JIPYONG LLC

Introduction

The recent amendment to Korea’s Act on Private International Law (‘APIL’) comes into effect in July 2022.  This full-scale amendment is something Korea’s Ministry of Justice has been working towards since 2012, and won a landslide vote in the National Assembly in December 2021.

The amended Act details a comprehensive set of principles for determining Korean court jurisdiction over matters involving international or foreign elements.  As a crude comparison, while the existing act has only one Article on international jurisdiction, the amended APIL has 35 new Articles setting out how Korean courts should determine to exercise international jurisdiction.  The law on governing law, on the other hand, saw minimal changes.


Overview of APIL

The principal standard for determining if a Korean Court has international jurisdiction is “substantial relevance”.  The Korean Supreme Court has long held that the specific criteria for deciding whether “substantial relevance” exists are (i) fairness between the parties, (ii) equity, and (iii) judicial economy.  This standard has been codified in Article 2(1) of the amended APIL.

The amended APIL provides for (i) general and special jurisdiction (Articles 3 to 5), (ii) contingent jurisdiction (Article 6), (iii) counterclaim jurisdiction (Article 7), (iv) jurisdiction by agreement (Article 8), (v) jurisdiction by pleading (Article 9), (vi) exclusive jurisdiction (Article 10), (vii) international lis pendens  (Article 11), (viii) forum non conveniens  (Article 12), and (ix) jurisdiction for preservation and nonlitigation matters (Articles 14 and15).

The amended APIL also has special provisions for proceedings involving (i) intellectual property, (ii) contracts for the supply of goods/services, (iii) consumer contracts, (iv) labor contracts, (v) torts, (vi) familial relationships and inheritance, (vii) bills and checks, and (viii) admiralty (Articles 13, 24-25, 38-39, 41-44, 56-62, 76, 79, 89-93).


Key Implications for Cross-border Litigation

Although the amended law takes effect in July 2022, existing proceedings may also benefit from its jurisdiction provisions.  Prior to amendment, forum non conveniens  was not a recognized doctrine.  The principle has been explicitly adopted in Article 12 of the amended APIL, giving courts more discretion and flexibility in exercising or resisting international jurisdiction.  Whether Article 12 may be invoked in pending proceedings is subject to debate, but since the doctrine closely resembles the “substantial relevance” principle couched in Korean Supreme Court decisions, it is likely that Korean courts may defer to Article 12 of the amended APIL for existing matters.

Under the amended law, Korean courts may suspend the proceedings if (i) the Korean lawsuit is brought later than a foreign proceeding, and (ii) judgment issued by the foreign court is expected to be recognized in Korea.  Nonetheless, in cases where (i) Korean courts have exclusive jurisdiction or (ii) when it is evidently more appropriate for Korean courts to decide matters in dispute, proceedings may not be suspended (Articles 11(1) and 11(5)).  In this regard, the amendment may pave the way for more races to the courthouse in Korea.