[1] In cases where a creditor in a contract performance guarantee insurance contract where a creditor as the insured under a principal contract extends the time limit for completion to the expiration of the contract after the maturity of completion under the principal contract, whether an insured event has not occurred within the insurance period even if the debtor fails to complete the construction within the extended time limit for completion (negative)

[2] The case holding that the court below erred in the incomplete hearing in holding that an insurance accident was not occurred within the insurance period on the ground that the time limit for completion was extended after the expiration of the contract without confirming whether the creditor extended the time limit for completion in advance before the arrival of the time limit for completion under the contract for performance guarantee to the creditor under the contract for performance guarantee as the insured

[3] Whether a contract performance guarantee insurance contract has a time to cancel or terminate a contract by the time after the expiration of the contract period as the expiry date of the contract period is earlier than the expiration date of the contract period, solely on the circumstance that there is time to cancel or terminate the contract after the expiration of the contract period, it can be readily concluded that the contract constitutes an insurance accident even if the contract is rescinded or

[4] The case holding that the judgment of the court below which concluded that the termination or termination of the main contract must be fulfilled without confirming how the requirements for forfeiture or reversion of the contract bond of the main contract were agreed in the contract performance guarantee contract, was erroneous in the incomplete hearing

[1] Articles 65 and 66 subparag. 2 and 5 of the Commercial Act / [2] Articles 665 and 666 subparag. 2 and 5 of the Commercial Act, Article 423 of the Civil Procedure Act / [3] Articles 665, 666 subparag. 2 and 5 of the Commercial Act / [4] Articles 665 and 66 subparag. 2 and 5 of the Commercial Act, Article 423 of the Civil Procedure Act

[3] Supreme Court Decision 2004Da16976 decided Apr. 28, 2006 (Gong2006Sang, 908)

Seoul Guarantee Insurance Co.

Incheon Metropolitan City Strengthening-gun (Attorney Doh-won, Counsel for defendant-appellant)

2. Atlantic 2 others

Seoul High Court Decision 2008Na109656 decided May 12, 2009

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

1. As to the extension of time limit for completion under the principal contract and the occurrence of insurance accidents within the insurance period

The instant insurance contract is a contract for contract performance guarantee concluded between the Plaintiff’s Intervenor’s Intervenor (hereinafter “ Intervenor”) and the Plaintiff’s Joint Defendant Sene Co., Ltd. (hereinafter “Sene”), which is the main contract for the instant agreement that is concluded between the Plaintiff’s Intervenor and the Plaintiff’s Intervenor, and is the Plaintiff’s contract with the intent to compensate the Intervenor for the contract bond to be forfeited or forfeited to the Intervenor by failing to perform the obligation stipulated in the instant agreement. Thus, even if Sinland did not perform its obligation stipulated in the instant agreement, if the nonperformance occurred after the insurance period stipulated in the instant insurance contract, it cannot be deemed that the occurrence of the instant insurance accident occurred within the insurance period. Therefore, if the Intervenor had extended the time limit for completion in advance before the expiration of the instant agreement, even if the time limit for completion was not completed within the extended time limit, it cannot be deemed that the occurrence of the insurance accident occurred within the insurance period. However, the said time limit was not extended prior to the completion of construction, but only after the expiration of construction by the Intervenor, which became due within the extended time limit under the instant agreement.

After finding the facts comprehensively based on the adopted evidence, the court below found that the intervenor continued to extend the construction period for the creation of the reinforced image complex provided for in the Convention of this case even after the expiration of the insurance period in Ireland, and determined that the intervenor cannot be deemed to have caused the insurance accident within the insurance period as long as the deadline for completion under the Convention was extended after the expiration of the insurance period.

Examining the reasoning of the judgment below in light of the records, we affirm the fact-finding by the court below that the intervenor had implicitly extended the construction period, and there is no violation of the rules of evidence as alleged in the grounds of appeal.

