Sued in Korea: What a Foreign Company Should Do After Receiving a Korean Complaint

A Korean complaint can arrive at a foreign company in several ways: through a Korean branch, through its home country’s central authority under the Hague Service Convention, or as a stack of Korean-language papers handed to its local office. However it arrives, Korean deadlines start running at once. The answer is generally due within 30 days, and some documents, such as a payment order, become final within just two weeks if not challenged. Jurisdiction and arbitration objections are lost if not raised at the start. This article explains how service works, which deadlines matter, and what a foreign company should do in the first weeks.

1. How a Korean Complaint Reaches a Foreign Company

Through a presence in Korea

• If the company has a Korean branch or a registered Korean representative, the court can serve the complaint there. For a branch, the clock can start running as soon as the branch receives the papers, even if head office learns of it later.
• A Korean subsidiary is a separate legal entity. Serving the subsidiary is not generally service on the parent, but subsidiaries often receive papers addressed to the parent and should be told to forward them immediately.

Service abroad

• If the company has no Korean presence, the Korean court sends the complaint abroad, usually through the Hague Service Convention central authority in the company’s country, or under a bilateral judicial assistance treaty. This typically takes several months.
• The papers usually come with a translation into the language of the destination country.

Service by publication

• If service abroad fails or is impossible, the Korean court can, after certain conditions are met, use service by publication. The case can then proceed without the company ever actually receiving the papers.

Key takeaway: Make sure every group company and office knows that any Korean court document must be sent to legal immediately, together with the envelope and the date of receipt.

2. The Deadlines That Matter

Document	Deadline	Consequence of missing it
Complaint	Answer within 30 days of service	The court can issue a judgment without a hearing in the plaintiff’s favor
Payment order	Objection within 2 weeks of service	The order becomes final and enforceable, like a judgment
First-instance judgment	Appeal within 2 weeks of service of the judgment	The judgment becomes final
Provisional attachment order	No fixed deadline to object, but act quickly	Your assets or receivables stay frozen

Notes on the 30-day answer deadline

• The judgment without a hearing can be avoided if an answer contesting the claim is filed before the judgment is issued, even after 30 days. Do not rely on this. File on time.
• It does not apply where the company was served by publication. In that case, the plaintiff must still prove its claim, but a judgment can follow without the company’s participation.

Payment orders: the most dangerous document

• A payment order is a simplified procedure for money claims. The court issues it based only on the creditor’s application, without hearing the debtor.
• A short written objection within two weeks turns it into an ordinary lawsuit. If no objection is filed, it becomes final, and the creditor can enforce it.
• Foreign companies often mistake payment orders for ordinary letters.

3. The First 30 Days: Action Plan

① Record the service date (day 1)

• Note exactly when and how the papers were received, and keep the envelope. Every deadline depends on it.

② Engage Korean counsel (week 1)

• All filings must be in Korean, and in practice a corporation needs a Korean lawyer to act in court.
• Share the complaint, all contracts and correspondence with the plaintiff, and the history of the dispute.

③ Prepare corporate documents (weeks 1–3)

• Power of attorney for Korean counsel, signed by an authorized representative
• Evidence of the company’s existence and the signatory’s authority, such as a certificate of incorporation or good standing and a board resolution
• These usually need notarization and an apostille, plus Korean translations. Start immediately, because this often takes longest.

④ Assess jurisdiction and arbitration (weeks 1–2)

• Check the contract for arbitration and choice of court clauses. See Section 4.

⑤ Check for asset freezes (week 1)

• Ask Korean customers, banks, and the subsidiary whether they have received any provisional attachment order. See Section 6.

⑥ Preserve evidence (week 1)

• Issue a litigation hold: stop routine deletion of emails and files related to the dispute.

⑦ Notify insurers (week 1)

• Check liability, product liability, or D&O policies, and notify insurers promptly.

⑧ File the answer (by day 30)

• If there is not enough time for a full answer, file a short answer denying the claims, with any jurisdiction or arbitration objections, and follow up with detailed briefs.

