建设·不动产
[Construction & Real Estate] A case in which we are granted damages for additional corporate income tax based on an oral agreement
1. Overview of the caseWhen the plaintiffs sold their land to the defendant, the defendant explained that the plaintiffs would not have to additionally pay corporate taxes because the defendant was going to conduct a publicly supported private rental housing project on the land, and the plaintiffs entered into a real estate purchase and sale contract in reliance on the defendant’s statement. However, the defendant later abandoned the publicly supported private rental housing project, and the plaintiffs had to pay additional corporate taxes. In response, the plaintiffs sued the defendant for damages for the additional corporate taxes, claiming that the defendant breached the arrangement that the plaintiffs would not have to pay additional corporate taxes from the transfer of land (the “arrangement in this case”). Meanwhile, the real estate sale and purchase agreement (the “SPA”) between the plaintiffs and the defendant did not have the arrangement in this case stipulated therein. 2. Issues in the caseIn the above case, the parties disputed various issues, including (i) whether the existence of the arrangement in this case that is not specifically stated in the SPA could be recognized, (ii) whether the arrangement in this case was prima facie incompetent because the defendant was not qualified to pursue the publicly supported private rental housing project in the first place, and (iii) whether the defendant's representative who entered into the arrangement in this case had the representative authority and, if not, whether representation could be established by unauthorized representation. Of these issues, the claims of prima facie incompetence and unauthorized representation were raised for the first time on appeal. 3. Our arguments and roleOn appeal, we argued on behalf of the plaintiffs that (i) the SPA contained the phrase “for the construction of publicly supported private rental housing” at the beginning of the agreement; (ii) the broker of the real estate purchase and sale testified that he had requested that the arrangement in this case be included in the agreement at the time of signing the agreement, but was rejected because of the phrase above at the beginning of the agreement; (iii) the defendant was objectively not in a state where it was impossible for the defendant to pursue the publicly supported private rental housing project, (iv) the defendant's representative was in charge of all matters related to the SPA, and the defendant even called the representative as a witness at the first trial, explaining that he was the person in charge of the overall matters relating to the SPA; and (v) the defendant was able to gain significant additional profits from the private project by abandoning the publicly supported private rental housing project. The Seoul High Court largely accepted our arguments and handed down a judgment in favor of the plaintiffs (dismissing the appeal). 4. Implications of the decisionThe above decision is significant in that it recognized an oral agreement that was not expressly stated in a purchase and sale agreement in connection with the acquisition of a business site for a real estate development project based on the opening paragraph of the agreement, the testimony of the parties involved, and other circumstances. We believe this decision will be instructive in other cases where the existence of an oral contract is at issue. The decision is also significant in that it reaffirms the existing jurisprudence regarding the determination of prima facie incapacity and the existence of representation power. □ Attorneys in charge: Kim Yong-kyun , Park Sang-Oh
2024. 04. 30
金融诉讼
证券
M&A/公司治理结构
[Financial/Civil] A case in which we obtain a favorable ruling by overturning the first trial court's ruling that recognized the termination of the agreement due to a change in circumstances because the target company was delisted after the signing of the stock purchase agreement
1. Overview of the casea. Who did Barun Law represent?: We represented a representative director of a local medium sized enterprise. b. Background of the case : The plaintiff, represented by Barun Law, entered into a stock purchase and sale agreement (the “Agreement”) with the defendant to sell certain shares in Company A, a publicly traded company, for KRW 3 billion. After the stock purchase and sale agreement was signed, Company A was delisted from the Korea Exchange. c. Litigation : The plaintiff sued the defendant, claiming that “the Agreement must be performed despite the delisting”. The court of first instance ruled in favor of the defendant that the Agreement did not need to be performed because it was delisted, accepting the defendant’s argument for the change of circumstances. The plaintiff filed an appeal to the decision of first instance. 2. DecisionThe court of appeal fully accepted our arguments, reversed the trial court’s judgment and ordered the defendant to fulfill its obligations under the Agreement. Recently, the Supreme Court also made the same decision as the appellate court 3. Basis of the judgmentBased on the circumstances, the court ruled that the defendant could have fully foreseen the possibility of delisting. Therefore, the defendant, who entered into the Agreement with such a risk, cannot claim a change of circumstances and must fulfill its obligations under the Agreement. 4. Our argument and roleOn behalf of the plaintiff in the appeal, we analyzed various disclosures, including the audit reports of Company A, in chronological order, and explained in detail the background and purpose of the Agreement executed between the plaintiff and the defendant. At the same time, we emphasized that the defendant knew that Company A was in danger of delisting, but took the risk and purchased the shares from the plaintiff. 5. Implications of the decisionAs the number of delisted companies has been increasing recently, disputes over stock purchase and sale contracts have been increasing rapidly. It is expected that this case will serve as a best practice for companies facing delisting. □ Attorneys in charge: Choi Jin-sook, Kim Do-Hyung, Choi Kyung-jin
