It is necessary to examine the governing law applicable to a legal relationship under private international law where the legal relationship is with foreign elements. This is now a well-established and widely recognized rule of law in practice. In thi...
It is necessary to examine the governing law applicable to a legal relationship under private international law where the legal relationship is with foreign elements. This is now a well-established and widely recognized rule of law in practice. In this regard, the Supreme Court of Korea Judgment 2019-Da-201662 (hereinafter‘the Judgment’) is very meaningful as it clarifies key legal principles regarding the determination of governing law that have been somewhat unclear.
First, the Judgment actually viewed the governing law for characterization of the legal relationship as the law of the forum, although it did not explicitly explain this rule directly. This stance is in line with the goal and purpose of private international law because it, as a result, helps parties to establish a stable legal relationship.
Next, the Judgment clarified the governing law for Assumption of Debt, which had been somewhat unclear, by holding that Article 34(2) of the former Private International Law (= Article 54(2) of the current Private International Law) applies to the Cumulative Assumption of Debt as well as the Privative Assumption of Debt. Previously, it had been argued that only Privative Assumption of Debt falls under this area. However, considering another Supreme Court of Korea Judgment (2019-Da-209345) that established the debt assumed by the Cumulative Assumption of Debt should be the same as the existing debt, it would be unreasonable to treat the governing law of the two differently. It also would be contrary to the purpose of Cumulative Assumption of Debt which is to protect the interests of creditors. This view is consistent with Supreme Court of Korea Judgment (2015-Da-42599) that requires reference to Article 34 of the former Private International Law where the Cumulative Assumption of Debt relationship is legally established.
Finally, the Judgment provided a specific standard for determining the implied governing law of contractual obligations. It utilized the standard that had been used in the old regime but adapted it to the text and system of the former and current private international law, which is likely to be used in the future. Implied choice of law is allowed only where it can be reasonably recognized but the governing law for the contractual obligations is basically based on party autonomy. Thus, choice of law in the absence of choice should not be applied directly without examining implied choice of law. The accumulation of cases will be required to establish the criteria for distinguishing between the two areas.