{"id":345,"date":"2026-01-12T03:24:30","date_gmt":"2026-01-12T03:24:30","guid":{"rendered":"https:\/\/atlaw.kr\/en-blog\/?p=345"},"modified":"2026-05-03T08:41:57","modified_gmt":"2026-05-03T08:41:57","slug":"how-to-file-deposit-withdrawal-lawsuit-in-south-korea-winning-case","status":"publish","type":"post","link":"https:\/\/atlaw.kr\/en-blog\/how-to-file-deposit-withdrawal-lawsuit-in-south-korea-winning-case\/","title":{"rendered":"How to File Deposit Withdrawal Lawsuit in South Korea? Winning Case"},"content":{"rendered":"<p><!-- ATLAS_HREFLANG_START --><link rel=\"alternate\" hreflang=\"ko\" href=\"https:\/\/atlaw.kr\/kr-blog\/%ea%b3%b5%ed%83%81%ea%b8%88%ec%b6%9c%ea%b8%89%ec%b2%ad%ea%b5%ac%ea%b6%8c-%ed%99%95%ec%9d%b8%ec%9d%98-%ec%86%8c%eb%8a%94-%ec%96%b4%eb%96%bb%ea%b2%8c-%ec%a7%84%ed%96%89%ed%95%98%eb%82%98%ec%9a%94\/\" \/><link rel=\"alternate\" hreflang=\"en\" href=\"https:\/\/atlaw.kr\/en-blog\/how-to-file-deposit-withdrawal-lawsuit-in-south-korea-winning-case\/\" \/><link rel=\"alternate\" hreflang=\"x-default\" href=\"https:\/\/atlaw.kr\/kr-blog\/%ea%b3%b5%ed%83%81%ea%b8%88%ec%b6%9c%ea%b8%89%ec%b2%ad%ea%b5%ac%ea%b6%8c-%ed%99%95%ec%9d%b8%ec%9d%98-%ec%86%8c%eb%8a%94-%ec%96%b4%eb%96%bb%ea%b2%8c-%ec%a7%84%ed%96%89%ed%95%98%eb%82%98%ec%9a%94\/\" \/><!-- ATLAS_HREFLANG_END --><br \/>\n<!--\n============================================================\nAtlas Legal Blog HTML\nTopic: Confirmation of Right to Withdraw Deposit Money\nAuthor: Soyoung Park, Managing Partner\n============================================================\n--><\/p>\n<p><!-- ===== Schema Markup Start ===== --><\/p>\n<p><!-- Article Schema --><br \/>\n<script type=\"application\/ld+json\">{\"@context\": \"https:\/\/schema.org\", \"@type\": \"Article\", \"headline\": \"How to File a Lawsuit for Confirmation of Right to Withdraw Deposit Money in South Korea? A Winning Case in Construction Payment Disputes | Atlas Legal\", \"description\": \"When multiple creditors compete with provisional seizures, who is entitled to the deposited funds? Learn from a winning case where we successfully confirmed our client's right to withdraw deposit money in a construction subcontract payment dispute in South Korea.\", \"author\": {\"@type\": \"Person\", \"name\": \"Soyoung Park\", \"jobTitle\": \"Representative Attorney\", \"worksFor\": {\"@type\": \"LegalService\", \"name\": \"Atlas Legal\", \"url\": \"https:\/\/atlaw.kr\", \"address\": {\"@type\": \"PostalAddress\", \"addressLocality\": \"Incheon\", \"addressRegion\": \"Songdo\"}}, \"@id\": \"https:\/\/atlaw.kr\/soyoung-park\/#person\"}, \"publisher\": {\"@type\": \"Organization\", \"name\": \"Atlas Legal\", \"url\": \"https:\/\/atlaw.kr\", \"@id\": \"https:\/\/atlaw.kr\/#legalservice\"}, \"datePublished\": \"2025-01-12\", \"dateModified\": \"2025-01-12\", \"mainEntityOfPage\": {\"@type\": \"WebPage\"}, \"@id\": \"https:\/\/atlaw.kr\/en-blog\/how-to-file-deposit-withdrawal-lawsuit-in-south-korea-winning-case#article\", \"keywords\": []}<\/script><\/p>\n<p><!-- FAQ Schema --><br \/>\n<script type=\"application\/ld+json\">\n{\n    \"@context\": \"https:\/\/schema.org\",\n    \"@type\": \"FAQPage\",\n    \"mainEntity\": [\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What is a lawsuit for confirmation of right to withdraw deposit money in South Korea?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"A lawsuit for confirmation of right to withdraw deposit money is a legal action filed to determine who has the right to claim deposited funds when multiple provisional seizures or seizures compete against a claim. Under Korean Civil Execution Act, when a debtor deposits the full amount due to competing attachments, each creditor must prove the existence and scope of their secured claim to confirm their portion of the deposit.\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"Is an assignment of claim valid even if there is a non-assignment clause in South Korea?