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

The email stated:

“As you may have heard from the newspapers/news, we plan to spin off the company on June 3, 2019 and establish a new ‘Hyundai Heavy Industries Co Ltd’ ….

We are sending you a notice of succession of contractual status following the spin-off so please refer to the attached notice and confirm receipt by providing your electronic signature on HiPro”.

The email forwarded an email from Mr Lee Sang-Geun, a manager in the Integrated Purchasing Division Marine Plant Purchasing Team headed “Hyundai Heavy Industries Spin-off Notice / HiPro / Electronic Signature Request” addressed to “Representative Director of Partner Company”. This provided:

“1.

We wish your company prosperity.

2.

We plan to spin-off and establish a new “Hyundai Heavy Industries Co., Ltd.” on June 3, 2019.

3.

In this regard, we are sending you a notice of succession of contractual status following the spin-off as set forth in the attachment hereto, so please refer to the attachment and confirm your receipt by providing your electronic signature.

* Electronic signature path: Company information management - electronic registration / submission documents

* Attachment: Notice of Succession of Contractual Status Following the Spin-off of the Company.”

The email attached a document entitled “Notice of Succession of Rights and Obligations Pursuant to Spin-Off” (“the April 2019 Notice”) which stated:

“We are writing to notify you that Hyundai Heavy Industries Co., Ltd. (the “Company” or “we”) plans to vertically spin-off (the “Spin-off”) practically all of our operational businesses (including shipbuilding, special vessels, offshore & engineering and industrial plant, and engine machinery businesses (collectively, the “Spin-off Business”)) to a new wholly-owned subsidiary, which will engage in the same line of businesses with the same employees, know-how, technique and facilities. We plan to name this subsidiary Hyundai Heavy Industries Co., Ltd. (“NewCo”). Upon completion of the Spin-off, we will function as an intermediary holding company of the subsidiaries engaged in the shipbuilding, special vessels, offshore & engineering and industrial plant, and engine machinery businesses within the Hyundai Heavy Group. We plan to rename ourselves, tentatively, Korea Shipbuilding & Marine Engineering Co., Ltd. (“SurvivingCo”). The plan for the Spin-off (the “Spin-off Plan”) was duly approved by our board on March 8, 2019. The tentative timeline of the Spin-off is as follows: - March 8, 2019: Board of Directors approved the Spin-off Plan - May 31, 2019: General meeting of shareholders to approve the Spin-off Plan - June 3, 2019: Court registration of the Spin-off (the “Effective Date”) Please be advised that, pursuant to the Spin-off, all of our existing rights and obligations under all of your contract(s)(together with any extensions, renewals, amendments, modifications and ancillary agreements thereto, collectively, the “Contracts”) with us, will, as of the Effective Date, be comprehensively transferred to and assumed by NewCo by operation of Korean law, and that the personnel in charge of the matters related to the Contracts will not change after the Spin-off.

Following the Spin-off, pursuant to the Korean Commercial Code and the Spin-off Plan, SurvivingCo and NewCo will remain jointly and severally liable for all of our existing obligations under all Contracts entered into with you prior to the Spin-off. As such, the Spin-off will not result in any change or cause any issues in relation to NewCo’s performance of such obligations under the Contracts.”

It is not entirely clear to me whether the April 2019 Notice originally provided for Mr Park to sign the document as the representative director of Energyen, or whether Mr Park’s name as the signatory as well as his electronic signature were applied at the Energyen end. While Mr Park suggests the former, I cannot see how on his own evidence he would have seen the April 2019 Notice in its pre-electronically signed form. Whichever was the case, an acknowledgement of the notice was signed on HiPro using Mr Park’s electronic signature.

Mr Park’s evidence is that the signature was affixed by the Senior Sales Manager, Mr Jeong who he described as part of middle management. Mr Park’s evidence is that he would not have expected the April 2019 Notice to have been reported to him because it was not significant, and that Mr Jeong’s superior Mr Kang had later advised Mr Park (after the present disputed emerged) that Mr Jeong had not told him about this either. In oral evidence, Mr Park said he had spoken to Mr Jeong (who no longer worked for the company) who also said he had not told Mr Park about this. Neither Mr Kang nor Mr Jeong provided statements.

The giving of the April 2019 Notice and the acknowledgement of receipt did not bind Energyen to a new contract. It was common ground between the Korean law experts that the Spin-Off plan, once adopted was automatically binding on Energyen, regardless of notice or consent.

The Supply Contract contained an outstanding latent defect warranty, and, in any event, a few months before there had been a further purchase order for the provision of additional services in relation to the same project on the same terms as the Supply Contract. The notice was, therefore, of a matter of potential significance to Energyen.

Mr Lee Sang-Geun’s email was addressed to “Representative Partner Director of Partner Company” and provided for a signature by “a representative director” (and indeed on Mr Park’s evidence, by him personally). That should have caused it to be treated as a communication of some significance.

