Encyclopedia of Private International Law
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Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
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Korea

Kwang Hyun Suk

I. Sources of private international law

1. Major legislation

The single most important piece of Korean legislation on private international law rules is the Private International Law Act of Korea (Act No 6465 of 2001, henceforth PILA), which mainly consists of provisions on applicable law and several provisions on international jurisdiction in →civil and commercial matters (an unofficial English translation by Kwang Hyun Suk is available in (2003) 5 YbPIL 315–336 and an unofficial German translation by Knut Benjamin Pißler is available in (2006) 70 RabelsZ 342–357). The general provisions on the recognition and enforcement of judgments are included in arts 217 and 217bis of the Code of Civil Procedure of Korea of 2002 (Act No 6626 of 2002, as last amended by Act No 133952 of 2016, henceforth CCP) and arts 26 and 27 of the Code of Civil Enforcement of Korea of 2002 (Act No 6627 of 2002, as last amended by Act No 13952 of 2016, henceforth CCE). The PILA consists of the following nine chapters: General Provisions (ch 1), Person (ch 2), Juridical Acts (ch 3), Rights in rem (ch 4), Obligations (ch 5), Family (ch 6), Succession (ch 7), Bills of Exchange, Promissory Notes and Cheques (ch 8) and Maritime Matters (ch 9).

2. International conventions

Under the Constitution (Constitution No 1 of 17 July 1948, Official Journal of Korea of 1 September 1948, as last amended on 29 October 1987), treaties that are concluded and officially published in accordance with the Constitution and generally accepted international rules of law shall have the same force as Korean law (art 6(1) Constitution). Korea became a Member State of the →Hague Conference on Private International Law in 1997. As of 1 February 2014, Korea is a contracting party to the following four Hague Conventions only: the Hague Legalisation Convention (Hague Convention of 5 October 1961 abolishing the requirement of legalisation for foreign public documents, 527 UNTS 189); the Hague Service Convention (Hague Convention of 15 November 1965 on the service abroad of judicial and extrajudicial documents in civil or commercial matters, 658 UNTS 163); the Hague Evidence Convention (Hague Convention of 18 March 1970 on the taking of evidence abroad in civil or commercial matters, 847 UNTS 241); and the Hague Child Abduction Convention (Hague Convention of 25 October 1980 on the civil aspects of international child abduction, 1343 UNTS 89). Korea has reflected in the PILA the main connecting principles of the Hague Maintenance Recognition and Enforcement Convention 1973 (Hague Convention of 2 October 1973 on the recognition and enforcement of decisions relating to maintenance obligations, 1021 UNTS 209) and the Hague Testamentary Dispositions Convention (Hague Convention of 5 October 1961 on the conflicts of laws relating to the form of testamentary dispositions, 510 UNTS 175), even though Korea is not a party to such conventions. Korea has ratified the New York Convention (United Nations Convention of 10 June 1958 on the recognition and enforcement of foreign arbitral awards, 330 UNTS 3) and the CISG (United Nations Convention of 11 April 1980 on Contracts for the International Sale of Goods, 1489 UNTS 3). Korea has entered into just four bilateral treaties on legal assistance in civil and commercial matters with →Australia (1999, Treaty No 1504, Official Journal of Korea of 17 January 2000), →China (2003, Treaty No 1729, Official Journal of Korea of 25 April 2005), Mongolia (2008, Treaty No 2002, Official Journal of Korea of 22 April 2010) and Uzbekistan (2012, Treaty No 2153, Official Journal of Korea of 26 August 2013).

3. Role of case-law

Various kinds of sources of law are set forth in art 1 of the Civil Code (Act No 471 of 1958, as last amended by Act No 13710 of 2016, henceforth CC). On its face, it only applies to civil matters under the CC. However, it could be applied by analogy to other areas of law, including matters governed by the PILA. Article 1 CC lists, as sources of law, statutes, customary laws and jori (ie nature of things), which can be understood as general legal principles. Customary laws are applicable only in the absence of applicable statutes, while jori is applicable only in the absence of applicable statutes and customary laws. Customary laws play no role as a source of private international law because there are no such customary laws. Even though case-law is not a source of law, it complements the legal system. Because the PILA has many gaps, the case-law of the Supreme Court has played a p. 1very important role in establishing choice-of-law rules, supplementing statutory provisions. For example, case-law has been determinative in filling gaps on issues such as the ex officio application of the PILA, the ex officio application of foreign law (→Foreign law, application and ascertainment) designated by the PILA, the →lex fori principle for procedural matters, hidden →renvoi, and the splitting of the law applicable to contract and the law applicable to distance torts (Distanzdelikte). Although judgments of the Constitutional Court have played important roles in various areas of law, their role has thus far been negligible insofar as private international law is concerned.

