Contracts with Korean Company or Foreign Subsidiary of Company: Enforcement of Foreign Judgments in Korea

A recent amendment of the Korean Civil Procedure Act added Article 217-2.  The Amendment has codified a holding by the Seoul Central District Court and other Korean courts noting, in part, that Korean courts may refuse to "recognize foreign damage awards that clearly exceed amounts considered reasonable in Korea in violation of good morals and the social order of Korea"(99 KaHap 14496, S. Cent. Distr. Court, 10/20/2000).

The Amendment allows courts, in Korea, the power to not recognize a damage award that the court's perceives as "excessive."  This standard-less "standard" leaves much wiggle room for Korean courts.    
A typical situation is a case where an American importer sues a Korean conglomerate in a U.S. court and damages are awarded to the U.S. company.  The American importer, then, attempts to enforce the judgment in Korea. 

There is a simple way to avoid the risk of your judgment not being enforced in Korea.  Don't require yourself to have a need to enforce your judgment in Korea.

Be smart - sign the agreement, not, with a Korean conglomerate's Korean HQ, but with the American subsidiary of the Korean conglomerate if, inter alia, the subsidiary is capitalized and has assets to attach.  Most Korean companies have substantial assets tucked away in Hong Kong, U.S. and European companies.

Please have an attorney with significant experience with enforcing judgments against Korean conglomerates review your agreement.  Signing an agreement with a subsidiary poses, potentially, other risks. 

The reality is, with this amendment and a few noted cases, a foreign judgment may not be fully enforced in Korea.  Thus, put strategy to work for you.  Also, remember it is better, in most cases, to not work and not be paid than to work and not be paid. 
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal.

He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.  Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.

5 Businesses to Avoid in Korea

We get a number of hare-brained foreigners that have requested advice on the opening of some peculiar businesses.  Here are a few businesses that we do not advise opening in Korea.
  1.  Farming. Prohibited for foreigners and foreign companies.  For example, the growing of rice and barley is prohibited for foreigners.  The farmers don't even want to be in this business.  Stay away.
  2. Publishing & Broadcasting.  Prohibited for foreigners to own 50% or more of a publishing company and totally prohibited in the case of radio & TV.  The industry is, also, saturated and the few foreigners operating as a minority shareholder in the publishing industry have faced difficulties in recent years, because of fierce competition for advertisers. 
  3. Raising Dogs for Consumption.  I, actually, had a man call me for this one.  Ignoring that this may be a prohibited business for foreigners, you will, likely, have a few protestors that will make it very difficult to do business.  If you love to eat or watch others eat dogs, we suggest considering a planet that doesn't have animal protection societies. 
  4. Any Business that is in Direct Competition with the Big Boys.  SHHH. Samsung.  Enough said.
  5. Did I Mention not Competing with the Big Boys?

I was motivated to write this post by my friends over at China Law Blog.  They wrote an article entitled: 4 Chinese Businesses to Avoid that was motivated by an article entitled: Keep Away from the Unicorns: 4 Chinese Businesses to Avoid.

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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.

Sentences Lower for the Wealthier in Korea - According to Recent Study

The Korea Herald reported on an interesting study regarding sentencing differentials between, inter alia, those that embezzled lower sums of money to those that embezzled greater sums of money.   The study was commissioned by the Supreme Public Prosecutors Office.  I have not taken a look at the study, but will in the near future.

The impression by many, in Korea, is that the most noteworthy cases of embezzlement and bribery concerning substantial amounts of money (often presidents, chairman of conglomerates and their family), normally, receive lighter sentences than those that are involved in less noteworthy crimes.  The study seems to substantiate this belief.

However, again, I have never read the finding of the study. 

The Korea Herald notes, in part, that: 
"The courtroom should be the last place where money talks. Many Koreans, however, remain skeptical about whether this saying applies to the local judicial system as they have seen some rich and influential people receive relatively lenient punishments for their crimes.
Their skepticism of judicial equality was probably deepened by a recent report indicating that judges here have made some unequal rulings on white collar crimes such as embezzlement and bribery. The report released by a research team at a local university last week cited specific data suggesting that the larger the amount of money involved, the more clemency judges tend to show to persons accused of misappropriation or bribery.
Over the 2011-13 period, 3,720 defendants charged with embezzlement and breach of trust were sentenced at courts of first instance across the country. More than 91 percent of the sentences were made within the scope of penalty assessment standards set by the Supreme Court.
But adherence to the standards was in inverse proportion to the scale of embezzlement as judges tended in more severe cases to make rulings that fell below sentencing guidelines. The compliance rate was as high as 98.4 percent for embezzlement of less than 100 million won ($90,800). But the figure declined to 68.5 percent and 41.7 percent for cases involving sums between 5 billion won and 30 billion won and above 30 billion won, respectively.
A similar tendency was found in rulings on bribery cases. More than 96 percent of sentences for those accused of giving or taking less than 10 million won in bribes adhered to the guidelines but the rate fell to 25 percent when the amount was between 50 million won and 100 million won.
Such findings reinforced the public perception that local courts are likely to become more compassionate when dealing with larger-scale white collar crimes. Judges should depart from this tendency, which deepens distrust in the judicial system and hampers efforts to eradicate corrupt practices pervading our society. Sentencing guidelines should be applied more strictly to embezzlement and bribery cases involving larger amounts of money. "
The complete article may be found at: Compassionate Ruling.
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.

