Litigation: South Korea

1. Describe the general organisation of the court system for civil litigation.

South Korea

The Korean court system for civil cases consists of three tiers: district courts, high courts and the Supreme Court. There is also a Constitutional Court, which is at the same level as the Supreme Court in the court hierarchy. The district courts are the courts of first instance. Cases in the district court are heard by a single judge or a panel of three judges, depending on whether the claim amount is greater than 500 million won. The court system also consists of certain specialised courts: the Patent Court, the Family Court, the Administrative Court and the Bankruptcy Court. Within the three-tiered hierarchy of the Korean judicial system, the Administrative Court, the Family Court and the Bankruptcy Court fall within the third (lowest) tier, while the Patent Court falls within the second tier. Korea does not have separate federal and provincial courts.

Appeals from a first instance decision with a claim amount up to 200 million won lie with a three-judge appellate panel of the district court, while appeals from a first instance decision with a claim amount exceeding 200 million won lie with the High Court. In both cases, further appeals lie with the Supreme Court.

Judges are appointed by the Chief Justice of the Supreme Court with the approval of the Supreme Court Justices’ Council.

The Korean legal system does not have the principle of stare decisis, and, in principle, courts are not bound by the decisions of other courts. In practice, however, courts regularly follow the decisions of higher courts. Supreme Court decisions, in particular, are very rarely departed from by the lower courts.

The Korean legal system does not use juries in civil matters. In civil matters, all decisions are made by judges. In some criminal proceedings, juries have been used in recent years subject to the written consent of the defendant. However, even in these cases, the jury’s findings are not binding on judges and are treated as reference only. The Korean judiciary is independent of the legislative and executive branches of government.

2. Give an overview of basic procedural principles that govern civil litigation in your jurisdiction.

South Korea

The Korean Civil Procedure Act, which came into effect on 1 July 1960, provides the legislative procedural framework for civil litigation. The Korean Civil Procedure Act sets out three overarching procedural principles applicable to all civil litigation procedures in Korea (ie, the court should aim to enhance (i) fairness, (ii) swiftness and (iii) efficiency in civil proceedings).

The principal objective of fairness is to provide parties with an equal and fair opportunity in a civil litigation proceeding where the judge (or panel of judges) rendering a decision is unbiased. To ensure procedural fairness, parties are equally allowed to make submissions to fully present their case. Furthermore, the Korean Civil Procedure Act allows parties to seek an exclusion or avoidance of conflicted judges in a trial.

As for swiftness, the Korean Constitution expressly states that every Korean citizen is entitled to an expeditious trial. To ensure this basic right, a Korean court has the power to disregard a party’s belated submission if it was not made in a timely fashion as ordered by the court.

Regarding efficiency, the Korean Small Claims Trial Act provides a simpler and more expeditious procedure for minor disputes with claims not exceeding 30 million won.

3. Describe the general organisation of the legal profession.

South Korea

For a period of approximately 10 years from 2007, there were two parallel processes to qualify as a lawyer in Korea. The traditional system, discontinued in 2017, required candidates to take the traditional bar exam to attend the Judicial Research and Training Institute. Candidates were admitted to the bar after successfully graduating from the Institute, which took two years. The newer system, introduced in 2009, requires candidates to attend three years of law school (graduate school) and then take the new bar exam to qualify as a lawyer.

The Korean legal profession consists of attorneys-at-law, without any further formal divisions. All attorneys-at-law have the same rights of audience to all the courts.

Foreign lawyers from certain jurisdictions can practise in Korea after qualifying as a foreign legal consultant under the Foreign Legal Consultant Act of Korea.

4. Give a brief overview of the political and social background as it relates to civil litigation.

South Korea

Korean businesses recognise that litigation is sometimes necessary. Therefore, litigation is not viewed as negatively as in certain other Asian cultures. That said, Korea cannot be described as a particularly litigious jurisdiction. Korea does not seem to have many instances of professional or activist plaintiffs.

