ㅇAttorney Gwang Hyeon Baek gave a lecture on Subcontracting Act and Mutually Beneficial Cooperation Act for compliance experts of Samsung Electronics, at Samsung Electronics Relationship Academy, located at Youngtong-gu, Suwon-si, on August 25, 2021.   ㅇThis lecture was carried out online, but it was no different from face-to-face lectures as Attorney Baek received questions and gave answers in real time   ㅇDuring the lecture, Attorney Baek explained of the amendments made to the Subcontracting Act and Mutually Beneficial Cooperation Act, as well as their implications, comparison between the two acts and cases concerning technology leakages, based on matters that require special attention.

ㅇAttorney Gwang Hyeon Baek (Barun Law) was awarded the Asia-Pacific 2021 Litigation Star in Competition/Antitrust Award from Benchmark Litigation, which provides the rankings of law firms and lawyers across the world based on their analysis of litigation, dispute cases and developments.   ㅇBenchmark Litigation explained that this year’s winners were selected by way of review that was carried out for several months as well as customer feedback surveys and one-on-one interviews.

Barun Law LLC will hold the 2nd webinar on "Analysis of and Response Measures to the Enforcement Decree Announced for Enactment” on September 7, 2021 at 3:00 p.m.   The firm’s Special Team for Response to Serious Accidents Punishment Act arranged the webinar seeking to provide help in minimizing the risks companies face by analyzing the enactment bill of the Enforcement Decree of the Serious Accidents Punishment Act and by providing explanations on what directions companies should take in responding thereto.   The webinar will be conducted online via Zoom, and the relevant link to take part in the online meeting will be sent via email to those who have submitted their application by September 3 (Friday).   Click here to apply for the webinar.

An article written by Foreign Attorney Rieu Kim, Attorney Hyuk Jun Jung and Foreign Attorney Caroline Yoon has been published on Kluwer Arbitration Blog, one of the leading blogs on arbitration in the world, on August 9, 2021.   This article calls for the need to create arbitration rules concerning class arbitration, cultivate relevant experts and carry out research into the relevant field with a long-term perspective, following the Korean government’s proposal of a bill that would allow class actions.   In particular, class certification, known as the starting point for class action arbitration, is an area that requires high-level of expertise and experience as the relevant decision must be made after analyzing various factors.  Accordingly, ample research and in-depth experience are needed to deal with this area. Time for Class Action Arbitrations in Korea? - Kluwer Arbitration Blog

Attorney Ki Joo Moon (Judicial Research and Training Institute of the Supreme Court of Korea, 35th) has been appointed as a legal advisor for Seoul Energy Corporation(President: Joong Sik Kim) on August 1, 2021.His appointment will be for two years from August 1, 2021 to July 31, 2023.

Attorney Tae Hun Kang gave a lecture on suspect interrogation method for investigators in charge of criminal tax investigations at the National Tax Officials Training Institute on July 12.

