• Journal of Arbitration Studies
• /
• v.14 no.1
• /
• pp.29-60
• /
• 2004

Recently stand-by credits are using as surety devices in various global business transactions including sale of goods. Stand-by credits have lots of merits but simultaneously have high possibility of improper demand by the beneficiary due to the characteristics of the documents required. So so-called fraud rule has developed as a solution to the improper demand in letter of credit transactions. And the actual way of the fraud rule is the injunction by the competent court. The purpose of this article is to examine the applicability of the injunction in stand-by credit transactions by means of case studies. For this purpose, the author examined the concept of the injunction, necessity of the injunction in stand-by credit transactions and the cases of injunction granted and injunction denied. Firstly, the courts have legal standard of the application of injunction due to the legislation of the relative articles in the United Nations Convention on Independent Guarantees and Stand-by Letters of Credit and the Uniform Commercial Code. Secondly, the courts have taken a negative attitude granting injunction in order to observe the independence principle. Thirdly, the courts have a tendency to grant injunction when the demand has no conceivable basis and the applicant will suffer irreparable injury without injunction. Finally, like the saying 'prevention is the best cure', the applicant always pays attention with reasonable care before improper demand by the beneficiary.

• Journal of Arbitration Studies
• /
• v.8 no.1
• /
• pp.323-352
• /
• 1998

Documentary letters of credit including standby letters of credit are governed by the independence or abstraction rule and the doctrine of strict compliance. Since the former rule requires the issuing bank to honor the drafts regardless of the defective performance of the underlying contract, the applicant(the customer) will be without a remedy if he is unable to make himself whole by litigation on the underlying contract. Therefore, the applicant is exposed to a risk much higher than in the commercial letters of credit. The Uniform Customs and Practice for Documentary Credit(UCP) has no provisions allowing legal relief for the applicant on the abuse of L/C by unscrupulous beneficiary, but UCC ${\S}5-114$ has provision allowing injunctive relief for the applicant. In this paper, I attempted to clarify certain standards of injunctive relief available for the customer in the credit. When there is fraud in the L/C transaction by any of the parties concerned, we must weigh the principle of independence or abstraction and the fraud rules. According to banking practice and judicial precedence, we need not keep the principle of independence and abstaction even in fraudulent transaction and the bona fide sufferer must be protected. The purpose of this paper is to review the studies of Fraud rule and the Injunction and to suggest the applicable standards for the Injunction therory under letters of credit. Specially this paper analysed the following ; (1) the guideline for the fraud (exception) rule to the autonomy principle, (2) the appilcable standards of the Injunction, and (3) the implications on parties concerned in letters of credit transaction. Conclusively, the Injunction should be granted if (1) there is clear proof of fraud (2) the fraud constitutes fraudulent abuse if the independent purpose of L/C (3) irreparble injury might follow if injunction is not granted or the recovery of damages would be seriously endangered.

• KDI Journal of Economic Policy
• /
• v.42 no.2
• /
• pp.1-30
• /
• 2020

This paper analyzes how injunctions relate to patent hold-up problems. To this end, we present a simple model of licensing negotiations between a patent holder and a downstream firm in the shadow of litigation. More specifically, we consider the situation in which an injunction is granted as a matter of course if a patent is found valid and infringed upon in litigation, but the patent holder may be under-compensated due to aspects of the patent remedy system other than injunctions. We show that if the downstream user is unaware of the patent before any investment in initially designing its product, the patent hold-up problems created by injunction threats are worrisome when (i) the redesign process is costly, (ii) the degree of patent protection (by aspects of the patent remedy system other than injunctions) is sufficiently strong and (iii) the injunction is requested not to practice the patented technology exclusively but to collect excessive patent royalties. Even if the downstream user is aware of the patent before the initial investment, the patent hold-up problems do not disappear. The findings here imply that a discretionary approach is required towards denying injunctions against patent infringement. If the degree of patent protection is not sufficiently strong, denying injunctions can exacerbate the under-compensation problem. However, once patent protection improves enough (not necessarily perfectly), we may see a surge of patent hold-up problems, and it would be better to apply alternative patent remedies in place of injunctions when necessary. Lastly, we discuss several possible alternatives to injunctions and their pros and cons.