The Korean government relies on the quality, speed and affordability of the Korean courts to maintain a good business climate. At the same time, the Korean government has also taken steps to alleviate some of the burden on the judicial system by investing in and facilitating alternative dispute resolution methods such as mediation and arbitration.

In 2021, the Korean courts dealt with 4,525,850 civil cases and formally received 4,458,253 new civil cases.

5. What are the sources of law and rules governing international jurisdiction in civil matters?

South Korea

The primary source of law governing jurisdiction of international civil matters is the Act on Private International Law, which came into effect as of 1 July 2001. It provides that a Korean court shall have international jurisdiction in a case where a party or dispute is substantively related to Korea. It further states that a court shall judge whether or not it has international jurisdiction in light of jurisdictional provisions of domestic laws, in particular the Korean Civil Procedure Act, and the unique nature of international jurisdiction.

The Act on Private International Law also sets out specific rules on international jurisdiction concerning particular proceedings, such as proceedings concerning patents, consumer contracts, and employment agreements. For instance, the Act states that a patent related proceeding falls within the exclusive jurisdiction of the country where the patent is registered. Consumers or employees may file a lawsuit in the court of the country in which they reside.

The Korean courts generally respect the parties’ agreement on their choice of a foreign jurisdiction, subject to the following conditions:

• the case is not subject to the exclusive jurisdiction of a Korean court;
• the designated foreign court has valid jurisdiction over the matter; and
• the designated foreign court has a reasonable connection to the matter in dispute.

6. What are the criteria for determining the jurisdiction and venue of the competent court for a civil matter?

South Korea

The competent court for a civil matter will include the district court with territorial jurisdiction over the defendant’s place of residence. If the place of residence of the defendant in a monetary dispute is not known or is abroad, the district court with territorial jurisdiction over the place where any of the defendant’s assets are located will have jurisdiction to hear the case. For a legal entity, its principal office or place of business will be considered its place of residence. The district court with territorial jurisdiction over the place where the remedy sought will be performed also has jurisdiction. For a claim relating to real property, the court that has territorial jurisdiction over the property will also have jurisdiction.

If several district courts have jurisdiction, the plaintiff can initiate proceedings in any one.

Parties can agree to the jurisdiction of a district court that might otherwise not have jurisdiction to hear a case, unless the case is subject to the exclusive jurisdiction of another court.

In lawsuits relating to intellectual property rights other than patents or trademarks, or in disputes relating to international transactions, instead of bringing the suit before the district court [Court X] that will normally have jurisdiction over the case, a party may bring the suit before a different district court [Court Y]. In order to do so, the latter court [Court Y] must have territorial jurisdiction over the area where the original district court’s [Court X’s] superior High Court is located. The goal of such procedural flexibility is to allow parties to access district courts that are likely to have more experience in these types of transactions by virtue of being located in areas with heavier commercial activity.

There are no special considerations for foreign parties other than the jurisdictional considerations listed above.

7. Does your jurisdiction commonly attract disputes that have a nexus with other jurisdictions?

South Korea

The Korean courts do not normally attract disputes that have a nexus with other jurisdictions.

8. How will a court treat a request to hear a dispute that is already pending before another forum?

South Korea

While there does not seem to be an established line of cases regarding the issue, in several cases, district courts have dismissed claims without hearing the merits if it is expected that the judgment to be rendered in a prior ongoing proceeding in another forum will be recognised in Korea.

9. How will the courts treat a dispute that is, or could be, subject to an arbitration clause or an agreement to arbitrate, including in interim proceedings?

South Korea

Where a dispute is subject to an agreement to arbitrate, the courts will dismiss the case without considering the merits, unless the arbitration agreement is null and void, inoperative, or incapable of being performed. Provided, however, that the existence of an arbitration agreement should be raised by the defendant no later than the submission of the defendant’s first statement on the merits of the case.

However, the Korean Arbitration Act does provide that a party to an arbitration agreement may seek interim measures from the Korean courts before or during arbitral proceedings.