4. Role of doctrinal writing

Doctrinal writings are not sources of law and have only persuasive authority. Although Korean courts consult doctrinal writings in practice, they do not cite doctrinal writings in their case-law. Only in very exceptional cases do lower courts cite doctrinal writings in their case-law. Doctrinal writings and scholars have had significant influence on the legislators when drafting private international law rules. This was clearly the case when the legislators substantially amended the PILA in 2001.

II. History of private international law

Korea used to have a prior Private International Law Act (Act No 966 of 1962, Official Journal of Korea of 15 January 1962, henceforth Prior PILA), called ‘Seoboesabeop’ in Korean, which was promulgated in 1962. The Prior PILA was replaced by the new PILA referred to as ‘Gukjesabeop’ in Korean, which was promulgated on 7 April 2001 and became effective as of 1 July 2001. The Prior PILA was modelled on the chapter of private international law of the then Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche of 21 September 1994, BGBl. I 2494, as amended, henceforth EGBGB) and the then Japanese Private International Law (Japanese Act on General Rules for Application of Laws (Hōrei), Act No 10 of 1898, as newly titled as Hōno Tekiyō ni Kansuru Tsūsokuhō and amended by Act No 78 of 21 June 2006, henceforth Japanese PILA). Unlike the Prior PILA, the Korean PILA has introduced rules on international jurisdiction. The Korean PILA has also reflected the following ideas: diversification of the →connecting factors; expansion of the principle of →party autonomy; consideration of the contents of substantive law protecting socio-economically weaker parties; and the introduction of methodological pluralism for the →choice of law. Legislators considered the efforts for the progressive unification of the choice-of-law rules, especially in the areas of family law and →succession law, consistently made by the Hague Conference.

The Korean PILA follows the approach of traditional private international law statutes on the European continent. It is a product of efforts to eliminate the problems existing under the Prior PILA and to modernize Korean private international law by adopting the standards laid down in international conventions and the national laws of advanced countries. Unlike the Prior PILA, which was strongly influenced mainly by the former Japanese PILA and the former German EGBGB, legislators took account of the Rome Convention (Rome Convention on the law applicable to contractual obligations (consolidated version), [1998] OJ C 27/34; →Rome Convention and Rome I Regulation (contractual obligations)), the Swiss Private International Law Act of 1987 (Bundesgesetz über das Internationale Privatrecht of 18 December 1987, 1988 BBl I 5, as amended, henceforth Swiss PILA), the German EGBGB and various Hague Conventions, thereby gaining a relatively greater level of universal credibility.

III. Administration of private international law

1. No special courts

There are no Korean courts that specialize in private international law matters. These matters fall within the scope of the jurisdictional powers of ordinary courts dealing with civil and commercial matters. However, in order to strengthen the expertise of the judges dealing with international commercial transactions, several courts in Korea, such as the Seoul Central District Court of the first instance and the Seoul High Court of the second instance, have designated some of their panels as ‘Special Panels in Charge of International Cases’.

2. Application and enforcement of foreign law

Although there is no express provision in the PILA, courts are obligated to apply the choice-of-law rules of the PILA of their own motion if they find that a case involves a foreign element. p. 1Further, art 5 of the PILA expressly provides that the court shall examine and apply ex officio the contents of the foreign law designated as the governing law under the PILA, and may request the parties’ cooperation for that purpose. Cooperation includes providing the relevant source of law or court precedent, which is not easily accessible to the Korean court, or providing information on the relevant authority or expert on the issue under examination. While the PILA does not sanction a party who fails to provide the necessary cooperation, the negative consequence in such a case would be the application of a substitute law in lieu of the governing law. The application of the choice-of-law rules of the PILA is clearly subject to review by appeal courts and ultimately by the Supreme Court. The application of foreign law designated by the PILA is also subject to review by appeal courts and ultimately by the Supreme Court. If foreign law is not proved to the satisfaction of the courts, even after the courts have made reasonable efforts to identify the contents of the foreign law, the court may apply any law that is similar to the applicable foreign law. The main means of evidence to prove foreign law in practice are opinions of experts qualified in the relevant jurisdiction to be submitted by the parties (→Evidence, procurement of). Judicial cooperation on the provision of information on foreign law contemplated by several bilateral treaties concluded between Korea and Australia as well as China, Mongolia and Uzbekistan may be useful for that purpose.

