Claim No: CL-2024-000563 - [2025] EWHC 1586 (Comm)

It was common ground that the effect of a corporate succession of a company incorporated in a foreign jurisdiction on an English law contract to which the pre-succession entity was a party is determined by the law of the company’s domicile (Dicey, Morris & Collins (16^th), [30-030]). In reported cases (including all those cited in the relevant footnote of Dicey) that principle has been applied in the context of universal succession. The effect of “partial succession”, where the original entity remains in being, does not appear to have been addressed in English case law – certainly, none that I was referred to.

I can see no reason in principle why the same approach should not be adopted where the effect of a statute in the law of a company’s domicile is that a new company formed as part of the relevant act of restructuring succeeds to only part of the “estate” of its predecessor. As I have noted, the same Korean legislation here covers both possibilities, and it is clear that other legal systems recognise “spin offs” both where the original company survives and where it does not (see for example s.123 of the German Transformation Act of 28 October 1994 (Federal Law Gazette I p. 3210; 1995 I p. 428)). In this case, the description of both experts as to the effect of partial succession under the Korean Commercial Act is to involve, in effect, the continuation of that part of the predecessor’s identity which pertains to the transferred business units. The “partial succession” by operation of statute in this case has much more in common with a universal succession, than where specific rights or liabilities are transferred from one existing entity to another, through the consent of both and/or any obligor. I accept that there may be cases where the continued existence of the original entity is of significance under English law (see, for example, Central Latino Americano de Commercio Exterior SA v Owners of the Kommunar (The Kommunar (No 2) [1997] 1 Lloyd’s Rep 8,and s.21(4) of the-then Supreme Court Act 1981). I am not persuaded that this is one of them.

I can see no reason why a partial succession of the kind under consideration here should be treated differently from a universal succession for conflicts of law purposes, and, in any event, it was not clear to me what alternative conflict rule might be applied. To treat reconstructions under statutes of this kind, which will generally involve succession to a whole host of property rights, assets and liabilities and employment relationships, as akin to assignments for the purposes of conflicts analysis seems fundamentally inconsistent with the non-consensual nature of the legal mechanisms in play.

Ms Morgan also relied upon a number of statements in English cases that the effect of universal succession is that the successor company “continues the personality of another” (Metliss v National Bank of Greece [1957] 2 QB 33, 51) and that “the successor is treated as the same person to whom he succeeds” (Eurosteel Ltd v Stinnes AG [2000] 1All ER (Comm), 964, 969). I accept that some caution is required in applying those expressions in the content of a partial succession, but I accept that they remain broadly correct within the scope of the partial transfer, and that is essentially how Mr Lee and Mr Yoo explained the position under Korean law (see [35]).