1. Case summary① Who did Barun Law (attorneys Kang Joo-heon, Park Sung-ho, Kim Jeong-jun, and Jeong Chan-ho) represent? We represented a mayor of a city. ② Case background “A” is a person who ran for mayor of a city as a member of a political party in the mayor re-election held on April 15, 2020. “B”, “C”, “D”, “E”, “F”, “G”, “H”, “I”, “J”, “K”, and “L” were residents of the city and supporters of A. When it was confirmed that the mayor re-election was to be held, B opened a Naver cafe with only those who supported A in October 2019 and invited C and the others as cafe members. Afterwards, B and the others conducted activities of pressing “Like” and posting “comments” on posts and card news posted on A's Facebook account, etc. and sharing the posts with their acquaintances. In addition, they held an event of launching the Naver café. As some members of a provincial council of the city announced that they supported “Z” who was competing with A in the political party, B intended to hold an event of declaring support for A by receiving signatures of support from more than 2,020 residents. B prepared an endorsement form and delivered it to his acquaintances, including C and the others. C and the others received signatures of support from constituencies from mid-January 2020 to January 30, 2020. B collected the signed endorsement forms and delivered them to K, who was volunteering at A’s election camp at the time, and asked to hold an endorsement event. The event was held at A’s election office on January 31, 2020. Meanwhile, A and I visited offices of the City Facility Management Corporation on March 30, 2020, April 3, 2020, and April 10, 2020. Prosecutors indicted A for violating the Public Official Election Act which was caused by violation of restrictions on the intra-party primary campaign method, violation of the ban on receipt of signatures and stamps as endorsement for a certain candidate from voters, and pre-election campaign on the ground that A used the endorsement campaign conducted by B and the others for his primary election campaign and his election campaign, given that A was aware, in conspiration with B and the others, that supporters expressed their intentions to support him by posting comments on the post on which B uploaded the endorsement form in the Naver band that he ran, that A condoned to keep endorsement forms at the entrance of A's election office, and that A participated in an event held on January 31, 2020 where supports submitted the signed endorsement forms at A’s election office. Meanwhile, prosecutors charged B and the others for violating the Public Official Election Act due to the establishment of a private organization, and A and I for violating the Public Official Election Act by violating restriction on door-to-door election campaign. ③ Litigation and our role Representing A, we aggressively argued that the collection of endorsement signatures was led by B, and A was not aware that B was receiving endorsement signatures from constituencies to hold a support declaration event, and therefore, it could not be viewed that A was colluded with B and the others or A’s functional behavioral domination of B’s acts through an essential contribution thereto existed, that since endorsement signatures received by B and the others were for A to be elected in the intra-party primary election, it could not be viewed that the act constituted an act of receiving signatures or stamps from constituencies for an election campaign or a pre-election campaign which were prohibited by the Public Official Election Act, and that the endorsement signatures collected by B and the others were a “simple expression of support for the party's nomination of a candidate” permitted by Article 58 (1) proviso 3 of the Public Official Election Act, and were one of the “methods to declare support for” A or an act incidental to the declaration of support and therefore, A could not be conclusively alleged that he violated restrictions on the intra-party primary campaign method under Article 57-3 of the Public Official Election Act. We also emphasized that even if the court had a different opinion and determined that A was guilty of the charges, the sentencing of the election crime was very important, because depending on the results of the election trial, A would be imposed irreparable material restrictions on the electoral rights, the right to be elected, and the right to hold public office taking office and there could be a huge riffle effect such as invalidation of the election result. We argued that A would be given the maximum leniency allowed by the law so that A could continue to devote himself to the citizens and the city by taking into account the various normal and favorable sentencing reasons that exist for A. We dealt with one trial preparation session and a total of 15 trials from around October, 2020, when the prosecution against A was filed, to around July, 2021 when the district court delivered a sentence. We submitted the lawyer's opinions more than nine times, including the statement of final argument. We faithfully carried out all the procedures for interrogation of more than 20 witnesses and defendants. 2. Decision (Suwon District Court Pyeongtaek Branch Court Decision 2020Gohap164 dated July 21, 2021) The district court accepted most of the above arguments made by us, and found that A was innocent of the allegations of violation of the ban on the receipt of signatures/seals as endorsement for a certain candidate, violation of the Public Official Election Act caused by the pre-election campaign, and violation of the Public Official Election Act caused by the violation of the primary election campaign methods. In addition, B and others were found innocent of the allegation of violation of the Public Official Election Act caused by the establishment of a private organization. A was convicted only of violation of the Public Official Election Act caused by violation of restriction on the door-to-door election campaign. The court finally sentenced that A pay a fine of 800,000 won, and A could maintain his mayor position. 3. ImplicationsThe decision has implications in that it reaffirms the existing theory that activities conducted for the election or failure of a candidate who runs for a public office in a primary election of a political party do not constitute election campaign under the Public Official Election Act (see Supreme Court of Korea’s Decision 2012Do12172 dated May 9, 2013), and that it clarifies the legal theory that in the case of opening an internet cafe, etc. for the purpose of election activities in the cyber space, recruiting online members, etc., such online activities should be permitted as one type of election campaign conducted through ICT network and such organizations cannot be regarded as a private organization under the Public Official Election Act (see Supreme Court of Korea’s Decision 2013Do2190 dated November 14, 2013). In addition, the court did not consider solely on the basis of the documentary evidence submitted by prosecutors and the statements made by the co-defendants or the witnesses at the investigative agency. The court heard and judged the case at trial, focusing on evidential documents submitted by prosecutors and lawyers of the defendant, statements made by the co-defendants and testimonies of witnesses. As such, the decision is meaningful in that it faithfully embodies the basic principle of trial-based judgement through direct hearing of the case.

