Korea Federation of Banks, an incorporated association, and 16 (Attorneys Kim Su-soo et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Choi Han-hoon, Counsel for defendant-appellant)

October 9, 2008

On February 11, 2008, the defendant revoked the disposition to permit the use of the standardized terms and conditions as of January 30, 2008, such as the loan transaction agreement I (for household loan), loan transaction agreement II (the comprehensive passbook loan and household current loan), credit transaction agreement I (for enterprises), loan transaction agreement II (the comprehensive passbook loan and current loan), mortgage contract, mortgage contract, mortgage contract, and mortgage contract.

The defendant dismissed the plaintiff's claim against the plaintiffs on February 11, 2008 as to the cancellation of the revised standardized terms and conditions on January 30, 2008, such as bank credit transaction basic terms and conditions (for household use) and bank credit transaction basic terms and conditions (for enterprise use).

The defendant's lawsuit seeking the revocation of the amendment of two kinds of standard terms and conditions, such as the Bank Credit Transactions Basic Terms and Conditions (for example), Bank Credit Transactions Basic Terms and Conditions (for example), and Bank Credit Transactions Basic Terms and Conditions, based on the resolution of the plenary session on January 30, 208.

Costs of lawsuit shall be borne individually by each person.

First, the defendant's decision that cancellation of the right to use the amended standard contractual terms and conditions on January 30, 208, such as bank credit transaction terms and conditions, bank credit transaction basic terms and conditions, bank credit transaction terms and conditions, loan transaction agreements I (for enterprises), loan transaction agreement II (for enterprise loan and household current loan), loan transaction agreement I (comprehensive passbook loan and household current loan), loan transaction agreement I (for enterprise loan), loan transaction agreement II), loan transaction agreement II (comprehensive automatic loan and cash loan), mortgage contract, mortgage contract, mortgage contract, mortgage contract, etc. on January 30, 208 against the plaintiffs on February 11, 2008, or

1. Details of the disposition;

A. On December 2004, the Defendant was requested by the Korea Consumer Agency (the former title prior to the alteration is the Korea Consumer Protection Board) to improve the terms and conditions related to bank credit transactions, which are disadvantageous to consumers or are inadequate to protect consumers.

B. On September 28, 2006, pursuant to Article 19-2(3) of the Act on the Regulation of Terms and Conditions to the Korea Federation of Banks (hereinafter “the Act”), the Defendant submitted to the Korea Federation of Banks the revised bill of Article 19-2(1) and (2) of the current standard terms and conditions of credit transactions (hereinafter “the Act”) and the basic terms and conditions of bank credit transactions (for enterprise use), respectively, Article 4(1) and (2) of the loan transaction agreement I (the letter of loan transaction, the letter of loan transaction II (the letter of loan for household use), the letter of credit transaction (the comprehensive passbook loan for enterprise use), the letter of credit transaction (the comprehensive passbook loan for enterprise use), and the letter of credit transaction (the comprehensive passbook loan for enterprise loan and the loan for party loan), and the letter of credit transaction (the letter of mortgage contract and the letter of mortgage contract) to request a review within four months. Accordingly, the Korea Federation of Banks, an incorporated association, submitted its opinion to the Defendant on February 12, 2007.

C. The Defendant opened a plenary session on January 30, 2008, and amended some provisions of the current standard terms and conditions of this case pursuant to Article 19-2(4) of the Act as follows (hereinafter “instant revised standard terms and conditions”).

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

D. On February 11, 2008, the Defendant recommended the Plaintiffs to use the amended standardized terms and conditions of this case pursuant to Article 19-2(5) of the Act.

[Reasons for Recognition] Evidence No. 6, Evidence Nos. 4, 5, 6, the purport of the whole pleadings

2. Judgment on the claim for revocation of a permit to use the amended standard terms and conditions of this case

(a) Related Acts and subordinate statutes;

Regulation of Standardized Contracts Act

Article 19-2 (Standard Terms and Conditions)

(1) In order to establish sound trade order and prevent the common use of unfair terms and conditions, enterprisers and enterprisers' organizations may prepare standard terms and conditions in a particular trade area and request the Fair Trade Commission to examine whether such terms and conditions violate this Act.

