2016Na204854 Action for setting aside an arbitral award

Co., Ltd. and 200

Unauthorized Facility Corporation

Seoul Central District Court Decision 2016Gahap513284 Decided July 14, 2016

March 24, 2017

April 14, 2017

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked.

In regard to the Korean Commercial Arbitration Act No. 1511-0149, Korean Commercial Arbitration Act between the Plaintiff and the Defendant

Among the arbitral awards made on December 9, 2015, the part against the plaintiff shall be revoked.

1. Basic facts

The following facts are not disputed between the parties, or acknowledged in Gap evidence 1 to 5 by integrating the purpose of the entire pleadings.

[1]

The contract price for the installation work (hereinafter referred to as "the facility work of this case") among the new construction work of a branch school for the purpose of this case, 26,140,000 LYD (Libyaviar) and construction period for the construction work of a new branch school for the purpose of this case, which is supplied by the Ministry of Government Administration and Infrastructure of Libya to the defendant on June 15, 2010.

6. From January 1 to May 18, 2012, a subcontract was made (hereinafter referred to as “instant subcontract”) and around that time paid KRW 2,162,385,547 as advance payments.

OEFA changed its trade name on June 1, 2012 to CEFA, a corporation, and COSA, a corporation was merged with the Plaintiff on September 1, 2014 (hereinafter “Plaintiffs,” without classifying before and after the merger).

[2]

O Around January 201, 201, after the Defendant commenced the instant installation works, the Defendant was born at the local site of Libybya, and the Defendant was recovered at the site of the said new construction works around February 2011.

(O) After the instant subcontract contract term has been extended several times, and the said contract term has been changed to February 3, 2016, but the instant project has not been resumed.

[3]

(O) Article 36 (2) of the terms and conditions of the subcontract for construction works, which are part of the terms and conditions of the instant subcontract, shall be construed as "Article 69 of the Framework Act on the Construction Industry if the parties fail to reach an agreement

The construction dispute mediation committee under the provisions of this Act or the subcontract dispute mediation council, etc. under the provisions of Article 24 of the Fair Transactions in Subcontracting Act may apply for mediation or apply for arbitration to an arbitration institution established under other Acts and subordinate statutes. In this contract, "Korea Commercial Arbitration Committee" shall be designated as an arbitration institution.

O) On June 19, 2015, the Plaintiff asserted against the Defendant to the following purport to the Korea Commercial Arbitration Board: (a) filed an application for arbitration seeking refund of KRW 2,162,385,547; and (b) payment of damages for delay from May 1, 2015 (Korean Commercial Arbitration Board No. 1511-0419).

The instant facility works were impossible to be performed due to reasons not attributable to both the two parties, namely, the outbreak of the power plant in the Asia; and the Defendant is not entitled to seek a payment of the construction cost for the instant facility works pursuant to Article 537 of the Civil Act, and thus, the advance payment already received to the Plaintiff ought to be returned as unjust enrichment.

Even if the Defendant’s right to claim the payment of construction price is not terminated pursuant to Article 537 of the Civil Act, the instant subcontract is in an impossible condition, and as such, was cancelled by agreement with the Plaintiff and the Defendant or by the Plaintiff’s right to rescission, the Defendant has to return the advance payment to its original state. However, since the Defendant did not perform construction work that can be seen as the nature of the instant subcontract, it should return the advance payment

[4]

C. On December 9, 2015, the Korea Commercial Arbitration Board rendered an arbitral award stating that “the Defendant shall pay to the Plaintiff KRW 1,196,100,009 and the amount of KRW 6% per annum from July 3, 2015 to the service date of the written arbitral award of this case, and the amount of KRW 15% per annum from the next day to the full payment date” (hereinafter “instant arbitral award”).

2. The plaintiff's assertion

The arbitral award of this case constitutes grounds for revocation under Article 36(2)1(c) and (d) of the Arbitration Act for the following reasons:

In the event that the arbitral award in this case is in violation of Article 29(4) of the Arbitration Act, which provides that the Defendant shall pay to the Plaintiff the expenses incurred by the Defendant on the ground of the legal principle of return of unjust enrichment, and this constitutes a violation of Article 29(3) of the Arbitration Act, which provides that the arbitral tribunal shall make a decision in accordance with the terms and conditions of the contract, and (2) the arbitral tribunal may make a decision in accordance with equality and good faith, and (3) the arbitral award is in violation of Article 32(2) of the Arbitration Act, which provides that the parties shall make a decision in advance only when it explicitly grants the right of the parties.

In determining the part of the advance payment made by the Defendant, the arbitral award in this case did not state any reason without fact-finding as to the authenticity of the disbursement or whether the requirements under the contract are met, or it was impossible to prove that the arbitral award is based on any factual or legal judgment because it is unclear even if the reasons are indicated. Furthermore, it is clearly urgent and contradictory to the judgment that only part of the purchase price should be returned even if the materials or equipment that the Defendant purchased as advance payment was not provided to the Plaintiff.This is in violation of Article 32(2) of the Arbitration Act requiring the statement of reasons, and constitutes grounds for revocation under Article 36(2)1(d) of the Arbitration Act.

