[Invest&Law] Will the ‘Choi-No Supreme Court Appeal’ Go to the Full Bench?

Many Complex Issues Burden 'Sobu'
If Referred, First Case of Property Division
"Supreme Court Has Not Clarified Position, Causing Confusion
Legal Stability May Be Undermined"

As the divorce lawsuit between Chey Tae-won, chairman of SK Group, and Noh So-young, director of Art Center Nabi, moves to the Supreme Court, attention is focused on whether the case will be referred to the full bench (en banc). Given the numerous legal points in dispute and the significant social attention, there is speculation that this could be the first divorce property division case to receive an en banc ruling.

If it is difficult for the four-justice petty bench to reach a unanimous decision or if there is a unanimous agreement that existing precedents need to be changed, the case can be referred to the full bench. The Chief Justice may also refer the case to the full bench ex officio, considering whether it is necessary to establish legal standards.

[Image source=Beomryul Newspaper]

Chairman Chey submitted a notice of appeal on the 20th to the Family Division 2 of the Seoul High Court (Presiding Judge Kim Si-cheol, Judges Kim Ok-gon and Lee Dong-hyun).

In the appeal trial, the key issues expected to be addressed include: whether the appellate court's recognition of Director Noh's contribution to SK Inc. shares and inclusion of those shares in the property division was appropriate; whether the appellate court's revision of the stock value of Daehan Telecom (later merged into SK) from 100 won per share to 1,000 won per share shortly before the death of former Chairman Chey in May 1998 was problematic; whether the 35% contribution recognized for Director Noh was appropriate; and whether the alimony of 2 billion won, described as the "highest amount ever," was excessive.

In particular, the recognition of Director Noh's claim that the slush funds of the late former President Roh Tae-woo were delivered to Chairman Chey's father, the late former Chairman Chey Jong-hyun, based on a memo and promissory note from Kim Ok-sook, the wife of former President Roh, is expected to be a significant issue. This is a key point in determining whether former President Roh's slush funds contributed to the growth of SK Inc.

Inside and outside the court, it is considered unlikely that the Supreme Court will conclude the case with a dismissal without review. Given the significant social impact and public interest, it would be burdensome for the Supreme Court to close the case without a detailed judgment. A "dismissal without review" is a system in civil, family, administrative, and patent appeal cases where the appeal is dismissed without further review if the grounds for appeal do not include violations of the Constitution, laws, Supreme Court precedents, or serious legal violations.

Regardless of which division the case is assigned to, it is expected to be a heavy burden for the justices. Some opinions suggest that it will be difficult to reach an agreement easily due to the large amount involved in the property division and the many complex issues, making it hard to view the case as a typical family matter.

According to legal newspaper reports, there has never been a case where the Supreme Court's full bench has ruled on property division. The petty bench has also never clearly settled its position.

On the other hand, property division disputes are increasing significantly in society. According to the Judicial Yearbook, in 2014, there were 750 first-instance rulings on property division, and 954 cases combined with divorce cases involving property division claims. In 2022, first-instance rulings on property division rose to 933, and combined cases with property division claims increased to 2,242. A representative example is the divorce and property division lawsuit of Smilegate founder and Chief Vision Officer (CVO) Kwon Hyuk-bin and his spouse.

This case is currently being tried in the Family Division 3 of the Seoul Family Court, where Kwon's spouse, Lee, is reportedly demanding half of the assets estimated at 5 to 6 trillion won. The expectation that disputes over property division will continue to increase is one reason for the heightened public interest in this case.

The Supreme Court has generally accepted the first and appellate court decisions in divorce and property division cases. It has not actively addressed issues on the borderline between facts and law, which has caused confusion when first and appellate court conclusions differ.

In the legal community, there are many calls for the Supreme Court to clearly state its legal position through this lawsuit. For example, whether parental contributions should be regarded as contributions by children needs to be legally clarified.

Regarding Chairman Chey's infidelity, the appellate court judged that "the main responsibility for the breakdown lies with Chairman Chey, who showed no respect for the sanctity of marriage and monogamy, which are specially protected by the Constitution." However, some criticize the court for emphasizing subjective values and traditional fault-based principles in marriage and divorce too much.

While many support the need for referral to the full bench, some argue that elements such as infidelity and presidential slush funds make the case inappropriate for en banc review, suggesting it is more likely to be concluded by the petty bench.

As a compromise, there is also speculation that the case might be resolved as a so-called "report case," where the opinions of all justices are unofficially gathered to reach a conclusion, which is then used as the basis for a petty bench ruling.

A former Supreme Court justice turned lawyer said, "The Supreme Court has never clearly stated its position on property division, so factual findings have often been confirmed as is, which has caused confusion and undermined legal stability. Especially since the first and appellate court rulings in this case are completely opposite and there are many important issues, the Supreme Court needs to declare 'what the law is.'"

On May 30, the Family Division 2 of the Seoul High Court ruled in the divorce appeal trial between Chairman Chey and Director Noh that "Chairman Chey shall pay Director Noh 2 billion won in alimony and approximately 1.38 trillion won in property division."

Park Su-yeon, Han Soo-hyun, Legal Newspaper Reporters

※This article is based on content supplied by Law Times.

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