 301, no. 337, no. 337, no. 43.0D vehicles (vehicle number omitted) for which the registration of ownership transfer was completed on May 21, 2013; (c) purchased on May 28, 2013, and completed the registration of ownership transfer; and (d) Defendant 2 owned the land No. 1,584 square meters and one building on its ground; and (e) Defendant 2 had each deposit claim against the National Bank of Korea and the New Bank of Korea.

6) The Plaintiff was issued a provisional attachment order with respect to the real estate, vehicles, claims, etc. as indicated in the Defendants’ claim against the Defendants, as indicated in the foregoing 5) by Jeju District Court No. 2013Kahap457, 2014Kahap57, 2014Kahap83, 2013Kadan273, 2014Kadan445, Seoul Central District Court No. 2013Kadan7647, etc.

7) The Defendants, since entering the Republic of Korea in around 2013, had been living in Jeju Special Self-Governing Province and had been raising their children while living in Jeju Special Self-Governing Province. The Defendants’ children obtained permission to enter schools corresponding to the preparation process for the Jeju International School Campus on February 14, 2014, and completed the said process.

8) On April 14, 2013, the Defendants acquired a visa from the Tourism Department (B-2) for one year of validity on April 14, 2013, and applied for a change of the status of a resident on April 15, 2013 on the grounds that they purchased real estate subject to investment under the Investment Interest Resident System, and acquired a visa with his/her child for two years of validity (F-2). Unless there are special circumstances, the validity period is extended by three years after the lapse of the two-year period, and if the status of an investor is maintained by holding the investment property up to that time, the Defendant’s visa level was lower than that of the above Defendant on the ground that the provisional attachment decision was rendered as described in the foregoing paragraph (6). Accordingly, the validity period was changed to the visiting F-1 visa until March 30, 2015 (F-2), and the validity period was reduced by Defendant 2 and his/her child.

9) Defendant 1 left the Republic of Korea on February 2015, and Defendant 2 left the Republic of Korea on July 23, 2013, and currently reside in China.

C. Determination

As seen above, the court of China, which is most substantially related to the lawsuit in this case, seeking the payment of loans from the lending of money against the Defendants of Chinese nationality, is the Chinese court.

However, on the other hand, the following circumstances revealed by the above facts and evidence revealed, i.e., ① after entering the Republic of Korea on March 12, 2013, Defendant 1 acquired real estate and owned a vehicle located in the Republic of Korea. From that time, until January 18, 2014, Defendant 2 had actually resided in the above real estate while raising his child without living basis in the Republic of Korea. Defendant 2, as Defendant 1’s husband, had resided in the Republic of Korea for a considerable period of time until he left Korea on July 23, 2013, and had lived with Defendant 1 and their children in the Republic of Korea. ② The Defendants and their children were admitted to the Republic of Korea as the premise for acquiring the sovereignty of the Republic of Korea (F-2) and, in light of the fact that the Defendants were unable to have resided in the Republic of Korea before and after their departure from Korea, and they appear to have been living in China due to the fact that the Defendants were not necessarily residing in the civil or criminal case after their departure from China.

In light of the above circumstances: ① it is difficult to view that the Plaintiff could not have anticipated to bring the instant lawsuit to the Korean court at all from the standpoint of the Defendants who left China to avoid the dispute as seen earlier; ② in the situation where the Defendants’ property, such as real estate and vehicles, exists in the Republic of Korea and the Plaintiff’s provisional seizure of the above property, it may be deemed that the Plaintiff would bring a lawsuit to the Korean court for effective enforcement of the instant claim; ③ it is difficult to easily dismiss the Plaintiff’s filing a lawsuit by appointing the Plaintiff’s legal representative in the Republic of Korea, and ④ The Plaintiff and the Defendants continued to have asserted and prove the instant case from the first instance to the trial court, and thus, the Plaintiff’s right to bring a lawsuit against the Chinese court would be more convenient to consider the facts that the instant lawsuit could have been brought to the Chinese court, as it is unreasonable to view that the instant case would have any more convenient outcome than the Chinese court’s substantive appellate court’s determination of the law applicable to the instant case.