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"Under Korean law, even if there is a non-assignment clause, the assignment of claim is valid if the assignee did not know or had no gross negligence in not knowing about the clause. The debtor bears the burden of proving the assignee's bad faith or gross negligence (Supreme Court of Korea, Judgment 2000Da5336, 5343, January 24, 2003).\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What is the effect of a direct payment agreement under the Korean Subcontracting Act?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"Under Article 14 of the Fair Transactions in Subcontracting Act of Korea, when the project owner, prime contractor, and subcontractor agree on direct payment of subcontract fees, the project owner must pay the subcontractor directly regardless of whether the subcontractor requests it. When such grounds arise, the prime contractor's obligation to pay the subcontractor is extinguished to that extent.\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What should a project owner do when multiple provisional seizures compete in South Korea?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"When multiple provisional seizures compete against a claim in South Korea, the debtor (project owner) may deposit the full amount of the claim pursuant to Articles 291 and 248(1) of the Civil Execution Act. 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What Is a Lawsuit for Confirmation of Right to Withdraw Deposit Money?<\/a><\/li>\n<li><a href=\"#section2\">2. Is an Assignment of Claim Valid Despite a Non-Assignment Clause?<\/a><\/li>\n<li><a href=\"#section3\">3. What Is the Effect of a Direct Payment Agreement Under the Subcontracting Act?<\/a><\/li>\n<li><a href=\"#section4\">4. What Is the Procedure for a Deposit Withdrawal Right Confirmation Lawsuit?<\/a><\/li>\n<li><a href=\"#section5\">5. What Are the Key Strategies for Winning This Type of Case?<\/a><\/li>\n<li><a href=\"#section6\">6. FAQ<\/a><\/li>\n<\/ul><\/div>\n<p>    <!-- Story Hook (50-80 words) --><\/p>\n<div class=\"story-hook\" style=\"padding: 15px 20px; margin-bottom: 15px; border-radius: 0; background-color: #f5f5f5;\">\n<p><strong>Real Case:<\/strong> A major construction project worth approximately KRW 20 billion was completed, but six creditors were competing for the subcontractors&#8217; construction payment claims through provisional seizures. The local government that ordered the project deposited approximately KRW 200 million, and our client\u2014even while in bankruptcy proceedings\u2014needed to protect their right to the deposit. How did we successfully confirm approximately KRW 55 million in rights amidst this complex web of claims?<\/p>\n<\/p><\/div>\n<p>    <!-- Key Answer (40-60 words) --><\/p>\n<div class=\"direct-answer\" style=\"padding: 15px; border-radius: 0; margin-bottom: 20px; font-weight: 500; background-color: #f5f5f5;\">\n        <strong>Key Answer:<\/strong> Under Articles 291 and 248(1) of the Korean Civil Execution Act, when execution deposit is made, each creditor must establish the scope of their secured claim through a lawsuit for confirmation of right to withdraw deposit money. The key to winning is comprehensively analyzing the validity of claim assignments, the scope of debt extinguishment through direct payment agreements, and accurately calculating the exact claim amount. In this case, our legal team organized the complex credit relationships and successfully confirmed our client&#8217;s rights.\n    <\/div>\n<p>    <!-- Story Development (100-150 words) --><\/p>\n<div class=\"story-detail\" style=\"padding: 20px; border-radius: 0; margin: 20px 0; background-color: #f5f5f5;\">\n<h3>How Did We Resolve the Competition Among Six Creditors?<\/h3>\n<p class=\"disclaimer\">\u203b This case is based on an actual winning case. Some facts have been modified for clarity, and the client&#8217;s personal information has been protected.