10. May courts in your country review arbitral awards on jurisdiction?

South Korea

According to the current Korean Arbitration Act, which came into effect on 4 February 2020, the Korean courts have the power to review jurisdictional rulings of all types, including negative jurisdictional rulings made by tribunals.

11. Are anti-suit injunctions available?

South Korea

Anti-suit injunctions are not available in Korean civil procedure.

12. Which entities are immune from being sued in your jurisdiction? In what circumstances? In what circumstances can creditors enforce a court judgment or arbitral award against a sovereign or a state entity?

South Korea

Governments and government-affiliated entities of a foreign country are immune from civil lawsuits. However, if a foreign country, government organisation or official has engaged in transactions in a private capacity, it can be sued as a private individual to the extent of the relevant transaction.

Furthermore, creditors can enforce a court judgment or arbitral award in Korea against the assets of a sovereign or state-owned entity that are situated in Korea only if the claim underlying the judgment or award has arisen out of a private transaction in which the relevant government entity or official acted in a private capacity and the assets in question are not being used for public or sovereign purposes (eg, an embassy building). Needless to say, where relevant, such enforcement would also be subject to all the other requirements for enforcing foreign judgments or arbitral awards in Korea.

13. How are proceedings commenced? To what extent will a court actively lead the proceedings and to what extent will the court rely on the parties to further the proceedings?

South Korea

Proceedings commence once the plaintiff files a complaint with the competent court. Given that Korea is a civil law jurisdiction, the court will actively lead the proceedings, starting from the service of the complaint on the defendant, to setting the hearing dates, the taking of evidence, appointment of experts and setting the issues in dispute (but not including the examination of witnesses).

14. What are the requirements for filing a claim? What is the pleading standard?

South Korea

In filing a complaint, the plaintiff is required to provide (i) the names and other particulars of the parties, (ii) the particulars of its legal representatives or counsel, where applicable, and (iii) the relief sought and grounds for relief. The plaintiff is also required to pay stamp duties when filing a complaint, which are broadly proportional to the claim amount. In terms of the pleading standard, the grounds for relief that have to be specified in the complaint include both legal and factual grounds, but detailed substantiation of the grounds is not required at the time of filing the complaint and can be provided later in the proceedings.

15. What are the requirements for answering claims? What is the pleading standard?

South Korea

A defendant is required to submit its answer to the complaint within 30 days of its service, failing which a default judgment may be rendered against the defendant. The answer is required to contain (i) the names of the defendant’s legal representatives or counsel, where applicable, and (ii) the defendant’s response to the claims stated in the complaint. In terms of the pleading standard, detailed substantiation of the responses is not required at the time of filing the answer and can be provided later in the proceedings.

16. What are the rules regarding further briefs and submissions?

South Korea

In the course of the proceedings, parties can freely submit briefs and evidence supplementing or amending their initial pleadings as they deem necessary, until the close of the last hearing. However, a plaintiff can only amend its claims provided that (i) the overall underlying factual basis of the claims remains unchanged, (ii) the amendment does not cause significant delay to the proceedings, and (iii) the amended claims do not fall within the exclusive jurisdiction of a different court.

There are no provisions under the Korean Civil Procedure Act (KCPA) allowing amicus briefs, nor are amicus briefs allowed in practice.

17. To what degree are civil proceedings made public?

South Korea

Subject to exceptions for national security or public policy reasons, civil proceedings are open for the public to attend. A copy of the final judgment has to be made available to the public, subject only to very limited exceptions. Court filings will only be accessible to a requesting party if they are sought for certain specified purposes (protection of rights, academic research, public interest, etc), provided that none of the parties or the witnesses in the proceedings object to the court filings being made available.

Videotaping, taking photographs and broadcasting the courtroom are prohibited unless specifically allowed by the presiding judge.

18. Will a court render (interim) assessments about any factual or legal issues in dispute? What role and approach do courts typically take regarding settlement? Are there mandatory settlement conferences between the parties at the outset of or during the litigation?

