The 944 billion won property division suit between Chey Tae-won, chairman of SK Group, and Roh Soh-yeong, director of Art Center Nabi, reaches its final crossroads on the 14th. If neither side files a further appeal by midnight that day (12 a.m. on the 15th), the appellate court's remand decision ordering Chey to pay 944 billion won to Roh as property division will be finalized. If either side objects, the property division dispute that began in 2017 will return to the Supreme Court.
The deadline for a further appeal is the same day because both sides received the written judgment at 12 a.m. on the 1st. In civil cases, an appeal to the Supreme Court must be filed within two weeks from the date the judgment is served. When the period starts at 12 a.m., the first day is included, so the period for a further appeal ends at midnight on the 14th.
The Seoul High Court's Family Division 1 (Presiding Judge Lee Sang-ju) on the 24th of last month ordered Chey to pay 944 billion won in cash to Roh as property division. Although that is 436.8 billion won less than the 1.3808 trillion won in the pre-remand appellate ruling, the decision to include SK Co. shares held by Chey in the division remained in place. The division ratio was set at two-thirds for Chey and one-third for Roh.
The court calculated the value of SK Co. shares as of Apr. 16, 2024, when the fact-finding hearing on the divorce claim ended, rather than at the close of arguments in the remand trial. It did not directly reflect subsequent stock price gains in the share value, considering them instead when setting the property division ratio.
◇ Even with a further appeal, it does not start "from scratch"
Even if a further appeal is filed, the issues the Supreme Court ruled on last year will not be re-tried from the beginning. In remand cases, the binding force of the prior Supreme Court ruling applies. The remand court must, in principle, follow the Supreme Court's factual and legal determinations that formed the grounds for reversal, and the Supreme Court, when reviewing the case again, is also bound by the same determinations.
The prior Supreme Court found fault with the appellate ruling that viewed 30 billion won, which it believed had been transferred from the side of former President Roh Tae-woo to the SK side, as Roh's contribution to forming the property. The remand court accordingly excluded the 30 billion won from calculating the property division ratio. If a further appeal is filed, the focus is expected to be less on reassessing the nature of the 30 billion won and more on whether the remand court properly reflected the Supreme Court's intent, and whether there are legal errors in viewing SK Co. shares as subject to division, in the timing of stock valuation, and in calculating the division ratio.
A party choosing to file a further appeal first submits a petition for appeal to the Seoul High Court. After the case record is sent to the Supreme Court, the party presents specific legal grounds for objection in a statement of reasons for appeal.
◇ If there is no further appeal, 944 billion won is finalized… 129.3 million won interest per day
If neither side further appeals, the legal dispute over the amount of property division itself ends. The remand court ordered payment of default damages at an annual 5% from the day after the judgment becomes final until the day the full amount is repaid. Based on 944 billion won, that is about 129.3 million won per day, or about 47.2 billion won per year.
Once the ruling is finalized, Roh can initiate compulsory execution using the final judgment as an enforcement title. However, the parties may also separately negotiate the timing and method of payment.
◇ "How will Chey Tae-won raise 944 billion won?" also draws attention
If the ruling is finalized, attention shifts to how Chey will raise 944 billion won. The most closely watched asset recently is the 29.39% equity in SK Siltron for which Chey's side holds economic rights through a total return swap (TRS).
SK Co. on the 31st of last month agreed to sell its 70.61% equity in SK Siltron to Doosan Co. for 2.3 trillion won. Applying the same transaction price simply, the value of Chey's side's equity would be about 958 billion won. However, the TRS principal of 253.5 billion won, financing costs, and taxes must be settled, and it is uncertain whether the same price would apply to a minority stake without management control. Even if the equity is sold, additional funding may be needed to cover the full property division payment.