Enforceability of Foreign Punitive Damage Awards in Korean Courts

IPG Legal litigates and arbitrates matters internationally and we, often face the challenge of enforcing punitive damage awards and even interest awards in Korean Courts, because of the viewpoint of courts in Korea that exemplary (punitive damage) awards are against public policy.

Many law firms in Korea capable of handling these cases, often don’t push to enforce the punitive damage portion of awards in fear of upsetting the status quo and their Korean clients. We have seen, over the past decade, with increased competition in the legal market – some positive changes.

Because of the many matters IPG Legal handled and a few other proactive litigation firms in Korea handled, the Korean courts are moving to become more accepting and understanding of the benefits to the legal system and the reputation of Korea in enforcing punitive damage awards and foreign judgments in Korean courts.

While, IPG Legal attorneys enforced punitive damage-like awards in lower Korean courts prior to the following holding noted below, the case explained below is the first case we found in which the Supreme Court of Korea made a definitive holding on the awarding of punitive (exemplary) damages.

Supreme Court of Korea Treble Damage Holding

March of 2022, the Supreme Court ruled that treble damages awarded by a Hawaiian court were enforceable in Korea and, thus, were not against Article 217-2 of the Civil Procedure Act of Korea as “contrary to the basic order of Korean laws.”

The Hawaii Court ruled that the plaintiffs in the matter suffered injuries since the defendant tortiously interfered with a contract (competition law/anti-trust law tort).

Hawaiian Revised Statutes Section 480-13 mandates that an injured party that is damaged may be ordered to pay “a sum not less than $1,000 or threefold damages by the plaintiff sustained, whichever sum is the greater.” The Hawaiian court awarded the treble damages and the plaintiffs in the matter attempted to enforce the judgments in Korea, seemingly, because the defendant had no discoverable assets in the United States.

The plaintiffs prevailed in a Seoul district court, but the Seoul High Court overruled the enforcement holding noting that the treble damages award was against public policy. The Supreme Court reversed the Seoul High Court’s decision noting, in short, that if Korean law provides within like laws treble or other exemplary damages, Korean courts may enforce the damage award in Korea. In the present case, the Korean Supreme Court ruled that the Hawaiian law was akin to regulations imposed by the Korean Fair Trade Act which allows for treble damages.

Other Korean acts that impose treble and other types of exemplary damages include the Korean Patent Act and Korean Trade Secret Act along with other acts such as acts related to labor & employment and privacy laws.

If you believe you shall not find assets in your own jurisdiction and shall litigate a case in your jurisdiction, please discuss the matter with us before litigating in your jurisdiction. In many cases, an argument can be made in your home jurisdiction that shall lead to the enforceability of punitive-like damages in Korea.

Sean Hayes 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, and IPG Legal is consistently ranked Top Dispute Resolution Law Firm for our litigation services.

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