1. Case summary① Who did Barun Law (attorneys in charge: Park Jae-peel, Park Sung-ho and Lee Su-kyoung) represent? We represented an education foundation. ② Case background: The plaintiff was a former director of an education foundation, which was a defendant in this case. On May 2, 2015, the board of directors rejected a resolution to reappoint him as a director. Arguing that the resolution in this case was invalid because the two directors in favor of the resolution in this case were residing in the United States and could not attend the board of directors meeting, and therefore the meeting failed to meet the quorum requirement, the plaintiff filed a suit against the educational foundation to obtain the decision that the resolution was invalid.③ Litigation: The defendant claimed that the two directors residing in the United States attended the meeting through video conferencing, and submitted a video of the meeting as evidence. In response, the plaintiff argued that the video had been created after the meeting had been held and that the file names were manipulated, so it could not be considered that the directors had participated in the meeting through video conference.2. DecisionThe court rejected the plaintiff’s argument on the basis that by comprehensively considering (i) the date and time of the meeting as stated in the minutes of the board of directors, (ii) the start and end times appearing in the file name and file properties of the video file, (iii) the meaning of numeral numbers repeatedly appearing in the hexacode of the video file, and (iv) the correlation between the playback time of the recorded file of the video and the duration of the meeting, it cannot be concluded that the video was created or manipulated after the fact. Furthermore, the court judged that the resolution could not be regarded as invalid because it could not find any substantive defects as well as procedural defects in the resolution.3. Our argument and role We presented information on the date and time that appeared in the file name and file attributes of the video file as evidence. In addition, we emphasized that the number that appeared repeatedly in the hexacode refered to the time when the defendant logged into the video conferencing program by analyzing the hexacode of the video file identified through the appraiser's analysis results. As a result, we argued that the video had not been manipulated ex post. Our arguments were accepted by the court, leading to a judgment that the resolution cannot be regarded as invalid. 4. ImplicationsAs important meetings such as a meeting of the board of directors of a company are often held in the form of video conferencing due to the recent COVID-19 pandemic, it is expected that the number of cases regarding the issue as to the legality of meetings using the video conferencing system and the allegation that a video file is manipulated is expected to increase. This case is expected to serve as an important precedent for future similar cases.

Attorneys Noh Seok-jun and Yi Min-hoon had successfully obtained approval for the M&A rehabilitation plan as a legal advisor to Samjong KPMG, the lead manager for the sale of the Jico, a KOSPI listed company before Jico’s rehabilitation proceeding was approved. Accordingly, the management rights to Jico were transferred to Samra Midas Co., Ltd. (“SM Group”), and Samra Midas completed the payment of a total of KRW 23.6 billion for acquisition according to the rehabilitation plan.   Jico was established in 1961 and listed on the KOSPI in 1994. As a partner of Hyundai Mobis, Hyundai Motors, and Kia Motors, Jico specializes in manufacturing auto parts (e.g., water pumps, front cases, auto parts, al cylinder heads, etc.).   As a legal advisor to the lead manager, we provided overall legal advice necessary for the pre-authorization of the M&A process, including public sale, finalization of an acquirer, negotiation of acquisition conditions, conclusion of investment contracts, and preparation of a rehabilitation plan.

