Korean Supreme Court Rules on Foreign Embassy Land Occupation: Denies Removal and Return Claims but Affirms Right to Compensation

In a recent ruling, the Korean Supreme Court clarified the legal boundaries surrounding foreign diplomatic missions occupying private land in Korea. While it confirmed that the removal of such missions or the return of occupied land cannot be demanded, it stated that compensation for land use may be claimed through litigation.

In the case at hand, a Korean company sued Mongolia for the removal of buildings located on land next to the Mongolian Embassy in Yongsan-gu, Seoul. The plaintiff had purchased land in 2015, but discovered that part of it was being used by the embassy for its diplomatic functions.  

The plaintiff filed a lawsuit in February 2017 seeking the removal of the building on the alleged purchased land and the return of the disputed land. Additionally, the plaintiff demanded the payment of unjust gains equivalent to rental fees for the unauthorized occupation.

The Korean district court and appellate court dismissed the plaintiff’s claims, citing that the use of the disputed building and land was part of the diplomatic mission. The use of the land directly and indirectly impacts the performance of the Mongolian Embassy’s duties and thus relates to sovereign activities, which precludes the jurisdiction of Korean courts.

However, the Korean appellate court accepted the plaintiff’s preliminary claim to confirm ownership, stating that even if a judgment confirming ownership of the disputed land were obtained, it would not be enforceable and could not, in itself, constitute undue interference in Mongolia’s sovereign diplomatic activities.

In contrast to the district court and the appellate court’s ruling, the Supreme Court of Korea ruled that the issue of compensation for land use should be reconsidered, emphasizing that foreign entities are not automatically exempt from the jurisdiction of Korean courts regarding land ownership. The Supreme Court of Korea stated that real estate is a matter of territorial sovereignty and that foreign entities cannot be automatically exempt from the jurisdiction of the courts in Korea where the property is located solely based on their foreign status.  The Korean Supreme Court determined that the occupation of domestic real estate by foreign entities cannot necessarily be classified as a judicial act that pertains to or is closely related to sovereign activities.

The ruling clarified that proceedings seeking the return of unjust gains do not, by themselves, affect the occupation of a foreign diplomatic mission and are not directly related to the performance of the embassy’s functions; therefore, it cannot be argued that there is a risk of obstructing the mission’s operations.

However, the Supreme Court of Korea emphasized that the occupation of property as a diplomatic area by a foreign entity is closely linked to sovereign activities, and under international law, foreign diplomatic areas are generally inviolable, with the host country having an obligation to protect them. Thus, it concluded that claims for removal or return of land cannot be accepted.

This ruling is significant as it establishes that claims for monetary compensation related to real estate occupied as diplomatic zones may fall within the jurisdiction of Korean courts, marking a notable clarification in diplomatic law.

by Minyeong Park (Korean Attorney-at-Law)

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