A provisional attachment can be cancelled if you delay the main lawsuit

This guide is for foreign founders, managers and finance staff of companies in Korea who use a provisional attachment (가압류) to freeze a debtor's assets, and for debtors whose assets have been frozen. The rule: getting the attachment order is not the end of the process. The court can require security even when your evidence is good, the debtor can obtain an order giving you at least 2 weeks to file the main lawsuit, and the attachment can be cancelled if no main lawsuit is filed for 3 years after it is executed.

What the application must state and show

A provisional attachment is a court order that freezes a debtor's property so that a money claim can be enforced later. It does not decide whether the debtor owes the money. That is decided in a separate, ordinary lawsuit called the main lawsuit (본안의 소).

The Civil Execution Act (민사집행법) sets out what the creditor must do after the order, and how the attachment is cancelled if the creditor does not do it. This is where cancellation applications come from: a creditor applies for the attachment, then keeps putting off the main lawsuit.

Article 279(1) lists what the application must state:

• the claim, and if it is not a fixed sum of money, its amount converted into money
• the facts that are the grounds for the attachment under Article 277

Article 279(2) requires a prima facie showing (소명) of both the claim and the grounds for the attachment. A prima facie showing means making the facts look likely to the judge. It is a lighter standard than full proof.

Security can be required even when you have shown your case

Article 280 treats the showing and the security as separate questions:

• The court can decide on the application without a hearing (paragraph 1).
• Even if you have not shown the claim or the grounds, the court can order the attachment once you provide security set by the court (paragraph 2).
• Even if you have shown the claim and the grounds, the court can make you provide security and then order the attachment (paragraph 3).
• When security is provided, the attachment order must state that it was provided and how (paragraph 4).

Paragraph 3 is often misread in practice. Creditors who filed enough evidence expect to be excused from security, but the text says the court can require security even after a successful showing. Security makes up for gaps in the showing. It also covers the loss the debtor may suffer from an unjustified attachment.

Check in advance how you will provide it: by a cash deposit (현금공탁) or a surety insurance policy (보증보험증권). The Civil Execution Act itself does not set the deadline for complying with an order to provide security (담보제공명령), or the rate used to calculate the amount. Both come from court practice, so go by the period and amount in the decision you receive.

The order to sue: the debtor can move first

If you attach the assets and put off the main lawsuit, the debtor can apply for an order to sue (제소명령). Article 287 sets out how it works:

Paragraph 3 says the court must cancel. It has no discretion. The period is at least 2 weeks, so in practice you may get as little as 2 weeks. Within that time you must file the complaint and also submit proof of filing, which leaves almost no slack once the order arrives. That is why it is safer to prepare a draft complaint for the main lawsuit when you apply for the attachment.

Paragraph 4 is a second trap. If you file the lawsuit, submit the documents and later withdraw it, the law treats the documents as never submitted. If you consider withdrawing it as part of a negotiation, factor in that the attachment can be cancelled too.

Three grounds the debtor can use to cancel

Under Article 288(1), the debtor can apply to cancel the attachment on three grounds, even after the court has upheld it:

• the grounds for the attachment have ceased to exist, or circumstances have otherwise changed
• the debtor has provided security set by the court
• no main lawsuit has been filed for 3 years after the attachment was executed (carried out against the property)

For the third ground, an interested party (이해관계인) can also apply. The court that ordered the attachment decides the application, but if the main lawsuit is already pending, the court hearing it decides (Article 288(2)).

The second ground is the debtor's way out. By providing the security set by the court, the debtor can get free of the attachment. When real estate or bank accounts are frozen and the business has stalled, the debtor compares the cost of providing security with the business losses.

Related guides: payment order objections and the stamp duty correction order and contracts without a seal: validity and proof.

Checklist

• State the claim, converted into a money amount.
• Describe the facts that justify the attachment in concrete terms.
• Attach material showing the claim and the grounds for the attachment.
• Assume security may be required even after a good showing, and prepare the funds.
• Check the methods of providing security (cash deposit, surety insurance policy) in advance.
• Check that the attachment order states the security and how it was provided.
• Start the execution procedure as soon as you receive the decision.
• Draft the complaint for the main lawsuit at the same time as the attachment application.
• If you receive an order to sue, schedule the filing from the first day of the period.
• After filing the lawsuit, obtain the document proving it is pending and submit it.
• If you withdraw the lawsuit as part of a negotiation, factor in that the attachment can be cancelled too.
• Mark on your calendar the date 3 years after execution.
• Keep evidence that the claim still exists up to date, in case the debtor argues changed circumstances.
• Do not miss the deadline for an immediate appeal against a cancellation decision.
• After the dispute ends, take separate steps to cancel the security and recover it.