Litigation: Dispute Resolution Through Korean Courts

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  1. Constitutional Court

 

The power to determine the constitutionality of laws is vested in the Constitutional Court. A judgment by the Court that a law is unconstitutional binds the ordinary courts, other state organizations, and local governments. When laws or provisions thereof are declared unconstitutional by the Court, they lose effect from the date of adjudication, but laws relating to criminal penalties lose effect retroactively.

 

  1. Judgment on Impeachment

 

The Constitutional Court has jurisdiction over impeachment brought against certain high-ranking public officials, including the President of the Republic, the Prime Minister and the members of the State Council or Ministers of Executive Ministers.

 

Such a motion for impeachment must be proposed by one-third or more of the total members of the National Assembly, and passed by a concurrent vote of a majority of the total members of the National Assembly. However, a motion to impeach the President of the Republic must be proposed by a majority of all the members of the National Assembly and approved by at least two-thirds of all the members of the National Assembly.

 

  1. Judgment on Dissolution of a Political Party

 

The Constitutional Court has jurisdiction over the dissolution of political parties. This jurisdiction is assigned to the Constitutional Court for the purpose of protecting fundamental democratic order from a political party.

 

  1. Judgment on competence Dispute

 

The Constitutional Court has jurisdiction over Competence or Jurisdictional Disputes between governmental entities. If any controversy regarding the existence of jurisdiction occurs between organs of the State and a local government, or between local governments, an organ of the State or local government may request in writing a judgment of the Constitutional Court as to respective competence

 

  1. Judgment on Constitutional Complaint

 

Under the Constitutional Court Act, anyone whose fundamental rights guaranteed by the Constitution have been infringed through the exercise or nonexercise of governmental powers may petiton the Constitutional court for relief. If a legislative act, presidential decree, ordinance or other law directly infringes upon an individual’s fundamental or basic rights, the individual may file a Constitutional Complaint against the law itself.

 

Constitutional Complaints must be filed within ninety days from the day the cause was known or within one year days from the day the cause occurred. However, when prior remedy procedures were requested, a Constitutional Complaint must be made within thirty days from the day the notice of the decision of final procedure was received.

 

Uncommon to other Constitutional Courts which allow Constitutional Complaints, another kind of Constitutional Complaint is prescribed in Article 68(2) of the Constitutional Court Act. Any party to an ordinary court proceeding, whose motion for referral to the Constitutional Court for a judgment on the constitutionality of a law was rejected by the court of original jurisdiction. This avenue is available in case the ordinary courts do not request a judgment of the constitutionality of a law by the Constitutional Court even though the law is suspected to be unconstitutional. A Constitutional Complaint according to the Article 68(2) must be requested within thirty days from the day the refusal of the court was decided.

 

Currently in Korea, as in most countries which have Constitutional Courts, the proportion of Constitutional Complaint cases in comparison to the total number of all cases has been the highest. Therefore, the Court has created a prior examination bench, the “Small Bench”, to determine whether a Constitutional Complaint will be accepted to be heard by the Court. A Small Bench is composed of a Constitutional Complaint. To determine and invalidated a Constitutional Court and the Bench takes charge of prior examinations of a Constitutional Complaint. To determine and invalidate a Constitutional Complaint, the Small Bench needs a unanimous vote of all the participating Justices.

 

A judgment accepting a Constitutional Complaint by the Full Bench of the Constitutional Court to accept a Constitutional Complaint binds all organs of the State and local governments.

 

  1. Civil courts

 

In civil cases, the court deals with civil disputes surrounding the rights of property or legal relations.

 

  1. Trial Proceedings

 

Civil proceedings begin when a plaintiff or his/her attorney files a complaint with a District Court, a Branch Court, or a Municipal Court. When the complaint is filed, the court serves the defendant with a duplicate and requires him/her to file a written answer within 30days. If the defendant fails to file a written answer within such limit, the court may render a judgment without hearings. If the defendant submits a written answer, the court holds the pleading process (proceeding whereby both parties, in writing, enter into offense and defense on allegations and evidence) and the hearings (proceeding whereby both parties appear before the court to clarify their respective positions on disputed issues as well as to examine witnesses), and then renders a judgment.

 

  1. Appeal Proceedings

 

The losing party who is dissatisfied with the findings of facts or conclusions of law by the trial court can appeal the judgment rendered by the trial court within two weeks from the date the judgment is served. In general, the High Courts hear appeals with the exception that the appellate panels of the District Courts hear appeals when the amount in controversy does not exceed 50 million Korean won. The appeal proceedings are similar to the trial proceedings, and the party is granted an opportunity to make new allegations and to produce new evidence.

