[edit] Supreme Court Decision 2001Du175 delivered on June 15, 2001 [Revocation of a Corrective Order, etc.]
【Main Issues】
[1] The legislative intent of providing 'an act unreasonably restricting the business contents or activities of member enterprisers' as prohibited activities of enterprisers' organization stated in Article 26 Paragraph (1) Item 3 of the Monopoly Regulation and Fair Trade Act
[2] Whether the Korea Customs Broker Association's Office Regulation of the Customs Broker & Assistant, which stipulates that the customs broker's assistants are totally banned from attracting businesses, falls under the 'act of unreasonably restricting the business contents or activities of member enterprisers' stated in Article 26 Paragraph (1) Item 3 of the Monopoly Regulation and Fair Trade Act (negative with qualification)
【Summary of Decision】
[1] The legislative intent of Monopoly Regulation and Fair Trade Act stipulating 'an act unreasonably restricting the business contents or activities of member enterprisers' as prohibited activities of enterprisers' organization in Article 26 Paragraph (1) Item 3 is as follows: the purpose of an enterprisers' organization is to augment the combined profits of the member enterprisers, and therefore a certain amount of restriction on the member enterprisers' activities as a result of the organization's decision making for the accomplishment of that purpose is anticipated to a certain extent; however, if such a decision excessively limits the business contents or activities of the member enterprisers to the extent that it impedes fair and free competition among the member enterprisers, it will not be allowed.
[2] The Office Regulation of Customs Broker & Assistant, established and executed by the Korea Customs Brokers Association, provides in Paragraph (3) of Article 11, that "an assistant should not take with him or her the work of customs clearance handled by the previous custom office, or entice it or attract it into his new office by informing his change of office.", and in Paragraph (4) of Article 11 provides that "an assistant should not attract the work of customs clearance or participate in management of the work of customs clearance or manage it in the way of Ji-ip." (Ji-ip is a word usually used in the field of carriage of freight of the enterprises that means the enterprises nominally have the car and its driver just as the property and employees, but the car owner is actually the driver. So in the field of customs clearance, Ji-ip means the assistant's behavior that even though he is hired by a certain customs broker, but he manages the work of customs clearance as if he has the ownership of the business when he works in the customs office.)
The reason why Korea Customs Brokers Association had established Paragraph (3) of Article 11 is: at first, nobody complained that the assistants hired by the customs brokers attracted business subordinately and unconditionally; gradually, some of the assistants began to utilize the human relationship they had nurtured in the process of their continuous and repetitive transactions as if it were their own trade mark or their own business property, asking the customs office for money as mediation or introduction fees; if their demands were denied, they moved to another customs office taking with them all their previous business clients; not only did they disrupted the order of the customs work by such actions, but also there were increasing cases even performing a type of Ji-ip management with the customs brokers or practically hiring customs brokers by borrowing their titles ; the legislative intent of establishing the above articles was to establish a sound order in customs clearance by preventing the assistants who moved to another customs broker from performing the above-mentioned absurd demands and activities. In light of the business specifications of the customs broker and assistant, the characteristics of customs broker's work, the reality of the customs brokering field, the establishment background of Paragraph (3) of Article 11 in the Office Regulation of Customs Broker & Assistant, the fact that Paragraph (3) of Article 11 itself only partially limits the actions of the assistants who move to another customs office, not prohibiting the customs brokers who hires them from attracting customs related work, thereby not directly limiting the activities of the customs broker, and the fact that banning the actions of enticing and attracting business from former business clients in such a manner actually promotes fair and free competition between the customs offices as the customs clearance work will be obtained by the abilities or the activities of the customs broker himself or herself instead of the abilities and activities of following assistants, Paragraph (3) of Article 11 of the above Office Regulation should be regarded positively, as it establishes a sound order in customs clearance and prevents absurd demands and activities, thereby preventing unfair trade. Therefore, Paragraph (3) of Article 11 of the above Office Regulation cannot be regarded as impeding fair and free competition among the customs brokers by excessively limiting their business field or their activities.
However, Paragraph (4) of Article 11 of the above regulation has the possibility of being interpreted as prohibiting assistants from all forms of attracting business, including subordinated attraction of business without personal gains in condition. As long as it is interpreted in such a manner, the above regulation exceeds the scope of prohibition stated in Paragraph (2) of Article 3 of the Customs Broker Act, to unjustly restrict business contents and activities of the customs brokers. Therefore, Paragraph (4) of Article 11 of the above regulation is not judged to be illegal as long as it is translated within the boundaries of forbidding the prohibited acts stated in Paragraph (2) of Article 3 of the Customs Broker Act and the actions of attracting business stipulated in Paragraph (3) of Article 11 of the above Office Regulation, which is likely to substantially corrupt the order of customs clearance activities beyond the limit determined in the above as being acceptable. The part stipulating prohibition in excess of this limit is not justified.
