Claim for damages against removal before expiration of the term of office of directors

According to Article 385 (1) of the Commercial Act, "a director may be removed from office at any time by a special resolution of the general meeting of shareholders, but if he is removed without any justifiable reason before the expiration of his term of office, he may claim compensation for damage caused by the removal of the director." In this case, the term of office refers to a case where the term of office is determined by the resolution of the articles of incorporation or the general meeting of shareholders. If the term of office of the director is not determined, he shall not claim compensation for damage even if he is removed for the period of three years, which is the maximum term of office of the director, unless the term of office is determined, and it shall not be interpreted that the articles of incorporation of the company provide that "the term of office of the director shall not exceed three years" as provided

Articles 383(2) and 385(1) of the Commercial Act

Plaintiff

Co., Ltd. (Law Firm Kim Shin & World, Attorneys Jeong Young-deok et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2000Na52518 delivered on April 3, 2001

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

1. According to Article 385(1) of the Commercial Act, "a director may be removed from office at any time by a special resolution of the general meeting of shareholders, but in case where the term of office of a director is fixed and he is removed before the expiration of such term without any justifiable reasons, he may claim compensation for damages caused by the removal of the director against the company." In this case, the term of office of a director is determined by the resolution of the articles of incorporation or the general meeting of shareholders. If the term of office of a director is not determined, he cannot claim compensation for damages caused by the removal even after three years have not passed since it

2. Examining the reasoning of the judgment of the court below in light of the records, the fact-finding and decision of the court below that the plaintiff, without setting the term of office, appointed as a director of the defendant company and dismissed by a special resolution of the general meeting of shareholders shall be justified, and it shall not be interpreted that the articles of incorporation of the defendant company, which provide that "the term of office of the director shall not exceed three years" as referred to in Article 383 (2) of the Commercial Act, is the purport of setting the term of office of the director three years. Since the articles of incorporation of the company does not fall under the terms and conditions, Article 5 (2) of the Regulation of Standardized Contracts Act shall not apply, and the term of office of the director shall be three years in the standard articles of incorporation established by the mutual savings and finance association of the defendant company shall be deemed to be incorporated into the articles of incorporation of the defendant company, or the purport that the articles of incorporation of the defendant company shall be the same as that of the standard articles of incorporation of the company, without properly

3. According to the records, with respect to documentary evidence submitted by the plaintiff, the defendant stated his opinion as to the formation of the petition en bloc at the date of the closing of argument at the appellate court. The court below did not accept the application for resumption of pleading, the application for submission of documents, and the request for the delivery of documents after the closing of argument, and sentenced the court below. On the other hand, as to the existence of the term of office of the plaintiff, which was the issue at the court below, it appears that both parties have made sufficient arguments and evidence, and it can be known that the defendant's documentary evidence or documentary evidence for which the plaintiff applied for the issuance of documents submission order and the request for delivery of documents has no relation to the above issues. Thus, the court below's rejection of the application for resumption of the plaintiff's oral argument, which is in violation of the principle of equity, did not err by misapprehending the fundamental rights of the citizens

4. Therefore, the appeal is dismissed, and all 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 Son Ji-yol (Presiding Justice)