1. Case summaryㅇFranchisees sent a content-certified letter to a franchisor, in which they informed the franchisor that they would cancel and terminate the franchise agreement unless the franchisor guaranteed profits under the expected income statement provided by the franchisor to them at the time of executing the franchise agreement. Afterwards, the franchisees unilaterally suspended business operations. ㅇ Representing the franchisor, we notified that the franchise agreement was terminated pursuant to the Franchise Business Act and requested the franchisees to pay penalties on the ground that they had suspended business operations for consecutive seven days or longer without a justifiable cause. 2. Franchisees’ argumentㅇ The franchisor deceived the franchisees, presenting fictitious sales and the fraudulent expected income statement to them at the time when they executed the franchise agreement. Since the franchisees were deceived to execute the franchise agreement, the franchise agreement with the franchisor was cancelled pursuant to Article 110 of the Civil Act. ㅇ The franchise agreement was cancelled pursuant to Article 109 of the Civil Act since the franchisor presented fictitious sales and the fraudulent expected income statement to them at the time when they had executed the franchise agreement and the franchisees had executed the franchise agreement by mistake of motives caused by the franchisor. ㅇ The franchise agreement with the franchisor was terminated due to the break of the trust relationship between the franchisor and the franchisees since the franchisor had committed an act of violating the Franchise Business Act by providing exaggerated information on expected profits to prospective franchisees without an objective basis. 3. The court’s judgement: The court accepted all the claims for the payment of penalties against the franchisees. ㅇ The court precluded all the arguments made by the franchisees above, and accepted all the claims made by the franchisor for the payment of penalties against the franchisees.ㅇ As for the franchisees’ argument over the cancellation of the franchise agreement, the court determined that it is hard to find the franchisor engaging in the alleged fraudulent acts and the court cannot view that the franchisees have a mistake in material aspects on the ground that it cannot be concluded that the franchisor provided the franchisees with false information just because there is a partial difference between the expected profit and loss statement provided by the plaintiff and the actual profit and loss statement of the franchisees on which it was prepared, that a franchisee enters into a franchise contract at his own discretion as an independent business operator, that even if franchisees operate the same franchise business, the operating profit may vary depending on the location of the franchisees and the efforts made by the franchisees, and that in light of the phrase “This is an estimate and may differ from the actual statement of profit and loss” in the expected income statement, it cannot be interpreted that the same profit as stated in the income statement can be achieved.ㅇ Regarding the franchisees’ claim to terminate the franchise agreement, the court held that it could not be recognized that the plaintiff provided false or exaggerated information to the defendants on the same ground as stated above.4. Our assistance for the clientㅇ We actively asserted that even if there is some difference between the expected profit and loss statement and the actual income statement, that alone does not lead to a reason for cancellation. In particular, it was emphasized that franchisees conclude franchise contracts based on their own judgment as independent business operators, and that the sales of franchisees can vary depending on the capabilities of franchisees.

1. Case summary ㅇ The main issue in this case was whether or not one of top 3 supermarkets in Korea had violated the Large Retail Business Act in relation to transactions with a pork supplier. The Korean Fair Trade Commission (the “KFTC”) imposed a fine of 41.1 billion won on the supermarket, which is the highest surcharge in cases involved with the Large Retail Business Act, and gave 100 million won to the supplier, which was the then largest amount of publicly notified reward. ㅇ The large supermarket filed a lawsuit for the cancellation of the KFTC’s sanction. Our Fair Trade Team represented the supplier to assist the KFTC in winning the case. 2.Our roleㅇ The supermarket made the following assertions in this case:    ① Since regular discount events are not promotion events that require temporary and special characteristics, it cannot be considered that the supermarket passed on promotion cost;   ② Since the supplier's branded pork (“differentiated pork”) had a special difference from the PB products, the supplier hired an employee for cutting work only to do its own work and the supermarket did not pass on the labor cost to the supplier; and    ③ Even though the supplier paid fees to the consulting firm, since the contract executed between the supermarket and the consulting firm was for the supplier, it cannot be said that the supermarket passed on the fees to the supplier.ㅇ In response to the assertions above, we collected past media reports to prove that competition for promotion of pork products (especially pork belly products) among supermarkets was fierce, and thus the pork discount events were a sales promotion event aimed at attracting customers.   - We also visited the supermarket and took photos to submit them as evidence proving that there was no big difference between PB pork and differentiated pork in the process of promotion and sales, and thus, the supermarket’s use of an employee of the supplier for cutting work was to pass on labor cost to be paid by the supermarket to the supplier.  - In addition, in light of the long-term relationship between the supermarket and the consulting firm and the consulting firm’s service confined to PB products sold by the supermarket, we proved that the supermarket had passed on fees for the consulting firm to the supplier who had paid the fees to the consulting firm on behalf of the supermarket.3. Decision and implicationsㅇ The Seoul High Court accepted our arguments and evidence, and dismissed all the claims made by the supermarket in the decision (numbered 2020Nu35716) made on July 22, 2021.ㅇ This case is expected to set a precedent in the future in that it is a case in which the court has made a decision on a matter that is not specifically stipulated in laws and regulations in relation to major issues under the Large Retail Business Act.