<\/p>\n<p>Around 2018, a local government in South Korea ordered a food waste recycling facility construction project worth approximately KRW 20 billion. The prime contractor, Company A, subcontracted to Companies C and D, and Company C further subcontracted to Company B Engineering, Company E Steel, and Company F Aggregates for material supply and sub-subcontracting. Problems became complicated when Company A entered bankruptcy proceedings. Each creditor either received assignment of claims against the local government or filed provisional seizures, and in April 2020, the local government deposited approximately KRW 200 million. Our legal team meticulously analyzed the validity of claim assignment agreements, the scope of debt extinguishment through direct payment agreements, and the amount of secured claims for each creditor. In January 2023, we obtained a judgment confirming our client&#8217;s right to approximately KRW 55 million of the deposit. The following sections detail the legal issues and winning strategies in this case.<\/p>\n<\/p><\/div>\n<p>    <!-- Main Content Sections --><br \/>\n    <\/p>\n<h2 id=\"section1\">1. What Is a Lawsuit for Confirmation of Right to Withdraw Deposit Money?<\/h2>\n<h3>Key Answer<\/h3>\n<p>A lawsuit for confirmation of right to withdraw deposit money is a legal action to obtain court confirmation of who has the right to claim deposited funds when multiple provisional seizures or seizures compete against a claim and the debtor deposits funds pursuant to the Korean Civil Execution Act. Through this lawsuit, each creditor can establish the amount attributable to them from the deposited funds.<\/p>\n<h3>Legal Basis for Execution Deposit<\/h3>\n<p>Article 291 of the Korean Civil Execution Act applies Article 248 to provisional seizures on claims. Article 248(1) provides that &#8220;a third-party debtor may deposit the full amount of the seized claim.&#8221; Therefore, when multiple provisional seizures compete, the third-party debtor (in this case, the local government as project owner) can be discharged from payment obligations by depositing the full amount of the claim.<\/p>\n<h3>Requirement of Interest in Confirmation<\/h3>\n<p>For a lawsuit for confirmation of right to withdraw deposit money to be proper, there must be an interest in confirmation. According to the Supreme Court of Korea Judgment 2009Da93299 (February 25, 2010), an interest in confirmation is recognized when there is a dispute between parties regarding the subject legal relationship, when the plaintiff&#8217;s legal status is uncertain or at risk due to that dispute, and when a declaratory judgment is the most effective and appropriate means to eliminate that uncertainty or risk. In this case, since the other defendants were disputing the plaintiff&#8217;s right to withdraw the portion of the deposit claimed, an interest in confirmation was recognized.<\/p>\n<p><\/p>\n<h2 id=\"section2\">2. Is an Assignment of Claim Valid Despite a Non-Assignment Clause?<\/h2>\n<h3>Key Answer<\/h3>\n<p>Even if there is a non-assignment clause, the assignment of claim is valid if the assignee did not know or had no gross negligence in not knowing about the clause. The debtor bears the burden of proving the assignee&#8217;s bad faith or gross negligence.<\/p>\n<h3>Position of the Supreme Court of Korea<\/h3>\n<p>According to the Supreme Court of Korea Judgment 2000Da5336, 5343 (January 24, 2003), a debtor may assert a non-assignment clause against an assignee who knew of its existence or had gross negligence in not knowing. &#8220;Gross negligence&#8221; here means that even without exercising the degree of due care ordinarily required, the existence of the clause could easily have been discovered with minimal attention, yet such minimal attention was not given to discover it.<\/p>\n<h3>Application in This Case<\/h3>\n<p>In this case, it was alleged that there was a non-assignment clause regarding the construction payment claim between the prime contractor and subcontractors. However, there was no argument or proof that the claim assignees knew of such non-assignment clause or failed to know due to gross negligence. Therefore, the court determined that the claim assignment agreements could not be deemed invalid.<\/p>\n<p><\/p>\n<h2 id=\"section3\">3. What Is the Effect of a Direct Payment Agreement Under the Subcontracting Act?