From what day does the 15-day period run for avoiding an act needed to assert a right against third parties? Supreme Court Decision 2003Da53497 on 'the day the effect of the causal act takes place'

Question

Article 80(1) of the Company Reorganisation Act provides that where, after a petition for suspension of payment, bankruptcy, composition or commencement of reorganisation proceedings, a person does an act needed to assert the creation, transfer or change of a right against third parties, and the act was done in bad faith more than 15 days after the day of the creation, transfer or change of the right, the act may be denied. The questions are which day starts the 15 days, whether an act that perfects the third-party requirement can be denied under the general denial provision of Article 78 in addition to Article 80, and whose acts can be denied at all.

Decision 2003Da53497 raises these questions on an appeal by the manager of a company in reorganisation proceedings. The manager sought to deny notices that the defendant sent to third-party debtors to perfect an assignment of receivables taken as security, and the appeal turned on when the 15 days began, on which denial provision reached the notices, and on whether the defendant's own acts could be the object of denial.

Material to check

The statute at the centre of the decision is Article 80(1) of the Company Reorganisation Act, quoted in the decision as stated above: an act needed to assert a creation, transfer or change of a right against third parties may be denied if it was done in bad faith more than 15 days after that creation, transfer or change. The decision also refers to Article 78(1), whose paragraphs it treats as the general denial provision directed at acts of the company, and to Articles 607 and 608 of the Civil Act, which the court below considered in holding the security arrangement not void.

The decisions are Decision 2003Da53497 (12 February 2004) and two decisions of 9 July 2002 that it cites on the range of acts that can be denied: Decision 99Da73159, on when a continuing guarantee is made and on the exceptional case in which a creditor's or third party's act can be denied, and Decision 2001Da46761, on security by assignment of a collective claim in the form of a preliminary contract and on acts of the creditor exercising the rights under such an arrangement.

Possible readings

On the first question, Decision 2003Da53497 reads Article 80(1) so that the 15-day period runs from the day the effect of the causal act takes place, not the day on which the causal act was made. Where the transfer of a right is deferred, as in a contract for performance in lieu of payment completed by a later act of completion, the period starts when that completion takes effect.

On the second question, the decision reads Article 80 as a special rule. An act perfecting a third-party requirement would in principle also fall under the general denial provision of Article 78, but where the causal act cannot itself be denied, the Act lets the parties' intended purpose be achieved and permits denial of the perfecting act only where the strict requirements of Article 80 are met. Such an act is therefore not separately a target of denial under Article 78.

On the third question, the decision, following Decisions 99Da73159 and 2001Da46761, reads Article 78(1) so that the object of denial is in principle an act of the company before the reorganisation. Where there was no act of the company, an act of a creditor or a third party can exceptionally be denied only where special circumstances, such as collusion with the company, make it possible to treat that act as the company's act.

What the decisions held

Decision 2003Da53497 dismissed the appeal and left the costs on the plaintiff manager. On the starting point of the 15 days, the court below had found the arrangement to be security by assignment of a collective claim in the form of a preliminary contract, under which the defendant obtained the right to select the receivables to be assigned, the right to complete the promise of performance in lieu of payment so as to form the assignment contract, and the authority to notify the third-party debtors of the assignment in place of the reorganisation company. The Supreme Court accepted those findings and held that under such an arrangement the rights were not transferred at the time of the preliminary promise but at the completion of the promise on 16 May 2001, so that notices sent within 15 days of that date left no room for the denial right of Article 80(1).

On the range of denial, the Supreme Court agreed with the court below that the notices the defendant gave the third-party debtors on 16 May 2001, acting for the reorganisation company, were acts of asserting the assignment of the receivables that took effect through the exercise of the right of completion, and that they were therefore not, separate from the causal agreement, an independent object of denial under Article 78. The manager's contrary argument failed.

On whose acts can be denied, the court below found that the acts of 16 May 2001 were the defendant's own exercise of its contractual rights, that there was no assignment by the reorganisation company for the manager to attack, and that there was no evidence of collusion between the defendant and the company in reorganisation or other circumstances warranting treating the defendant's acts as the company's acts. The Supreme Court upheld that finding. It also upheld the court below in holding that the arrangement was not void as contrary to Articles 607 and 608 of the Civil Act, since the receivables to be assigned were only identified when the notices were sent and their value could not be compared with the debt at the time of the agreement, and in finding insufficient evidence for the ground of denial under Article 78(1)(i) alleged by the manager, namely that the company, already insolvent, knew the arrangement would reduce the estate and create inequality among creditors.

Points left open

The decision fixes the starting point of the 15 days by reference to when the effect of the causal act takes place, but its application is to a promise of performance in lieu of payment completed on 16 May 2001. For other forms of creation, transfer or change of a right, and for causal acts whose time of effect is less clear, the decision gives no further guidance on identifying that day.

The decision states that a creditor's or third party's act can exceptionally be denied where special circumstances such as collusion with the company make it identifiable with the company's act, and it found no such evidence on these facts. It does not say what circumstances beyond collusion would suffice, nor how far the rule that a perfecting act is deniable only where the strict requirements of Article 80 are met reaches where the perfecting act is a creditor's or third party's act treated as the company's act.

When to reconsider

We revisit this brief if the Act's denial provisions are amended, if a later Supreme Court decision identifies the day the effect of a causal act takes place in a transaction other than a promise of performance in lieu of payment, or if a later decision states the circumstances other than collusion that make a creditor's or third party's act deniable.

Statutes referred to

• 회사정리법 제80조, 제78조

Decisions referred to

• 대법원 2004. 2. 12. 선고 2003다53497 판결 · Decision ledger
• 대법원 2002. 7. 9. 선고 99다73159 판결
• 대법원 2002. 7. 9. 선고 2001다46761 판결 · Decision ledger

Verification status

Everything cited in this brief was read at the National Law Information Center on 24 October 2026: the decision in its published case points, holdings and reasons, and the two cited decisions of 9 July 2002 in their published case points and holdings. The decision quotes the words of Article 80(1) itself, and no other statutory text is published with it.