1.Case summary The plaintiff was a project financing vehicle established to conduct a certain project under the Corporate Income Tax Act. A consortium composed of the shareholders of the plaintiff, and a local autonomous government and a public foundation, which were the owners of the project, executed an agreement for the project. The project relevant to this case was conducted on a BTO (build-transfer-operate) basis. Under the agreement, the plaintiff would finance money and conduct the project. The plaintiff agreed to transfer the ownership of the facilities and a building (collectively, the “Facilities”) to the local autonomous government or the public foundation upon construction completion. Actually, the ownership of the Facilities belonged to the public foundation after construction completion. The defendant imposed acquisition tax on the plaintiff on the basis that the Facilities were constructed by the plaintiff’s money and efforts, and therefore, the ownership of the Facilities originally belonged to the plaintiff upon construction completion. Representing the plaintiff, attorneys Byon Sang-yup and Han Seung-yeob filed a lawsuit to cancel the acquisition tax on the ground that the original acquirer of the Facilities was the public foundation.2. Decision The court ruled that the acquisition cost be cancelled because there was an agreement constituted among the related parties, under which the ownership of the Facilities would be originally acquired by the public foundation around the time when the owner of the Facilities was changed to the public foundation, and the public foundation originally acquired the Facilities when an approval for use of the Facilities was delivered, on the premise that if there was an agreement under which a developer will construct a building under a construction permit obtained in another person’s name and the developer will give the ownership of the building to the person, the ownership of the building originally belongs to the person. In particular, the court pointed out that a reasonable interpretation would be as follows: the term, “donation” does not have a limited meaning that the plaintiff will transfer the ownership of the Facilities to the local autonomous government or the public foundation after it acquires the ownership and then waits for a specific donation activity, but constitutes an expression of intent to directly vest the ownership of the Facilities in the local autonomous government or the public foundation when the use of the Facilities is approved.3. Our argument and role It was difficult to directly apply tax exemption provisions pertaining to the state under the Local Taxation Act because the project was not subject to the Civil Investment Act regarding the development of infrastructure, and it was not the state or a local autonomous government but a public foundation to which the ownership of the Facilities belonged. We noticed that the agreement carried nature as a construction contract, and argued and substantiated that various circumstances surrounding the case, including the fact that the owner of the project of the public foundation showed that there was an agreement made among the parties in which they agreed to make the ownership of the Facilities belong to the public foundation. Even though the business structure of the project was complex as the project adopted a structure of private investment projects, we explained the content of the project in detail by taking advantage of experience that we had built by dealing with diverse private investment projects, and persuaded the court to recognize that the ownership of the Facilities must be determined on the basis of a construction contract.4. Implications Private investment projects to develop infrastructure, to which the Private Investment Act is applied, are entitled to tax exemption pursuant to relevant provisions pertaining to the state under the Local Tax Act. However, where a public entity places an order to construct a building, the public entity is required to pay acquisition tax as the owner of the construction project even though the project is not different from those ordered by the state or a local autonomous government. The decision makes it clear that it is a public entity who originally acquires the ownership of a building and a developer is not obligated to pay acquisition tax. With the Local Tax Act being amended, it is expected that the decision will apply to private investment projects in the future because tax exemption is not applied to a case where a right to use a building with no charge is granted in return for the ownership of the building.

The column, "The extent of food delivery permitted for each business type" written by Attorneys Mi Yeon Kim and Seung Hwan Choi has been published on Food News.

The column, "Subtle psychological tactics behind M＆A due diligence" written by Attorney Yang Hun Chung has been published on Biz Korea.

The column, "Multi-Level Businesses Going Online: Current Issues and Future" written by Attorney Yang Hun Chung has been published on Opinion Times.

The column, "Should direct payment to subcontractors occur before setting off advanced payments against construction payment amount? ” written by Attorney Ji Youn Yeo has been published on The Segye Times.

The column, "If an association takes possession of and/or uses a road of which its usage is to be repealed, should the association pay the rent fee?" written by Attorney Ji Youn Yeo has been published on Metro Seoul.

The column, "Damages for exercising unlawful lien" written by Attorney Eung Se Lee has been published on DNews.