Civil Court Proceedings in Korean Courts

1. Should Korea-related Lawsuits Be Filed Only in Korea? (International Jurisdiction)

No. If there is agreement between the parties on the international jurisdiction under the contract for their transaction, a Korea-related lawsuit may be filed in a foreign country as specified in the contract.

Unless expressly agreed otherwise in advance, if a party or a case in dispute is substantively related to Korea, Korean courts have the international jurisdiction. “Substantially related” means that there should be relevance enough to justify the exercise of international jurisdiction by Korean courts. In judging the existence of the substantial relevance, several factors will be considered; defendant’s residence address, the place where obligations were actually discharged pursuant to the contract, and the place where wrongful acts were committed. 

Also, in cases where both parties agree on the foreign courts’ jurisdiction, but such agreement is remarkably unreasonable, unfair and lacks reasonable relevance, Korean courts may exceptionally have international jurisdiction.  

Korean courts do not discriminate against foreign companies in court. Therefore, if you are a foreign company and seeking a lawsuit against a Korean company having most of the property in Korea, it is worth considering to file a lawsuit in Korea for the convenience of enforcing execution after you win the case.  

2. How Much Does a Civil Suit Cost in Korea?

When you file a civil suit in Korea, the following costs are incurred: 1) stamp fees, 2) service of process fees, 3) attorney fees, if represented by an attorney, 4) appraisal fees and 5) witness travel expenses, if applicable depending on the proceedings.  

1) Stamp Fees – A stamp equivalent to the following amount must be attached to a complaint in proportion to the claim amount (value of relief sought).

Claim Amount (Value of Relief Sought) Stamp Fee
Less than 10 million won Claim Amount X 50/10,000
10 million won to less than 100 million won Claim Amount X 45/10,000 + 5,000 won
100 million won to less than 1 billion won Claim Amount X 40/10,000 + 55,000 won
More than 1 billion won Claim Amount X 35/10,000 + 555,000 won

2) Service of Process Fees – When filing a complaint, a service of process fee calculated based on the number of parties must be paid to the bank in the courthouse, and the payment slip should be attached to the complaint. Service of process fee per serving is 5,100 won. Service of process fees for court cases are calculated as follows:

Court Case Calculation of Service of Process Fees
Civil – 1st instance for small claims No. of parties X Service of process fees for 10 servings
Civil – 1st instance by single judge No. of parties X Service of process fees for 15 servings
Civil – 1st instance by collegiate body No. of parties X Service of process fees for 15 servings
Civil – Appellate court No. of parties X Service of process fees for 12 servings
Civil – Supreme court No. of parties X Service of process fees for 8 servings
Civil – Conciliation No. of parties X Service of process fees for 5 servings
Auction case for real estate, etc. (No. of interested parties listed on the application + 3) X Service of process fees for 10 servings

For your reference, the website of the Korea Legal Aid Corporation provides a formula to automatically calculate 1) stamp fees and 2) service of process fees if you fill in the required information.

Automatic Calculation of Litigation Costs from the Website of the Korea Legal Aid Corporation

3) Attorney Fees – Attorney fees are freely set by agreement of the parties. A person who wins a civil lawsuit may be entitled to reimbursement of his/her attorney fees from the losing party according to the standards specified in the relevant regulations. However, in most cases, the attorney’s actual remuneration is higher than the standards stipulated in the regulations, so the prevailing attorney’s fees exceeding the standards should be borne by the winning party. The following is the attorney fees of the winning party that must be borne by the losing party.

Claim Amount(Value of Relief Sought)(Million Won = M) Litigation Costs Inclusion Ratio Attorney Fees Borne by Losing Party(Million Won = M)
Up to 20 M 10% 2 M
More than 20 M to 50 M 8% 2 M + (Claim Amount – 20 M) x 8/100
More than 50 M to 100 M 6% 4.4 M + (Claim Amount – 50 M) x 6/100
More than 100 M to 150 M 4% 7.4 M + (Claim Amount – 100 M) x 4/100
More than 150 M to 200 M 2% 9.4 M + (Claim Amount – 150 M) x 2/100
More than 200 M to 500 M 1% 104 M + (Claim Amount – 200 M) x 1/100
More than 500 M 0.5% 134 M + (Claim Amount – 500 M) x 0.5/100

4) Appraisal Fees – Appraisal fees only occur when you receive an appraiser’s service in order to investigate specific matters. Appraisal refers to a part of discovery process in which an appraiser develops and reports to the court an opinion of the real estate value, amount of damages incurred, corporate value, etc. The appraiser must be an expert with special knowledge and experience in the relevant field. In some cases, appraisal costs may be higher than attorney fees.