(2) Any consumer organization registered pursuant to Article 29 of the Framework Act on Consumers or the Korea Consumer Agency established pursuant to Article 33 of the same Act (hereinafter referred to as the "consumer organization, etc.") may request the Fair Trade Commission to prepare standard terms and conditions of contract in the field of trade in which consumer damage frequently occurs.

(3) The Fair Trade Commission may, upon the request of a consumer organization, etc. referred to in paragraph (2) or upon the request of many customers in a particular business area, recommend that an enterpriser or enterprisers' organization prepare standard terms and conditions to apply for review if there is no standardized terms and conditions or an unfair standardized contract exists.

(4) If enterprisers and enterprisers' organizations fail to take necessary measures within 4 months from the date of receiving the recommendation under paragraph (3), the Fair Trade Commission may prepare standard terms and conditions of contracts after hearing the opinions of the trading parties and consumer organizations in the related fields, and consulting with the related ministries and agencies.

(5) The Fair Trade Commission may make a public announcement of terms and conditions examined or prepared pursuant to paragraphs (1), (3) and (4) (hereinafter referred to as the "standard terms and conditions") and recommend enterprisers and enterprisers' organizations to use them.

(6) An enterpriser or enterprisers' organization which is recommended by the Fair Trade Commission to use standard terms and conditions shall indicate major contents different from standard terms and conditions in a manner that customers can easily understand them.

(7) The Fair Trade Commission may determine marks of standard terms and conditions in order to encourage the use of standard terms and conditions, and enterprisers and enterprisers' organizations, when they use standard terms and conditions, may use marks of standard terms and conditions as published by the

(8) No enterpriser or enterprisers' organization, if any content different from that of the standardized terms and conditions is used as a standardized terms and conditions mark, shall use it

(9) Where enterprisers and enterprisers' organization use marks of standard terms and conditions in violation of paragraph (8), the contents of such terms and conditions which are more unfavorable to customers shall be null and void.

Article 34 (Fine for Negligence)

(1) Any person who falls under any of the following subparagraphs shall be punished by a fine for negligence not exceeding 50 million won:

1. A person who violates the provisions of Article 19-2 (8);

(2) Any person who falls under any of the following subparagraphs shall be punished by a fine for negligence not exceeding five million won:

2. A person who violates the provisions of Article 19-2 (6);

B. Determination on this safety defense

The defendant asserts that the defendant's disposition of recommending the use of the amended standard terms and conditions of this case against the plaintiffs on February 11, 2008 is not an administrative disposition that is subject to appeal litigation since it does not cause direct change in the rights and obligations of the plaintiffs.

However, if an enterpriser or enterprisers' organization that is recommended by the defendant to use the standardized terms and conditions in a way different from that of the standardized terms and conditions, it should be noted that customers can easily understand the contents that are different from the standardized terms and conditions (Article 19-2 (6) of the Act). (2) If an enterpriser or enterprisers' organization uses any terms and conditions different from those of the standardized terms and conditions as the standardized terms and conditions (Article 19-2 (8) of the Act), the contents of the standardized terms and conditions that are more unfavorable to customers than the contents of the standardized terms and conditions when the enterpriser or enterprisers' organization uses the standardized terms and conditions in violation of Article 19-2 (8) of the Act (Article 19-2 (9) of the Act). (4) If an enterpriser or enterprisers' organization violates Article 19-2 (6) and (8) of the Act, it is reasonable to see that the above revision of the standardized terms and conditions in this case is subject to a disposition by the defendant directly considering the following reasons:

