2008da85147 Request for nullification by the Board of Directors

Plaintiff

Defendant corporation

Attorney Choi Jong-won, Counsel for the defendant-appellant

Seoul High Court Decision 2008Na16341 Decided October 24, 2008

May 28, 2009

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. Where a person who was dismissed from office as a representative director by a resolution of the board of directors on the first ground of appeal is dismissed from office by a valid resolution of the general meeting of shareholders held after the resolution of the board of directors was made, even if there is any defect in the resolution of the board of directors concerning the removal of the representative director, barring any special circumstance such as the absence or invalidation due to procedural defect other than that of the general meeting convened by an unentitled person, or the revocation of the resolution, the absence or invalidation of the resolution or seeking the revocation of the resolution shall be deemed to have failed to meet the requirements for protection of rights as a lawsuit for confirmation (see Supreme Court Decisions 96Da24309, Oct. 11, 1996; 2005Da38348, Apr. 26, 2007, etc.).

On the other hand, the convening of the general meeting of shareholders is conducted by the representative director who has the authority to execute the decision according to the decision of the board of directors with the authority to convene the meeting, and it cannot be convened without the decision of the board of directors. However, even if there is no decision of the board of directors, so long as the person with authority to convene the meeting lawfully takes the convocation procedure by external decision, it cannot be deemed that there is no decision of the board of directors, and there was no decision of the board of directors, and the circumstance such as the notice of convening a general meeting of shareholders was merely a ground for revocation of the resolution of the general meeting of shareholders (see Supreme Court Decisions 79Da1264, Oct. 27, 198; 93Do698, Sept. 10, 1993).

The court below dismissed the plaintiff as the representative director and appointed the non-party 1 as the chairman of the board of directors on October 18, 2006, and there is a defect in the grounds for invalidation of the resolution of the board of directors of this case. The non-party 1 convened as the chairman of the board of directors and resolved to convene an extraordinary general meeting of shareholders and to appoint the non-party 2 representative director as the chairman of the board of directors, and there is a defect in the resolution of the board of directors made on October 27, 2006.

27. On December 11, 2006, which was decided to dismiss the plaintiff from the office of director of the defendant company by convening a special shareholders' meeting according to the resolution of the board of directors, there is a defect in the resolution of the provisional shareholders' meeting. However, the non-party 1 and the non-party 2 who convened the above provisional shareholders' meeting not only have a legitimate authority to convene the general shareholders' meeting but also convened the above provisional shareholders' meeting through the resolution of the board of directors for convening it. The above provisional shareholders' meeting convened the above provisional shareholders' meeting after the resolution of the board of directors. The defect in the convocation procedure of the above provisional shareholders' meeting is merely a cause for revoking the resolution of the general shareholders' meeting, and it does not constitute a serious defect to the extent that the above resolution does not exist in law. Since there is no evidence to deem that the plaintiff filed a lawsuit seeking its revocation within two months after the resolution of the provisional shareholders' meeting was adopted, there is no interest in seeking confirmation of the invalidity of the resolution

was determined to the effect that it was.

In light of the above legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to defects in the resolution of the general meeting of shareholders or in violation of precedents.

The Supreme Court precedents cited in the grounds of appeal cannot be invoked in this case due to different cases.

2. As to the second ground of appeal, Article 368 (3) of the Commercial Act provides that "a shareholder may have his/her proxy exercise his/her voting right. In this case, the proxy shall submit a document proving his/her power of representation to the general meeting." The phrase "documents proving his/her power of representation" refers to a letter of delegation, and the request of a company to submit a certificate of personal seal impression, a letter of attendance, etc. along with the power of attorney is required to verify the proxy's qualification more clearly. If the shareholder or his/her agent fails to present such documents, if it can prove the authenticity or delegation of power of attorney by other means, the company cannot deny his/her power of representation. On the other hand, the request of a company to attend the general meeting of shareholders is merely a means to verify the shareholder's identity more clearly, and if it is possible to verify the shareholder himself/herself by other means (see Supreme Court Decision 2005Da2701, 2718, Apr. 23, 2009).

The lower court determined that the shareholders’ attendance at the general meeting of shareholders or their representatives’ right to represent the shareholders cannot be denied solely on the ground that there is no seal imprint seal affixed by the shareholders at the meeting of shareholders or that there is no letter of delegation attached to the letter of delegation, and that the temporary general meeting of shareholders on December 11, 2006 attended and exercised voting rights by the shareholders themselves or legal representatives.

In light of the above legal principles and records, the judgment of the court below is just, and there is no error of law such as misconception of facts against the rules of evidence.

3. Conclusion

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.

Justices Kim Young-ran

Justices Lee Hong-hoon

Justices Kim Nung-hwan

Justices Cha Han-sung