If a judgment revoking the resolution of the general meeting of shareholders becomes final and conclusive, the validity of the act done before the judgment revoking the appointment of the representative director by the appointed directors becomes final and conclusive (= null and void)

Article 376 of the Commercial Act

[Plaintiff-Appellant] Plaintiff 2002Da19797 delivered on February 27, 2004 (Gong2004Sang, 519)

Plaintiff

주식회사 썬앤킴

Seoul High Court Decision 201Na62870 decided July 26, 2012

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

The grounds of appeal are examined.

1. In a case where a judgment revoking the resolution of the general meeting of shareholders on the appointment of directors becomes final and conclusive, the representative director selected by the board of directors composed of the directors appointed as directors by the resolution shall lose his qualification retroactively, and the representative director's act committed before the judgment revoking the resolution of the general meeting of shareholders becomes final and conclusive shall be null and void as an act without representative authority (see Supreme Court Decision 2002Da19797 delivered on February 27, 2004

2.The following facts shall be known by the record, or shall be significant to this court:

A. On December 10, 2010, the Plaintiff filed an application for the instant payment order with the Defendant’s representative director Nonparty 1, and the Defendant filed an objection on January 10, 201.

B. On February 10, 201, when the lawsuit in the first instance was pending, the Defendant’s general meeting of shareholders passed a resolution to appoint Nonparty 2, 3, 4, 5, and 6 as an internal director (hereinafter “the resolution of the instant general meeting of shareholders”), and Nonparty 3 was appointed as the representative director at the Defendant’s meeting held on March 4, 201.

C. On April 12, 2011, the Defendant submitted to the first instance court an application for correction of a party’s indication to the effect that the Defendant’s representative director was changed from Nonparty 1 to Nonparty 3, and Nonparty 3 appeared as the Defendant’s representative director on the date of pleading opened on May 17 and June 2 of the same year and stated the preparatory document.

D. On July 7, 2011, the first instance court: (a) appointed the Defendant’s representative director as Nonparty 3 and sentenced the first instance court to partially accept the Plaintiff’s claim; (b) the Defendant filed an appeal via the attorney appointed by Nonparty 3 as the representative director.

E. On May 30, 2012, when the lawsuit of the court below was pending, the Gwangju High Court rendered a judgment revoking the resolution of the general meeting of shareholders of this case in the case where Nonparty 7, who was the Defendant’s manager, requested the Defendant to cancel, to confirm the absence or invalidity of the resolution, etc. of the general meeting of shareholders of this case, or to confirm the invalidity or absence of the resolution, etc. of the general meeting of shareholders of this case. The above judgment was finalized by dismissal of the Defendant’s final appeal by Supreme Court Decision 2012Da5992 Decided October 25, 2012.

F. However, on July 26, 2012, the lower court: (a) indicated the Defendant’s representative director as Nonparty 3 and declared the lower judgment partially citing the Defendant’s appeal.

G. On August 16, 2012, the Plaintiff filed an appeal, and Nonparty 3 asserted that it has no legitimate authority to represent the Defendant. On December 26, 2012, the Plaintiff submitted the Defendant’s corporate register stating that Nonparty 7 was appointed as the Defendant’s representative director on November 24, 2012, and filed an application to resume the Defendant’s legal proceedings.

3. Examining these facts in light of the legal principles as seen earlier, the non-party 3, who was appointed as the representative director by the board of directors composed of the directors appointed as directors by the resolution of the general meeting of shareholders in this case, loses his qualification retroactively to the conclusion of the revocation judgment on the resolution of the general meeting of shareholders in this case, and thus, there is no legitimate authority to represent the defendant. Thus, the judgment of the court below on the merits on the premise that the non-party 3 has the power of representation

4. Therefore, without examining the remaining grounds of appeal, 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 Kim Yong-deok (Presiding Justice)