<\/h2>\n<h3>Key Answer<\/h3>\n<p>Under Article 14 of the Fair Transactions in Subcontracting Act of Korea, when the project owner, prime contractor, and subcontractor agree on direct payment of subcontract fees, the prime contractor&#8217;s obligation to pay the subcontractor is extinguished to the extent of the agreed amount.<\/p>\n<h3>Legal Effect of Direct Payment Agreement<\/h3>\n<p>According to Article 14(1)(2) and (2) of the Fair Transactions in Subcontracting Act in effect at the time of this case, when the project owner, prime contractor, and subcontractor agree to pay subcontract fees directly to the subcontractor, the project owner must pay the subcontractor directly regardless of whether the subcontractor requests it. When such grounds arise, the project owner&#8217;s payment obligation to the prime contractor and the prime contractor&#8217;s subcontract fee payment obligation to the subcontractor are deemed extinguished within that scope.<\/p>\n<h3>Application in This Case<\/h3>\n<p>In this case, around October 2019, Company A (prime contractor), Company C (subcontractor), and Company E Steel (sub-subcontractor) reached a direct payment agreement for sub-subcontract payment of approximately KRW 36 million. According to Supreme Court of Korea Judgment 2007Da50717 (November 29, 2007), once a direct payment agreement is established, the project owner&#8217;s payment obligation to the prime contractor and the prime contractor&#8217;s subcontract fee payment obligation to the subcontractor are extinguished to the extent of the agreed amount, even before the subcontractor requests direct payment. Therefore, in this case, the portion of approximately KRW 36 million under the direct payment agreement was extinguished around October 2019, which was before the claim assignment notice arrived. Thus, the prime contractor could assert this debt extinguishment effect against the claim assignee.<\/p>\n<p><\/p>\n<h2 id=\"section4\">4. What Is the Procedure for a Deposit Withdrawal Right Confirmation Lawsuit?<\/h2>\n<h3>Key Answer<\/h3>\n<p>A lawsuit for confirmation of right to withdraw deposit money is filed against all creditors disputing rights to the deposit to confirm the scope of one&#8217;s withdrawal right. The court comprehensively examines the existence and scope of each secured claim, the validity of claim assignments, and grounds for debt extinguishment.<\/p>\n<h3>Standing to Sue<\/h3>\n<p>In a lawsuit for confirmation of right to withdraw deposit money, the plaintiff is the party claiming the right to withdraw the deposit, and the defendants are other creditors claiming rights to that deposit. In this case, the plaintiff was the bankruptcy trustee, and the defendants were six creditors who had provisionally seized the deposit (Company B Engineering, Mr. Kim, Company F Aggregates, Company E Steel, Company C Construction, and Company D Construction).<\/p>\n<h3>Determination of Proper Lawsuit<\/h3>\n<p>In this case, the court dismissed the claims against some defendants (Company C Construction and Company D Construction). The reason was that these defendants were not disputing the plaintiff&#8217;s right to withdraw the deposit. In a declaratory action, an interest in confirmation is recognized when there is a dispute between parties regarding the subject legal relationship and the plaintiff&#8217;s legal status is uncertain or at risk. Requests for confirmation against parties with whom there is no dispute are improper due to lack of interest in confirmation.<\/p>\n<h3>Calculation of Claim Amount<\/h3>\n<p>To determine the scope of the right to withdraw deposit money, one must accurately calculate the scope of claims transferred under each claim assignment agreement, the scope of debts extinguished by direct payment agreements, and other grounds for payment or deduction. From practical experience handling numerous similar cases, in complex construction disputes, it is crucial to organize the flow of construction payments in diagrams and clearly identify the timing of each claim assignment and direct payment agreement.<\/p>\n<p><\/p>\n<h2 id=\"section5\">5. What Are the Key Strategies for Winning This Type of Case?