On the 24th, the Supreme Court's en banc panel ruled that a debtor does not incur a repayment obligation simply by acknowledging the debt after the expiration of the statute of limitations. This marks a change in precedent after 58 years.
Previously, since 1967, the Supreme Court had ruled that if a debtor acknowledges the debt after the expiration of the statute of limitations, it is presumed that the debtor has waived the benefits of the expiration. With the recent change in precedent by the en banc panel, there are analyses in the legal community suggesting that the new ruling could work in favor of debtors.
On this day, the Supreme Court's en banc panel overturned the second trial ruling that partially favored A against B in the 'lawsuit of objection to the distribution of dividends' and remanded the case back to the Incheon District Court. This is based on the majority opinion of eight justices.
Under civil law, the right to claim interest expires if it is not exercised for three years. However, the Supreme Court ruled in its 1967 decision that a repayment obligation can arise even after the expiration of the statute of limitations. If a debtor made partial payments to a creditor after the three-year period, the rationale was that the debtor is presumed to have knowingly waived the benefits of the expired limitation. This precedent has been upheld by the Supreme Court and lower courts ever since.
In this case, A borrowed 240 million won from B in four installments between 2006 and 2015. This includes 30 million won in 2006, 90 million won in 2009, 20 million won in 2011, and 100 million won in 2015. A repaid 18 million won of the borrowed money to B around 2015. At that time, the statute of limitations for the interest on the money borrowed in 2006 and 2009 had already expired.
In the first trial, there was no dispute regarding the expiration of the statute of limitations, but it became an issue in the second trial. A received a ruling that partially favored the debtor in the second trial. The court determined that A must pay interest on the money borrowed in 2006 and 2009 based on existing Supreme Court precedents.
However, the Supreme Court's en banc panel overturned the second trial ruling, thereby changing the existing precedent.
The Supreme Court noted, 'It cannot be presumed that A expressed an intention to waive the benefits of the expiration of the statute of limitations simply because the debtor partially repaid the debt after the expiration.' It added, 'This presumption of existing Supreme Court precedent is not supported by empirical principles or contradicts them, and it does not sufficiently consider the differences between acknowledging the debt and waiving the benefits of the expiration.' Furthermore, it stated that 'the presumption of the existing Supreme Court precedent does not align with the general principle of strictly interpreting the waiver of rights or benefits and imposes a burden on the debtor to overturn the presumption, thus placing them in a disadvantageous position.'
Accordingly, the Supreme Court stated, 'Whether a debtor has expressed an intention to waive the benefits of the expiration of the statute of limitations while being aware of it must be reasonably assessed in light of the overall circumstances of each individual case.'