2024. 04. 30
控告及应对调查
[Criminal] A case in which we obtain the dismissal of the prosecution's request for issuance of an arrest warrant against Samsung Electronics' former expatriate of an overseas subsidiary for the alleged violation (breach of duty) of the Act on Aggravated Punishment for Specific Economic Crimes
1. Overview of the case
Samsung Electronics filed a complaint against two former expatriates and two current employees of an overseas subsidiary, alleging that they conspired to deliver tablet PC packages to a company in a foreign country in 2021 and embezzled approximately KRW 7 billion by providing the profits, which Samsung Electronics should have earned, to the vendor and being returned a portion of the profits from the vendor.After filing the complaint, the prosecution secured evidence through seizure and search, and conducted direct investigations for several months. On March 20, 2024, the prosecution requested an arrest warrant for three people, including our client.The client had retained other lawyers to respond to the investigation, but in September 2023, the client requested assistance from us, which have strong experience in anti-corruption investigations.2. Our roleWith the help of partner lawyers who are familiar with the prosecution’s anti-corruption investigations, we clearly identified factual information and submitted several opinion letters stating that there was no criminal offense in the entirety of the criminal allegations, and conducted face-to-face defense against the investigation line.In the warrant court, we emphasized that (i) the client, who left the company in 2019, is not a co-culprit of the alleged crime of breach of duty because he was not involved in instigating the alleged criminal act or the alleged crime as a whole, even if we followed the prosecution’s argument; (ii) since the tablet PCs in the tablet PC packages were decided by the Dubai subsidiary and headquarters of Samsung Electronics, and the accessories were decided by the vendor in Egypt, the low-level employee had no influence on pricing the products, (iii) the company established by the client was a business that conducted normal trade transactions and was not a paper company as claimed by Samsung Electronics, (iv) contrary to the prosecution’s allegations, the client never engaged in equal distribution of profits, (v) the prosecution also admitted that half of Samsung Electronics’ accusations were false and the prosecution deleted them from the criminal facts of the seizure and search warrant and the arrest warrant; and (vi) Samsung Electronics’ accusations were based on the factual statements of the low-level employees, half of which the prosecution recognized as false and the other half of which were not credible because they were contradicted by objective evidence. We also clarified that given that the client argued his innocence, the client was not likely to attempt to run away and destroy evidence. The court dismissed the prosecution’s request for issuance of arrest warrants filed against three suspects, including the client.3. Outcome and significanceThis case is a case in which Samsung Electronics conducted an internal audit and appointed the largest law firm in Korea to sue its former and current executives and employees for violation of the Act on Aggravated Punishment for Specific Economic Crimes (Breach of Duty) amounting to approximately KRW 7 billion. If not handled properly, there was a strong possibility that an arrest warrant would have been issued.However, by appointing Barun Law, which has excellent capabilities in handling anti-corruption investigations, the client was able to go to trial without being detained.□ Attorneys in charge: : Cho Jae-bin, Lee Won-Keun, Son Young-Ho, Lee Yun-sang
2024. 04. 30
行政诉讼
宪法诉讼
[Administrative] A case in which we obtain final judgment that a law school's admission rejection against a Seventh-day Adventist on the basis of his absence of the interview assessment held on a Sabbath despite his request to change the interview time is illegal
1. Overview of the casea. Who was the party represented by Barun Law? : Barun Law represented a Seventh-day Adventist who applied for admission to Chonnam National University School of Law in 2021. b. Background of the case : A is a Seventh-day Adventist. According to Seventh-day Adventist doctrine, the period from sunset on Friday to sunset on Saturday is observed as a Sabbath. A does not engage in secular activities such as work, business, school activities, and taking exams on the Sabbath. A applied for admission to Chonnam National University’s law school class of 2021. He would be unable to fulfill his religious beliefs to observe the Sabbath if the interview was scheduled before sunset on Saturday. However, when the president of Chonnam National University notified A that he had passed the first stage of the enterance exam, the president designated that he should have an admission interview in the morning of Saturday. A submitted an appeal to the president of Chonnam National University, stating that he wished to change the interview to the last round on Saturday afternoon, but the president of