1. Overview of the case
a. Who did Barun Law represent?: We represented the administrator of the estate of a decedent who died in the United States after being caught in a machine sold by the defendant.
b. Background of the case: The defendant sold the machine in question to a U.S. corporation. The machine lacked the protective equipment required by U.S. law. The decedent, who was 31 years old at the time, was crushed to death by the machine. The plaintiff, a mother of the decedent's children, as administrator of the decedent's estate, sued the defendant in Georgia. After several years of litigation, the defendant suddenly abandoned its defense, and the Georgia State Court entered a default judgment in favor of the defendant, awarding it approximately US$25 million in compensation. The plaintiff then filed an action in Korea seeking recognition and enforcement of the U.S. judgment in this case.
c. Litigation: Due to the burden of paying a huge stamp duty, the plaintiff sought recognition and enforcement of only US$10.36 million of the US$25 million judgment awarded by the Georgia State Court in Korea, which represents compensation for the lost economic value of the deceased's life. In response, the defendant argued that: (i) the default judgment, which invalidated the original allegations and evidence, was procedurally illegal and contrary to public policy; and (ii) the award of US$10.36 million was unacceptably excessive under Korean law and contrary to actual public policy.
2. Decision
As in the first instance, the court affirmed the original U.S. judgment of US$10.36 million and granted enforcement.
3. Basis of the decision
i) Alleged violation of procedural public policy (which is required under Article 217(1)(3) of the Civil Procedure Act)
The court considers that it would not be contrary to procedural public policy to recognize the United States judgment for the following reasons:(i) the Georgia State Court's decision to try the defendant in absentia was based on the defendant's failure to comply with the court's orders, which had been set out in his counsel's application for resignation to the U.S. court, and the defendant knew or could have known of this; and (ii) the Korean Civil Procedure Act also penalizes parties who violate court orders with respect to admitting facts, so it is difficult to say that the U.S. court's decision to try the case in absentia is inconsistent with the basic moral beliefs and social order that Korea's domestic legal order seeks to protect.
ii) Alleged violation of substantive public policy (which is required under Article 217(1)(3) of the Civil Procedure Act)
The court considers that recognizing the U.S. judgment in this case would not be contrary to substantive public policy for the following reasons: (i) the U.S. judgment in this case was an award of compensatory damages, not punitive damages under Georgia law, as Georgia law provides for a separate system of punitive damages that is distinct from compensatory damages, (ii) the calculation method and amount of damages must be respected in principle as long as the U.S. court is recognized as having extraterritorial jurisdiction; and (iii) even if a foreign judgment awards damages in an amount greater than the amount that would have been awarded if Korean law had been applied, enforcement of the foreign judgment cannot be said to be contrary to public policy.
4. Our argument and role
In cases involving the recognition and enforcement of foreign judgments, such as the U.S. judgment in this case, there were few cases where a defendant suddenly gave up responding to a lawsuit after several years of litigation. We won the case by finding an argument that a judgment that invalidated the defendant's claim and granted a default judgment could be recognized under domestic law, using the document production order system under the Civil Procedure Act. In addition, whether a wrongful death claim under the law of Georgia, U.S.A., is in the scope of compensatory damages is an issue in this case, and we won the case by presenting a standard that can be used to reasonably interpret the precedents of the Georgia law.
5. Significance of the decision
Following the Supreme Court's ruling that “if a foreign court's final judgment orders damages that compensate for the actual damages suffered by a party, recognition cannot be restricted on the basis of Article 217(2)(1) of the Civil Procedure Act” (Supreme Court Decision 2015Da1284, dated October 15, 2015), the Supreme Court went on to rule that a foreign judgment ordering triple damages can be recognized if it falls within the scope of individual laws that allow damages that exceed the scope of compensatory damages in Korea (Supreme Court Decision 2018Da231520, dated March 11, 2022).
This High Court decision reaffirms the principle of the Supreme Court's ruling above and makes it clear that compensation for damages cannot be denied, even if the amount of damages is higher than what is allowed under national law.
Having already obtained a triple damages judgment in 2022 (2018Da231550), we have unrivaled expertise in the field of enforcement of foreign judgments.
□ Attorneys in charge: Jung Hyuk-jun, Baik Ji-won, Lee Si-yoon and Koh Hyun-ju