C. Whether the disposition is lawful

(1) The plaintiff's assertion

(A) The standard point of time for determining the illegality of the administrative disposition is at the time of the administrative disposition. Although the unfairness of the current standard terms and conditions of the present case is the requirement for the recommendation of the use right of the present case, the defendant decided that the use right of the present case does not meet the requirement for the use right of the present case and decided that the use right of the present case was not the requirement for the use right of the present case, the use right of the present case should be revoked without any need to

(B) The ex officio enactment of the standard terms and conditions under Article 19-2 (4) of the Act and the right to use the standard terms and conditions under Article 19-2 (5) of the Act shall be premised on the recommendation to prepare the standard terms and conditions under Article 19-2 (3) of the Act. The recommendation under Article 19-2 (3) of the Act may be made only when there is no standard terms or unfair terms and conditions in the pertinent market. In addition, the contents of the current standard terms and conditions in this case are not unfair and the current standard terms and conditions in this case are not unfair, and in light of the fact that the current standard terms and conditions in this case undergo the defendant's review, the current standard terms and conditions in this case are not unfair terms

(2) Determination

(A) The Defendant’s assertion that the instant license disposition should be revoked on the ground that he did not examine or decide on the unfairness of the current standard terms and conditions of the instant case when the Defendant rendered the instant license agreement.

In full view of the purport of the argument in Eul evidence No. 6, when the defendant amends the current standard terms and conditions in this case, it can be recognized that the defendant reviewed and determined the unfairness of the following: ① the basic terms and conditions in bank credit transactions and the basic terms and conditions in bank credit transactions (for example, household loan), ② the loan transaction agreement I (for household loan), the loan transaction agreement II (general automatic passbook loan and household loan), the loan transaction agreement I (for company loan), the loan transaction agreement I (general automatic passbook loan and household loan), and the loan transaction agreement II (comprehensive automatic passbook loan and cash loan) and the loan transaction agreement II (for company loan), and ③ the mortgage transaction agreement and the mortgage transaction agreement, etc.

(B) As to the assertion that the current standard terms and conditions of this case are not unfair, the disposition of this case’s right to use are unlawful

Article 19-2 (3) of the Act provides that "The Fair Trade Commission may, upon the request of a consumer organization, etc. under paragraph (2) or at the request of a consumer organization, etc. under Article 19-2 (2) or when there is no unfair standardized contract, recommend an enterpriser or an enterprisers' organization to prepare and request a review of the standardized contract if there is no standardized contract." Article 19-2 (4) and (5) of the Act provides that if an enterpriser or enterprisers' organization fails to take necessary measures within 4 months from the date it receives a recommendation under Article 19-2 (3) of the Act, the defendant may prepare standardized contract ex officio and encourage an enterpriser or enterprisers' organization to use it. Even if a consumer organization, etc. under Article 19-2 (2) of the Act has already made a request for a review of the standardized contract in a certain business area, if the defendant has already made a request for a review of the standardized contract, as well as where there is no unfair contract in a particular business area or there is a request of a consumer organization, etc. under Article 19-2 (2) of the Act.

Furthermore, we examine whether the current standard terms and conditions of this case are unfair clauses.

① Of the current standard terms and conditions of this case, each of the terms and conditions of bank credit transactions and the basic terms and conditions of bank credit transactions (for business use) provide that an obligor shall bear the burden of investigating the collateral. The cost of investigating the collateral in the above standardized terms and conditions appears to include not only the cost of exercising the security right but also the cost of securing the security right. In light of the fact that a bank is obliged to bear the cost incurred by the secured party in order to secure the security right (see Supreme Court Decision 86Meu2435, Jun. 9, 1987), it is reasonable to deem that the above standardized terms and conditions of the standardized terms and conditions of this case as unfair because it is unfairly unfavorable to a customer to determine a person who bears the cost of securing the security right through the standardized terms and conditions as a customer, and it cannot be deemed that the above standardized terms and conditions of the standardized terms and conditions are unfair. Thus, the Plaintiff’s assertion based on the premise that the standardized terms and conditions of this case are not unfair.

