(영문) 서울중앙지방법원 2016. 4. 28. 선고 2015가합570969 제21민사부 판결

A. On February 3, 2012, the Plaintiff and the Defendant entered into a contract for the supply of non-meters (hereinafter referred to as “instant supply contract”) with the Plaintiff, which would produce and supply 1 set of prefabricated type equipment (hereinafter referred to as “the instant non-meter equipment”) for the purpose of maintaining the boiler for the 2nd coloning power plant (hereinafter referred to as “the Plaintiff”) and receive 1,852,500 tons from the Defendant.

B. Article 1.1 of the General Conditions of Contracts, which is part of the instant supply contract, provides for the following dispute settlement provisions (hereinafter referred to as "Dispute settlement provisions of this case"), concerning the occurrence of disputes between the Plaintiff and the Defendant:

The dispute on factual issues arising out of the General Terms and Conditions of the instant supply contract, Article 1.18, 1.18, 1.18.1 shall be determined by the South East-dong Development. The decision shall become final and conclusive if the contractor does not raise an objection to the remaining East-dong Development within 30 days from the date on which the contractor is notified of the decision on the remaining East-dong Development. The dispute arising out of the contractor by raising an objection to the decision on the remaining East-dong Development shall be settled through consultation, and if the agreement is not reached, the dispute shall be settled as follows:

C. Pursuant to the instant supply contract, the Plaintiff supplied the first supply portion on March 12, 2012, and the second supply portion on March 31, 2012, respectively. The Defendant completed the inspection of the instant non-facilities on April 4, 2012, and thereafter, from April 5, 2012 to April 26, 2012, the purchase price of KRW 1,852,500 and import value added tax on the Plaintiff.

271,161,060 won was paid.

D. Although the instant non- fraternity device is subject to safety certification under the Industrial Safety and Health Act, the Enforcement Decree of the same Act, and the Public Notice of the Procedure for Reporting Safety Certification and Voluntary Safety Confirmation (Public Notice of the Ministry of Employment and Labor No. 2012-15) by the Ministry of Employment and Labor, the Plaintiff and the Defendant did not obtain certification from the Industrial Safety and Security Agency. Accordingly, there was a dispute over the safety certification of the instant non- fraternity device from May 2012 between the Plaintiff and the Defendant, and the Defendant filed an application for arbitration with the Korea Commercial Arbitration Board (hereinafter referred to as the “instant application for arbitration”) on March 8, 2013 pursuant to the instant dispute resolution clause (hereinafter referred to as the “instant application for arbitration”).

E. On June 5, 2013, the Plaintiff filed an application for suspension of arbitral proceedings with the Defendant for one month on the grounds that the agreement with the Defendant was in progress, and subsequently, requested the KCA to extend the period of suspension of arbitral proceedings on a total of 20 occasions between July 8, 2013 and July 31, 2014 for the same reason, the Plaintiff negotiated with the Defendant, but did not reach the final agreement.

F. On December 4, 2014, the Korea Commercial Arbitration Board notified the Plaintiff and the Defendant that the sole arbitrator’s arbitral tribunal was the Gu. On December 29, 2014, the Plaintiff submitted a written reply stating a written defense prior to the draft “The instant dispute settlement clause falls under the selective arbitration clause, and the Plaintiff has no intent to resolve the instant dispute through arbitration. Therefore, the instant arbitration application must be dismissed as it is the absence of an arbitration agreement.” On May 21, 2015 and June 12, 2015, the Plaintiff submitted a written reply stating the conjunctive objection to the effect that “The Plaintiff’s claim for damages against the Defendant (the Defendant’s fault in concluding the contract) against the Defendant’s right to claim restitution by setting off the conjunctive counterclaim.”

G. On August 26, 2015, Korea Commercial Arbitration Board rejected the Plaintiff’s defense prior to the merits for the following reasons, and rendered an arbitral award containing the order of the award stated in the attached Form (hereinafter “instant arbitral award”).