Doing Business in Korea: A blog and webroll

A client has requested that I provide to him a list of blogs and websites that I regularly read on business in Korea.  Ok. I don't, actually, regularly read these sites and blogs, but they may be useful to the reader. 
The reality is Korea has few useful sites for entrepreneurs wishing to do business in Korea.  Most sites are not updated often, the information is too general or they contain useless rubbish. 

If I should include a site, please advise.  If this list gets long enough, I will place this list on a blogroll.  Guys, I know a couple of these sites are useless for readers of this blog.  Most of the information on some of these sites are useless for those that have spent a good deal of time doing business in Korea. 

BASIC GUIDES TO BUSINESS IN KOREA
 BLOGS/NEWS MAGAZINES
More to come.  Please post blogs that we should add in the comment section below.
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info@ipglegal.com

Dow Chemical & Monsanto Prevail at Seoul High Court Against Korean Vietnam War Veterans

The Seoul High Court has ruled, this week, that no "epidemiological correlation" exists between the use of defoliants in Vietnam and the alleged sickness of veterans since the "causes of these diseases are very complicated."

The decision is, likely, a welcomed decision by the numerous Korean conglomerates and chemical companies that are experiencing similar lawsuits. 

We will update the reader on future cases that are handed down by the Korean courts.
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.

Regulating the Korean Government Way: Consumer vs. Small Retailers

The Korean government, increasingly, is looking for ways to project small enterprises, often, with disregard for consumers.  A recent regulation on book sales is a key example.  

A new regulation allows booksellers to, only discount from the cover price by up to15% with 5% of the discount via a bookstore membership scheme.  The new regulation does not distinquish between recently released books and older books. 

The law has led to some stores to discount books by as much as 90% and for customers to drastically increase the number of books purchased before the enactment of the law late next week.  

The purpose of the law, facially, is to protect small stores from online discount vendors and mega bookstores.  Many consumers are up in arms.

What do you think? 


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info@ipglegal.com

Captain of Korean Ferry Receives 36 Year Jail Sentence: Likely Life Sentence for Elderly Captain

The prosecution has requested the death penalty based on a charge of murder.  The captain was found not guilty of the murder charge and guilty of the charge of grossly negligent homicide in the death of 304 passengers.

We will be reviewing the decision and will post more details in the near future.

I am happy to see that the court did not make a mere political decision.  The facts, clearly, do not equal murder. 

What do you think?
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.

Exit Ban of Foreigners in Korea for Not Paying Taxes, Custom Duties or Violation of Law: Immigration Law Basics

The Korean Immigration Control Act and related acts allows the potential to permanently impose an exit ban on foreigner for nearly all acts that are determined by the Ministry of Justice as "harming the interest, public safety or order in the economy of the Republic of Korea" until the reason for the exit ban ceases to exist. (Immigration Control Act of Korea Article 4(1)5.)

The Immigration Control Act of Korea, also, always Korean government agencies to request the imposition of an exit ban on foreigners.

Determination of the Ministry of Justice may be appealed within the Ministry and if turned down - may be appealed to the Administrative Court of Korea.

Yes, this post is related to a matter we are presently handling.

The relevant provisions of Korean law includes:
  1. Immigration Control Act, Article 4 (Prohibition of Departure)
  2. Immigration Control Act, Article 4-2 (Extension of Period of Prohibition of Departure)
  3. Immigration Control Act, Article 4-3 (Revocation of Prohibition of Departure)
  4. Immigration Control Act, Article 4-4 (Notice of Decision etc. on Prohibition of Departure)
  5. Immigration Control Act, Article 4-5 (Filing Objections to Decisions, etc. on Prohibition of Departure)
  6. Immigration Control Act, Article 29 (Suspension of Foreigners' Departure)
Other articles that may be of interest to the reader:
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.