【Reference Provisions】[1] Article 26 Paragraph (1) Item 3 of the Monopoly Regulation and Fair Trade Act / [2] Article 3 Paragraph (2) of the Monopoly Regulation and Fair Trade Act; Article 26 Paragraph (1) Item 3 of the Customs Broker Act
Article 26 of The Monopoly Regulation and Fair Trade Act (Prohibited Activities of Enterprisers' Organization) (1) No enterprisers' organization shall commit any of the following acts:
1.~2. <omitted>
3. An act unreasonably restricting the business contents or activities of member enterprisers (referred to an enterpriser who is a member of the enterprisers' organization; hereinafter the same shall apply)
(2)~(4) <omitted>
Article 3 of The Customs Broker Act (Limitation of business of customs clearance) (1) <omitted>
(2) No person shall introduce or intercede the business of Article 2 to the person stipulated in Paragraph (1) including a customs broker and take compensation for introduction or request it.
【Reference Cases】[1] Supreme Court Decision 94Nu13794 delivered on May 12, 1995 (Gong1995Sang, 2130); Supreme Court Decision 96Nu150 delivered on May 16, 1997 (Gong1997Sang, 1759)
【Plaintiff, Appellant】 Korea Customs Brokers Association (Attorneys Park Jun-suh and 3 others, Counsel for plaintiff-appellant)
【Defendant, Appellee】The Fair Trade Commission (Attorneys Oh Sung-whan and 2 others, Counsel for defendant-appellee)
【Judgment of the Court below】 Seoul High Court Decision 99Nu13538 delivered on December 5, 2000
【Disposition】The judgment of the court below shall be reversed and the case shall be remanded to Seoul High Court
【Reasoning】 1. The legislative intent of Monopoly Regulation and Fair Trade Act stipulating 'an act unreasonably restricting the business contents or activities of member enterprisers' as prohibited activities of enterprisers' organization in Article 26 Paragraph (1) Item 3 is as follows: the purpose of an enterprisers' organization is to augment the combined profit of the member enterprisers, and therefore a certain amount of restriction on the member enterprisers' activities as a result of the organization's decision making for the accomplishment of that purpose is foreseen to a certain extent; however, if the contents of such a decision excessively limit the business contents or activities of the member enterprisers to the extent that it impedes fair and free competition among the member enterprisers, it will not be allowed.
2. The court below, having fully assessed the evidence introduced at the trial, found as follows. Paragraph (3) of Article 11 of the Office Regulation of Customs Broker & Assistant which had been established and enforced by the plaintiff on September 22, 1999 (hereinafter referred to as 'Office Regulation') stated "an assistant should not take with him or her the work of customs clearance being dealt with by the previous customs office, or entice it or attract it into his new office by informing his change of office." and Paragraph (3) of Article 11 of the Office Regulation stated "an assistant should not attract the work of customs clearance or participate in management of the work of customs clearance or manage it in the way of Ji-ip." The defendant imposed a corrective order and an order of paying fine (hereinafter referred to as the 'disposition in question') on the ground that the above clauses of the Office Regulation totally prohibited assistants from attracting customs clearance businesses, not to mention business attraction activities conducted under the control the brokers with no personal profits, and therefore fell under the case of unjustly restricting the customs broker's business contents or activities which violated Article 26 Paragraph (1) Item 3 of the Act. The court below then ruled for the reasons presented in its judgment that the disposition in question is legal, denying the plaintiff's claim for the revocation of the disposition in question.
3. A. We will examine the judgment of the court below which ruled that Paragraph (3) of Article 11 of the Office Regulation violates the Fair Trade Act.
The court below judged the above Office Regulation as violating the Fair Trade Act due to the following reasons: the order of customs clearance can be established by the customs brokers' aggressive management of their own businesses and thorough supervision of their assistants' work; the assistant's behavior that corrupts the order of customs clearance can be controlled by disciplinary measures, criminal punishments, etc.; if assistants who moved to another office are prohibited from attracting business from their previous clients even when such an act is conducted unconditionally as subordinate work of the broker, the business of the broker who hired new assistant will in practicality be seriously restricted so that brokers who wish to open a new office or hire a new assistant would face great difficulties in hiring a capable assistant.
