A party attempting to collect on a debt or potential liability based on breach of contract or torts in Korea may obtain a Provisional Attachment of an Asset. Another useful tool to expedite proceeding in a Korean civil matter is to Obtain a Payment Order from a Korean Court.
A provisional attachment is considered provisional, since the attachment is executed prior to the final judgement. The, facial, purpose of a provisional attachment is to secure assets necessary for enforcement in cases where a defendant may conceal or dispose of assets. However, a provisional attachment, often, encourages settlement. We advise most creditors attempting to enforce a debt or potential debt against a debtor is to obtain a provisional attachment if the debtor is a company or individual without significant tangible assets. Companies with significant assets are likely to pay debts after a judgement and, normally, are not significantly harmed by the attachment.
Courts are liberal in the type of asset a plaintiff may attach. A plaintiff may, thus, request to a Korean Court to attach rental deposits, receivables, real property and movable assets including automobiles, office equipment and bank accounts.
Provisional Attachment Test
In order to obtain a Provisional Attachment, in Korea, a creditor must establish that:
- A prima facie claim exists that is likely to lead to the awarding of monetary damages; and
- Without the attachment enforcement of the judgment is not likely.
The provisional attachment, typically, is granted without the participation of the defendant in the matter (Ex Parte). However, the defendant may file an objection to the provisional attachment after the awarding of the attachment based on not meeting of the Provisional Attachment Test or other reasons specified under Korean Law. In many cases, for the attachment to be lifted, the defendant shall be required to post security.
A plaintiff, in order for a provisional attachment to be granted needs, in most cases, to post a cash security equal to a percentage of the attached value.
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