Supreme Court: "The statute of limitations for the right to claim the return of entrusted items is 5 years from the date of delivery"

Hyundai Motor Supplier Lawsuit 2nd Trial Overturned and Remanded
Statute of Limitations Starts from Delivery, Not Contract Termination

Supreme Court, Seocho-dong, Seoul.

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The Supreme Court has ruled that the statute of limitations for the right to claim the return of deposited goods in a deposit contract, where the depositor entrusts the storage of goods, should be calculated from the time the goods are delivered.

This is the first time the Supreme Court has clarified when the starting point of the statute of limitations for the right to claim the return of deposited goods begins.

The Supreme Court's Third Division (then presided over by Justice Kim Jae-hyung) announced on the 13th that it overturned the lower court's ruling ordering the payment of over 2 billion won and interest in the final appeal of a lawsuit filed by Company A, which manufactures and supplies automotive exhaust gas catalysts to Hyundai Motor Company (hereinafter Hyundai Motor), against Company B, which processes the catalysts to manufacture and supply catalytic purification devices to Hyundai Motor, and remanded the case to the Seoul High Court.

The court stated, "The lower court's ruling contained an error in the legal principle regarding the starting point of the statute of limitations for the right to claim the return of deposited goods, and failed to conduct the necessary examination, which affected the judgment," as the reason for the reversal and remand.

Company A, which had signed a basic parts transaction contract with Hyundai Motor to manufacture and supply automotive exhaust gas catalysts, delivered 350,538 catalysts to Company B from 2012 to 2017 under Hyundai Motor's instructions.

However, Company A received payment only for 326,828 catalysts from Hyundai Motor and filed a lawsuit against Company B, demanding the return of 23,710 unused catalysts it had sent.

The claim was based on the fact that ownership of the unused remaining catalysts belonged to Company A, so Company B should return the goods or, if the goods were lost, compensate an amount equivalent to the value of the goods plus delay interest.

Additionally, Company A stated in the lawsuit that if a deposit contract entrusting the storage of the remaining catalysts processed into catalytic purification devices and supplied to Hyundai Motor by Company B was established, it was terminating that contract.

The key issue in the trial was when the statute of limitations for the right to claim the return of deposited goods, which Company A asserted for the excess catalysts delivered to Company B, should begin?that is, the starting point of the statute of limitations.

Previously, the first and second trials assumed that an implied deposit contract was established between the two companies for the remaining 19,840 catalysts. They regarded the date Company A terminated the deposit contract against Company B (after the lawsuit was filed) as the starting point of the statute of limitations, rejected Company B's statute of limitations defense, and concluded that Company B was responsible for returning the remaining catalysts or compensating approximately 2 billion won and interest for catalysts delivered over five years ago.

However, the Supreme Court's judgment differed.

The Supreme Court held that since the depositor can terminate the deposit contract at any time and claim the return of the deposited goods, the starting point of the statute of limitations for the right to claim the return of deposited goods should be considered the time when the deposit contract was established and the goods were delivered. It overturned the second trial's ruling, stating that Company B has no obligation to return goods delivered over five years ago. The court accepted Company B's statute of limitations defense.

The court explained, "The claim for the return of deposited goods following the termination of the deposit contract is naturally anticipated from the time the deposit contract is established. Since the depositor can terminate the contract and request the return of the deposited goods at any time under the deposit contract, unless there are special circumstances, the statute of limitations for the right to claim the return of deposited goods begins from the time the deposit contract is established and the goods are delivered to the depositary, not from the time the depositor terminates the deposit contract."

It continued, "The lower court should have examined when the deposit contract for the remaining catalysts in this case was established, when the remaining catalysts were delivered to the defendant, and whether the statute of limitations period had elapsed from that time, and then made a judgment on whether the statute of limitations was completed. However, the lower court, based on the incorrect premise that the starting point of the statute of limitations for the right to claim the return of deposited goods was the date of termination of the deposit contract, failed to examine these matters and simply concluded that the statute of limitations for the right to claim the return of deposited goods had not been completed," it pointed out.

This content was produced with the assistance of AI translation services.