In the arbitral proceedings, the Defendant claimed that the advance payment amount was reduced to KRW 2,107,658,778 from the initial KRW 3,376,983,222 to KRW 2,107,658,778, and the instant arbitral award determined that the Defendant’s initial expenditure amount was not disputed between the parties.

This is included above. ① This constitutes grounds for revocation under Article 36(1)1(c) of the Arbitration Act, because it deals with a dispute not subject to an arbitration agreement or deals with a matter beyond the criminal intent of an arbitration agreement, and ② The arbitration procedure is not in compliance with the agreement between the parties, and there is no statement in the grounds for such judgment, and thus constitutes grounds for revocation under Article 36(2)1(d) of the Arbitration Act.

In regard to the initial date of the advance payment, the arbitral award of this case was determined on July 3, 2015, on the basis of the Plaintiff’s claim on May 10, 2015, and without any reason, the duplicate of the written arbitral award was served on July 3, 2015, which constitutes grounds for revocation under Article 36(2)1(d) of the Arbitration Act as an obvious omission of judgment and omission of reasoning (the Plaintiff’s assertion falls under Article 36(2)1(c) of the Arbitration Act as “the omission of judgment on the starting date of the calculation of delay damages” and omission of reasoning. In light of the overall content and purport of the above assertion, it is determined to the effect that the above assertion falls under Article 36(2)1(d) of the Arbitration Act.

3. Defendant’s defense prior to the merits

The lawsuit seeking revocation of only part of the arbitral award, which is not the subject matter of the arbitration agreement, is unlawful, unless the arbitral award referred to in Article 36(2)1(c) of the Arbitration Act does not fall under “a case where the part concerning the subject matter of the arbitration agreement can be separated from that concerning the non-subject matter of the arbitration agreement.” However, the lawsuit in this case is unlawful since it seeks revocation of only the part against the plaintiff which is a part of the arbitral award in this case, even though the arbitral award does not dispute the facts that

Even if the plaintiff sought revocation of a part of the claim for family members, the ground for revocation alleged by the plaintiff is against the entire arbitral award of this case. Thus, the lawsuit of this case seeking revocation of only the part against the plaintiff, which is part of the arbitral award of this case, is unlawful.

B. Determination

(1) An action for setting aside an arbitral award is an action for setting aside the arbitral award and retroactively null and void the arbitral award, and may be brought only when it satisfies the formal requirements set forth in law and satisfies the final requirements and falls under any of the subparagraphs of Article 36(2) of the Arbitration Act (see, e.g., Supreme Court Decision 2003Da70249, 70256, Oct. 14, 2004). As such, the arbitral award subject to an action for setting aside an arbitral award refers to the arbitral award that satisfies the formal requirements set forth in law and makes a final decision on its merits.

However, Article 36 of the Arbitration Act, which provides for an action for setting aside an arbitral award, only stipulates that the subject matter of setting aside shall be limited to the whole arbitral award, or that the subject matter of setting aside of the arbitral award shall not be limited to the whole arbitral award, or that the subject matter of setting aside of the arbitral award shall be prohibited.

On the other hand, Article 36 (2) 1 (c) of the Arbitration Act provides that "However, if an arbitral award can be separated from the part concerning the subject matter of the arbitration agreement, only that part of the arbitral award which is not subject to the arbitration agreement may be set aside," and the above provision provides that if the arbitral award contains any part not subject to the arbitration agreement, only that part of the arbitral award may be set aside and that part of the arbitral award which is not subject to the arbitration agreement may not be set aside if it falls under the above provision, and that part of the arbitral award may be set aside and that it does not fall under the above provision

It can not be interpreted even to the meaning that the whole decision can be revoked.

(2) In the event that the arbitral award is related to “indivisible one claim,” it is difficult to present only a part of the award where there exists a cause for revocation.

However, if the arbitral award relates to " multiple claims" or "a single claim, but in the form of divisible claims", only some of the claims can be revoked, and in such a case, some of the arbitral awards can be revoked.

As long as it is possible to set aside a part of the arbitral award with respect to a claim or an arbitral award on which multiple claims are made or both, there is no reason to allow the revocation of a part of the arbitral award at the stage of filing a suit, even at the stage of filing a suit.

In addition, it is possible to determine whether there is a cause to bring a lawsuit only in part of the arbitral award on " multiple claims" or "brupt claims", and therefore, it is difficult to determine the legitimacy of the lawsuit, considering whether there is a cause to bring a lawsuit only in part of the arbitral award on the grounds for revocation, which is subject to deliberation on the merits of the lawsuit before the examination on the merits of the grounds for revocation is completed.

If so, it is reasonable to view that an arbitral award on "Multiple Claims" or "vey claims" can be brought to seek partial revocation of the arbitral award.

(3) In this case, the plaintiff sought the cancellation of the part against the plaintiff among the arbitral awards in this case. Since the arbitral award in this case concerns both claims for return of advance payment following the cancellation of the subcontract in this case and thus, the lawsuit in this case seeking the cancellation of the part against the plaintiff which is part of the claim is legitimate. Therefore, the defendant's prior defense on the merits is without merit.

