CONTENTS
- 1. A Case Concerning a Dispute over Provisional Attachment and Damages for Delay
- - The Lower Court's Determination
- 2. The Claim Amount of a Provisional Attachment and the Scope of Interruption of Prescription as Determined by the Supreme Court
- - The Effect of a Provisional Attachment Stating Only the Principal
- - Whether Interruption of Prescription Is Recognized for a Claim for Damages for Delay
- - Application of the Five-Year Extinctive Prescription for Commercial Claims
- 3. Implications of the Judgment and Points to Verify
- - The Importance of Specifying the Claimed Credit in a Provisional Attachment
- 4. The Strategy of Daeryun Law Firm LLP's Real Estate Attorneys
- - Points to Verify
- - Assistance from a Real Estate Attorney
1. A Case Concerning a Dispute over Provisional Attachment and Damages for Delay
This case arose out of a dispute over whether, where a creditor stated only the principal in the claim amount when applying for a provisional attachment, the effect of interrupting prescription also arises with respect to the damages for delay that are ancillary to the principal.
In 2002, the plaintiffs entered into a sale contract for commercial-building units with the defendant and paid a portion of the sale price.
However, as construction of the commercial building was suspended, the sale project did not proceed normally, and the plaintiffs and the defendant subsequently agreed to terminate the sale contract and to have the defendant refund the sale price it had received.
When the sale price was nonetheless not refunded, the plaintiffs applied for a provisional attachment of a claim against the defendant's property in order to preserve their own claims.
At that time, however, the application for provisional attachment described the claimed credit as a "claim for return of the sale price" or a "claim for return of investment funds" while stating only the principal in the claim amount, and it did not separately include interest or damages for delay.
After a long period had elapsed, the plaintiffs filed a suit on the merits and claimed the principal of the sale price together with damages for delay, in response to which the defendant argued that the claim for damages for delay had already become extinguished by prescription.
The Lower Court's Determination
The lower court took the view that the effect of interrupting prescription through a provisional attachment also extends to ancillary rights.
Accordingly, it held that, even though only the principal had been stated in the claim amount at the time of the application for provisional attachment, the claim for damages for delay ancillary to the principal claim was likewise interrupted as to its prescription.
In the end, the lower court took the view that the effect of interrupting prescription through the provisional attachment was recognized with respect to the claim for damages for delay as well, and it therefore did not accept the defendant's argument that prescription had been completed.
2. The Claim Amount of a Provisional Attachment and the Scope of Interruption of Prescription as Determined by the Supreme Court
The Supreme Court determined the extent to which the effect of interrupting prescription is recognized according to the scope of the claim amount stated at the time of the application for provisional attachment.
The lower court took the view that the effect of interrupting prescription through a provisional attachment also extends to a claim for damages for delay ancillary to the principal claim; the Supreme Court, however, held that the effect of interrupting prescription must be determined based on the scope of the claimed credit preserved by the provisional attachment.
In particular, whether the effect of interrupting prescription may also be recognized with respect to a claim for damages for delay not included in the claim amount, where only the principal is stated in the application for provisional attachment, became the central issue in this case.
The Effect of a Provisional Attachment Stating Only the Principal
The Supreme Court held that the effect of interrupting prescription through a provisional attachment arises only within the scope of the claimed credit specified by the provisional attachment.
From Supreme Court, Decision of October 25, 2024, 2024 Da 233212
"Where a creditor asserts a portion of a divisible claim as the claimed credit to be preserved and obtains a provisional attachment of property owned by the debtor, the effect of interrupting prescription arises only with respect to that portion of the claimed credit, and the effect of interrupting prescription cannot arise with respect to the remaining claims not included in the claimed credit preserved by the provisional attachment."
In this case, the plaintiffs described the claimed credit as a claim for return of the sale price at the time of the application for provisional attachment, but they stated only the principal in the claim amount.
The Supreme Court took the view that the scope of interruption of prescription must be determined based on the claim amount itself stated in the application for provisional attachment, and it held that the effect of interrupting prescription arises only with respect to the principal claim included in the claim amount.
Whether Interruption of Prescription Is Recognized for a Claim for Damages for Delay
From Supreme Court, Decision of October 25, 2024, 2024 Da 233212
"If only the principal of a claim is stated as the claim amount of a provisional attachment, then even if the provisional-attachment creditor holds, in addition to the principal claim, a claim for interest or damages for delay ancillary thereto against the provisional-attachment debtor, the effect of interrupting prescription cannot arise with respect to the ancillary claims not included in the claim amount."