Therefore, the main defense of the Defendants is without merit.

3. Judgment on the merits

A. Determination of the governing law

Article 26(1) and (2) of the Private International Act provides, “Where the parties concerned fail to choose the applicable law, the contract shall be governed by the law of the country most closely related to the contract. Where the parties concerned perform any of the following obligations pursuant to the contract, the law of the country where their habitual residence is located (where the parties concerned are a corporation or organization, the law of the country where their principal office is located) shall be presumed to be the most closely connected at the time of the conclusion of the contract; Provided, That where the contract is concluded through the occupation or business activities of the parties, it shall be presumed that the law of the country where the party’s principal place of business is located is the most closely connected.” Article 26(1) and (2) of the same Act provides, “in the case of the contract for use, the performance by the parties who are allowed to use the goods or rights,” and thus, the law of the China where the Plaintiff’s habitual residence and place of business are located at the time of the conclusion of the

B. Determination on the cause of the claim

1) In full view of the evidence Nos. 8 through 11, evidence Nos. 43-2, evidence Nos. 52, 60, 61, evidence Nos. 63 through 65, testimony of Nonparty 2 by the witness, the results of the Plaintiff’s questioning, and the overall purport of oral argument, the Plaintiff, along with Nonparty 1, 3, and Nonparty 2, operated a credit business by independently investing in and managing the “△△△△△△△△△△△△△△△△△△△” in China. ② The Plaintiff used the financial account in his name in the course of running the credit business, as well as the financial account in his name, Nonparty 4, 5, and 6, and the above financial account in the name of Nonparty 1, 3, 52, 60, 60, 63 through 65, 50, 000, 000, 000, 000, 10,0000, 10,0000.

Nonparty 1,00,000 on May 24, 2009, Nonparty 4, Nonparty 1 (Defendant 1’s employee) on June 17, 2009, Nonparty 5, Nonparty 10 (Defendant 1’s employee) on June 18, 2009, Nonparty 6, Nonparty 8 (Defendant’s employee) on June 24, 2009, Nonparty 200,000 on June 24, 2009. Nonparty 10 (Defendant’s employee)

2) According to the above facts, it is reasonable to view that the Defendants jointly borrowed 5,00,000 bills totaling from the Plaintiff, not Nonparty 1, as indicated in the above table, at the maturity of 10,000 on November 25, 201 and at the rate of 2,00 per annum (no dispute between the parties as to the fact that interest was set at the rate of 2% per annum). Thus, barring any special circumstance, the Defendants are jointly obligated to pay the Plaintiff the above borrowed money and its agreed interest or delay damages (hereinafter the Defendants’ obligations against the Plaintiff are referred to as “the instant borrowed money”). Thus, pursuant to the interpretation of Article 29 of the Supreme People’s Court Regulations, Article 24 of the Supreme People’s Court Regulations on the issue of several legal issues applicable to private loans, and Article 24 of the Supreme People’s Court Act on the application of the People’s Republic of China Marriage Law of the People’s Republic of China.

C. Determination as to the defendants' defense of repayment

1) Through the financial account of Nonparty 8 or Nonparty 10, the Defendants issued 1 60,00 bills on June 2, 2009; 12,40 bills on June 24, 2009; 90,00 bills on August 7, 2009; 150,00 bills on August 21, 200; 10,00 bills on August 7, 200; 20, 10, 10, 20, 30, 100 bills on September 4, 200; 20, 30, 10, 10, 10, 400 bills on September 1, 20, 200; 20, 10, 150, 10, 2000 bills on September 5, 2009; 20, 10, 2010.

(11) In addition to the payment of this case, the Defendants merely stated 60,00 bills on August 12, 209; 2. 14; 150,00 bills on August 2, 209; 3. 63,00 bills on August 11, 201; 400 bills on August 20, 201; 4; 6. 1,00 bills on August 20; 1, 201; 6. 1,00 bills on August 20; 6. 1, 50; 6. 1,00 of the above bills on August 25, 201; 6. 1, 10 of the above bills on July 29; 1, 201; 8. 1,000 bills on June 20, 200; 1, 2001>

In addition, the Defendants asserted that they paid each of the bills to the Plaintiff on September 4, 2009; 60,000 bills on September 5, 2009; 60,000 bills on September 6, 2009; and 60,000 bills on September 13, 2009; however, it is not sufficient to acknowledge only the descriptions of the evidence Nos. 5-24, 26, and 11-4 on the evidence Nos. 5-24, 26, and 11-4, and there is no other evidence to prove otherwise.