South Korea

Korean courts will not issue interim assessments on factual or legal issues in dispute. Courts take an active role in exploring the possibility of settlement between the parties. While there are no pre-fixed mandatory settlement conferences between the parties, a judge hearing a matter may direct parties at any time to pursue court-administered mediation (the parties themselves can also opt to do so by agreement). Where considered appropriate, a judge may also directly propose certain settlement terms to the parties.

19. Is referral to mediation or another form of ADR an option, or even mandatory, before or during the litigation?

South Korea

The Civil Mediation Act provides that parties may refer their disputes to court-administered mediation before or during court proceedings. In addition, where proceedings are under way, the parties’ dispute can be referred to court-administered mediation by the decision of the court. If the parties are unable to reach a settlement through court-administered mediation, the mediation judge can issue a decision in place of the settlement, which becomes binding if neither party objects to it within two weeks from the date of its service.

For certain types of disputes, there may be a statutory requirement of mandatory mediation prior to the initiation of a suit. For instance, certain types of financial disputes, labour law disputes and consumer-protection disputes have mandatory mediation requirements.

20. What are the forms of emergency or interim relief?

South Korea

Courts can grant several types of interim relief. The most common types are provisional injunctions, temporarily requiring a party to do something or refrain from doing something, and provisional attachments, temporarily attaching a defendant’s assets in anticipation of a possible judgment in favour of the plaintiff.

21. What must a petitioner show to obtain interim relief?

South Korea

For a provisional attachment, a party needs to demonstrate that it has a prima facie claim on the merits and that the provisional attachment is necessary. The application for provisional attachment is an ex parte procedure.

For a provisional injunction, a party needs to show that it has a prima facie claim and that without the provisional injunction, either (i) the execution of a favourable ruling would be impossible or very burdensome, or (ii) the provisional injunction is necessary to prevent imminent loss or harm.

An applicant may be asked to provide security to the court in the form of a bond and/or cash as a condition for being granted a provisional attachment or injunction.

22. What types of decisions (other than interim relief) may a court render in civil matters?

South Korea

Courts can grant the following remedies, among others:

• specific performance;
• compensatory damages;
• declarations; and
• judgments affecting legal relationships.

23. At what stage of the proceedings may a court render a decision? Are motions to dismiss and summary judgment available?

South Korea

For each case, multiple hearings are held during which the parties can continue to file briefs and submit evidence. The court normally renders a written judgment within two to four weeks of the close of the final hearing.

Defences that seek to have claims dismissed for defects in their legal bases, effectively amounting to summary judgments or motions to dismiss, are available under Korean law. In principle, a ruling on such defences can be sought early in the proceedings. However, they are normally dealt with in the final judgment of the court.

24. Under which circumstances will a default judgment be rendered?

South Korea

Under the Korean legal system, a court may render a default judgment without receiving further written or oral pleadings if a defendant fails to submit a written answer to a complaint within 30 days from the service of the complaint. In such a case, the court may render a judgment granting the claims set out by the plaintiff. However, this does not apply if the defendant was not served in person but only a public notice was issued.

Where a party, often a defendant, fails to appear at the date of a hearing, the court will take that party’s written pleadings into account and ask the other party to plead its case at the hearing. Unless the absent party has filed written pleadings denying the other party’s allegations, it will be deemed to have admitted the other party’s allegations.

25. How long does it typically take a court of first instance to render a decision?

South Korea

Korean court proceedings are known for their efficiency. Depending on the complexity of the case, a civil lawsuit will typically take between six months to a year at the first instance from the filing of a complaint to a judgment. This estimate does not take into account the time needed to serve a foreign defendant under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Hague Service Convention), which normally takes between three to six months.