• Journal of Legislation Research
• /
• no.44
• /
• pp.571-610
• /
• 2013

The current patent system is more often used for defensive purposes to exclude others' use or as a means to hold unfair strong positions in negotiations rather than for the original purpose as the dissemination and active use of useful technology. An injunction together with a damage is an important remedy for patent infringements. However, unlike a claim for damages, injunctions do not require the subjective requirement of intent and negligence or the occurrence of loss. If the validity of the patent and the fact of infringement are confirmed, automatically injunctions are issued without consideration of other circumstances. So a patent holder would exclude others' use and have a powerful position in negotiations because of injunctions for patent infringements. Therefore, those injunctions for patent infringements should be flexibly restricted according to cases under the premise to ensure fair compensation for the patent owner, rather than absolutely admitting injunctions for patent infringements like now. If then, it would serve the use of a useful technology and industrial development as the purpose of the patent system. First of all, judgments for preliminary injunctions should be strict and by deliberate decision on the merits permanent injunctions should be determined. In addition, it is needed that court's discretion possible to considerate 'the need for an injunction'. When the courts judge 'the need for an injunction', 'whether a patent holder has implemented a patent invention, the possibility of monetary compensation and the ability of the infringer for damages, a patent holder's intent to license and whether an injunction has been used as a weapon of negotiation, the proportion of patent technology in the entire products, the characteristics of patent technology and the possibility of patent invalidity, the competitive relationship for market share, the public interests and gains and losses between the parties and so on' should be considered. After these judgements, if 'the need for an injunction' is not approved, a patent owner would be protected by post-monetary compensation. However, because damages are related to illegal conducts in the past, in the case that an injunction is restrained, measures to ensure the legal implementation in the future are needed. It is primarily desirable that reasonable royalty is estimated throughout private negotiations between parties, but if agreement between the parties does not occur, patent owner should be able to claim the royalty for future.

• Korean Architects
• /
• s.599
• /
• pp.114-121
• /
• 2019

• Journal of Arbitration Studies
• /
• v.27 no.1
• /
• pp.85-106
• /
• 2017

This article deals with the relationship between arbitration and state court in each procedural stage. As most legal systems over the world respect arbitration agreement, the relationship between arbitration and state courts puts emphasis on party autonomy and provides the independent power of arbitration agreement tribunal (Kompetenz-Kompetenz). Most institutional arbitration rules the arbitral tribunal to rule on its own jurisdiction. Modern national laws have similar provisions based on Art. 16 UNCITRAL Model Law. In this regards the author throws a question in Chapter II, whether the doctrine of Kompetenz-Kompetenz, namely the ability of the tribunal to decide upon its own jurisdiction is worth while persisting, and whether the Kompetenz-Kompetenz-agreement should be regarded as valid, with the conclusion, that this doctrine should concede to the power of state court and that Kompetenz-Kompetenz-Klausel is invalid. In Chapter III the author discusses the issue of whether the breach of an arbitration agreement could lead to the compensation of damage. Although the author stands for the procedural character of arbitration agreement, he offers a proposal that the breach of an arbitration agreement bring about the compensation of damage. The issue of anti-suit injunction is discussed also in this Chapter. He is against the approval of anti-suit injunction based on an arbitration agreement resisting the other party from pursuing a lawsuit in a foreign country.

• Korea Trade Review
• /
• v.43 no.6
• /
• pp.25-50
• /
• 2018

It is an undeniable fact that the counter-guarantees are always exposed to wrongful or fraudulent demands for payment due to its institutional hallmarks and simplicity. Generally counter-guarantees are payable by presenting a written statement indicating that the local guarantor was in receipt of the beneficiary's statement that the principal was in breach of the underlying contract without any proof of any default. No proof of actual payment of guarantee is required. These matters may lead to numerous disputes or conflicts between the parties concerned. These problems raise may legal issues such as a guarantor(or a counter-guarantor)'s dishonor, the wrongful or fraudulent demands for payment, and the fraudulent conspiracy or the acquiescence of the local guarantor in the course of the procedural demand for payment. On the other hand, the guarantor's dishonor or an injunction are sometimes misused as dispute resolution method between parties involved. Therefore, this research analyzed the guarantor's wrongful dishonor and related issues such as an injunction, fraud exception, and others under the counter-guarantee regime focusing on the relevant cases. This paper also suggested practical implications and countermeasures from a business point of view.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.69
• /
• pp.261-301
• /
• 2016

