Reimbursement of about KRW 60 million from a supplier in rehabilitation

Background

Our client bought solar equipment from a supplier and, at the supplier's request, exchanged a direct-payment consent under which our client would pay part of what the supplier owed the manufacturer directly to the manufacturer. The supplier, then in rehabilitation proceedings, later said direct payment was not possible and billed our client itself, and our client paid. The manufacturer then sued our client on the direct-payment consent and won, leaving our client paying twice for the same goods.

The issue

Whether our client, having assumed the supplier's debt and paid the manufacturer, could claim reimbursement from the supplier.

Our approach

Our client claimed reimbursement, and alternatively damages, pointing out that the supplier had proposed the direct payment in the first place and had deducted the amount our client already paid the manufacturer when billing our client.

The court's reasoning

The court noted that a party assuming a debt in substitution generally has difficulty claiming reimbursement. But because both bills concerned the same goods, the supplier had proposed the assumption, and it had deducted the direct payment when billing, the court found the supplier had agreed to bear the consequences and allowed reimbursement. It rejected the supplier's argument that the loss stemmed only from our client's handling of the rehabilitation claim.

Outcome

The court ordered the supplier to pay about KRW 59.81 million, the full principal claimed, plus late-payment interest; only the start date for interest was adjusted. The supplier was ordered to bear nine-tenths of the costs.

What this case means

A double payment arising from dealings with a party in rehabilitation can be corrected through reimbursement when the course of the transaction is proven.

This is the outcome of an individual case and does not guarantee the same result in similar matters. Some facts have been generalized to protect the parties involved.