4. Determination as to whether the merits fall under Article 36(2)1(c) of the Arbitration Act

(1) Article 36(2)1(c) of the Arbitration Act provides for “The fact that an arbitral award has dealt with a dispute which is not subject to arbitration agreement or that the arbitral award has dealt with a matter beyond the scope of the agreement” as the grounds for revocation of the arbitral award.

(2) The specific grounds for the Plaintiff’s assertion that the instant arbitral award constituted the above grounds for revocation are as follows: (a) the Defendant asserted that the advance payment content was reduced and thereby included approximately KRW 1,000,000 among the parties to the instant arbitral award in the scope of determination.

(3) However, as alleged by the Plaintiff, even if the Defendant asserted the correction of the detailed contents of the advance payment made by the Defendant during the instant arbitral proceedings, the part pertaining to approximately KRW 1,00,000 cannot be deemed to have been established as a non-contentious part between the parties. Even if the instant arbitral award pertains to the determination of the content of the expenditure initially asserted by the Defendant, it cannot be said that the arbitral award dealt with disputes not subject to the arbitration agreement or dealt with matters beyond the scope of the arbitration agreement. Thus, the Plaintiff’s assertion is without merit.

B. Determination as to whether Article 36(2)1(d) of the Arbitration Act falls under Article 36(2)1(d)

(1) Article 36(2)1(d) of the Arbitration Act provides that “In the event that the composition of the arbitral tribunal or the arbitral proceedings do not comply with an agreement between the parties that do not go against the mandatory provisions of this Act, or in the absence of such agreement, the fact of non-compliance with this Act” shall be deemed to be the ground for revocation of

(2) Specific grounds for the Plaintiff’s assertion that it constitutes the grounds for the above revocation (1) of the instant judgment

In the advance payment to be returned by the Defendant on the basis of the principle of return of unjust enrichment, the Defendant’s deduction of the station in which the Defendant asserts is different as stipulated in the contract, and without authority is judged in accordance with equity and good faith. The Defendant violated Article 32(2) of the Arbitration Act, which requires the statement of the reasons to be stated in an emergency and contradictory manner, and ② the determination of the particulars of the Defendant’s assertion in the instant arbitral award violates Article 32(2) of the Arbitration Act, which requires the statement of reasons because it is not indicated in the grounds or unclear and its determination was non-regular and contradictory, and ③ the Defendant’s decision on the portion of KRW 1,00,000,000, which is no dispute between the parties due to the reduction of the details of advance payment, thereby failing to comply with the agreement between the parties, and thus violating Article 32(2) of the Arbitration Act that requires the statement of reasons for lack of the reasons for such determination.

(3) Article 32(2) of the Arbitration Act provides that “Arbitral Award shall state the grounds on which the award is based: Provided, That this shall not apply where there exists an agreement between the parties or where the ruling is an arbitral award by compromise under Article 31; Article 36(2)1(d) provides that “a case where the parties have agreed to or is an arbitral award by compromise under Article 31” provides that “a case where the arbitral procedure is one of the grounds on which the arbitral award may be cancelled and where there is no agreement between the parties not contrary to the mandatory provisions of this Act, or where there is no such agreement, the fact that the arbitral procedure has not complied with this Act.” Thus, if the parties fail to state the grounds for the arbitral award

In such a case, "when the reasons for the arbitral award are not stated" means that the arbitral award does not have any reason or it is unclear even if the reasons are stated.

The award refers to a case where it is impossible to confirm whether it is based on the judgment or not, and the reasons are inconsistent. As long as the written arbitral award states the reasons, it is justifiable to use the judgment as the basis thereof regardless of the positive law and is fair. The reasons to be attached to an arbitral award are sufficient to the extent that it is possible to find out how the decision is made by an arbitrator without being required to make clear and detailed judgments on the relationship of rights and duties which are the premise of the case, and it does not constitute a case where there is improper or incomplete points in the judgment, unless it is clearly urgent and contradictory (see, e.g., Supreme Court Decision 2007Da73918, Jun. 24, 2010).

In light of the above legal principles, the arbitral award of this case contains an indication to the extent that it can be possible to find out how the arbitrator has reached the judgment on advance payment and the details of expenditure claimed by the defendant, and its judgment cannot be seen as an obvious non-emergency and contradiction, and thus, the plaintiff's assertion cannot be deemed to exist as alleged by the plaintiff. Thus, the plaintiff's assertion is without merit.

5. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it has no reason. However, the judgment of the court of first instance has dismissed the lawsuit of this case, and since it is recognized that the court of first instance has been tried to the extent that it can render a judgment on the merits, the court of first instance has not remanded to the court of first instance, and this court has rendered a judgment on the merits. However, in the case of which only the plaintiff appealed, the court of first instance cannot dismiss the plaintiff's claim by revoking the judgment of the court of first instance disadvantageous to the plaintiff

Judges of the presiding judge;

Judge Choi Young-young

Judges Jeon Soo-soo