Ultimately, from June 22, 2009 to November 11, 201, the Defendants paid to the Plaintiff the sum of 14,509,120 + 60,00 + 12,400 + 90,000 + 150,000 + 70,000 + 30,000 + 150,000 + 1,000,000 + 20,000 + 1,357,00 + 1,912,00 + 1,756,920 + 3,000 + 3,000 + 1,756,920 + 00,000 + 1,000,000 + 1,000,000,000 + 00,0000,000 +

2) However, on the other hand, comprehensively taking account of the overall purport of Gap evidence Nos. 18, 20, and Gap evidence Nos. 22 through 27 and the overall purport of the arguments, the "date" as set forth below can be recognized as the fact that the "amount" was transferred from the account under the name of "receiving Account" to the account under the name of "Receipt Account" (hereinafter collectively referred to as "the separate financial transaction of this case") by aggregating all the financial transaction details as set forth below.

Plaintiff 804,800 on August 1, 2009, Nonparty 503,00 on August 1, 2009, Nonparty 8, 12,000 on August 16, 2010, Nonparty 8, on March 19, 2010, Nonparty 8, 1,000,00 on May 25, 2010, Nonparty 8, 1,800,000 on May 25, 2010, Nonparty 6, 1,80,000 on July 23, 2010, Nonparty 8, Nonparty 6, 200,000 on June 30, 200, Nonparty 1, 300,000 on June 30, 200, Nonparty 8, 18, 200 on June 1, 200, Nonparty 18, 198, 2009

The above facts and evidence revealed as follows. ① The separate financial transactions of this case include the remittance account and receipt account (in the name of the same person and account code or account number are the same with each other) as used in the financial transactions, which are the premise for the debt of this case. ② As seen above, Nonparty 8 and Nonparty 10 are employees of the Defendants, and Nonparty 9 are Defendant 1’s subsidiaries. The Defendants cannot find out the circumstances that the Defendants used their financial accounts in their usual monetary transactions with the Plaintiff separately. ④ In comparison with the date and amount of each item of the separate financial transactions with the Plaintiff, it is difficult to view that the Defendants paid the loan of this case to the extent that the funds of this case were remitted to the Defendants according to the separate financial transactions of this case, and it is reasonable to view that the Defendants already paid the loan of this case to the extent that the funds of this case exceeded the amount of the loan of this case 10,50,000,000 to the extent that the funds of this case were considerably different from the funds of this case.

3) Ultimately, the Defendants’ defense that the instant loan obligation was repaid upon the payment of the instant loan cannot be accepted (or, however, that the entire amount of the instant loan does not reach the principal of the loan obligation arising from the separate financial transaction of the instant case. As such, there is no room for appropriating the remainder after being appropriated for the repayment of the loan obligation arising from the separate financial transaction of the instant loan, as it is appropriated for the repayment of the loan obligation arising from the instant separate financial transaction).

D. Sub-committee

Therefore, the defendants are jointly and severally liable to pay to the plaintiff 906,500,000 won (=5,000,000 won x 181.30 won per annum, which is the rate of 24% per annum from June 26, 2009 to the date of completion of payment) which is the rate of 50,000 won converted into the currency of the Republic of Korea according to the foreign exchange market rate as of June 8, 2015, which is close to the date of closing the argument at the trial.

4. Conclusion

Therefore, the plaintiff's claim against the defendants shall be accepted on the grounds of all reasons, and the judgment of the court of first instance which has different conclusions is unfair, and it is so decided as per Disposition by cancelling this and ordering the payment of the above money.

[Attachment] Relevant Acts and subordinate statutes (Applicable Acts): omitted

Judges Ma-ju (Presiding Judge)