26. How can third parties become involved in proceedings?

South Korea

A third party may be involved in ongoing proceedings in certain cases. Third parties may participate in proceedings either as a party to the proceedings or as a non-party, depending on the basis on which they have joined or intervened in the proceedings. A third party may join an ongoing proceeding as a party in one of the following cases: (i) the whole or part of the subject matter of the lawsuit belongs to the third party; (ii) the rights of the third party are likely to be infringed by the outcome of the proceedings; or (iii) the dispute can only be resolved when the third party joins the proceedings. In all such cases where a third party joins as party to the proceedings, the court’s decision will be fully binding on the third party.

Alternatively, a third party can also be involved in a lawsuit as an intervenor for either the claimant or the defendant if it has an interest in the dispute being decided in favour of one of the parties. A third party can join as an intervenor either of its own volition, or upon being issued a notice by a party to the dispute to join as an intervenor. In such a case, the result of the proceedings will be binding between the third party and, as the case may be, (i) the party which the third party joined as an intervenor or (ii) the party that sent a notice to the third party to act as an intervenor.

Under Korean law, a failure to join a particular third party to an ongoing proceeding does not preclude a litigant in that proceeding from bringing the same or similar claims against that third party later.

27. Describe the rules of fact-finding in your jurisdiction.

South Korea

The Korean Civil Procedure Act sets out the rules of fact-finding by Korean courts. In general, under Korean law, the party advancing a claim, usually the plaintiff, bears the burden of proving his or her claim by way of submitting evidence relevant to the claim. The court is bound to make a judgment based on the evidence presented by the parties and is not permitted to rule on the basis of the judge’s personal experience. Material facts that are undisputed by the parties may not be challenged by the court. If the evidence presented by the parties is deemed insufficient, the court has the power to proceed with its own evidential investigation at its discretion, but in practice this rarely takes place.

The court has wide discretion in assessing the admissibility of evidence. In court practice, documentary evidence is considered to have more evidentiary weight than oral testimony by a witness.

28. Will a court take or initiate the taking of evidence or will it rely on the parties to request the taking of evidence and to present it?

South Korea

Parties may apply to the court for the examination of certain documents, witnesses, and other evidence. The courts will decide which documents and witnesses to accept as evidence and may deny all or any of the parties’ requests to adduce evidence. When the court deems it necessary it will take or initiate the taking of evidence to supplement the existing evidence.

29. Is an opponent obliged to produce evidence that is harmful to it in the proceedings? Is there a document disclosure procedure in place? What are the consequences if evidence is not produced by a party?

South Korea

There are no specific provisions under the Korean Civil Procedure Act which oblige either party to voluntarily disclose or produce evidence that is harmful to it in the proceedings. However, either party may request the court to order the holder of certain documents to produce the documents.

If a party fails to comply with a court’s order to produce documents or destroys a document with the purpose of obstructing the proceedings, the court may draw an adverse inference against that non-complying party regarding the contents of the document sought. If a third party fails to comply with a court’s document production order, a court may impose a fine not exceeding 5 million won on the third party.

30. Please describe the key characteristics of witness evidence in your jurisdiction. Is witness preparation allowed?

South Korea

In general, Korean courts tend to place greater reliance on documentary evidence than on witness testimony. However, where needed, courts may compel a witness to appear before them to testify. A witness may submit written witness statements to the court, unless the opposing party objects to the submission of testimony in writing, in which case the witness will be required to testify in person. 

There is no statutory prohibition in Korea regarding the preparation of witnesses.

31. Who appoints expert witnesses? What is the role of experts?

South Korea

In Korean civil proceedings experts are appointed by the court. A party that wishes to rely on expert evidence must apply to the court to appoint an expert and the court will decide whether expert evidence is required. The expert’s duty is to the court and not to the parties. Although a court is not bound by such a court-appointed expert’s opinion, in practice, it will give considerable weight to the expert’s opinion.

These experts will produce expert (or appraisal) reports, and on occasion give oral testimony and be cross-examined.

While parties can submit opinions prepared by party-appointed experts, these opinions are treated as documentary evidence and not expert evidence. In general, courts will give limited weight to the opinions of party-appointed experts.