① The instant dispute settlement clause constitutes a selective arbitration clause, and the Plaintiff, upon submitting a written answer, made a defense prior to the merits that there is no arbitration agreement.

② However, in the process of presenting a negotiation proposal to the Defendant to resolve the dispute, the Plaintiff had the intent to proceed with the arbitral proceedings without objection if the agreement is not reached, such as proposing the criteria for the proceedings such as arbitrator, place of arbitration, language of arbitration, applicable law, etc. The Plaintiff suspended the proceedings for a long period of time on the ground of negotiations with the Defendant. On November 2014, the Plaintiff intentionally delayed the arbitral proceedings, such as dismissing his/her own arbitrator, delayed the proceedings, and made the negotiations with the Defendant in bad faith. If the Plaintiff had the intent to deny the existence of the arbitration agreement based on the selective arbitration clause, the Plaintiff should have claimed the absence of the arbitration agreement within 30 days after the delivery of the written request for arbitration within the deadline for submission of the response or within a reasonable period of time, the Plaintiff’s non-existence of the arbitration agreement constitutes a means of de facto attack and defense and also violates the principle of good faith.

3. Therefore, despite the Plaintiff’s non-existence of arbitration agreement, the dispute resolution clause of this case is effective as a second agreement, and thus, the arbitral tribunal has the authority to make adjudication on this case

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 4 (including each number), Eul evidence 2 to 22, the purport of the whole pleadings

2. Determination

A. Relevant legal principles

1) Article 3(1) of the Arbitration Act provides that “Arbitral award means the procedure by which a dispute under private law is resolved by an agreement between the parties, not by a court’s trial, but by an arbitrator’s decision.”

Article 8(1) of the Arbitration Agreement provides that "An arbitration agreement may be concluded in the form of an independent agreement or an arbitration clause, including an arbitration clause, in writing." Article 8(2) of the Arbitration Agreement provides that "An arbitration agreement may be concluded in the form of an arbitration clause," and Article 9(1) of the same Act provides that "where a lawsuit is instituted in respect of a dispute which is the object of an arbitration agreement, the court shall dismiss the lawsuit where the defendant raises an arbitration agreement: Provided, That this shall not apply where the arbitration agreement is nonexistent, invalidated, or becomes void, or it is impossible to perform the agreement." As such, an arbitration agreement becomes effective by an agreement between the parties on a legal relationship under private law, or all or part of a dispute that has already occurred or may occur in the future, without resorting to a court ruling, through an arbitration agreement in writing." Article 8(1) of the same Act provides that "An arbitration agreement shall be concluded in the form of an arbitration agreement in the form of an arbitration agreement or in the form of an arbitration agreement referred to in 2013.20 (3).

2) The so-called selective arbitration clause is effective as an arbitration agreement only when a party selects the other party to the arbitration procedure and demands the other party to resolve the dispute in accordance with the arbitration procedure and the other party participates in the arbitration procedure without any particular objection. As to a party’s claim for arbitration, the other party is active in the absence of the arbitration agreement in the response to the claim

The arbitration agreement cannot be deemed to have been effective if the claimant objects to the arbitration (see, e.g., Supreme Court Decision 2004Da42166, Nov. 11, 2004). Meanwhile, Article 17(2) of the Arbitration Act provides that "any objection to the jurisdiction of the arbitral tribunal shall be filed until the submission of a written reply to the merits" and provides that "any objection to the absence of the jurisdiction of the arbitral tribunal shall be filed until the submission of a written reply to the arbitral tribunal." Since the arbitral tribunal's power is directly related to the existence or validity of the arbitration agreement, "an objection to the jurisdiction of the arbitral tribunal" as referred to in the above provision includes "an objection to the existence or validity of the arbitration agreement". Thus, unless the respondent raises an objection to the application for arbitration based on the selective arbitration clause of the arbitral tribunal in accordance with the above provision, such objection may not be filed at the remaining stage of the arbitration procedure, while the above provision becomes effective as a final and conclusive arbitration agreement (see, e.g., Supreme Court Decision 2005Da2545255).