IV. Basic principles of jurisdiction

1. General structure

The PILA has introduced three articles on international jurisdiction. Article 2 in the General Provisions lays down general rules on international jurisdiction. Articles 27 and 28 of the PILA have introduced special rules to protect consumers and employees. Article 2 of the PILA states that detailed and refined rules on international jurisdiction should be developed by consulting, but without being bound by arts 2–25 and arts 29–31 of the CCP (‘CCP Venue Provisions’) in civil or commercial matters. At the same time, it is necessary to take into account the special characteristics of international jurisdiction, as distinct from domestic territorial jurisdiction. The idea underlying art 2 is to require judges to establish more detailed and refined rules on international jurisdiction after considering the special characteristics of international jurisdiction, instead of mechanically assuming that the ‘rules on international jurisdiction’ are equal to the ‘CCP Venue Provisions’. Accordingly, the CCP Venue Provisions could be used as a reference for Korean courts in developing detailed and refined international jurisdictional rules. There is a division of opinion among legal commentators as to whether or not the doctrine of →forum non conveniens, under which a Korean court may refuse to exercise international jurisdiction even if it has international jurisdiction, is permitted.

The specific criteria that the Korean courts may apply in determining the question of jurisdiction may be described as below.

2. General jurisdiction: defendant’s domicile

The CCP provides that an action is subject to the jurisdiction of the court located at the place where the defendant has his or her domicile (in the case of a natural person) or its principal place of business (in the case of a legal person; arts 2, 3 and 5 CCP) (→Domicile, habitual residence and establishment). It is generally recognized that this rule (actor sequitur forum rei) applies to international jurisdiction.

3. Corporations

An action against a person maintaining an office or a business office (loco negotium) can be brought before the court located in that area only if the action concerns the business affairs of such office or business office (art 12 CCP). It is generally recognized that this rule applies to international jurisdiction. Article 5(2) of the CCP also provides that the general forum for a foreign corporation shall be the place in Korea where it has an office or a business office. According to this provision, it is not material to the exercise of jurisdiction by the court located in the general forum whether such office or place has any relation to the action. Despite a strong opposing view, Korean courts tend to hold that if a foreign corporation establishes an office or a business office in Korea, it will be subject to Korean international jurisdiction generally without regard to whether the particular cause of action is connected with the operation of the Korean office or business office, which can be viewed as supporting the American concept of doing business. However, considering a recent p. 1case of 2010 the Supreme Court now appears to depart from its previous position.

4. Property

An action concerning property rights (→Property and proprietary rights) against a person who does not have a domicile in Korea may be brought before the court located in the area where the subject matter of the claim, the subject matter for security or any attachable property of the defendant is located (art 11 CCP). This appears to confer jurisdiction merely on the grounds of the location of any specified subject matter or property. Despite an influential view criticizing such a position as allowing exorbitant jurisdiction, the Supreme Court admitted in 1988 that art 11 of the CCP may be applied to international jurisdiction.

However, considering a recent case of 2014 the Supreme Court now appears to depart from its previous position.

5. Intellectual property

The most problematic disputes concerning intellectual property are those involving the registration or validity of patents or other similar rights requiring registration. It has been generally thought that Korean courts have exclusive international jurisdiction in proceedings concerning the registration or validity of patents or other similar rights if the registration has taken place in Korea. However, in a recent case of 2011, the Supreme Court distinguished (i) proceedings whose subject matter is the validity or existence of patents on the one hand, and (ii) proceedings whose subject matters are the interpretation and effects of the contractual obligations between the parties on the other, and clearly held that only the first category falls under the exclusive jurisdiction of the country of registration.

6. Obligations

An action concerning →contractual obligations may be brought before the court located in the →place of performance of the obligations (art 8 CCP). The Supreme Court held in 1972 that art 8 of the CCP could be a basis of international jurisdiction. It is not clear whether the Supreme Court still maintains this position, because in a recent case of 2006 it apparently did not follow the foregoing approach in a contractual dispute. In order to protect socio-economically weaker parties, the PILA sets forth special rules on international jurisdiction in respect of passive →consumer contracts and individual employment contracts (arts 27 and 28 PILA), which are modelled on arts 13–15 of the Brussels Convention (Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, [1972] OJ L 299/32, consolidated version, [1998] OJ C 27/1) with certain modifications to reflect Internet transactions (in the case of art 27 PILA).