32. Can parties to proceedings (or a party's directors and officers in the case of a legal person) act as witnesses? Can the court draw negative inferences from a party's failure to testify or act as a witness?

South Korea

Parties to proceedings (or, in the case of legal entities, their directors and officers) can give testimony.

In general, if a party fails to appear before the court when he or she has been asked by the court to do so (either on the court’s own initiative or on the request of the other party) or refuses to testify without reasonable justification, the court may accept the other side’s allegations regarding the intended subject matter of the testimony as correct. However, this does not apply when a director or officer of a party fails to appear.

33. How is foreign law or foreign-language documentation introduced into the proceedings and considered by the courts?

South Korea

Issues of foreign law are treated as questions of law. And thus a party is not required to establish the substance of the foreign law. Having said that, in practice, it is possible that the court will not have a thorough understanding of the foreign law in question and it is prudent for parties to fully establish their case under the foreign law. Arguments on the substance of the foreign law can be introduced through expert reports and legal literature. 

All foreign-language documentation is required to be accompanied by Korean translations.

34. What standard of proof applies in civil litigation? Are there different standards for different issues?

South Korea

The standard of proof in civil litigation is to prove “high likelihood”. This standard may, in some cases, be relaxed. In claims where the calculation of damages is difficult due to the nature of the loss, the court may award a reasonable amount as damages on the basis of the evidence and arguments before it without requiring the exact amount of the loss to be established. Recent amendments to the Korean Civil Procedure Act have codified the possibility of such a relaxed standard in certain cases.

35. What are the possibilities to appeal a judicial decision? How many levels of appeal are there?

South Korea

Parties in Korean civil proceedings are entitled to two levels of appeal as a matter of right. At the first level of appeal, a party can appeal the first instance decision of a single judge of a district court to an appellate panel of the district court consisting of three judges or the first instance decision of a three-judge panel of the district court to the relevant High Court, as the case may be. The second level of appeal consists of an appeal to the Supreme Court.

36. What aspects of a lower court's decisions will an appeals court review and by what standards?

South Korea

At the first level of appeal (see above) parties can appeal on both factual and legal points. Parties are also allowed to introduce new arguments and evidence on appeal and the courts undertake a de novo review of the points being appealed.

The second level of appeal, which lies to the Supreme Court, is relatively limited. The grounds for an appeal to the Supreme Court are strictly limited to questions of law.

37. How long does it usually take to obtain an appellate decision?

South Korea

The first level of appeal typically takes between six months and a year, roughly the same amount of time as the first instance proceedings, and at times may take a few months longer if a large number of new arguments or facts are introduced before the appellate court.

38. In which conditions does your domestic arbitration law apply? Does it apply equally to purely domestic and international arbitrations, and to commercial and investor-state arbitrations?

South Korea

The Korean Arbitration Act was amended and came into effect on 4 February 2020. In principle, the Korean Arbitration Act applies to cases where the seat of arbitration is Korea. However, certain provisions relating to the role of Korean courts are applicable irrespective of the seat or place of arbitration, such as the dismissal of a case on the ground that an arbitration agreement exists, or the recognition and enforcement of arbitral awards by the courts.

The Korean Arbitration Act states that it applies to an arbitration in which a disposable right of a party is in dispute. Thus, a dispute on a public or otherwise non-disposable right by a party, such as criminal proceedings, family law disputes or administrative proceedings, will not be considered arbitrable in Korea.

39. Give an overview of instances in which state courts come into play in domestic and international arbitration proceedings.

South Korea

Korean courts may only intervene in an arbitration in limited circumstances which are expressly stipulated in the Korean Arbitration Act. These include the following: (i) deciding on the appointment of an arbitrator or the designating body; (ii) deciding a challenge against an arbitrator; (iii) deciding a request for terminating an arbitrator’s authority; (iv) deciding on the tribunal’s competence or jurisdiction; (v) deciding a challenge against an expert; and (vi) assisting the tribunal in taking evidence.
In particular for (vi), since an arbitral tribunal cannot compel a witness to give evidence, the Korean Arbitration Act provides that the tribunal may, at its discretion or upon request of a party, seek assistance from a court to compel a witness to appear at a hearing and testify. The arbitrator or the parties may attend while the witness is giving such testimony in court with the permission of the presiding judge. Alternatively, the court may order a witness to testify before the arbitral tribunal if so requested by the arbitral tribunal.