② Of the current standardized terms and conditions in this case, Article 4(2) of the Bank Credit Transactions Basic Terms and Conditions and Article 4(2) of the Bank Credit Transactions Basic Terms and Conditions provides that where a bank pays expenses under Article 4(1) on behalf of a customer, the debtor shall be paid in addition to the agreed interest rate on household loans in cases of household loans from the date of payment on behalf of the bank to the date of full payment. In cases of corporate loans, the debtor shall be paid in addition to damages for delay calculated according to the rate set by the bank within the limit set by the Acts and subordinate statutes (Articles 4(2) and 3(5) of the General Terms and Conditions in Credit Transactions (for enterprises), and damages for delay shall be calculated at the rate set by the bank within the limit set by the Acts and subordinate statutes (Article 3(5)). Since Article 55(2) of the Commercial Act provides that the bank shall not be deemed unfair from the date of payment on behalf of the customer, the bank shall not be deemed unfair from the date of payment on behalf of the customer, as well as from the above statutory interest rate set by the bank.

(3) Article 3(1) of the Loan Transaction Agreement (AB), Article 5(1) of the Loan Transaction Agreement II (AB) and Article 6(1) of the Credit Transaction Agreement I (AB) and Article 7(1) of the Credit Transaction Agreement II (AB) provide that the person liable for payment of stamp taxes may select the person liable for payment of stamp taxes. Article 8(2) of the Agreement provides that the person liable for payment of stamp taxes may select the person liable for payment of stamp taxes. Article 8(2) of the Agreement provides that the person liable for payment of registration tax for the establishment of a mortgage right or mortgage shall be able to select the person liable for payment of expenses incurred in the establishment of a mortgage right or mortgage and the person liable for stamp taxes. Since the Defendant did not properly guarantee the customer’s choice during the actual process of concluding a contract, the above agreement is alleged to be an unfair contract, but the above agreement itself cannot be deemed to be an unfair contract terms and conditions. Therefore, since the above unfair contract terms and conditions are based on the premise that the loans are unfair.

3. Determination as to the claim for revocation of amendment of two kinds of standard terms and conditions, such as bank credit transaction basic terms and conditions and bank credit transaction basic terms and conditions (for business purposes), among the current standard terms and conditions in this case

Of the current standard terms and conditions of this case which the Defendant made on January 30, 2008, the amendment of two types of standard terms and conditions of bank credit transactions, such as bank credit transaction basic terms and conditions and bank credit transaction basic terms and conditions, are merely nothing more than the defendant's internal decision-making, and thus cannot be deemed an administrative disposition that is subject to appeal litigation (see Supreme Court Decision 94Nu13794 delivered on May 12, 1995). Thus, the lawsuit seeking the revocation of the amendment of two types of standard terms and conditions of bank credit transactions among the current standard terms and conditions of this case, including bank credit transaction basic terms and conditions of this case and bank credit transaction basic terms and conditions, is unlawful.

4. Conclusion

Therefore, the plaintiffs' claims seeking the cancellation of the permit for the use of the amended standard terms and conditions in the case of six types, such as the loan transaction agreement I (for commercial use), the loan transaction agreement II (for commercial use), the loan transaction agreement I (the automatic passbook loan and household current loan), the credit transaction agreement II (the comprehensive passbook loan and current loan), the mortgage contract, the mortgage contract, and the mortgage contract, are reasonable. Accordingly, the plaintiffs' claims seeking the cancellation of the permit for the use of the amended standard terms and conditions in the case of two types, such as the bank credit transaction basic terms and conditions (for commercial use) and the bank credit transaction basic terms and conditions (for commercial use), are dismissed. It is so decided as per Disposition by the assent of all participating Justices, since the lawsuits seeking the cancellation of the revised permit for the use of the amended standard terms and conditions in the case of two types, such as the bank credit transaction basic terms and conditions (for commercial use) and the bank credit transaction basic terms and conditions (for commercial use)

Judges Lee Sung-sung (Presiding Judge)