 

The party who is dissatisfied with the judgment of the court of appeals may appeal to the Supreme Court, the court of last resort, within two weeks from the date the judgment is served. As the Supreme Court hears only matters of law, appeals cannot be lodged with the Supreme Court unless the judgment of the court of appeals erred in conclusion of law or appeal proceedings were in grave contravention of law.

 

  1. Trial Proceedings on a small Claim Case

 

A small claim case is a case in which the plaintiff claims payment of money, fungibles, or securities not exceeding 30 million Korean won. A District Court, a Branch Court, and a Municipal Court take charge of small claim suits, which amount to over 70 percent of all civil suits. The trial proceedings on a small claim adopt various procedures to expedite the resolution of the cases.

 

The trial proceedings on a small claim, which feature expeditious and convenient processes for resolving disputes, contribute to the protection of the rights of the public. Only about two percent of the judgment rendered by the trial courts on small claim cases are appealed.

 

  1. Civil Execution of Claims Procedure

 

A civil execution of claims procedure includes a procedure of compulsory execution as well as a procedure of foreclosure.

 

Compulsory execution is the procedure whereby the creditor obtains a satisfaction of his/her claim with the assistance of the state, from the property of the debtor who does not voluntarily perform his/her obligation even though the judgment has been rendered against him/her. Authorities other than the judgment, such as a payment order, or notarial deed can also be a basis for execution. The property of the debtor, which is subject to execution, includes real property, ships, automobiles, construction equipment, aircraft, movable property, and bonds. It is the court that enforces the compulsory execution on most property. However, in case of movable property, the marshal enforces the compulsory execution.

 

The most frequently used compulsory execution is execution sale of real property whereby the court seizes and sells real property of the debtor by an open tender. The proceeds are distributed among creditors.

 

Foreclosure is a legal proceeding instituted by the lender (the mortgagee) to force a sale of the mortgaged property in order to satisfy the unpaid debt secured by the property. The procedure of foreclosure is similar to that of execution sale of real property.

 

  1. Statement of Property, Debt Defaulter Roster, and Property Inquiry

 

These methods are devised to secure the effectiveness of compulsory execution as well as to enable the judgment creditor to easily obtain satisfaction of his/her claim.

 

In the event that a debtor does not discharge a pecuniary obligation and it is difficult to ascertain the property of the debtor, the creditor who is entitled to make a request for compulsory execution, may request the court to order the debtor to tender a list of property which clearly specifies property in his/her possession. If the debtor fails to comply with the court’s order or tenders a false list of property, he/she is subject to imprisonment, fine or confinement.

 

If the debtor does not discharge his/her obligation within 6 months after a money judgment becomes final and conclusive, fails to comply with the court’s order to tender a list of property, or tenders a false list of property, the creditor may request the court to enter him/her in a debt defaulter roster. When the debtor is listed in the debt defaulter roster, such information is provided to financial institutions and the debtor may face difficulty in carrying on future credit transactions.

 

The Civil Execution Act introduces a new method through which inquiries about the debtor’s property can be made. If the debtor fails to comply with the court’s order to tender a list of property, or tenders a false list of property, the creditor may request the court to make inquiries about the debtor’s property. The court, pursuant to the creditor’s request, makes inquiries at the institutions which keep information on the debtor’s real property or financial assets in the form of electronic data, and orders them to submit such information. The creditor, then, can make use of information submitted by the institutions and move to the execution stage.

 

  1. Provisional Attachment and Provisional Disposition Procedure

 

If the debtor hides or disposes his/her property before the compulsory execution procedure is commenced, the creditor is obstructed from obtaining satisfaction of the claim. To prevent such attempts and to secure the debtor’s property, the court may order provisional attachment or provisional disposition, pursuant to the creditor’s request. If it is necessary to preserve the execution of the monetary claim, the court may order the debtor’s property to be put under provisional attachment. Provisional disposition may be granted for the purpose of setting the temporary state of affairs in regard to disputed legal relations or preserving the execution in regard to the claim for delivery of specific immovable or movable property.

 

  1. Criminal courts

 

In criminal cases, the court determines guilt or innocence of the accused and imposes a sentence when the accused is found guilty

 

  1. Investigation and Accusation

 

The public prosecutors and police officers take charge of investigation of crimes. As a general rule, the suspect is put under investigation without being arrested or detained. Under certain circumstances, however, the investigative authorities can arrest or detain the suspect after they have obtained a warrant from a judge. If the suspect is caught in the act of committing a crime or exigent circumstances exist, the warrant may be obtained after arrest. The judge issues a warrant only if the suspect has no fixed dwelling or there are reasonable grounds to believe that the suspect may attempt to escape or to destroy evidence.