Further, under the Korean Civil Execution Act, there are three types of interim measures available for arbitration proceedings: (i) provisional attachment; (ii) provisional injunction on property under dispute; and (iii) provisional injunction to preserve the status quo. A party seeking to obtain one of the interim measures above from the court must establish that there is an ‘urgent need’ for such interim measure.

40. Describe the rules governing recognition and enforcement of arbitral awards in your jurisdiction. To what extent do domestic courts review arbitral awards on the substance?

South Korea

Korean courts are known to be friendly when recognizing and enforcing an arbitration award. Under the Korean Arbitration Act, a domestic arbitral award has the same legal effect on the parties as a final and conclusive court judgment, unless a ground for refusal of recognition or enforcement exists under the Korean Arbitration Act. Further, an order made in an arbitral award has res judicata effect. The recent amendment of the Korean Arbitration Act provides that a decision enforcing an arbitral award must be made by way of a court order (not a judgment), which allows an enforcement procedure to proceed more expeditiously.
Since Korea is a member state of the New York Convention, an award made in another New York Convention jurisdiction is subject to enforcement in Korea in accordance with the provisions of that convention. In contrast, a foreign award that is not subject to the New York Convention must be recognised or enforced by the Korean court in light of the reciprocity principle and the laws applicable to foreign judgments in Korea (see also question 47).

In general, arbitral awards are not subject to review by the domestic courts. However, the Korean Arbitration Act provides narrow grounds for setting aside an award if an award violates the public policy of Korea. It should be noted that Korean courts have the tendency of recognising and enforcing arbitral awards and have only refused recognition of an arbitral award on very rare occasions.  

41. Are class actions available?

South Korea

Under the Korean legal system, class actions are not permissible unless specifically provided for by statute. For example, a class action can be brought in accordance with the Act on Securities-Related Class Action upon satisfying certain requirements.

42. Are derivative actions available?

South Korea

Derivative actions are available in Korea. A shareholder who satisfies certain requirements may request a company in writing to file an action against the directors of the company to prevent them from taking certain actions or seeking damages from them. If the company fails to do so, the shareholder may bring a claim against the directors in his or her own name but on behalf of the company and for the company’s benefit.

43. Are fast-track proceedings available?

South Korea

Fast-track proceedings are available in small-claims cases. Since January 2017, the definition of small-claims cases has been revised to include cases in which the amount in dispute is below 30 million won (previously, the upper-limit was 20 million won). In these fast-track proceedings, a court may recommend at the outset that the defendant accept the claims against it and render performance as sought by the plaintiff. The defendant can object to such a recommendation within two weeks, in which case the dispute shall proceed in ordinary proceedings.

Korean law also provides a procedure whereby a party can apply to a court for a payment order against a debtor owing money, fungibles or securities. The court will issue a payment order in favour of the creditor unless it is convinced that the application is groundless. Once the payment order is issued, if the debtor objects to the payment order within two weeks of the service of the order, the payment order loses effect, otherwise it becomes binding and enforceable (it does not, however, have res judicata effect).

44. Is it possible to conduct proceedings in a foreign language?

South Korea

In general, it is not possible to conduct civil proceedings in the Korean courts in a foreign language. However, starting from June 2018, patent cases may be pleaded in a foreign language if the parties agree and the court approves.

45. What legal effects does a judgment have?

South Korea

A final and conclusive judgment is binding upon the parties to the case and has res judicata effect. The judgment can also have an issue preclusion effect on third parties where the third party was involved in the proceedings as a non-party or was given notice to join the proceedings but did not do so (see answer to question 24). Except for a court’s finding on set-off, only a court’s dispositive ruling is binding. A judgment only becomes final when all appeals have been exhausted or have not been availed within the time fixed. However, first instance judgments are normally accompanied by provisional enforcement orders that allow for them to be provisionally enforced even before the judgment becomes final.