Chonnam National University refused. A did not take the admission interview, and the president of Chonnam National University gave A a notice of rejection. c. Litigation : The court of first instance dismissed A's claim, stating that “the change in the order of the interview is likely to result in possible fraudulent practices or attempts to cheat in the examination, and various difficulties are expected for the administrators. Therefore, even though the interview was held before sunset on the Saturday without taking alternative measures, it is hard to say that the principle of proportionality or equality is violated. Accordingly, it is hard to say that the rejection was an abuse of discretion”. On the other hand, the appeal court found that the “interview after quarantine” method requested by A could be an alternative method that would allow A to observe his religious conscience and would not compromise the equality and fairness of the interview process, so the Chonnam National University president’s refusal to reschedule the interview was an abuse of discretion in violation of the principle of proportionality. Accordingly, the appeal court canceled the president of Chonnam National University's action of refusing to reschedule the interview and the rejection of the candidate, respectively. 2. DecisionSupreme Court Decision 2022 Du 5661, dated April 4, 2024 3. Basis of the decisionThe Supreme Court held that even if the measures to eliminate the disadvantage caused by the Adventists’ religious beliefs somewhat restrict the public interest or the interests of third parties, if the degree of restriction is recognized as significantly less than the disadvantage suffered by the Adventists, the defendant (i.e., the president of Chonnam National University), who bears the duty and responsibility to realize substantive equality, is obliged to take active measures to eliminate the disadvantage suffered by the Adventists upon their request. In this case, the Supreme Court held that A’s religious beliefs caused him to be disadvantaged by not being able to take the interview scheduled for Saturday morning, and that the disadvantage of being deprived of the opportunity to enter Chonnam National University’s law school could not be considered light. On the other hand, unlike the paper-based test, the interview evaluation in this case is conducted individually, so it is easy to change the interview time of only A's interview to after sunset on Saturday, and there is no need to change the interview time of other candidates in the process, and it is difficult to see that A suffered any unfair advantage in the process because all candidates for the interview evaluation submit their belongings and wait for their turn to be interviewed in isolation. Therefore, even if the president of Chonnam National University changed the interview time to address the disadvantage caused by A's religious beliefs, the public interest or the interests of third parties that would be restricted as a result would be significantly less than A’s disadvantage. The Supreme Court dismissed the appeal of the defendant (president of Chonnam National University), holding that the rejection of A by the president of Chonnam National University was based on A’s failure to appear at the illegally designated interview date, and therefore, there was no legitimate reason for the rejection and it should be canceled. 4. Our arguments and roleOn behalf of A before the appeal court and the Supreme Court, we explained that the alternative method of “interview after quarantine” could be reconciled with A’s religious beliefs (conscience) without compromising the fairness and equality of the entrance examination, citing the precedents involved with exams conducted at a university and a law school, as well as domestic and foreign legislative precedents and cases that allow the change of the examination schedule for religious reasons. We also vigorously argued that the defendant’s rejection of A’s request to reschedule the interview and the rejection of A's application for admission should be reversed because it was an abuse of discretion in violation of the principle of proportionality, and it constituted “indirect discrimination” on the basis of religious belief in that it resulted in a typical disadvantage for an applicant such as A, who is a Seventh-day Adventist, to be unable to take the interview on a Saturday, and there was no reason to justify it, which was an abuse of discretion in violation of the principle of equality. In addition, we emphasized that the need for judicial redress for A was critical since not only did the defendant's failure to seriously consider alternatives that could have reconciled the public interest of fairness and equality in the interview test with the plaintiff’s freedom of conscience and freedom of religion, despite the existence of such alternatives, run counter to the trend towards substantive guarantees of fundamental rights triggered by the Constitutional Court’s decision in the case of conscientious objection to military service (Constitutional Court En Banc Decision 2011 Heonba 379, dated June 28, 2018), but also it conflicted with the liberal democratic spirit of tolerance and inclusion of minorities. 