An action for tort may be brought before the court of the place where the tortious act occurred (art 18 CCP). It is generally recognized that art 18 of the CCP could apply in determining the question of international jurisdiction. Where the tortious act occurred in one place and the consequence of the injury occurred in another, each of them could be a ground for international jurisdiction. The majority view maintains that the places should be determined rationally from the viewpoint of international jurisdiction and that, in the case of product liability in particular, it should be taken into account whether the place of acting or the place of injury was one of the areas that the defendant was reasonably able to foresee. The Supreme Court endorsed such a view in the product liability case of 1995. This judgment was apparently influenced by the idea of ‘reasonable foreseeability’ and ‘purposeful availment’ appearing in the decisions of the Supreme Court of the US (World-Wide Volkswagen Corp v Woodson, 444 U.S. 286 (1980) and Asahi Metal Industry Co v Superior Court, 480 U.S. 102 (1987)).

7. Family matters

In its leading case of 1975, the Supreme Court held that: (i) in principle, the domicile of the defendant should be located in Korea in order for Korean courts to have jurisdiction, because the forum rei principle is also valid for family matters including divorce cases; and that (ii) however, by way of exception, the Korean courts may have jurisdiction even if the domicile of the defendant is located outside of Korea, where the refusal to entertain the action could amount to a denial of justice. As situations amounting to a denial of justice, the Supreme Court mentioned cases where the defendant fails to appear or a comparable situation exists, or the p. 1defendant actively responds to the action. It is not clear whether the Supreme Court still maintains such a position after the amendment of the PILA in 2001. Lower courts make efforts to establish the jurisdictional rules on a case-by-case analysis under the PILA, instead of following the jurisdictional rules established by the Supreme Court in 1975.

8. Succession

An action concerning a →succession, a bequest or other acts effective on death may be brought before the court located in the area where the general forum of the deceased was located at the time when such succession commenced (art 22 CCP). In addition, an action concerning a succession claim and the liability of an estate, which does not fall under art 22 of the CCP, may be brought before such a court if the whole or part of the estate is located in the jurisdiction area of the court under art 22 of the CCP. It is generally recognized that these rules apply to international jurisdiction.

9. Jurisdiction agreement and appearance

The validity of the parties’ agreement on international jurisdiction in a cross-border action is generally accepted in Korea. The Supreme Court held in 1997 that in order for a jurisdiction clause conferring exclusive jurisdiction upon a foreign court to be valid: (i) the case must not fall under the exclusive jurisdiction of Korea; (ii) the agreed-upon foreign court must have valid jurisdiction under its law; (iii) the case should have a reasonable relationship with the chosen foreign court; and (iv) the jurisdiction agreement must not be egregiously unreasonable or unfair. Even if a person is not otherwise subject to the international jurisdiction of Korean courts, if he or she appears before the Korean court and responds to the merits without objecting to the jurisdiction, the Korean court will assume international jurisdiction since he or she can be deemed to have consented to the international jurisdiction of the Korean courts.

In June 2014, the Korean Ministry of Justice established an expert committee in charge of amending the Korean PILA to introduce detailed rules on international jurisdiction. Accordingly, we will be able to see detailed and refined rules on international jurisdiction in the Korean PILA in 2017 or 2018.

V. Basic principles of choice of law

1. General structure

Chapter 1 of the PILA, entitled ‘General Provisions’, includes several provisions dealing with issues of a general nature which arise in applying choice-of-law rules. Article 7 of the PILA sets forth the application of internationally mandatory rules of Korean law if it is clear from their legislative purposes that they must be applied irrespective of the governing law. Article 8 of the PILA introduces an →escape clause (or exception clause) in order to achieve the principle of the closest connection, which is modelled on the Swiss PILA (art 15).

The Korean PILA does not permit transmission except under art 51(1). However, the PILA permits direct →renvoi (remission) to Korean law and lists cases where direct renvoi is not permitted (art 9 PILA). For example, direct renvoi is not permitted: (i) in cases where the parties have chosen the governing law or where the law governing a contract is designated by the PILA; and (ii) in cases where renvoi would be contrary to the purpose of designating the governing law by the PILA. In a divorce case of 2006 between US citizens, the Supreme Court permitted hidden renvoi and applied Korean law instead of the laws of the State of Missouri originally designated by art 39 of the PILA. Foreign law shall not be applied where its application is manifestly incompatible with the good morals and other social order of Korea (art 10 PILA).