 

Criminal proceedings begin when a criminal action is instituted by a public prosecutor unless otherwise provided by law. Unlike the U.S. or U.K., neither a grand jury system nor private prosecution is available in Korea. The public prosecutor may bring a case before the court by summary proceedings when it is deemed that the offense is punishable by fine. In such a case, the judge usually issues the summary order without holding a trial, he/she can refer the case to regular trial proceedings. The accused may also request regular trial proceedings within 7 days from the date of the notification of the summary order.

 

  1. Hearing

 

The hearing is held at the courtroom on the hearing date and is open to the public. It starts with the presiding judge asking the accused personal identification such as name and date of birth. Then follow a statement by the public prosecutor of the essentials of the accusation, direct questioning of the accused by the public prosecutor, cross-examination of the accused by the defense counsel, examination of evidence, statement of opinion by the public prosecutor, closing argument by defense counsel, and final statement by the accused.

 

After the conclusion of the aforementioned, the court closes the hearing and renders a judgment.

 

  1. Right to Counsel

 

The accused is entitled to receive the assistance of counsel for his/her defense in the course of investigation as well as trial proceedings. Trial proceedings cannot proceed in the absence of defense counsel when the accused is charged with an offense punishable by death penalty, life imprisonment, or imprisonment for a minimum of three years. In such a case, if no defense counsel has been appointed by the accused, the court should assign a defense counsel ex officio.

 

Moreover, the court should also assign a defense counsel ex officio in the following circumstances: where the accused is a minor; where the accused is 70 years of age or over; where the accused is deaf-and-dumb; where the accused is suspected of mental and physical unsoundness; and where there is a request by an indigent defendant. The defense counsel assigned by the court is called “assigned counsel” or “public defender”.

 

  1. Request for Warrant of Detention and Examination of the Suspect

 

In the event that the investigative authorities, after arrest of the suspect, seek a warrant of detention, the suspect, his/her defense counsel, legal representative, spouse, lineal relative, brother or sister, head of a household, member of a family, cohabitant, or employer may request the judge to examine the suspect before deciding on whether to issue a warrant of detention. The public prosecutor or police officer should inform the suspect of the right to request examination and indicate on the record whether the suspect has requested examination or not.

 

When the investigative authorities seek a warrant of detention for suspect who is not under arrest, the judge if it is deemed necessary, may examine him/her ex officio before deciding on whether to issue a warrant of detention.

 

Examination of the suspect is presided over by the judge. The suspect and his/her defense counsel are granted the opportunity to fully state the opinion concerning the offense he/she is suspected of and the grounds for detention. Taking into account the result of examination as well as the records submitted by the investigative authorities, the judge decides on whether the grounds for detention exist and whether the circumstances justify the detention.

 

  1. Review of Legality of Arrest and Detention, and Release on Bail

 

The suspect or any of the concerned persons mentioned above may request the competent court to review the legality of arrest or detention before the public prosecutor institutes a criminal action, when the warrant of arrest or detention has been issued against law or when circumstances have substantially changed after the detention. The court, promptly reviewing the legality of arrest or detention, orders release of the accused where there is a valid ground for the request.

 

The court may permit release of the accused upon request of the accused or the like, or ex officio under the condition of payment of bail money. This is called release on bail. A written undertaking accompanied by surety insurance policy may be substituted for bail money. When release on bail is granted, the court usually orders the defendant to remain within the physical boundaries of his/her immediate neighborhood or home.

 

  1. Principle of Free Evaluation of Evidence and Confession of the Accused

 

In criminal proceedings, it lies upon the public prosecutor to prove guilt of the accused. The court determines guilt or innocence of the accused on the basis of evidence produced by the public prosecutor and in conformity with the Constitution and law. When confession of the accused is the only evidence against him/her, he/she shall not be judged guilty. Corroborating evidence in support of confession is indispensable for conviction. Confession of the accused extracted by torture, violence, threat or after unjust prolonged detention, or suspected to have been made involuntarily, shall not be admitted as evidence of guilt.

 

The accused has the right to remain silent. He/She may refuse to answer any of the questions.

 

  1. Judgment

 

If guilt has not been proved beyond a reasonable doubt, the court declares the accused not guilty. In such a case, the accused who has been placed under detention is entitled to claim compensation as provided by law. The court finds the accused guilty if the charge against the accused constitutes a crime and evidence is sufficient for conviction. Once the accused is found guilty, the court imposes punishment such as death penalty, imprisonment with labor, imprisonment without labor, deprivation of qualifications, suspension of qualifications, fine, penal detention, minor fine, and confiscation. Imprisonment with or without labor can be either for life or for a specified term. The specified term is usually from on month to 15 years, but it may be extended to 25 years in light of aggravating certain circumstances.

