 |
Photo = Yonhap news |
[Alpha Biz= Kim Jisun] The Supreme Court has ruled that Standard Chartered Bank (SC Bank) is not required to fully pay the 40 billion won tax surcharge that it had initially paid on behalf of Korea Line Corporation.
SC Bank had requested the surcharge be recognized as a "public interest claim" (a special claim eligible for full repayment) after the conclusion of Korea Line's rehabilitation process, seeking preferential repayment. However, the Supreme Court rejected this, emphasizing that in rehabilitation procedures, exceptions allowing some creditors to receive more than others should be applied only in very limited circumstances to ensure fair treatment of all creditors.
According to the legal community on Friday, the Supreme Court's Second Division (Chief Justice Oh Kyung-mi) ruled on the 13th in favor of Korea Line in the 40 billion won claim lawsuit filed by SC Bank. The Court stated, "The scope of public interest claims in rehabilitation procedures must be interpreted strictly." This is because broadly recognizing public interest claims could reduce the repayment amounts to other creditors, disrupting the fairness among them.
The dispute originated from a BBCHP (installment-based ship leasing) agreement between SC Bank and Korea Line, which later included a "Tax Lease" deal (a tax-saving method where the depreciation of high-value assets like ships is quickly recognized to reduce corporate tax obligations).
Korea Line entered rehabilitation in 2011 and continued to fulfill its ship leasing agreement with SC Bank, eventually graduating from rehabilitation in 2013 after being acquired by SM Group. However, due to changes in UK tax law in 2015, the tax benefits were retroactively canceled, prompting SC Bank to pay the taxes on behalf of Korea Line.
SC Bank filed a claim against Korea Line in 2019, arguing that the tax surcharge, which arose while Korea Line continued to honor its ship leasing agreement during the rehabilitation process, should be repaid in full as a public interest claim.
On the other hand, Korea Line argued that the tax surcharge was merely a general rehabilitation claim and should only be repaid according to the repayment rate specified in the rehabilitation plan. The first trial sided with SC Bank, but the second trial ruled in favor of Korea Line, stating that the tax-related agreement was ancillary and therefore not subject to full repayment like the ship leasing agreement.
The Supreme Court upheld this decision. Choi Hyo-jong, the attorney representing the case from the law firm Lin, explained, "Recognizing public interest claims broadly, allowing certain creditors to receive preferential repayment, would infringe upon the rights of other creditors. Therefore, this ruling faithfully follows the existing Supreme Court precedent, which strictly limits the scope of public interest claims."
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