Where the lex patriae designated by the PILA is the law of a country with various local laws, the law designated by the relevant choice-of-law rules of that country shall govern; if there are no such rules, the law of the local district with which the person in question is most closely connected shall apply (art 3(3) PILA). There are no provisions on characterization, the incidental question, fraus legis (→Evasion of laws (fraus legis)) and adaptation, which are resolved by court precedents and the views of scholars. Although there is no provision on point, procedural matters are governed by the lex fori.

2. Corporations

The first sentence of art 16 of the PILA adopts the incorporation theory to respect the interests of the parties more appropriately and to promote legal certainty. As an exception to the foregoing principle, the second sentence provides that Korean law shall apply if the head office p. 1of the legal person or association is located in Korea or the principal activities of such person or association are conducted in Korea, which is designed to protect third parties who engage in business transactions with such legal persons and associations in Korea.

3. Juridical acts

Chapter 3 on juridical acts deals with the formal validity of juridical acts and the law applicable to agency (arts 17–18 PILA; →Agency and authority of agents; →Commercial agency, franchise and distribution contracts). As to the formal validity of juridical acts, art 17 of the PILA adopts the principle of favor negotii by subjecting the formal validity of a juridical act to either the law governing its substance or the law of the place where it is effected (the principle of locus regit actum). As regards the law applicable to voluntary agency, the internal relationship between principal and agent is subject to the law governing the legal relationship between the parties, whereas the external relationship is governed by the law of the country of the agent’s place of business or, if there is none or if the agent’s place of business is not ascertainable by the third party, by the law of the country where the agent has actually acted in the particular case. The PILA has also introduced party autonomy, provided that the principal’s choice is expressly stated in the document proving the agent’s authority or is notified in writing to the third party by either the principal or the agent.

4. Property (real rights)

The PILA sets forth the general rules applicable to immovables and movables (art 19) and the special rules on special types of property such as: (i) means of transportation; (ii) bearer securities; (iii) res in transit; and (iv) contractual security interests over claims, shares and other rights (arts 20–23). There is no separate provision on the law governing trusts in the PILA. Real rights concerning immovables and movables and other rights subject to registration are governed by the lex situs of the subject matter, whereas acquisition, loss or change of real rights is governed by the lex situs of the subject matter at the time of the completion of the causal action or event (art 19 PILA). Real rights to an aircraft are governed by the laws of its →nationality, whereas real rights to rolling stock are governed by the laws of the country approving its traffic service. Bearer securities are treated as movables and are thus subject to the lex cartae sitae (art 21 PILA), which should not apply in cases where investors hold their securities indirectly through intermediaries and cross-border securities transactions are concluded by a mere account transfer. The law applicable to the disposition of the intermediated securities is not clear, although there is an influential view supporting the ‘place of the relevant intermediary approach (PRIMA)’.

5. Intellectual property

The protection of intellectual property rights is subject to the law where the right was infringed (art 24 PILA). Article 24 is interpreted broadly as designating the law of the protecting country in matters relating to intellectual property rights in general, embodying the principle of lex protectionis. However, contractual matters such as disputes on licence agreements are governed by the provisions on the law applicable to contract in arts 25, 26 and 29 of the PILA. If the relevant international convention on a specific intellectual property right, such as the Paris Industrial Property Convention (Paris Convention for the protection of industrial property of 20 March 1883, with later amendments, 828 UNTS 305) and the Berne Convention (Berne Convention for the Protection of Literary and Artistic Works of 9 September 1886, completed at Paris on 4 May 1896, revised at Berlin on 13 November 1908, completed at Berne on 20 March 1914, revised at Rome on 2 June 1928, revised at Brussels on 26 June 1948, revised at Stockholm on 14 July 1967 and revised at Paris on 24 July 1971, 1161 UNTS 3 and amended in 1979 Treaty Doc No 99-27, and 1985, 828 UNTS 221), is interpreted to include choice-of-law rules, such rules will override art 24 of the PILA.