However, according to the records and reasons in the judgment of the court below, the reasons why the plaintiff had established Paragraph (3) of Article 11 are as follows: at first, nobody complained that the assistants hired by the customs brokers attracted business subordinately and unconditionally; gradually, some of the assistants began to utilize the human relationship they established in the process of their continuous and repetitive transactions as if it were their own trade mark or their own business property, asking the customs broker office for money as mediation or introduction fees; if their demands were denied, they moved to another customs office taking with them all their previous business clients; not only did they disrupted the order of the customs work by such actions, but there were increasing cases even performing a type of Ji-ip management with the customs brokers or practically hiring customs brokers by borrowing their titles ; the legislative intent of establishing the above articles was to establish a sound order in customs clearance by preventing assistants who moved to another customs broker from performing the above-mentioned absurd demands and activities. In light of the business specifications of the customs broker and assistant, the characteristics of customs broker's work, the reality of the customs brokering field, the establishment history of Paragraph (3) of Article 11 in the Office Regulation of Customs Broker & Assistant, the fact that Paragraph (3) of Article 11 itself only partially limits the actions of the assistants who move to another customs office, not prohibiting the customs brokers who hires them from attracting customs work, thereby not directly limiting the activities of the customs broker, and the fact that banning the actions of enticing and attracting business from the previous business clients in such a manner actually promotes fair and free competition between the customs offices as the customs clearance work will have to be received by the abilities or the activities of the customs broker himself or herself instead of the abilities and activities of following assistants, Paragraph (3) of Article 11 of the above Office Regulation should be regarded positively, as it establishes a sound order in customs clearance and prevents absurdities, thereby preventing unfair trade. Therefore, Paragraph (3) of Article 11 of the above Office Regulation cannot be regarded as impeding fair and free competition among the customs brokers by excessively limiting their business field or their activities.
Accordingly, the court below erred in matters of law in relation to Article 26 Paragraph (1) Item 3 of the Fair Trade Act by holding that the defendant's disposition in question was justified on the basis that the above Office Regulation violated the Fair Trade Act, which affected the conclusion of its ruling. The ground for appeal on this point is justified.
B. Meanwhile, the court below ruled that the part of Paragraph (4) of Article 11 of the Office Regulation prohibiting an assistant from attracting customs clearance business also violated the Fair Trade Act, on the ground that Article 3 Paragraph (2) of the Customs Broker Act provides that "no person shall introduce or intercede the business of Article 2 to the person stipulated in Paragraph (1) including a customs broker and take compensation for introduction or request it", merely prohibiting conditional introduction and mediation acts, not all acts of attracting customs clearance business, attracting business naturally falls under one of ordinary activities of the customs clearance broker's work, and an assistant who assists the broker in the process of customs clearance can attract business as a form of assisting the broker, as long as his or her behavior is not conditional and as long as attracting business is not his or her only primary task.
In light of the records and provisions of the Act, Paragraph (4) of Article 11 of the above regulation has the possibility of being interpreted as prohibiting the assistants from all forms of attracting business, including subordinated attraction of business without personal compensation. Only as long as it is interpreted in such a manner, the above regulation exceeds the scope of prohibition stated in Paragraph (2) of Article 3 of the Customs Broker Act such as unjustly restricting business contents and activities of customs brokers.
Therefore, Paragraph (4) of Article 11 of the above regulation is not against the law as long as it is translated within the boundaries of forbidding the prohibited acts stated in Paragraph (2) of Article 3 of the Customs Broker Act and the actions of attracting business stipulated in Paragraph (3) of Article 11 of the above Office Regulation, which is likely to substantially corrupt the order of customs clearance activities that has already been determined in the above as being acceptable. The part prohibiting in excess of this limit is illegal.
Nonetheless, the court below ruled that the defendant's order to correct Paragraph (4) of Article 11 of the Office Regulation is legal on the basis that in relation to an assistant's activities of attracting customs clearance businesses conducted unconditionally, all such activities of attracting business, including the defendant's activity of attracting business that is prohibited by Paragraph (3) of Article 11 of the above Office Regulation, are in conflict with the Fair Trade Act. Thes part upholding of the corrective order without any qualification is not justified and therefore, cannot be maintained.
C. In addition, once defendant's corrective order as to the plaintiff's Office Regulation is determined to be unjustified, other dispositions based on the assumption that the above corrective order is justified are also illegal. Therefore, the rest of judgment of the court below stating that the remaining dispositions are all legal also can no longer be maintained.
4. Therefore, the judgment of the court below shall be reversed in its entirety and the case shall be remanded to the court below for retrial and determination. This decision is delivered with the assent of all Justices who heard the appeal. It is so decided as per Disposition.
Justices Son Ji-yol (Presiding Justice)
Song Jin-hun
Yoon Jae-sik (Justice in charge)
Lee Kyu-hong
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