46. What are the procedures and options for enforcing a domestic judgment?

South Korea

If the losing party does not voluntarily comply with a judgment, the successful party may initiate proceedings for execution. First instance decisions, though not final until all appeals are exhausted or not availed within fixed time limits, can be executed by virtue of provisional enforcement orders that are normally issued together with the judgments.

47. Under what circumstances will a foreign judgment be enforced in your jurisdiction?

South Korea

Foreign judgments are enforced in Korea by filing an enforcement action against the judgment debtor at the Korean court. In this regard, article 217(1) of the Korean Civil Procedure Act sets out four requirements for the enforcement of a foreign judgment. That is, a foreign judgment may be enforced if (i) the foreign court rendering the judgment had international jurisdiction, (ii) proper service of process was effectuated, (iii) the judgment does not contravene the public policy of Korea and (iv) there is reciprocity between Korea and the foreign country in terms of their treatment of foreign judgments.

This last element of reciprocity can be evidenced, for instance, by a precedent of the foreign country recognising a Korean judgment. If there is no precedent in that foreign country that has recognised a Korean judgment, it is possible to enforce the foreign judgment in Korea if an applicant can prove that there is a substantial likelihood that the foreign country’s court would enforce a Korean judgment.

For reference, the following is a list of foreign jurisdictions with which mutual guarantees have been determined to exist in Korean courts: the US (New York, California, Minnesota, Oregon, Kentucky, Texas, New Jersey and the Northern Mariana Islands), Canada (Ontario), Germany, the United Kingdom, Argentina, Japan, Australia, Hong Kong and Taiwan. In contrast, reciprocity with Thailand and Denmark were denied in some lower court cases.

If a foreign judgment on damages fundamentally violates Korean law, the court may deny the recognition or enforcement of that judgment in full or in part. In doing so, the court may consider whether the damages awarded by a foreign court were of punitive nature.

48. Will the successful party's costs be borne by the opponent?

South Korea

In principle, the costs of a lawsuit, including legal fees, will be borne by the losing party. In practice, these costs are often apportioned to each party in proportion to the success achieved by each party. However, the prevailing party’s legal fees are only compensated up to a certain statutory amount, which is proportionate to the amount in dispute. In certain cases, depending on the circumstances, a court may order the successful party to pay all or part of the costs arising from certain procedural steps.

49. May a party apply for legal aid to finance court proceedings? What other options are available for parties who may not be able to afford litigation?

South Korea

There are mainly two avenues for parties to seek legal aid to finance court proceedings. One is to apply to the Korean Bar Association or the Korean Legal Aid Corporation prior to commencing a court proceeding and the other is to apply to the relevant court while the proceedings are under way.

Parties who are unable to afford litigation may also consider entering into contingency fee arrangements with counsel.

50. Are contingency fee arrangements permissible? Are they commonly used?

South Korea

In civil cases, contingency fee or conditional fee arrangements are not only permissible under Korean law but are common. However, on an application by a party, the court may reduce the amount of contingency fees agreed between the party and its lawyers if the court finds that the agreed amount was unreasonably excessive and violates equity and the principle of good faith under Korean law.

51. Is third-party funding allowed in your jurisdiction?

South Korea

There are no particular prohibitions or developing trends in Korea on third-party funding. The generally held view is that third-party funding is prohibited under the Attorneys-at-Law Act.

52. Are there fee scales lawyers must follow? Are there upper or lower limits for fees charged by lawyers in your jurisdiction?

South Korea

There are no specific fee scales that lawyers must follow. However, when it comes to compensating parties for their legal fees in court proceedings, courts are bound by a statutory fee-scale that specifies the maximum amount of compensation for legal fees that can be granted, based on the amount in dispute.