5. Significance of rulingIn order to observe the Sabbath, Seventh-day Adventists have filed several constitutional complaints against the scheduling of written examinations on Saturdays, but all of their claims have been rejected (Constitutional Court Decision 2010 Heonma 41, dated June 24, 2010 – Bar Exam Plan Notification, Constitutional Court Decision 2021 Heonma 171, June 20, 2023 - Announcement of the Implementation Plan for the Nursing Assistant Examination). However, as the Supreme Court took account in delivering this decision the differences in the characteristics of the written exam and the interview assessment and the circumstance that it is easier to change the date of the interview assessment than the written exam, there is more room for a request for the change of interview assessment schedule to be accepted in other cases in the future. In addition, while the Supreme Court did not directly use the concept of indirect discrimination (discrimination that applies the same standard to multiple groups but results in an unequal outcome because of the characteristics of a particular group) in its ruling, the Supreme Court held that equality under Article 11 of the Constitution means “equality in substance, not in form,” and that Adventists are “consequently” disadvantaged on the basis of their religious beliefs when it comes to randomly assigned interview dates. In particular, considering that this is the first case to explicitly uphold an Adventist's claim to reschedule an examination, and the first to set out the criteria for determining the illegality of a request for rescheduling exam dates, it is of great significance in that it clarifies the scope of the constitutional obligation of the public administration to prevent unfair discrimination against minorities. □ Attorneys in charge: Park Sung-ho, Min Kyung-chan
2024. 04. 30
建设·不动产
[Construction/Real Estate] In a case where a construction company that defaulted on its obligation to comply with responsibility for construction completion, subrogated the developer’s loan and attempted to seize the developer's right to implement the project, Barun Law obtains the dismissal of all preliminary injunctions seeking confirmation of the constructor’s shareholder status
1. Summary of the case a. Who did Barun Law represent?
Barun Law represented a developer of a low-temperature logistics warehouse.
b. Background of the case
(1) The creditor is a co-constructor of a low-temperature logistics warehouse development project. As the developer of the project, the client received a PF loan of approximately KRW 55 billion from a financial institution and pledged the shares held by the client's CEO and others as collateral (security interest).
(2) However, due to the commencement of the rehabilitation process for the joint contractor B, the contractor was unable to complete the construction by the required completion date. As a result, the contractor lost the time benefit of the loan agreement, subrogated the loan to the financial institution, and then received all rights and security rights under the loan agreement from the financial institution.
(3) Subsequently, claiming that it had become a shareholder of the client by executing the share pledge transferred from the financial institution, the contractor filed an application for a provisional injunction seeking confirmation of its shareholder status.
2. The court’s judgment
(1) Judgment of the Seoul Central District Court: The first instance court dismissed the provisional injunction application for the following reasons: (i) It would be a violation of the principle of good faith or an abuse of rights for the contractor to acquire control of the client by executing a security right transferred from a financial institution through subrogation. (ii) If the contractor is recognized as a shareholder, it becomes unfair for the client to lose the opportunity to pursue the contractor for damages arising from the contractor's failure to comply with its obligation to complete the construction, as the contractor acquires control of the client.
(2) Judgement of the Seoul High Court: Further, the court of second instance dismissed the appeal against the provisional injunction decision on the grounds that it was unreasonable to allow the contractor, which believed that it would earn a large profit from the project if it acquired the client's right to execute the project, to intentionally default on its responsibility for completion and to pay for the loan instead of the developer to the financial institution, thereby taking the project from the developer.
3. Our argument and role
We argued that (1) the contractor’s failure to comply with its obligations resulted in the acceleration of the loan agreement, (2) it is not interpreted that the contractor that failed to comply with its obligations under the loan agreement is allowed to seize the developer’s right to execute the project by exercising its pledge over the shares, and (3) if it is interpreted otherwise, the contractor may intentionally violate its obligations to comply with its obligations in a project that is expected to be profitable and seize the right to execute the project, which constitutes a violation of the principle of good faith and abuse of rights.
4. Significance of the decision
Recently, due to the deterioration of the real estate sector, many disputes have arisen regarding land management trust projects implemented under the responsibility of completion. If the PF loan agreement and trust agreement are interpreted solely according to the text therein, there is room for interpretation that a construction company that defaults on its obligation of responsible construction can subrogate the loan and take away the project implementation rights of the developer by executing security for shares. This case, therefore, is significant as a precedent in that the court determined that it is impermissible for a contractor that is responsible for defaulting on its obligation of responsible construction to exercise its rights under the subrogation of the debtor to acquire the right to execute the project, which is contrary to the principle of good faith.