6. Obligations

Chapter 5 consists of choice-of-law rules: (i) on →contractual obligations modelled on the Rome Convention with some modifications (arts 25–29 PILA); (ii) on non-contractual obligations (arts 30–33 PILA); and (iii) on the assignment of both contractual and non-contractual p. 1claims, the assumption of obligations and the transfer of a claim by operation of law which are applicable to both contractual and non-contractual obligations (arts 34–35 PILA).

a) Contractual obligations

Article 25 of the PILA declares the principle of →party autonomy and permits →dépeçage and a subsequent change of the law applicable to the contract. In the absence of the parties’ →choice of law, the contract is governed by the law most closely connected to the contract. Article 26 of the PILA introduces a rebuttable presumption based upon characteristic performance, an illustrative list of which is contained therein. As regards contracts with passive consumers and individual employment contracts, arts 27 and 28 of the PILA restrict party autonomy and modify the general rules on the objective governing law in order to protect socio-economically weaker parties. Originally modelled on art 5(2) of the Rome Convention, the scope of the consumer contracts has been modified to cover also consumer contracts concluded via the Internet (→Internet, jurisdiction).

b) Non-contractual obligations

Articles 30–33 of the PILA deal with non-contractual obligations arising from →negotiorum gestio, →unjust enrichment and →tort. First, as for the non-contractual obligations in general, art 33 permits the ex post party autonomy in favour of Korean law, provided that the rights of third parties shall not be prejudiced by such an agreement. In the absence of the parties’ choice of Korean law, the rules below are applicable.

Unjust enrichment is governed by the laws of the country where the enrichment took place (art 31 PILA). This connecting principle can be displaced by the law governing the legal relationship between the parties if the unjust enrichment resulted from an act based on the existing legal relationship.

Article 32(1) of the PILA provides for the lex loci delicti principle. The PILA does not include a special rule dealing with a Distanzdelikt, which occurs when the place of the tortious act and the place of the injury are in different countries. The connection under art 32(1) of the PILA could be displaced by the law of the country of their common habitual residence (→Domicile, habitual residence and establishment) if the tortfeasor and the injured party had their habitual residences in the same country at the time of the tort. Moreover, the connecting principles under art 32(1) and 32(2) of the PILA could be displaced by the law governing the legal relationship between the parties if the tort violates an existing legal relationship between the tortfeasor and the injured party (‘the secondary or accessory connecting principle’). Where a tort is governed by foreign law, →damages arising from the tort shall not be awarded if the nature of the loss is clearly not appropriate so as to merit compensation to the injured party or if the damages so awarded would substantially exceed the amount of compensation deemed appropriate in the particular case (art 32(4) PILA). Punitive damages and ‘grossly excessive damages’ are examples of the former and the latter, respectively.

The PILA does not include choice-of-law rules for special types of →torts such as →products liability. However, there are unilateral choice-of-law rules in other statutes, such as the Monopoly Control and Fair Trade Act (Act No 11119 of 2011; art 2bis) and the Capital Market and Financial Investment Business Act (Act No 8635 of 2007; art 2), both of which embody the ‘effects doctrine’.

7. Family matters

The choice-of-law rules on international family relations consist of the following four categories: (i) international marriages (arts 36–39 PILA); (ii) international parent–child relationships (arts 40–45 PILA); (iii) international maintenance (art 46 PILA); and (iv) international guardianship (art 48 PILA).

a) Law of international marriage

The substantive requirements for the formation of →marriage are governed by the lex patriae of each of the parties. The formal validity of a marriage is governed by the laws of the place where the marriage ceremony took place or the lex patriae of any one of the parties; however, provided that the marriage ceremony took place in Korea and one of the parties is a Korean, the formal validity of marriage is governed by Korean law. This is to ensure that the marriage is registered in the family register in Korea. As regards the general effects of marriage, art 37 of the PILA has adopted the ‘cascade connecting principle’ by subjecting them first to the common lex patriae of the spouses, second to the law of the common habitual residence of the spouses p. 1and third to the law of the place with which the spouses are most closely connected. The →matrimonial property regime is governed by the law applicable to the general effects of marriage; however, party autonomy is permitted under certain restrictions. Divorce is subject to the law governing the general effects of marriage (art 39 PILA). In order to relieve the Korean family registration officers of the practical burden of determining the applicable law, the PILA has introduced the ‘Korean clause’, which subjects a divorce to Korean law if one of the spouses is a Korean with a habitual residence in Korea (→Divorce and personal separation).

b) Law of international parent–child relationships

The PILA distinguishes between: (i) the formation of a parent–child relationship on the one hand; and (ii) the rights and obligations arising therefrom on the other.