B. The nature of the dispute resolution clause of this case and the validity of the arbitration agreement

1) The dispute resolution clause of this case provides that "a dispute which the plaintiff raises an objection against the defendant's decision shall be settled by consultation and shall be resolved by arbitration by the arbitration agency, the court's ruling, and the procedure (in the case of international tender) prescribed in Articles 28 through 31 of the Act on Contracts to Which the State is a Party (in the case of international tender)." The literal meaning of the dispute resolution clause of this case is that "a dispute shall be resolved by mutual agreement between the parties, but each party may file a lawsuit with an arbitration agency or file a lawsuit with a court," and it is merely interpreted as an selective presentation of the dispute resolution method by arbitration or court's ruling, and otherwise, the dispute resolution method between the plaintiff and the defendant shall be resolved by arbitration."

shall not be construed to have been resolved only.

In full view of these points, it is reasonable to view the dispute resolution clause of this case as a "selective arbitration clause".

2) Meanwhile, as seen earlier, the fact that the Plaintiff actively asserted the absence of an arbitration agreement in the response to the Defendant’s claim for arbitration, and opposed to the resolution by arbitration.

Therefore, the dispute resolution clause of this case cannot be valid as an arbitration agreement unless there are special circumstances.

C. Judgment on the defendant's assertion

1) As to the assertion that the Plaintiff agreed to resolve the dispute through arbitration in the course of negotiations with the Defendant

A) The Defendant asserts that, in the process of negotiations prior to the submission of the written reply, the Plaintiff expressed his/her intent to “to resolve the dispute through the arbitration of the ordinary members on the case where negotiations have been concluded,” the agreement between the Plaintiff and the Defendant was concluded.

B) According to Gap evidence Nos. 1 and Eul evidence Nos. 2 through 22, the plaintiff submitted to the KCAB a written application to suspend arbitral proceedings on June 5, 2013 to the effect that "the plaintiff and the defendant will suspend arbitral proceedings for a period of one month until the plaintiff and the defendant request the resumption of arbitral proceedings", ② the plaintiff’s proposal is stated in the accompanying document of e-mail sent by the plaintiff to the defendant on July 1, 2013, under the title "IV. This case’s arbitration relationship", ③ the fact that the plaintiff applied for the extension of the period of suspension of arbitral proceedings for negotiations with the defendant, ④ the agreement prepared by the plaintiff to the KCAB is resumed, and the plaintiff and the defendant filed with the KCAB.

Recognizing the existence of the content that “a joint submission of a document requesting the resumption of arbitration” exists.

However, once the arbitral proceedings have commenced upon the Defendant’s request for arbitration, the suspension of the arbitral proceedings is inevitable to proceed with private negotiations in the arbitral proceedings, and the arbitral proceedings are to be resumed if negotiation is conducted. ② The Plaintiff presented his opinion on the basic procedural standards and direction for the arbitral proceedings in the course of negotiations with the Defendant, and there is no express intention to resolve the dispute of this case ultimately through the arbitral proceedings. ③ At the time of negotiations, the Plaintiff and the Defendant discussed with the focus on drawing an agreement through negotiations. The reference or discussion on the arbitral proceedings is conducted in addition to the necessary scope. ④ Article 8(2) of the Arbitration Act provides that “The arbitration agreement shall be made in writing.” Article 8(3)3 provides that “Where either party claims that there is an arbitration agreement in the contents of the documents exchanged between the parties and the other party, and the other party does not dispute it, the Plaintiff cannot be seen as having actively asserted that the agreement was concluded with the Plaintiff and the Plaintiff cannot be seen as an arbitration agreement that is a final and conclusive settlement of the dispute of this case based on the arbitral proceedings and this case.

2) As to the plaintiff's assertion that non-existence of an arbitration agreement violates the principle of good faith, etc.

A) The defendant's defense prior to the plaintiff's merits is contrary to the principle of no-competence or the principle of good faith.

