Korea has recently been affected by typhoons and severe flooding caused by the heaviest rainfall in centuries. These issues led to the loss of life, property, business and the livelihood of many individuals. Many alleged defaulting/breaching parties to an agreement have claimed Force Majeure as a defense to non-performance of contractual obligations. A Korean court recognized Force Majeure Event offers relief to the alleged defaulting/breaching party, in Korea, if the party fulfils the legal requirements noted below. Force Majeure Defined
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Garnishing Wages in Korea: Collection of Debts in Korea
I received a call from a friend asking about information concerning collecting on a personal debt. He loaned money to a “friend” and the friend never made a payment on the loan. I advised one of the ways to encourage payment is via garnishing wages. Korea has an effective and efficient method of garnishing wages. In Korea, after a judgment or order to pay by a court, a plaintiff can collect on an unpaid debt through garnishing wages. Garnishing of
Continue readingDebtor’s Liability to New Owner after Transfer of Business and Trade Name
A developer recently contacted IPG Legal concerning a dispute with a supplier of building materials. The developer purchased building materials from a supplier with payment to be forwarded 30-days after receipt of the materials. This is a common practice when a supplier has a long-term relationship with a developer, provides a consistent flow of supplies to a developer, and the developer is solvent. Here comes the problem. The supplier was sold and the business and trade name was transferred to
Continue readingHow Foreign Companies and Individuals can Collect Debts from Debtors in South Korea?
Many foreigners, both companies and individuals, seek our advice on how they can effectively collect debts from debtors with assets, businesses and/or residences in Korea. The following article details the major means of collecting on a debt in Korea. Collecting a Debt in South Korea from a Korean Debtor Hire an Experienced English-Speaking Korean Law FirmIt is crucial that you hire a Korean law firm with experience in collecting on debts for non-Korean or foreign-capital invested companies. Not all lawyers
Continue readingProvisional Attachments of Assets in Pending Litigation in Korea Courts
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
Continue readingKorean Commercial Liens versus Korean Civil Liens
Korea, in short, has two major types of liens – Commercial Liens and a Civil Liens. For example, in a dispute between a contractor and a landowner or developer, a contractor make execute a Commercial Lien or Civil Lien. A Commercial Lien is governed by the Korean Commercial Code while a Civil Lien is governed by the Korean Civil Code. I shall for ease, utilize the contractor and landowner (developer) for example purposes only. For explanation of Korea’s law on
Continue readingArrest/Attachment of Ships at Korean Ports: Maritime Liens in Korea
The arrest of vessels/ships in Korea is a common tool to satisfy judgements against debtors. Korean courts allow the ex-parte arrest of ships. The court, normally, does not request from the Korean counsel of the creditor/claimant evidence of how long the ship will remain in Korean waters, as is, sometimes, the case in other neighboring jurisdictions. We find Korea to be a much easier destination for arresting vehicles than many other Asian nations, because of the efficiency focus of the
Continue readingKorean Act on Special Cases Concerning the Establishment and Operation of Internet Banks
In September 2018 the Korean National Assembly passed the Korean Act on Special Cases Concerning the Establishment and Operation of Internet Banks (hereinafter as “Act on Internet-Only Banks”), which is in force since January 2019. The major facial intent of the Act on Internet-Only Banks is to “…encourage innovative enterprises to enter the financial market while laying the legal framework for the convergence of information and communications technologies (ICT) with financial services, and the creation of new economic growth drivers.”