The email specifically sought an electronic signature on the HiPro system to confirm receipt of the notice. Mr Jeong did not ignore the email, but acknowledged receipt, and did so using Mr Park’s signature block. The use of Mr Park’s signature block signing as a “representative director” once again objectively suggested that the document was intended to be, and was treated as being, of some significance.

While Mr Park says he does not believe he was asked about the April 2019 Notice at the time, he confirmed that had the matter been raised with him, he would not have regarded it as of any great import.

At this distance of time, I am not persuaded that Mr Park has any present recollection of an event which it appears he would not have regarded as important at the time, nor do I feel able to rely on his hearsay as to what Mr Kang and Mr Yeong may have said so long after the event, and after the dispute had arisen.

In any event, whether or not Mr Jeong spoke to Mr Park, I am satisfied that Mr Jeong’s knowledge is attributable to Energyen for the purpose of fixing it with the knowledge of the Spin-Off for the purposes of the administration of the Supply Contract. Mr Jeong had been entrusted with the Energyen authorisation details for accessing HiPro. It has not been suggested that in taking the steps that he did, Mr Jeong exceeded his authority, nor that Mr Jeong acted inappropriately in acknowledging receipt in Mr Park’s name. In these circumstances, there is no reason to conclude that in acknowledging receipt of the April 2019 Notice in Mr Park’s name, Mr Jeong was acting outside of his authority.

It is also relevant to note the objective effect of Energyen’s conduct. Mr Park’s evidence suggests that the April 2019 Notice was loaded onto the HiPro system on three occasions in April 2019, with the email to Mr Jeong being in the nature of a prompt. What came back from the Energyen side was an acknowledgement signed with the electronic signature of a representative director. The objective appearance was that receipt of the April 2019 Notice had been acknowledged at director level.

At paragraph 1(1), “the Company shall, by way of a simple vertical spin-off (the ‘Spin-Off’), spin off the shipbuilding, special vessels, offshore plant and engines and machinery business [units/areas] (‘the Spun-Off Business [Units/Areas]’) which shall not include the investment business [unit/area], from its existing businesses and establish the New Company. The Surviving Company shall, by converting into a holding company within the meaning of the Fair Trade Act, establish corporate governance for long-term growth.”

At paragraph 1(2), that “after the Spin-off, the Surviving Company shall focus on the management of its subsidiaries, investment in new businesses, etc. while the New Company shall focus on the Spun-off Business [Units/Areas] …”

At paragraph 1(3), that “the Surviving Company is expected to serve as a control tower for its shipbuilding subsidiaries including the New Company and, by combining R&D and engineering functions, also operate as a technology-focused company.”

At paragraph 2(1), that the Surviving Company’s “Business [Unit/Area]” was “investment business unit aimed at management and investment of equity interest in subsidiaries and investee companies, new technology and basic research business [unit/area], etc” with a role of “holding company” and for the New Company, “shipbuilding, special ships, offshore plant, engine & machinery business [units/areas]” with the role of “operating company”.

Paragraph 2(5) provided for the transfer of property and public law rights and obligations, and that certain rights and obligations “be attributed to the New Company if related to the Spun-off Business [Units/Areas], and be attributed to the Surviving Company if related to the [units/areas] other than the Spun-off Business [Units/Areas].” It continued: “the New Company shall succeed to labor and legal relationships (labor contract, etc.) of all employees who work at the Spun-off Business [Units/Areas] as of the date of the Spin-off.”

Paragraph 2(6) provided for the attribution of liabilities depending on whether the liabilities are “mainly related to the Spun-off Business [Units/Areas]”.

Paragraph 2(8) provided for the “allocation of claims or other rights”, to which paragraph 6 was to apply.

Paragraph 2(9) provided that “any contract to which the Company is a party prior to the date of the Spin-off shall be, if it relates to the Spun-off Business [Units/Areas]” attributed to the New Company.

Paragraph 5(12) provided that “the New Company shall succeed to employment and related legal relationships (labor contract etc) of all employees who, as of the date of the Spin-off, work at the Spun-off Business [Units/Areas]”.

Paragraph 6(1) provides for the position where, before the date of the Spin-Off, “there is any change in the assets and liabilities (or contractual relationship) of the Spun-off Business Units due to business or financial changes in the Spun-off Business Units.”

the Spin-Off was registered;

the Original HHI Signatory was renamed “Korea Shipbuilding & Offshore Engineering Ltd” (but I will continue to refer to it as the Original HHI Signatory); and

a new company was incorporated (which I have been referring to as the HHI 2019 Company), called “Hyundai Heavy Industries Co Ltd” (i.e. the former name of the Original HHI Signatory) with company code 329180 and corporate registration number 230111-0312741.