<\/h2>\n<h3>Key Answer<\/h3>\n<p>To win a lawsuit for confirmation of right to withdraw deposit money, one must prove the validity of the claim assignment agreement, identify the exact scope of the assigned claim, and accurately calculate the claim amount after deducting portions extinguished by direct payment agreements or other reasons.<\/p>\n<h3>Interpretation of Claim Assignment Agreement<\/h3>\n<p>In this case, the claims subject to the assignment agreement were &#8220;claims for a certain amount of the HVAC, sanitary, and fire protection equipment material supply payments to be generated currently or in the future.&#8221; The court interpreted &#8220;HVAC, sanitary, and fire protection equipment material supply payments&#8221; as meaning the portion with the character of payment for materials that the subcontractor procured and supplied to the construction site. Therefore, the amount that the prime contractor paid by subrogating the subcontractor&#8217;s wage obligations (which has the character of labor costs) was determined not to be included in the assigned claims.<\/p>\n<h3>Identifying the Timing of Debt Extinguishment<\/h3>\n<p>The conclusion differs depending on whether the debt extinguishment effect from the direct payment agreement occurred before or after the arrival of the claim assignment notice. In this case, the direct payment agreement was made around October 2019, and the claim assignment notice arrived on November 2, 2019. Therefore, the debt extinguishment effect from the direct payment agreement had already occurred before the arrival of the claim assignment notice, so the prime contractor could assert this against the claim assignee.<\/p>\n<h3>Final Claim Amount Calculation<\/h3>\n<p>In this case, our legal team calculated the claim amount as follows. First, from the total amount of the first subcontract payment, we deducted the amounts already paid, the amounts extinguished through the direct payment agreement, and the labor cost portions excluded from the scope of the claim assignment. As a result, we determined the remaining balance as approximately KRW 25 million for Company B Engineering, approximately KRW 72 million for Mr. Kim and Company F Aggregates, and approximately KRW 34 million for Company E Steel. After deducting these from the total deposit amount, we obtained confirmation of the plaintiff&#8217;s right to withdraw approximately KRW 55 million of the deposit.<\/p>\n<p>    <!-- FAQ Section --><br \/>\n    <\/p>\n<h2 id=\"section6\">6. FAQ<\/h2>\n<div class=\"faq-section\" style=\"padding: 20px; border-radius: 0; margin: 30px 0; background-color: #f5f5f5;\">\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q1. What is a lawsuit for confirmation of right to withdraw deposit money in South Korea?<\/div>\n<div class=\"faq-answer\">A. A lawsuit for confirmation of right to withdraw deposit money is a legal action filed to determine who has the right to claim deposited funds when multiple provisional seizures or seizures compete against a claim. Under the Korean Civil Execution Act, when a debtor deposits the full amount due to competing attachments, each creditor must prove the existence and scope of their secured claim to confirm their portion of the deposit.<\/div>\n<\/p><\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q2. Is an assignment of claim valid even if there is a non-assignment clause in South Korea?<\/div>\n<div class=\"faq-answer\">A. Under Korean law, even if there is a non-assignment clause, the assignment of claim is valid if the assignee did not know or had no gross negligence in not knowing about the clause. The debtor bears the burden of proving the assignee&#8217;s bad faith or gross negligence (Supreme Court of Korea, Judgment 2000Da5336, 5343, January 24, 2003).<\/div>\n<\/p><\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q3. What is the effect of a direct payment agreement under the Korean Subcontracting Act?