The Supreme Court full bench has ruled that even if a contract serving as the basis for a claim is terminated by mutual agreement after a creditor attaches the receivable, the effect of the existing attachment remains valid in principle.

This ruling modifies previous precedents to prioritize and protect the interests of the attaching creditor over the freedom of disposal regarding attached assets.

The Supreme Court full bench (presiding Justice Kwon Young-jun) overturned the lower court's ruling, which had dismissed the plaintiff's complaint, in a collection lawsuit filed by a person surnamed A against Company B, and sent the case back to the Ulsan District Court with a unanimous decision today (the 29th).

A invested 300 million won in a company's business in 2015, but when the company failed to execute the project, it was agreed that A would be refunded 400 million won, consisting of the investment plus 1 million won in profits.

Subsequently, the company entered into a contract to transfer its biogas power generation business to Company B for 850 million won. In 2020, A provisionally seized 350 million won of the business transfer proceeds receivable that the company was to receive from Company B.

After obtaining a claim attachment and collection order transferring the provisional seizure to a definitive attachment, A filed a lawsuit against Company B demanding payment of the collection amount.

However, Company B argued that it had no obligation to pay A because it had already terminated the contract to take over the business through a mutual agreement with the company.

The first and second instance courts dismissed the plaintiff's claim, stating that it was difficult to view the contract termination between the two companies as having been made solely for the purpose of extinguishing the claim without reasonable cause.

This judgment followed the existing Supreme Court precedent that if parties mutually terminate the contract underlying a claim even after provisional seizure, such termination can be asserted against the provisionally attaching creditor barring special circumstances.

Whether to maintain this previous precedent became the key issue before the Supreme Court.

During today's full bench session, the court ruled that the effect of attachment is maintained in principle even if a contract is terminated by mutual agreement, thereby modifying the existing precedent.

The Supreme Court stated, "Mutual agreement to terminate is essentially no different from an act of disposing of the claim itself, given that it is an act by the debtor that extinguishes the attached claim in a state where the disposal restriction effect of the attachment has arisen."

The court explained that under the previous legal doctrine, even if a creditor spends time and money to secure an attachment, its effect could disappear solely through an agreement between the parties.

It further explained, "Considering the purpose of the attachment system as well as the subjects and chronological precedence between attachment and mutual termination, it is reasonable that the legal risks triggered by mutual termination should in principle be borne by the debtor."

However, the Supreme Court noted that the effect of contract termination can exceptionally be asserted in cases where statutory or contractual grounds for termination have already been met, or where maintaining the attachment effect would be deemed notably unfair considering the nature of the contract and the background of the mutual termination.

It added that such exceptional grounds must be proven by the party obligated to pay the attached funds.

The Supreme Court stated that the lower court failed to examine whether there were exceptional circumstances warranting recognition of the contract termination's effect, and thus remanded the case for re-trial.

The Supreme Court explained, "This ruling is significant in that it shifted the principles and exceptions regarding the mutual termination of a contract after claim attachment, prioritizing and protecting the interests of the attaching creditor over the debtor's freedom of disposal."

(Photo: Yonhap News)