The dispute resolution clause of this case is invalid as it violates the above, and the dispute resolution clause of this case asserts that the arbitration agreement of this case has a conclusive effect (as seen earlier, the decision of this case was made to the same effect on the ground of the delay of the plaintiff's express arbitration procedure).

B) However, in light of the following legal principles and circumstances, the defendant's above assertion and the judgment of the arbitral tribunal cannot be accepted.

(1) An arbitration is a procedure to resolve a dispute under private law by an arbitration rather than by a court’s judgment (Article 3(1) of the Arbitration Act). An arbitration agreement shall be deemed to have the unity of the parties’ intent not to exercise the right to claim a trial as provided by Article 27(1) of the Constitution. In addition, a party’s rejection of a defense, even though the other party actively claims the absence of an arbitration agreement, is limited to the other party’s constitutional right to claim a trial. Thus, the rejection of a non-existence of an arbitration agreement shall be carefully conducted according to strict standards only when there are clear grounds in statutes,

(2) As seen earlier, the Plaintiff merely discussed the basic matters regarding the arbitral proceedings in response to the Defendant’s application for arbitration, and did not express its intention to ultimately resolve the instant dispute according to the arbitral proceedings. Furthermore, Article 17(2) of the Arbitration Act provides that “A party shall file an objection to the authority of the arbitral tribunal not later than the submission of a written answer to the merits. In this case, any party may raise an objection even if he/she has appointed an arbitrator or participated in the appointment procedure.” In light of the foregoing, the Arbitration Act provides that “when submitting a written answer to the authority of the arbitral tribunal, the party who has participated in the arbitral proceedings shall have the right to raise an objection” and provides that the party who has participated in the arbitral proceedings shall also have the right to raise an objection, such as the appointment of the arbitrator prior to the submission of the written answer

The second defense cannot be deemed to be contrary to the doctrine of speech or the principle of trust and good faith.

③ The reasons for the instant arbitral award are as follows: (a) the Plaintiff intentionally delayed the arbitral proceedings; (b) thereby increasing the costs of arbitral proceedings and causing economic loss to the Defendant; (c) however, the extended period of arbitral proceedings is due to the delay in negotiations between the Plaintiff and the Defendant; and (d) there is no ground to deem that the Plaintiff intentionally delayed the arbitral proceedings or caused economic loss due to the delay in the proceedings. Furthermore, insofar as the Plaintiff applied for the extension of the period of the arbitral proceedings to the KCA according to lawful procedures with the consent of the Defendant and the KCAB was accepted by the KCAB, the circumstance that the arbitral proceedings were suspended for a prolonged period or that the response stating the absence of the non-existence of the arbitral agreement was later submitted cannot be the grounds for rejecting the non-existence defense.

④ Although the negotiations between the Plaintiff and the Defendant did not reach a final agreement, it is difficult to readily conclude that the cause of failure to reach an agreement was attributable to the Plaintiff’s bad faith in negotiations. Even if the Plaintiff was in bad faith in negotiations, the validity of the Plaintiff’s defense prior to the merits cannot be denied in arbitral proceedings, which are separate procedures for dispute resolution, based on the issue in the private negotiations

C) Therefore, the Plaintiff’s non-existence of an arbitration agreement is valid, and the instant dispute settlement clause has no validity as an arbitration agreement.

D. Sub-determination

Ultimately, the arbitral award of this case must be set aside when it deals with a dispute which is not subject to arbitration agreement (Article 36(2)1(c) of the Arbitration Act).

3.In conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition.

Judges

Judges Kim Young-hoon

Judges Lee Jin-hee

Judges Suspension Board

Site of separate sheet

Order of Award

1. The respondent shall pay 1,852,500 dollars to the applicant simultaneously with the receipt of devices listed in the Schedule from the applicant.

2. The applicant's remaining claims are dismissed;

3.The arbitration costs (gold 48,650,418) shall be ten minutes and the 1 (gold 4,865,042) shall be borne by the Respondent, the remaining 9 (gold 43,785,376) by the Respondent.

A person shall be appointed.

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