CONTENTS
- 1. The Client Who Requested Corporate Litigation Assistance
- - The Circumstances of the Client's Case
- 2. Corporate Litigation: Relevant Statutes and Issues in the Case
- - Corrective Measures and the Penalty Surcharge
- 3. Corporate Litigation: Assistance Provided to Prevail
- - Establishing the Facts of Non-Performance of the Contract
- - Legal Review and the Propriety of Imposing the Penalty Surcharge
- - Emphasizing the Balance Between Contractual Principles and the Transactional Order
- 4. Result of the Corporate Litigation Assistance: “Revocation Judgment”
- - If You Are Involved in Corporate Litigation
1. The Client Who Requested Corporate Litigation Assistance
The client, who sought to revoke a corrective order and penalty surcharge disposition imposed for abuse of a superior bargaining position arising from a contractual breach by some of its partner companies, came to a corporate law attorney and requested assistance through corporate litigation.
The Circumstances of the Client's Case
The client, who operated a manufacturing company, had been running the business while securing key components stably through a regular supply contract.
The problem arose when some suppliers failed to comply with their contractual obligations and conducted independent transactions through delivery delays, omission of quality inspection, and similar conduct.
Accordingly, relying on its contractual rights, the client implemented measures requiring correction of the delayed deliveries and the uninspected materials, as well as restrictions on transactions.
However, the Fair Trade Commission determined this to be an abuse of superior bargaining position and issued a corrective order and an imposition of a penalty surcharge.
In response, the client sought to request revocation of the corrective order through corporate litigation and asked a corporate law attorney for assistance.
2. Corporate Litigation: Relevant Statutes and Issues in the Case
Article 45 of the Monopoly Regulation and Fair Trade Act prohibits a business operator from unfairly using a superior position in a transaction to disadvantage the other party.
The Monopoly Regulation and Fair Trade Act regards the following conduct as unfair trade practices.
2. Unfairly discriminating against a transaction partner
3. Unfairly excluding a competitor
4. Unfairly inducing a competitor's customers to deal with oneself
5. Unfairly coercing a competitor's customers to deal with oneself
6. Unfairly using one's position in a transaction to deal with the other party
7. Dealing on terms that unfairly restrict the business activities of the transaction partner
8. Unfairly obstructing the business activities of another business operator
9. Unfairly supporting a specially related person or another company
Corrective Measures and the Penalty Surcharge
Where unfair trade practices such as abuse of superior bargaining position are confirmed, the Fair Trade Commission may order the necessary corrective measures. (Article 49 of the Monopoly Regulation and Fair Trade Act)
▶ Types of Corrective Measures
A penalty surcharge may also be imposed based on turnover.
The penalty surcharge is calculated within an amount equal to the turnover prescribed by Presidential Decree multiplied by 4 per 100, and even where there is no turnover, it may be imposed up to a maximum of KRW 1 billion.
3. Corporate Litigation: Assistance Provided to Prevail
The issue in this case was whether the client company's measures constituted a mere exercise of contractual rights or amounted to an abuse of superior bargaining position.
In response, the corporate law attorney systematically established the suppliers' non-performance of the contract and emphasized that this was a legitimate exercise of the company's rights.
Establishing the Facts of Non-Performance of the Contract
The corporate law attorney established, with documents and evidence, specific instances such as the suppliers' delivery delays, failure to make advance deliveries, and omission of quality inspection materials.
Through this, the attorney made clear that the client company's measures were a mere exercise of contractual rights and emphasized that they did not constitute an abuse of superior bargaining position.
Legal Review and the Propriety of Imposing the Penalty Surcharge
Relying on Supreme Court precedents and existing cases, the attorney specifically analyzed the boundary between the exercise of contractual rights and an abuse of superior bargaining position.
The attorney logically demonstrated the insufficient legal basis for imposing the penalty surcharge where actual damage had not been established.
The attorney prepared and actively used materials rebutting the calculation of the penalty surcharge and the legal issues.
Emphasizing the Balance Between Contractual Principles and the Transactional Order
The corporate law attorney emphasized that, between the principle of freedom of contract and the purpose of the Monopoly Regulation and Fair Trade Act, the distinction between the exercise of contractual rights and unfair trade practices was important.
The attorney pointed out that uniformly protecting suppliers who fail to perform a contract could undermine the stability of the transactional order.
4. Result of the Corporate Litigation Assistance: “Revocation Judgment”
The court accepted the corporate law attorney's arguments and revoked the Fair Trade Commission's corrective order and the imposition of the penalty surcharge.
As a result, the client was relieved of an unnecessary financial burden and was able to continue normal business operations.
If You Are Involved in Corporate Litigation
A case of abuse of superior bargaining position may lead to an investigation by the Fair Trade Commission and the imposition of a penalty surcharge, and if the review of the facts and the legal principles is insufficient, a company may suffer substantial damage.
This firm forms a task force of corporate law attorneys and specialists in each field to establish a systematic strategy from the early stage of the case.
Through comprehensive responses from the investigation stage through the litigation stage, the firm protects the company's rights and provides comprehensive assistance that also prepares for long-term risks.
If you are facing corporate litigation related to unfair trade practices and require legal assistance, 🔗Legal Consultation Bookingplease request assistance through this link.
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