The lower court held that, once a provisional attachment of the principal claim had been effected, the effect of interrupting prescription also extended to the claim for damages for delay.
The Supreme Court, however, took the view that the effect of interrupting prescription does not necessarily extend to a claim for damages for delay merely because it is a claim ancillary to the principal claim.
Accordingly, it held that the effect of interrupting prescription does not arise with respect to the claim for damages for delay not included in the claim amount at the time of the application for provisional attachment.
Application of the Five-Year Extinctive Prescription for Commercial Claims
A claim arising from a commercial activity shall, unless otherwise provided in this Act, become extinguished by prescription if it is not exercised for five years.
"A claim for damages for delay on a claim arising from a commercial activity is, like the principal claim, also subject to the five-year extinctive prescription under Article 64 of the Commercial Act."
The Supreme Court took the view that the claim for return of the sale price in this case is a claim arising from a commercial activity.
Accordingly, it held that the claim for damages for delay ancillary to the principal claim is likewise subject to the five-year extinctive prescription under Article 64 of the Commercial Act.
The Supreme Court also took the view that, because only the principal had been stated in the claim amount at the time of the application for provisional attachment, the effect of interrupting prescription does not arise with respect to the claim for damages for delay.
In the end, it held that, among the damages for delay claimed by the plaintiffs, the portion for which five years had already elapsed as of the filing date of the suit had been extinguished by the completion of prescription, and on that ground it reversed and remanded the part of the lower judgment concerning damages for delay.
3. Implications of the Judgment and Points to Verify
This judgment is significant in that it more clearly set out the standard for determining the extent to which the effect of interrupting prescription through a provisional attachment is recognized.
In practice, it is not uncommon for a creditor to state only the principal when applying for a provisional attachment.
This judgment, however, took the view that the effect of interrupting prescription must be determined based on the scope of the claimed credit stated in the application for provisional attachment, and that the effect of interrupting prescription does not necessarily extend to ancillary claims not included in the claim amount.
The Importance of Specifying the Claimed Credit in a Provisional Attachment
This judgment is significant in that it clarified that the scope of the claimed credit specified at the time of the application for provisional attachment is the standard for determining the effect of interrupting prescription.
The Supreme Court set out the standard that the mere fact that a provisional attachment was effected does not protect every claim ancillary to the principal claim, and that the determination must be based on the scope of the claimed credit actually stated in the application for provisional attachment.
In particular, it clarified that, where only the principal is stated as the claim amount, it is difficult to recognize the effect of interrupting prescription with respect to a claim for damages for delay.
Accordingly, in cases where a prolonged dispute is anticipated, it is necessary to carefully review the scope of the claim to be preserved from the provisional-attachment stage.
4. The Strategy of Daeryun Law Firm LLP's Real Estate Attorneys
A provisional attachment is an important procedure for preserving a claim, but the manner in which the claimed credit is specified and the content stated in the claim amount can affect the outcome of future litigation.
In particular, in cases where the principal, interest, and damages for delay are all at issue, it is necessary to comprehensively review the scope of the claim and the issue of extinctive prescription from the provisional-attachment stage.
Points to Verify
Category | Key Points to Review |
|---|---|
Application for Provisional Attachment | Content stated for the claimed credit and the claim amount |
Extinctive Prescription | Whether prescription is running on the principal claim and the claim for damages for delay |
Suit on the Merits | Consistency between the provisional attachment and the purport of the claim |
Recovery of the Claim | Scope of preservation and the amount that can actually be recovered |
Even where a provisional attachment has been effected, the same effect does not arise with respect to every claim.
Accordingly, the scope of the claimed credit and whether prescription is running must be reviewed together from the stage of applying for the provisional attachment.
Assistance from a Real Estate Attorney
Disputes over provisional attachment and extinctive prescription are matters that require a comprehensive review of the scope of the claimed credit specified at the time of the application for provisional attachment, the course of the running of prescription, and the scope of the claim in the suit on the merits.
Accordingly, it is necessary to closely analyze the relevant documents and the rights and relationships involved before deciding on a course of response.
Daeryun, the ninth-largest law firm in the Republic of Korea (based on 2025 value-added tax filings with the National Tax Service), draws on extensive experience in the fields of real estate, construction, civil litigation, and compulsory execution to provide comprehensive legal services in disputes concerning the return of sale prices, the return of investment funds, and provisional attachment and claim recovery.
If you require a legal review regarding real-estate-related claim disputes, such as the scope of the effect of a provisional attachment, whether extinctive prescription has been completed, or a claim for return of a sale price, you are welcome to review a specific course of response through a consultation with a 🔗real estate attorney.
