Courts and Codes
Civil claims are heard by the District Courts, with commercial obligations governed by the Commercial Act where the parties are merchants and by the Civil Act otherwise. Proceedings are documentary in emphasis and move at a reasonable pace by regional standards. Korea is a party to the New York Convention, and KCAB administers arbitrations where contracts provide for them.
Provisional Attachment Is the Normal First Move
A creditor can apply to attach a debtor's bank accounts, receivables or property before judgment. The court requires security, but the amounts are modest relative to the claim and applications supported by clear documentary evidence are routinely granted - often within weeks and without the debtor being heard.
Because attachment is standard practice rather than an aggressive escalation, Korean debtors expect it and read its absence as a signal that the creditor is not serious. The commercial effect of a frozen account on a trading company is immediate, and a substantial proportion of Korean files settle at that point rather than proceeding to judgment.
Payment Order and Ordinary Claims
The payment order procedure allows a creditor to obtain an order on documentary application without a hearing. The debtor has a short period to object, and an objection converts the matter into ordinary proceedings. It is inexpensive and worth using, but on a Korean file it is usually the attachment that produces the outcome and the payment order that formalises it.
Five Years Between Merchants
Claims arising from commercial transactions between merchants are subject to a five-year limitation period under the Commercial Act, shorter than the ten years the Civil Act applies to ordinary civil claims. Certain categories carry shorter periods still.
For a supplier the working figure is five years from when the claim became exercisable. Commencing proceedings interrupts it; an application for provisional attachment also has interrupting effect, which is a further reason it tends to be the first step rather than a later one.
How Long Does a Korean Claim Take?
| Stage | Typical Duration | Cost |
|---|---|---|
| Formal demand Written demand, often by content-certified post | 2–5 weeks | Low |
| Provisional attachment Application to freezing order | 3–8 weeks | Medium |
| Payment order Documentary application, unopposed | 6–12 weeks | Low |
| Ordinary proceedings District Court, first instance | 8–18 months | High |
| Enforcement Realisation of attached assets | 2–5 months | Medium |
Which Company Actually Owes You
Korean industrial groups trade through large numbers of separately incorporated affiliates, frequently sharing a brand and a head office address while remaining distinct legal persons. A parent does not become liable for an affiliate's trade debt because the name on the building matches the name on your invoice.
Before any attachment application we verify the contracting party against the corporate registry, using the registration number rather than the English trading name. Attachment is a time-limited advantage - applying it against the wrong affiliate spends that advantage and warns the right one.
How Does SXB Global Handle a Korean Case?
We identify banking and receivable positions early, because attachment is where Korean leverage comes from and it works best before the debtor has time to reorganise. Contact is conducted in Korean, using the formal written channels Korean businesses expect. Where legal proceedings become appropriate, SXB Global coordinates the instruction of appropriately authorised local counsel. Legal services are provided by the relevant independent legal professionals.