<\/div>\n<div class=\"faq-answer\">A. Under Article 14 of the Fair Transactions in Subcontracting Act of Korea, when the project owner, prime contractor, and subcontractor agree on direct payment of subcontract fees, the project owner must pay the subcontractor directly regardless of whether the subcontractor requests it. When such grounds arise, the prime contractor&#8217;s obligation to pay the subcontractor is extinguished to that extent.<\/div>\n<\/p><\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q4. What should a project owner do when multiple provisional seizures compete in South Korea?<\/div>\n<div class=\"faq-answer\">A. When multiple provisional seizures compete against a claim in South Korea, the debtor (project owner) may deposit the full amount of the claim pursuant to Articles 291 and 248(1) of the Civil Execution Act. Once deposited, the debtor is discharged from liability, and each creditor must file a lawsuit for confirmation of right to withdraw deposit money to establish the scope of their rights.<\/div>\n<\/p><\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q5. What must be proven to win a lawsuit for confirmation of right to withdraw deposit money?<\/div>\n<div class=\"faq-answer\">A. To win a lawsuit for confirmation of right to withdraw deposit money in South Korea, you must prove the existence of your secured claim, the validity of the assignment of claim agreement, proper delivery of the assignment notice, and the scope of the assigned claim. If there are portions extinguished by direct payment agreements or other reasons, you must accurately calculate the remaining amount after deduction.<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>    <!-- Experience Statement --><\/p>\n<p>Atlas Legal, based in Songdo, Incheon, provides legal services in construction disputes, debt recovery, and deposit-related litigation. Drawing on our extensive experience handling numerous construction payment disputes, we systematically analyze even complex multi-party credit relationships to effectively protect our clients&#8217; rights.<\/p>\n<p class=\"disclaimer\" style=\"margin: 20px 0;\">\u203b The case introduced in this article is based on an actual winning case. Some facts have been modified for clarity, and the client&#8217;s personal information has been protected.<\/p>\n<p>    <!-- Author: Soyoung Park --><\/p>\n<div class=\"author-box\" style=\"background-color: #f8f9fa; padding: 20px; border-radius: 0; margin-top: 30px; border-left: 2px solid #722f37;\">\n<h3>About the Author<\/h3>\n<div class=\"author-name\">Soyoung Park | Managing Partner<\/div>\n<div class=\"author-info\">Attorney specializing in Family Law, Inheritance, and Real Estate Disputes<\/div>\n<div class=\"author-info\">33rd Class, Judicial Research and Training Institute<\/div>\n<div class=\"author-info\">LL.B., Korea University School of Law<\/div>\n<p>        <a href=\"https:\/\/        \n\n<div class=\"author-info\">Atlas Legal | Incheon Songdo, South Korea<\/div>\n<p>        atlaw.kr&#8221; target=&#8221;_blank&#8221; rel=&#8221;noopener noreferrer&#8221;>Visit Atlas Legal Website<\/a>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Table of Contents 1. What Is a Lawsuit for Confirmation of Right to Withdraw Deposit Money? 2. Is an Assignment of Claim Valid Despite a Non-Assignment Clause? 3. What Is the Effect of a Direct Payment Agreement Under the Subcontracting Act? 4. What Is the Procedure for a Deposit Withdrawal Right Confirmation Lawsuit? 5. What&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kadence_starter_templates_imported_post":false,"_kad_post_transparent":"default","_kad_post_title":"default","_kad_post_layout":"default","_kad_post_sidebar_id":"","_kad_post_content_style":"default","_kad_post_vertical_padding":"default","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[223,15],"tags":[345,344,343,347,346],"class_list":["post-345","post","type-post","status-publish","format-standard","hentry","category-corporate-disputes","category-corporate","tag-assignment-of-claim","tag-construction-dispute-south-korea","tag-deposit-withdrawal-right","tag-provisional-seizure","tag-subcontracting-act"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to File Deposit Withdrawal Lawsuit in South Korea? 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