5) Witness Travel Expenses – Witness travel expenses occur when a witness is examined. Out-of-pocket expenses such as railroad fare, air fare and car fare are paid to the witness.

3. If I Raise a Civil Lawsuit in Korea, Where Should I File a Complaint? (General Jurisdiction)

Court of competent jurisdiction is determined as follows:

(1) For monetary debt cases – the court for the place where the creditor is domiciled

(2) For real estate cases – the court for the place where the real estate is located

(3) If there is an agreement between the parties – the court agreed under the contract (Agreed jurisdiction)

(4) For other cases – the court for the place where the defendant is domiciled

(5) If exclusive jurisdiction exists – the court as determined by the special act such as family court, patent court, etc.

If there are multiple jurisdictions, you can submit the complaint to any court which is most convenient for you. Please note that you need to be cautious in specifying the competent court in the complaint because if you make a mistake, your case may be transferred to a wrong court or the lawsuit itself may be dismissed in some cases.   

4. What is the Process of the Civil Proceedings at Korean Courts?

The following is the timetable-based outline of Korean civil court proceedings at Korean courts: 1) Plaintiff’s filing of a civil complaint to a Korean district court, 2) Defendant’s filing of an answer to civil complaint, 3) Court date for pleading, 4) Court date of pronouncement, 5) Appeal, 6) Final judgment and execution.

A plaintiff submits a complaint, and the court reviews the complaint. If the court finds any defect in the complaint, it will order the plaintiff to correct the defect. If no defect is found, the defendant will be served with a copy of the complaint.

The defendant, in most cases, has 30 days to answer the complaint filed by the plaintiff. The defendant may simply respond in an answer that admits or denies each of the plaintiff’s allegations in the complaint. Specific reasons and evidence are, in many cases, submitted in the form of legal briefs after the answer is filed.   

When the issues are cleared up, the court determines a court date for pleading. On the date for pleading, the parties or their representatives appear in court and argue each other on the case. The evidence and arguments to be made on the date for pleading must be submitted to the court in advance via legal briefs. In Korea, it is unusual that parties make a lengthy oral argument during the pleading because in most cases, the court deems that the argument has already been sufficiently made in writing through the complaint, the answer and the briefs. So, at the pleading, the court simply confirms the parties’ arguments and makes just a few questions. Usually, the pleadings are held several times and it is rare that the parties plead only once.

If the court judges that the arguments have been sufficiently made and all evidence has been submitted, the pleadings are closed and the court designates a court date of pronouncement. After the closing of pleadings, the court draws up a judgment and pronounces it on the court date of pronouncement.   

Any party who disagrees with the judgment of the court may appeal to a higher court. Since Korea has a three-trial system, the party can appeal up to two times including appealing to the Supreme Court.

If the losing party does not appeal or a final judgment is rendered by the Supreme Court, the winning party may enforce the judgment against the losing party. If an original court pronounces a provisional execution, the execution may be enforced even before the final judgement is made.  

5. How Long Does a Lawsuit Take in Korea?

Civil lawsuits usually take six months to a year. If a case has many issues or the case goes through all three trials by appealing, it may take more than two years to get a final decision.

6. Is It Necessary to Take Preservative Measures for the Other Party’s Property Before Filing a Lawsuit in Korea?

A party needs to request an order of provisional attachment to attach the other party’s assets before filing a lawsuit if there is a possibility that the other party will dispose its assets. This is because even though the party wins the case, if he/she fails to find the other party’s assets, execution will not be possible and it will become a waste of time and money to raise a lawsuit.

It is not unusual for Korean courts to issue an order of provisional attachment once the preserved right is recognized. However, if there exists real security or the defendant has sufficient other assets, a request for provisional attachment will not be accepted. 

In addition, when the Korean court permits a provisional attachment requested by the plaintiff, it also orders the plaintiff to deposit security equivalent to 40% of the claim amount. However, a deposit in cash is usually replaced by a guarantee insurance policy with the permission of the court. However, in the case of provisional attachment of a bank account, half of the deposit must be paid in cash, rather than guarantee insurance policy.

Since a provisional attachment is a preservative measure for execution, a court’s decision on issuing an order does not mean you can immediately collect money. In order to enforce execution, you must win the case.