Open Decision Ledger · Rehabilitation & bankruptcy
Nature of the Provision Prohibiting Set-Off Agreements on Subordinated Borrowings and the Test for Prejudice Under the Right of Avoidance as to Integrated Acts
Translated from the Korean original. Read the Korean
Supreme Court, Sept. 24, 2002, 2001Da39473 (judgment)
Case name: 보험금
Official text on the National Law Information Center
Question
Is a special agreement granting a set-off right that violates the financial soundness rules void, and may only the set-off agreement be severed from a transaction carried out as an integrated whole so as to be avoided under the Bankruptcy Act?
Holding
Even if a special agreement granting a set-off right violates the provision of the financial soundness rules prohibiting set-off agreements, it is not void as a matter of private law. The prejudice under the right of avoidance is assessed in light of the effect that the acts carried out as an integrated whole have as a whole upon bankruptcy creditors, and the Supreme Court held that where, viewed as a whole, there is no disadvantage, prejudice cannot be recognized by severing an individual agreement alone.
Summary of the holding, verbatim
일체로 이루어진 행위에 대한 파산법상 부인권 행사의 요건으로서의 유해성은 그 행위 전체가 파산채권자에게 미치는 영향을 두고 판단되어야 할 것이며, 그 전체를 통틀어 판단할 때 파산채권자에게 불이익을 주는 것이 아니라면 개별약정만을 따로 분리하여 그것만을 가지고 유해성이 있다고 판단하여서는 안 된다.
Unofficial English translation
The detriment, as a requirement for the exercise of the right of avoidance under the Bankruptcy Act with respect to acts carried out as a single whole, must be determined in light of the effect which the act as a whole has upon bankruptcy creditors, and where, upon an assessment of the whole taken together, it does not cause disadvantage to bankruptcy creditors, an individual agreement must not be separated out and, on the basis of that agreement alone, detriment must not be found to exist.
Disposition
Dismissed Stated in the decision
상고를 기각한다.
Unofficial English translation
The appeal is dismissed.
Form of the test
Elements stated Stated in the decision
부인권 행사의 요건으로서의 유해성은 그 행위 전체가 파산채권자에게 미치는 영향을 두고 판단되어야 할 것이며
Unofficial English translation
The detriment, as a requirement for the exercise of the right of avoidance, must be determined in light of the effect which the act as a whole has upon bankruptcy creditors, and
Factors
- 그 행위 전체가 파산채권자에게 미치는 영향
- 개별약정만을 따로 분리하여 그것만을 가지고 유해성이 있다고 판단하여서는 안 된다
- 상계권 부여특약이 위 규정에 위반하였다고 하더라도 사법적 효력을 가지지 못하여 무효라고는 할 수 없다
- 후순위 차입금에 대한 상계약정 금지규정이 강행규정인지 여부(소극)
Unofficial English translation
• the effect which the act as a whole has upon bankruptcy creditors
• an individual agreement must not be separated out and, on the basis of that agreement alone, detriment must not be found to exist
• even if the special agreement granting the right of set-off violated the above provision, it cannot be regarded as being null and void on the ground that it fails to have effect under private law
• whether the provision prohibiting set-off agreements with respect to subordinated borrowings is a mandatory provision (negative)
Relation to precedent
States a new standard Read from the decision
그 전체를 통틀어 판단할 때 파산채권자에게 불이익을 주는 것이 아니라면
Unofficial English translation
where, upon an assessment of the whole taken together, it does not cause disadvantage to bankruptcy creditors
Decisions referred to
None listed
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
What is the specific criterion distinguishing acts carried out as an integrated whole from separate acts, and is the same conclusion maintained in transactions where funds actually changed hands?
This reading will be re-read when it is confirmed whether the same test for prejudice is maintained after the right of avoidance provisions of Article 64 of the Bankruptcy Act were replaced by the Debtor Rehabilitation and Bankruptcy Act.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
When compared with an independent reading by a different-family AI (GPT-6 Astra), which read only the original text without seeing the first reading, 7 of the 8 axes matched, and the readings diverged on axis 6 (Relation to precedent).
Axis 6 (Relation to precedent): Primary “States a new standard” vs Independent “Cannot be determined”
If the assessment of prejudice based on the transaction as a whole set out in the original text is viewed as the statement of a test, it may be read as a new standard; but in that the relationship to earlier decisions is not expressly stated, it may be read as cannot be confirmed.