However, the court below did not clearly state whether the implied extension of the construction period was made before the expiration of the construction period or after the expiration of the construction period under the Convention without completion of the construction, and even according to the factual relations acknowledged by the court below, it is difficult to deem that the implied extension of the construction period was made before the expiration of the construction period under the Convention. Ultimately, the court below determined that the occurrence of an insurance accident was not occurred within the insurance period on the ground that the extension of the construction period and the occurrence of the insurance accident within the insurance period was extended after the expiration of the construction period without confirming whether the extension of the construction period was made before the expiration of the construction period under the Convention. Accordingly, the court below erred by misapprehending the legal principles on the extension of the construction completion period under the Agreement and the occurrence of the insurance accident within the insurance period, and failing to exhaust all necessary deliberations.

2. As to the determination of insurance accidents

The term "insurance accident" refers to an uncertain accident that specifies the insurer's obligation to pay insurance proceeds in an insurance contract. As such, the insurance accident in a performance guarantee insurance contract refers to an uncertain accident that sets forth the insurer's obligation to pay insurance proceeds, it shall be determined by comprehensively taking into account the details of the insurance clauses included in the contract and the insurance policies and main contracts citing the insurance clauses (see, e.g., Supreme Court Decision 2004Da16976, Apr. 28, 2006). As such, the termination date under the main contract is agreed to arrive earlier than the expiration date of the insurance period, the fact that there is time to cancel or terminate the main contract by the lapse of the insurance period after the expiration of the period for the implementation of the main contract shall not be readily concluded to constitute the insurance accident only

As seen earlier, since the instant insurance contract is a contract for performance guarantee with the purport of compensating for the intervenors of the contract deposits that shall be forfeited or forfeited by the intervenor due to his failure to perform the obligation stipulated in the instant agreement, and thus, in order to determine the specific insurance accident of the instant insurance contract, it should first be determined as to how the requirements for forfeiture or attribution of the contract deposits have been agreed in the instant agreement, which is the main contract, and whether the intervenor has agreed not only to confiscate or revert the contract deposits, but also to allow the intervenor to confiscate or revert the contract deposits until the rescission or termination of the instant agreement.

Without confirming how the requirements for forfeiture or reversion of contract deposit were agreed in the instant agreement, the lower court determined to the effect that the instant agreement was caused by the occurrence of an insurance accident on the sole ground that there was time to cancel or terminate the instant agreement from the expiration of the construction period to the expiration of the insurance period, as well as Sinland’s nonperformance of obligation, and the occurrence of the instant agreement upon the rescission or termination of the instant agreement. However, the lower court determined that the instant agreement could not be deemed to have been terminated or terminated within the insurance period, even if the construction period cannot be deemed to have been extended after the insurance period

Examining the reasoning of the judgment below in light of the records, we affirm the judgment below that the agreement of this case is not revoked or terminated within the insurance period, and there is no violation of the rules of evidence as alleged in the grounds of appeal.

However, in light of the above legal principles, it cannot be readily concluded that the occurrence of an insurance accident must be terminated or terminated without confirming how the requirements for forfeiture or reversion of the contract bond under the instant agreement were agreed.

Meanwhile, Article 5 of the General Terms and Conditions of the instant insurance contract provides that "The insured shall terminate or cancel the main contract before claiming insurance proceeds. If the insured fails to terminate or cancel the insurance proceeds, the company shall not compensate for losses." However, Article 2 of the Special Terms and Conditions for Payment of Insurance Proceeds incorporated into the contents of the instant insurance contract provides that "Where any cause for the insured to revert the contract bond arises, the company shall pay the amount to be forfeited to the insured, notwithstanding the provisions on exemption from the General Guarantee Insurance Terms and Conditions, and thus, the insured shall not be deemed to have satisfied the insurance accident subject to the rescission or termination of the instant contract based on Article 5 of the above General Terms and Conditions."

Ultimately, what is the insurance accident in the instant insurance contract is determined according to how the requirements for forfeiture or reversion of the contract bond are agreed under the instant agreement, which is the main contract. Therefore, the court below erred by misapprehending the legal principles on the determination of the insurance accident and failing to exhaust all necessary deliberations, in concluding that the insurance accident must be rescinded or terminated without confirming the contents of the instant agreement.

3. Conclusion

Therefore, the judgment of the court below is reversed and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cha Han-sung (Presiding Justice)