Kwang Hyun SUK, Legal Personality of a Foreign Company mainly conducting Business in Korea and its Capacity to become a Party in Civil Lawsuit: with respect to the Supreme Court Judgment on a Foreign Legal Person exclusively engaged in Asset Securitization, Advanced Commercial Law Review, Vol. 90 (2020), pp. 33-64.
<Abstract>
Nowadays the major players in international trade are national companies. In this context, several questions arise, including whether the counterpart company has the legal personality and is entitled to have rights and assume obligations, and who is the representative. This in fine leads to the question of which law applies to determine them, namely the law applicable to companies or the lex societatis. This is an issue of private international law, and more precisely of international company law. In this article, the author reviews the Korean Supreme Court judgment rendered in 2015 on the issue. The judgment pertains to a case where the plaintiff was a foreign legal person exclusively engaged in asset securitization. Although not discussed at all by the Korean courts, the author examines in the present article whether the plaintiff, a pseudo-foreign company, was able to become a party to a lawsuit in the light of the proviso of Article 16 of the Private International Law Act ("PILA"). The critical issue is the consequence of applying the law of the seat (i.e. Korean law) to a pseudo-foreign company under the proviso of Article 16 of the PILA. It is deeply regrettable that all of the Korean courts including the Supreme Court which dealt with the case have not considered the proviso of Article 16 of the PILA. In the famous Überse ring case, the German lower courts denied the plaintiff's capacity to have rights and assume obligations and to become a party in civil lawsuits by applying the real seat theory to Überse ring, which had been originally established in the Netherlands and later moved to Germany. We must establish the consequences of applying the proviso of Article 16 of the PILA and Article 617 of the Commercial Act to pseudo-foreign companies, and if such application is not acceptable, we must consider their future amendment. In the case studied in this article, the Supreme Court revealed its lack of private international law thinking. With respect to foreign legal persons exclusively engaged in asset securitization, we could solve the problems with the assistance of the Asset Securitization Act. However, we should pay more attention to the interpretation and future legislation of Article 16 of the PILA as there may be problems with respect to other special purpose companies that do not have such special legal basis.
<Keywords>
law applicable to company, incorporation theory, real seat theory, foreign legal person exclusively engaged in asset securitization, pseudo-foreign corporation, Fremdenrecht, capacity to become a party to a civil lawsuit, capacity to have rights and assume obligations
Kwang Hyun SUK, Legal Personality of a Foreign Company mainly conducting Business in Korea and its Capacity to become a Party in Civil Lawsuit: with respect to the Supreme Court Judgment on a Foreign Legal Person exclusively engaged in Asset Securitization, Advanced Commercial Law Review, Vol. 90 (2020), pp. 33-64.
<Abstract>
Nowadays the major players in international trade are national companies. In this context, several questions arise, including whether the counterpart company has the legal personality and is entitled to have rights and assume obligations, and who is the representative. This in fine leads to the question of which law applies to determine them, namely the law applicable to companies or the lex societatis. This is an issue of private international law, and more precisely of international company law. In this article, the author reviews the Korean Supreme Court judgment rendered in 2015 on the issue. The judgment pertains to a case where the plaintiff was a foreign legal person exclusively engaged in asset securitization. Although not discussed at all by the Korean courts, the author examines in the present article whether the plaintiff, a pseudo-foreign company, was able to become a party to a lawsuit in the light of the proviso of Article 16 of the Private International Law Act ("PILA"). The critical issue is the consequence of applying the law of the seat (i.e. Korean law) to a pseudo-foreign company under the proviso of Article 16 of the PILA. It is deeply regrettable that all of the Korean courts including the Supreme Court which dealt with the case have not considered the proviso of Article 16 of the PILA. In the famous Überse ring case, the German lower courts denied the plaintiff's capacity to have rights and assume obligations and to become a party in civil lawsuits by applying the real seat theory to Überse ring, which had been originally established in the Netherlands and later moved to Germany. We must establish the consequences of applying the proviso of Article 16 of the PILA and Article 617 of the Commercial Act to pseudo-foreign companies, and if such application is not acceptable, we must consider their future amendment. In the case studied in this article, the Supreme Court revealed its lack of private international law thinking. With respect to foreign legal persons exclusively engaged in asset securitization, we could solve the problems with the assistance of the Asset Securitization Act. However, we should pay more attention to the interpretation and future legislation of Article 16 of the PILA as there may be problems with respect to other special purpose companies that do not have such special legal basis.
<Keywords>
law applicable to company, incorporation theory, real seat theory, foreign legal person exclusively engaged in asset securitization, pseudo-foreign corporation, Fremdenrecht, capacity to become a party to a civil lawsuit, capacity to have rights and assume obligations