그 전체를 통틀어 판단할 때 파산채권자에게 불이익을 주는 것이 아니라면Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below recognized the conclusion of the insurance contract and the 10 billion won loan, the subordination special agreement, and the supplementary agreement providing that, upon bankruptcy, the insurance premium refund obligation and the loan claim could be set off against each other, and then accepted the defendants' set-off defense and dismissed the claim for a refund of insurance premiums. The court below took the view that the special agreement granting a set-off right did not become void due to the violation of the rules, and reached the conclusion of also rejecting the assertion of the right of avoidance.
Supreme Court standard: The Supreme Court held that the view of the court below, that the violation of the rules has no effect on its validity under private law, was correct. It further held that, since the payment of insurance premiums and the loan were carried out merely by accounting on the books and in the documents, it is difficult to find that the transaction as a whole prejudiced bankruptcy creditors, and that prejudice cannot be recognized by severing the set-off agreement alone, and that the outcome does not change merely by reason of an improper purpose of raising the BIS ratio or the circumstances of disclosure; the final appeal was therefore dismissed.
Distinguishing conditions
- Where the payment of insurance premiums and the loan involve an actual movement of funds rather than accounting in the documents, so that, even viewing the transaction as a whole, a disadvantage arises to bankruptcy creditors
- Where the set-off agreement was not carried out as an integrated whole with the other agreements, but constitutes an independent act concluded at a separate point in time and for a separate purpose
- Where the provision at issue is not a mere supervisory order but a mandatory provision, with the law expressly stipulating the effect of denying validity under private law in the event of violation
Record verification notes
Before asserting the same conclusion, it must first be confirmed on the record from the flow of funds whether those agreements were in fact carried out as an integrated whole, and whether the entire transaction reduced the bankruptcy estate or conferred a preferential benefit on a particular creditor.
From the official text
Points at issue
[1] 구 증권거래법 제54조와 같은법시행령 제37조에 의하여 증권관리위원회가 제정한 ‘증권회사의 재무건전성준칙’상의 후순위 차입금에 대한 상계약정 금지규정이 강행규정인지 여부(소극) [2] 일체로 이루어진 행위에 대한 파산법상 부인권 행사의 요건으로서 유해성 유무의 판단 기준
Unofficial English translation
[1] Whether the provision prohibiting set-off agreements with respect to subordinated borrowings under the "Standards for Financial Soundness of Securities Companies" enacted by the Securities Management Commission pursuant to Article 54 of the former Securities and Exchange Act and Article 37 of the Enforcement Decree thereof is a mandatory provision (negative) [2] The criteria for determining whether detriment exists as a requirement for the exercise of the right of avoidance under the Bankruptcy Act with respect to acts carried out as a single whole
Summary of the holding
[1] 구 증권거래법(1997. 12. 13. 법률 제5423호로 개정되기 전의 것) 제54조, 제209조 제7호에 따르면 증권관리위원회는 필요한 경우 증권회사에 대하여 필요한 명령을 할 수 있고 이를 위반한 경우 형사처벌의 대상이 되며, 이에 따른 시행령 제37조에 의하여 증권관리위원회가 1997. 2. 28. 제정한 ‘증권회사의 재무건전성준칙’ 제9조 제2항 제4호가 ‘영업용 순자본’에 가산될 수 있는 ‘후순위 차입금’은 그 본질을 해할 우려가 있는 상계약정이나 담보제공약정이 붙어 있어서는 안되도록 규정하고 있으나, 상계권 부여특약이 위 규정에 위반하였다고 하더라도 사법적 효력을 가지지 못하여 무효라고는 할 수 없다. [2] 일체로 이루어진 행위에 대한 파산법상 부인권 행사의 요건으로서의 유해성은 그 행위 전체가 파산채권자에게 미치는 영향을 두고 판단되어야 할 것이며, 그 전체를 통틀어 판단할 때 파산채권자에게 불이익을 주는 것이 아니라면 개별약정만을 따로 분리하여 그것만을 가지고 유해성이 있다고 판단하여서는 안 된다.
Order
상고를 기각한다. 상고비용은 원고의 부담으로 한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the plaintiff.
Provisions referred to
[1] 구 증권거래법(1997. 12. 13. 법률 제5423호로 개정되기 전의 것) 제54조, 제209조, 구 증권거래법시행령(1997. 3. 22. 대통령령 제15312호로 개정되기 전의 것) 제37조 [2] 파산법 제64조
Read 2026-10-16 · Cross-read 2026-10-16. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
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