Continue readingPiercing the Corporate Veil in Korea: Suing Shareholders of a Corporation
It is possible, in some situations, for shareholders to be sued for the acts of a corporation. The concept is called “piercing the corporate veil.” The Supreme Court of Korea has noted that the corporate veil may be pierced and a shareholder may be sued: “Where a company maintains the external appearance of a juristic person while it merely takes the form of a juristic person and, in substance, it is equivalent to other person’s private enterprise behind the corporate
Continue reading7 Musts to Succeed in Business in Korea
We have the unique pleasure to have a bird’s-eye view of numerous clients’ businesses in Korea. At this stage of our experience in Korea we are, typically, able to determine which companies will, likely, succeed and which companies will, likely, fail. We are far from perfect, but companies that succeed in Korea, normally, have the following seven things in common: 1. Comprehensive Understanding of the Korean Market by a Neutral Local Consultant This understanding, normally, comes from one of the
Continue readingWills, Trusts, Pre-Nuptial Agreements, Living Wills, and Power of Attorneys in Korea
We receive numerous calls requesting the notarization of wills, living wills, general and specific power of attorneys, prenuptial agreements and other like agreements and documents in Korea. These documents are, often, just pulled from the internet. Pulling these documents from the internet is not adequate – in most cases. We, sometimes, notarize these agreements for clients, however, in most cases we refer the client to their local embassy in Seoul, since the embassy stamp has a far less chance of
Continue readingEnforcement of Arbitral Awards in Korean Courts: Arbitration Law Basics
After an arbitration panel outside of Korea renders an arbitral award against a Korean company or individual, typically, if the non-prevailing party lacks assets outside of Korea or the prevailing party needs to enjoin acts in Korea, the prevailing party chooses to enforce the arbitration award in Korea. Enforcement is not as easy as just giving arbitral awards to non-prevailing Korean parties. For enforcement of foreign judgments in Korean courts please see: Enforcement of Foreign Judgments in Korean Courts. When
Continue readingTax Liability of Controlling Shareholders in a Korean Company: Tax Law Updates
Under Article 39 of Korea’s Framework Act on National Taxes, unpaid taxes owed to the Korean government are enforceable against certain “ologopolistic” shareholders of respective debtor company’s shareholder. This secondary liability of shareholders is codified within the Framework Act on National Taxation. Article 39 of the Framework Act on National Taxes, specifically, notes that: “Where the property of a corporation is not enough to pay national taxes, additional dues and disposition fees for arrears imposed upon or to be paid
Continue readingPrivity of Contract in Franchise Agreements in Korea: Korean Franchise Law Updates
Normally, in Korea, a contract/agreement cannot confer rights nor impose obligations upon a person who is no a party to the contract/agreement. One interesting case, in franchise law, applied this principle to the benefit of the franchisor and the detriment to a supplier. A Supplier delivered food through a Distributor to a Franchisee based on a franchisee requirement iterated in a franchise agreement with a franchisor. The case brings to light, also, the potential liability of franchisors for acts of Korean franchisees. The
Continue readingDebt Collection Cases in Korea on the Rise: Buyers and Sellers Beware
My firm has noticed a sharp increase in the number of requests for the debt collection services of my team. One of these cases involves an unpaid invoice from a British company to a Korean wholesaler for over USD 700,000. The British company was duped by a small paid invoice which was quickly followed by an unpaid large invoice. Of course, the Korean company (not a company –one guy and a personal bank account) was not capitalized and has few
Continue readingEnglish-speaking Korean lawyers and International Lawyers at International Law Firm in Korea discussing issues of Korean Law
IPG Legal is a leading client-focused international law firm with offices in Korea that is, often, selected over the ubiquitous Korean Law Firms when success is essential and success depends on nuanced street-smart advice, proactive and unconflicted representation. Our attorneys are, intentionally. different from the crowd. From our retired judge partners to our junior associates, we are all trained with an intense focus on client success, lawyer proactivity, and to understand the nexus between your commercial and legal needs. Our attorneys
Continue readingA Franchisor may be Unable to Prosecute a Franchisee for Embezzlement in Korea
Article 355 of Korea’s Criminal Act defines embezzlement as: “a person who, having the custody of another’s property, embezzles or refuses to return the property shall be punished by imprisonment for not more than five years or a fine not exceeding fifteen million won.” In a landmark case in Korea’s Franchise Jurisprudence, the Supreme Court ruled a franchisee may not be held criminally liable for embezzlement for “arbitrary spending of funds” and not paying franchise fees under the franchise agreement,
Continue readingExecution/Enforcement of American, European & other Nation Court Judgments in Korean Courts
Question: I have a final judgment against a Korean company from a New York State Court. How can I enforce this judgment in Korea against this Korean company? Korean Central District Court. Answer: A foreign judgment, in Korea, can be executed based on meeting the requirements of the Civil Execution Act of Korea and Civil Procedure Act of Korea. The relevant provision are Article 26 and Article 27 of the Korean Civil Execution Act and Article 217 of the Korean
Continue readingWill the Korean Government Kill Bitcoin? The legality of Bitcoin in Korea
Local Korean vernaculars have reported that Bitcoin and other “Alt Coins” are to be investigated by the Bank of Korea, Korea’s Prosecutors Office and other government agencies. It is alleged by some in the Korean government that these crypto-currencies may be nothing more than Ponzi or Pump & Dumb Schemes. While, others, proclaim these currencies are at the foundation of freedom and they help to fight inflation imposed by central banking authorities, allows for anonymous transactions and low transaction fees.
Continue readingKorea New Exchange (KONEX) Basics
The Korean Exchange (KRX) established, on July 1, 2013, an SME only-listed securities market with the, facial, purpose of providing a new avenue for SMEs in obtaining assets for investments. A KONEX-listed firm with capabilities to list, at a later date, on the KOSDAQ or KOSPI may, also, benefit from a stream-lined procedure to list on the KOSDAQ or KOSPI. Korea’s capital markets have been, strongly, criticized for not providing adequate funding sources for small companies. Most funding for companies
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