□ Attorneys in charge: Koh Kyoung-hee and Seo Ho-seok
2024. 03. 31
重建·再开发
[Civil Execution] A case in which Barun Law obtains a final decision that an auction for a newly reconstructed apartment is valid on the premise that an ownership preservation registration made by the court’s request is valid for a reconstructed apartment, with regard to which construction completion has not been approved and a notice of transfer has not yet been made due to violation of the building act
1. Overview of the caseA reconstruction association established to demolish existing tenements and construct an apartment building and a neighborhood living facility entered into a contract for reconstruction work with a general contractor, N, around July 2008, under which the general contractor agreed to be transferred 10 out of 30 newly constructed apartment units and the entire neighborhood living facility in exchange for payment of the construction price.
The apartment building was fully constructed around May 2015, but the general contractor had not received the completion certificate from the competent government office for a long time due to its violation of the building law by constructing and selling an office building in the place where the neighborhood living facility was supposed to be located. In the meantime, the registration of ownership preservation in the name of the rebuilding association was completed at the request of the court following the creditors' application for an injunction against real estate disposal and foreclosure. Since 2014, creditors continued to apply for forced and voluntary auctions of the real estate, and several auction proceedings were initiated.
However, on March 18, 2022, the judicial assistant of the Seoul Central District Court decided to cancel all the auction proceedings and dismiss the auction applications on the grounds that the auction proceedings were initiated based on the title preservation registration in violation of the Urban and Residential Environment Maintenance Act and its registration procedures.
2. Our argument and role
In response, our attorneys filed an appeal with the Seoul Central District Court on behalf of the creditors who had applied for the arbitrary auction of the properties, arguing that (i) the auction court does not have the authority to determine the invalidity of the registered deeds for each of the properties in this case, and therefore, the decision of the judicial assistant on the premise that it can determine otherwise is illegal; (ii) since the reconstruction association acquired the ownership of the building in question in the first place, the registration of the preservation of ownership in the name of the reconstruction association by the court’s request is valid; and (iii) the application for auction by the keun-mortgagee of the land before the separate ownership of the collective building was established was legal.
On June 22, 2023, the appellate court accepted the arguments set forth in (ii) above and reversed the first instance decision for the following reasons: when a project developer receives approval for the completion of an improvement project and notifies of the transfer, it is required to register the land and buildings directly and collectively pursuant to Article 56 of the former Urban Maintenance Act and Article 5 of the former Urban and Residential Environment Maintenance Rules, but, as in this case, if the building is completed and the building can become an object of ownership, but the transfer notification has not yet been made, the registration procedure under the former Urban Maintenance Act cannot be said to apply, and therefore, if there is a request for registration of a restriction on disposal from the court, there is no restriction on the registrar of deeds to register the preservation of ownership of the building ex officio as a prerequisite for registering the restriction on disposal, and the registration of preservation of ownership by the court’s request is legal.
In response, the reconstruction association appealed to the Supreme Court. However, on January 8, 2024, the appeal was dismissed and the decision of the appellate court was affirmed.
3. Significant of the decision
Article 56(1) of the former Urban Maintenance Act (now Article 88 of the Urban Maintenance Act) (Registration Procedures and Restrictions on Changes in Rights) stipulates that “the project developer shall, without delay, request or apply for registration of the land and buildings at the competent district court or registry office upon notification of transfer pursuant to Article 54(2).” In the absence of a clear Supreme Court ruling on this, there have been views that, in consideration of the public nature of a reconstruction project, it is not possible to register the preservation of ownership rights in the name of a reconstruction association by a court's request, regardless of whether a transfer notification has been made, and that only registration by request or application by the reconstruction association, which is the project developer, is possible. There are also cases in which relevant registration precedents are understood of the same effect.
However, this ruling is significant as it is the first precedent to clarify that the old Urban Maintenance Act only applies to cases where there is a transfer notice, but not to cases where the transfer notice is not made because the completion approval has not been received. However, just like this case, when the title is registered under the Urban Maintenance Act, the existing mortgage registration is transferred at the same time in accordance with Article 88(3) of the same Act. There have been cases in which reconstruction associations have delayed the notification of transfer for a long period of time to evade liability and continued to enjoy the use of the property, but this case has made it possible to prevent such bad practices.
□ Attorney in charge: Son Heung-soo
2024. 03. 31