Whether a court of the Republic of Korea has jurisdiction over civil disputes between local enterprises in the Gisung Industrial District (affirmative), and whether the same applies to cases where the subject matter of a lawsuit is a building, etc. located in the Gisung Industrial District (affirmative)

Further to Articles 2 subparag. 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15, and Articles 17 and 17-2 of the Inter-Korean Exchange and Cooperation Act, the courts of the Republic of Korea naturally have jurisdiction over civil disputes between local enterprises of the Gsung Industrial District with respect to civil disputes, which are based on the free market economy order as stipulated in the Constitution of the Republic of Korea, does not change because the subject matter of lawsuit is a building, etc. located in the Gsung Industrial District.

Article 119 of the Constitution; Articles 2 subparag. 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15 of the GIC Support Act; Articles 17 and 17-2 of the Inter-Korean Exchange and Cooperation Act; Article 2 of the Civil Procedure Act

Gsung Young-gu Co., Ltd. (Law Firm Lee & Lee, Attorneys Dog-jin et al., Counsel for the plaintiff-appellant)

G. G.S. P.T. (Law Firm Rosp, Attorneys Nam-hee et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2015Na2025424 decided November 27, 2015

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Article 2 Subparag. 4 of the Act on the Support of the Gisung Industrial District (hereinafter “Gisung Industrial District”) provides that “an enterprise established by South Korean residents in the Gisung Industrial District upon obtaining approval for, or receiving a report on, a cooperative project under the Inter-Korean Exchange and Cooperation Act (hereinafter “Inter-Korean Exchange and Cooperation Act”),” and Articles 17 and 17-2 of the Inter-Korean Exchange and Cooperation Act stipulate the requirements and procedures necessary for the establishment of a local company in the Gisung Industrial District by stipulating the approval for, and the report on, the cooperative project.

Furthermore, Article 2 Subparag. 8 (a) of the Industrial Sites and Development Act provides that the Government may take measures necessary for financial support for the smooth creation and operation of the GIC or support the installation of infrastructure, such as roads, water supply, railroads, communications, electricity, etc. In this case, the GIC Act provides that the GIC shall be deemed a national industrial complex under Article 2 Subparag. 8 (a) of the GIC Act (Article 6). Meanwhile, the Government may provide that local enterprises of GIC may provide various support under the relevant Acts and subordinate statutes, such as support for the establishment and promotion of small and medium enterprises and the promotion fund for the establishment of small and medium enterprises, support for the prevention of industrial accidents and industrial accidents, support for the rationalization of energy use, support for the rationalization of energy use, support for the rationalization of energy use, etc. (Articles 7 through 12). In addition, Articles 13 through 15 of the National Pension Act, the National Health Insurance Act, the Employment Insurance Act, the Industrial Accident Compensation Insurance Act, the Labor Standards Act, the Minimum Wage Act, etc. shall apply

In addition to the above relevant provisions, considering the fact that civil disputes between local enterprises of the Gsung Industrial Zone arise in the course of engaging in economic activities based on the free market economic order stipulated by the Constitution, the Korean court has jurisdiction over civil disputes between local enterprises of the Gsung Industrial Zone as a matter of course, and this does not change on the ground that the subject matter of lawsuit is a building, etc. located in the Gsung Industrial Zone.

Therefore, we cannot accept the allegation in the grounds of appeal that there is no jurisdiction over this case as a civil dispute between local enterprises of the Gsung Industrial District in the Republic of Korea.

2. As a matter of principle, the Plaintiff’s lawsuit of performance is asserting the existence of the right to claim performance, and the benefit of protection of rights is recognized, and such benefit is not denied solely on the ground that it is practically impossible or considerably difficult

Therefore, we cannot accept the allegation in the grounds of appeal to the effect that there is no benefit in the lawsuit since compulsory execution is difficult even if the plaintiff won in the lawsuit claiming the delivery of the building of this case located in the Gsung Industrial District.

3. On the grounds indicated in its reasoning, the lower court determined that: (a) the Defendant was obligated to deliver the instant building to the Plaintiff who succeeded to the lessor’s status under the instant lease agreement; (b) it cannot be deemed that the instant lease agreement constitutes a weak meaning of security for transfer between Egypt Co., Ltd. and the Defendant; or (c) it was concluded that the Defendant was entitled to exercise the right of repurchase by paying the construction cost at any time before the lease term expires; and (d) it cannot be deemed that the lease term under the instant lease agreement was extended.

In light of the relevant legal principles and records, the above determination by the court below is just, and contrary to what is alleged in the grounds of appeal, it did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, misapprehending the legal principles

4. Therefore, the appeal is 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 Kim Shin (Presiding Justice)