 

  1. Appeal Proceedings

 

Not only the accused but also the public prosecutor can bring an appeal against the judgment rendered by the trial court within 7 days from the date the judgment is rendered. There is little difference between the appeal and the trial proceedings. In case an appeal has been lodged by the accused, the punishment cannot be severer than the original judgment. Appeal from the judgment of court of appeals may be filed with the Supreme Court within seven days from the date the judgment is rendered. Appeal to the Supreme Court must contain one or more of the grounds specifically prescribed in the Criminal Procedure Act.

 

  1. Summary Trial Proceedings for Minor Offenses

 

The judge of a District Court, a Branch Court, or a Municipal Court may impose a fine not exceeding 200,000 Korean Won or penal detention for less than 30 days under summary trial proceedings in misdemeanor cases such as violation of Road Traffic Act, or Punishment of Minor Offense Act, etc. The chief of the competent police station, nto the public prosecutor, is entitled to bring a case before the judge under summary trial proceedings.

 

If the judge deems that the case is inadequate for summary trial proceedings, he/she should dismiss the case. The chief of the police station should then take the case to the District Public Prosecutor’s Office without delay.

 

Either the accused or the chief of the police station, if dissatisfied with the judgment, may apply for regular trial proceedings within 7 days from the date the judgment is rendered. When judgment under summary trial proceedings becomes final and conclusive, it has the same effect as the final and conclusive judgment under regular trial proceedings.

 

  1. Administrative Court

 

In administrative cases, the court decides on whether feasance or nonfeasance of administrative entities is illegal and resolves disputes surrounding legal relationships in public law.

 

Most administrative cases relate to revocation or affirmation of nullity of dispositions or decisions of administrative entities. Dispositions include levy of taxes, suspension or revocation of driver’s license, refusal to pay industrial accident compensation insurance money, disciplinary measure against civil servants, suspension or revocation of business license, refusal to accept an application, etc. Decisions include decision of eminent domain by Central Land Tribunal, review decision by National Labor Relations Commission, decision of reparation by the Board of Audit and Inspection, etc.

 

Acting for affirmation of status as a civil servant and action regarding a contract in public law are examples of actions which concern legal relationships in public law. Moreover, action for affirmation of illegal nonfeasance is allowed if the administrative entity fails to respond to the application by the public.

 

  1. Standing and Limitation Period

 

Only a person who holds a direct and concrete legal interest from revocation of a disposition in question may bring an action before the court. If interest to be restored is indirect or abstract, then action is not allowed.

 

In general, an action may be instituted without first resorting to a remedy arranged by an administrative entity. However, in regard to levy of taxes, suspension or revocation of driver’s license, etc., exhaustion of administrative remedy is a prerequisite to filing an action with the court.

 

Legal relationships in administrative law need to be stabilized promptly since there are far-reaching consequences of these influences. In this regard, actions challenging legality of a disposition must be filed within the period prescribed by Administrative Litigation Act or other applicable laws.

 

  1. Hearing and Judgment

 

In principle, administrative proceedings and civil proceedings have similarities in the way they are held. However, as administrative proceedings are more deeply related to the public interest, there is a greater need for the court to intervene ex officio in administrative proceedings rather than in civil proceedings. In administrative proceedings, the court may examine evidence ex officio and consider the facts not averred by the parties though the parties also bear the responsibility to make allegations and to produce evidence.

 

When disposition is deemed gruoundless, or excessively harsh and severe with all circumstances taken into account, if it has any ground, the court is to revoke disposition in favor of the plaintiff. However, even where a demand of the plaintiff is deemed reasonable, if revocation of disposition is deemed remarkably inappropriate to the public welfare, the court may reject the demand of the plaintiff.

 

The losing party, like in other proceedings, may appeal against the judgment rendered by the trial court to the High Court and then likewise to the Supreme Court.

 

  1. Suspension of Execution in the Administrative Disposition

 

As institution of an administrative action does not preclude the effect or execution of disposition, the judgment in favor of the plaintiff may turn out to be useless if it takes a long time to obtain such judgment.

 

In this regard, Administrative Litigation Act empowers the court to provisionally suspend, upon a request from the plaintiff or ex officio, the effect or execution of disposition under certain circumstances. However, suspension of execution is not permitted if it is feared to have a seriously negative effect on the public welfare.