In keeping with the treatment under the CC, the PILA distinguishes relationships between a parent and a legitimate child from relationships between a parent and an illegitimate child, specifying different →connecting factors for each of them. To facilitate the formation of relationships between a parent and a legitimate child, art 40 of the PILA designates the lex patriae of one of the parents at the time of the child’s birth as the law governing the formation of such relationships. Article 41(1) of the PILA subjects the formation of a relationship between a parent and an illegitimate child to the mother’s lex patriae at the time of the child’s birth. To facilitate the formation of a parent–child relationship between a father and an illegitimate child, art 41(1) stipulates two additional alternative governing laws. The recognition of a child is governed by either the law generally applicable to the formation of a relationship between a parent and an illegitimate child or by the recognizing party’s lex patriae at the time of recognition. Article 42(1) of the PILA facilitates the legitimation of an illegitimate child by subjecting such legitimation to the lex patriae of the father or the mother, or to the law of the child’s habitual residence at the time that the event constituting the legitimation is completed (→Kinship and legitimation). The requirements for formation and effects as well as the dissolution of an →adoption are governed by the lex patriae of the adoptive parent at the time of adoption. However, if the child’s lex patriae requires the child’s or a third party’s consent to the formation of the parent–child relationship, such a requirement must be satisfied. What is practically more important for the overseas adoption of Korean children is the Special Adoption Act (Act No 2977 of 1976, Official Journal of Korea of 31 December 1976, as last amended by Act No 13322 of 2015). In 2013, Korea signed the Hague Adoption Convention (Hague Convention of 29 May 1993 on protection of children and co-operation in respect of intercountry adoption, 32 ILM 1134) and is in the process of preparing for its ratification.

The rights and obligations arising from a parent–child relationship which has been established by one of the governing laws described above are determined by the law of the child’s habitual residence (art 45 PILA). However, if the child’s lex patriae is also the lex patriae of both father and mother, then that law shall apply.

c) Law of international maintenance

Article 46 of the PILA reflects the choice-of-law rules of the Hague Maintenance Convention by subjecting →maintenance obligations to a uniform connecting factor. Maintenance obligations are governed by the law of the habitual residence of the maintenance creditor. However, if the maintenance creditor is unable to obtain maintenance from the debtor under such a law, the law of their common nationality shall apply. Maintenance obligations between divorced spouses are governed by the law that actually applied to the divorce, if the divorce was granted or recognized in Korea.

d) Law of international guardianship

Matters relating to international guardianship (→Guardianship, custody and parental responsibility) are governed by the ward’s lex patriae, irrespective of whether the ward is a minor or an adult (art 48 PILA).

8. Succession matters

Matters of →succession, whether testate or intestate, are governed by the lex patriae of the deceased at the time of his or her death (art 49(1)). The PILA adopts the ‘principle of unity’. Influenced by the Hague Succession Convention (Hague Convention of 1 August p. 11989 on the law applicable to succession to the estates of deceased persons, available at <www.hcch.net>), the PILA also introduces party autonomy to a limited extent (art 49(2)). Issues relating to the will are governed by the testator’s lex patriae at the time he or she made the will, while the amendment or withdrawal of a will is governed by the testator’s lex patriae at the time that the will was amended or withdrawn (art 50 PILA). As regards the form of a will, the PILA provides five options: the law of the testator’s habitual residence either at the time the will was made or at the time of his or her death; the law of the testator’s nationality either at the time of his or her death or at the time the will was made; and the law of the place where the testator made the will, which has been modelled on the Hague Testamentary Dispositions Convention.

9. Bills of exchange, promissory notes and cheques

Chapter 8 of the PILA includes choice-of-law rules on →bills of exchange, promissory notes and cheques, which are modelled on the Convention of 7 June 1930 for the settlement of certain conflicts of laws in connection with bills of exchange and promissory notes, 143 LNTS 317, and the Geneva Cheques Convention (Convention of 19 March 1931 for the settlement of certain conflicts of laws in connection with cheques, 143 LNTS 407).