4. Jurisdiction and Arbitration Objections: Raise Them First

Arbitration clause

• If the contract contains an arbitration agreement, the company can ask the Korean court to dismiss the lawsuit.
• Under Korea’s Arbitration Act, this objection must be raised no later than the company’s first statement on the merits. Arguing the merits first can waive the right to arbitrate.

Choice of court clause

• An exclusive foreign jurisdiction clause can also lead to dismissal, if it is valid under Korean law. Raise it at the start.

Lack of international jurisdiction

• Under Korea’s amended Act on Private International Law (2022), Korean courts can hear claims against foreign companies on several grounds, for example where the company has a business office in Korea and the dispute relates to it, where the contract was to be performed in Korea, or where a tort occurred or caused harm in Korea.
• If none applies, contest jurisdiction in the first answer. A defendant that argues the merits without objecting can be treated as having accepted Korean jurisdiction.

Key takeaway: Decide on jurisdiction and arbitration strategy before anything is said about the merits, including in the first answer and any early hearing.

5. Preparing the Answer

A Korean answer typically includes:

• a statement of whether the company admits or denies each claim
• objections to jurisdiction, arbitration, or standing, if any
• a short summary of the company’s position
• a list of supporting evidence, where available

Korea has no US-style discovery. Each party mainly relies on its own documents. The court can order a party to produce specific documents, and can ask third parties for information, but the company should assume it needs to prove its own case with its own records. Collect key contracts, emails, invoices, and technical documents early, and have them translated.

6. If the Plaintiff Has Already Frozen Your Assets

Korean plaintiffs often obtain a provisional attachment before or at the same time as filing suit, without notice to the defendant. Common targets are:

• receivables owed by Korean customers to the foreign company
• deposits in Korean bank accounts
• shares in a Korean subsidiary

Options include:

• Objection to the attachment, arguing there was no valid claim or no urgency
• Order to file the main action, if the plaintiff has frozen assets without suing
• Release by deposit: depositing the amount set by the court to release the assets, which is often useful when frozen receivables are disrupting customer relationships
• Damages for wrongful attachment, if the plaintiff later loses

7. Parallel Criminal Complaints

In commercial disputes, Korean counterparties sometimes file a criminal complaint alongside the civil suit, for example alleging fraud or breach of trust, to increase pressure.

• Criminal complaints can involve police questioning of the company’s Korean staff or representatives, and possibly exit bans on individuals during an investigation.
• Coordinate the civil defense with the response to any criminal complaint. Statements made in one proceeding can be used in the other.

8. What Happens After the Answer

• Hearings: the court sets a schedule of written briefs and hearings. A first-instance case commonly takes around a year, longer for complex cases.
• Mediation: Korean courts frequently refer commercial cases to court-annexed mediation, which can resolve disputes faster.
• Appeal: the losing party can appeal within two weeks of receiving the judgment. Korea’s appeal court reviews both facts and law, so the case is effectively reheard.
• Costs: the losing party generally pays court costs and a portion of the winner’s attorney fees, calculated under court rules, usually well below actual fees.

9. Why Ignoring a Korean Lawsuit Is Costly

• A default judgment or final payment order can be enforced against Korean assets immediately: receivables, bank accounts, shares in the Korean subsidiary, and goods in Korea.
• A Korean judgment may also be recognized and enforced abroad, depending on the laws of the company’s home country.
• Challenging a judgment after it becomes final is much harder than defending the case in the first place.

10. Conclusion

When a foreign company is sued in Korea, the key steps come in the first 30 days: record the service date, engage Korean counsel, prepare the notarized and apostilled corporate documents, decide whether to object to jurisdiction or invoke arbitration before saying anything on the merits, check for asset freezes, and file the answer on time. A payment order demands even faster action: an objection within two weeks.

Companies that respond promptly can often move the dispute to arbitration, have the claim dismissed, or negotiate a settlement from a position of strength. Companies that wait can find their Korean receivables frozen and a judgment issued before head office has read the complaint.