 

  1. Patent Court

 

In patent cases, the court decides on whether the decision of the Intellectual Property Tribunal(IPT) on the rights of patent, utility model, design, or trademark is illegal and should be revoked. The IPT makes decisions on legality of refusal to accept an application for patent registration, on invalidation of patent registration, and on affirmation of the scope of a patent right. The party who is dissatisfied with the decision of the IPT may file a suit seeking to revoke the decision with the Patent Court within 30 days from the date the decision is served. When decision on legality of refusal is challenged , the defendant of a suit shall be the opposite party in the decision process. On the principle of separation of powers, the Patent Court can only revoke the decision of the IPT and neither permit patent registration of any invention nor invalidate a patent right.

 

In Korea, the Patent Court exercises exclusive jurisdiction over patent issues. Under the three-tier system, the Patent Court is situated on the High Court level and has territorial jurisdiction over the entire nation. At the Patent Court, a panel of three judges hears cases. As in civil proceedings, the pleading process and hearings are held. As a patent case is a kind of administrative case, the court may examine evidence ex officio if it is deemed necessary.

 

In addition to lawyers, patent attorneys are also permitted to represent the parties in the proceedings at the Patent Court. When the case relates to patent rights or utility model rights, the court normally holds pre-trial hearings where the parties, or their attorneys, are granted the opportunity to fully state their positions and to produce evidence. The Patent Court has technical examiners to assist judges in highly technical matters. They have degrees in various fields such as chemistry, mechanics, metal engineering, life science, electrical engineering, electronics, etc. They may participate in pre-trial and trial proceedings with the presiding judge’s approval. To precisely understand the technical aspects of patent-or utility model-related disputes, the Patent Court may hold explanatory sessions where parties or relevant experts can make presentations using drawings, real objects, models, computer graphics, or video devices.

 

When the case relates to design rights or trademark rights, the court does not hold pre-trial hearings because the issues have become evident during IPT decision process.

 

A party who is dissatisfied with the judgment of the Patent Court may appeal to the Supreme Court.

 

  1. Insolvency Case

 

In case a debtor is unable to pay matured debts due to financial distress, the creditors can file a bankruptcy petition with the District Court. Insolvency proceedings have taken a new shape after the enactment, on April 1 2006, of the Act on the Reorganization and Liquidation of a debtor.

 

  1. Reorganization Proceedings for Business Entities

 

The purpose of reorganization proceedings is to seek maintenance and rehabilitation of business entities under the supervision of the court, by adjusting the claims and equities of the entities concerned, such as creditors and equity holders. The court, upon a request from a debtor, creditor, or equity holder, renders an order for relief, and appoints a trustee. In principle, the debtor is appointed as a trustee. Debtor-in-Possession System, in which the Court does not appoint any trustee but leave the right of administration and disposal of the estate to the debtor, is allowed under certain circumstances, such as when a debtor is an individual, a medium sized business entity, or a public company with sound corporate governance. The trustee is required to submit, within the period fixed by the court, a reorganization plan which contains a detailed program for administration and disposal of the estate as well as a plan for adjustment of debts. If the plan is accepted by creditors or equity holders, and confirmed by the court, the rights of the creditors or equity holders are altered according to the plan. In the event that a reorganization plan begins to be implemented by the debtor, the court shall close the case unless a debtor is likely to fail in carrying out the plan in the future.

 

  1. Liquidation Proceedings

 

The liquidation proceedings are proceedings whereby the court-appointed trustee collects the property of the debtor, converts that property to cash, and distributes the cash to the creditors. The court, upon a request from the creditor or debtor, declares bankruptcy if the debtor is deemed unable to make payments. When the debtor has no or little property, the distribution proceedings may be omitted. Debtors, who are individuals, can be discharged from remaining debts. The granting of a discharge may not be given if it is deemed that bankruptcy, in whole or in part, was caused by extravagance or fraudulent practices. In practice, the court tends to be lenient in granting a discharge of debts.

 

  1. Reorganization Proceedings for individuals

 

Individuals with debts below a statutory threshold and with likelihood of sufficiently stable and regular income in the future, are entitled to reorganization proceedings for individuals, by which debtors may adjust debts and make installment payments to creditors pursuant to a court-confirmed plan. Once the debtor repays a certain amount of debt within a planned period not exceeding 5 years, he/she may be discharged from the remainder of the debt. The debtor should submit a list of the creditors and file a plan for payment. A Court-appointed standing trustee will investigate on the estate and income of the debtor, and advise on the plan for payment. After the plan is confirmed by the Court, the debtor should repay the debt according to the plan. After full implementation of the plan, the debtor can be discharged from the remaining debt.