10. Maritime matters

One of the characteristics of the PILA is that it includes ch 9, which consists of special choice-of-law rules for maritime commerce. Article 60 of the PILA subjects various matters relating to maritime commerce to the law of the country of the ship’s →flag (which is understood as the law of the country of registration of the ship): (i) the ownership, mortgage, maritime lien and other real rights (rights in rem) in a ship; (ii) the priority of the security interests in a ship; (iii) whether the shipowner, charterer, manager, operator or other users of the ship shall be entitled to invoke limitation of liability and the scope of such limitation of liability; (iv) general average; and (v) the power of agency of a shipmaster. The Supreme Court used to apply art 60 of the PILA to ships with a flag of convenience. However, in a recent judgment of 2014, the Supreme Court refused to apply the law of the flag (ie Panamanian law) and held that by operation of art 8 of the PILA, Korean law should apply to: (i) whether the plaintiffs had acquired a maritime lien attached to the ship registered in Panama; and (ii) the priority of such maritime lien over the mortgage on the ship. The rationale was that the Panamanian flag was a flag of convenience and Korean law had the closest connection to the issues in question.

Chapter 9 also includes separate choice-of-law rules on the collision of ships (art 61) and →salvage (art 62). Articles 61 and 62 of the PILA are special rules having priority over art 32 of the PILA on tort and art 30 of the PILA on negotiorum gestio, respectively.

VI. Recognition and enforcement of judgments

The recognition and enforcement of foreign judgments in Korea is governed by the CCP and the CCE. Pursuant to art 217(1) of the CCP, a foreign judgment may only be recognized in Korea if five conditions are satisfied. First, the judgment must be final, conclusive and no longer subject to ordinary forms of review. Provisional or interim orders do not meet this condition. Second, the foreign court must have had international jurisdiction under the principles of international jurisdiction laid down by Korean law or international treaties. Third, the defendant must have been served with the complaint (or the equivalent document) and the summons or any orders in a lawful manner (other than public notice or similar methods) in advance so as to allow sufficient time for preparation of his or her defence, or the defendant must have responded to the suit without having been served. Fourth, the recognition of the foreign judgment must not be contrary to Korean →public policy. In this regard, it is noteworthy that art 217bis(1) inserted in May of 2014 expressly provides that the Korean court may not recognize a foreign judgment in part or in whole if the foreign judgment concerning damages leads to a result that is manifestly incompatible with the basic principles of Korean law or the international treaties to which Korea is a party. In addition, art 217bis(2) also expressly provides that in cases where the Korean court applies art 217bis(1), regard is to be had to whether the scope of damages rendered by the foreign court encompasses legal costs such as lawyers’ fees. The purpose of art 217bis is to p. 1set forth clearer criteria than those under the public policy test, rather than introducing new stricter requirements for the recognition of foreign judgments. Incompatibility of the foreign judgment with a judgment given in Korea is regarded as being against the public policy of Korea. Fifth, there must be a guarantee of →reciprocity between Korea and the foreign country where the judgment was rendered. Review of the merits is prohibited in the process of recognition and enforcement. Korean courts take a relatively liberal approach to the recognition and enforcement of foreign judgments. While the recognition of a foreign judgment takes place automatically under the CCP if the conditions are satisfied, the CCE permits the enforcement of a foreign judgment only when the enforcement of the judgment has been approved by a Korean court in an enforcement judgment (exequatur; art 26 CCE). The CCE requires that in order for a Korean court to render an enforcement judgment, the foreign judgment must fulfil the conditions for the recognition specified in the CCP (art 27).

VII. Arbitration

The Arbitration Act (Act No 6083 of 1999, as last amended by Act No 14176 of 2016 of 2013, henceforth AA), which is modelled on the UNCITRAL Model Arbitration Law (United Nations Commission on International Trade Law, UNCITRAL Model Law on international commercial arbitration as adopted on 21 June 1985 and as amended on 7 July 2006, UN Doc A/40/17 and A/61/17), took effect as of 31 December 1999. The Korean legislators have expanded the scope of the UNCITRAL Model Arbitration Law in two respects. First, the AA deals with domestic arbitration as well as international arbitration. Second, the AA is applicable to civil arbitration as well as commercial arbitration. Article 29 of the AA refers to the law applicable to the substance of the dispute: first, the law chosen by the parties applies (the law in this context is understood to refer to ‘rules of law’); in the absence of choice, the arbitral tribunal shall apply the law of the state with which the subject matter of the dispute is most closely connected. Under art 35 of the AA, the arbitral award rendered in Korea shall have the same effect on the parties as the final and conclusive judgment of the court which is no longer subject to ordinary review. Korea is a party to the 1958 New York Convention. The enforcement of a foreign arbitral award does not automatically take place, even if there is no ground for non-recognition under the New York Convention, whereas the recognition takes place automatically. Korea has made the two reservations (commercial reservation and the reciprocity reservation) available under the New York Convention on the basis of art 1(3).

Literature