Recently the abusive calls on on-demand bonds have been a critical issue among many engineering and construction companies in Korea. On-demand bond is referred to as an independent guarantee in the sense that the guarantee is independent from its underlying contract although it was issued based on such underlying contract. For this reason, the issuing bank is not required to and/or entitled to look into whether there really is a breach of underlying contract in relation to the call on demand-bonds. Due to this kind of principle of independence, the applicant has to run the risk of the on demand bond being called by the beneficiary without due grounds. Only where the call proves to be fraudulent or abusive in a very clear way, the issuing bank would not be obligated to pay the bond proceeds for the call on on-demand bonds. In order to prevent the issuing bank from paying the proceeds under the on-demand bond, the applicant usually files with its competent court an application for injunction prohibiting the beneficiary from calling against the issuing bank. However, it is in practice difficult for the applicant to prove the beneficiary's call on the bond to be fraudulent since the courts in almost all the jurisdictions of advanced countries require very strict and objective evidences such as the documents which were signed by the owner (beneficiary) or any other third party like the engineer. There is another way of preventing the beneficiary from calling on the bond, which is often utilized especially in the United Kingdom or Western European countries such as Germany. Based upon the underlying contract, the contractor which is at the same time the applicant of on-demand bond requests the court to order the owner (the beneficiary) not to call on the bond. In this case, there apparently seems to be no reason why the court should apply the strict fraud rule to determine whether to grant an injunction in that the underlying legal relationship was created based on a construction contract rather than a bond. However, in most jurisdictions except for United Kingdom and Singapore, the court also applies the strict fraud rule on the ground that the parties promised to make the on-demand bond issued under the construction contract. This kind of injunction is highly unlikely to be utilized on the international level because it is very difficult in normal situations to establish the international jurisdiction towards the beneficiary which will be usually located outside the jurisdiction of the relevant court. This kind of injunction ordering the owner not to call on the bond can be rendered by the arbitrator as well even though the arbitrator has no coercive power for the owner to follow it. Normally there would be no arbitral tribunal existing at the time of the bond being called. In this case, the emergency arbitrator which most of the international arbitration rules such as ICC, LCIA and SIAC, etc. adopt can be utilized. Finally, the contractor can block the issuing bank from paying the bond proceeds by way of a provisional attachment in case where it also has rights to claim some unpaid interim payments or damages. This is the preservative measure under civil law system, which the lawyers from common law system are not familiar with. As explained in this article, it is very difficult to block the issuing bank from paying in response to the bond call by the beneficiary even if the call has no valid ground under the underlying construction contract. Therefore, it is necessary for the applicants who are normally engineering and construction companies to be prudent to make on-demand bonds issued. They need to take into account the creditability of the project owner as well as trustworthiness of the judiciary system of the country where the owner is domiciled.

• Journal of Arbitration Studies
• /
• v.19 no.3
• /
• pp.43-66
• /
• 2009

This paper investigates what are the types and legal grounds for interim measures in the U.S. arbitration practices. The statutory ground for the interim measures is the Revised Uniform Arbitration Act. Another ground, probably the most important, is the parties' own intentions to adopt the interim measures in their arbitration proceeding. Most typical interim measures in arbitration include preliminary injuction, attachment and antisuit injunction. In the U.S ex parte motion for interim measure is rarely allowed while the Revised UNCITRAL Model Law specified an ex parte interim measure. In launching the interim measures, the US courts have demanded several requirements including imparability, probability of success and passing of the balance test. In general, the U.S. courts have properly interfered with the procedural issues in arbitration unreined but leaving the substantive issues untouched. It is believed that such interference has helped to enhance the credibility in arbitration with respect to fairness and justice.

• Proceedings of the Safety Management and Science Conference
• /
• 2004.05a
• /
• pp.169-172
• /
• 2004

Is entering in age that brand becomes consumer's goods purchase standard as income level is improved, dying injunction brand is trend that governing power in the world market is expanded as international economy does single market. Therefore, do to support market public information and marketing because do it so that may improve product level because introduces and operate system brand of our ceramics by ceramics market possession of advanced nation such as the United States of America, Japan, Britain and utilizes cooperation brand of medium and small enterprises product eternal generation and improves ceramics market competitive power in inside and outside of the country.