Attorneys Ji Heon Oh and Hee Soo Cho of One Law Partners, LLC successfully represented the applicant in a case in which the Supreme Court adopted a strict interpretation of the scope of permissible security for a stay of execution, overturning a lower court decision and remanding the case.
 

1. Case Overview

When compulsory execution or a judicial foreclosure proceeding is initiated based on a first-instance judgment provisionally enforceable pending appeal, the judgment debtor may apply for a stay of execution together with an appeal.

To protect the interests of the judgment creditor, courts may grant a stay of execution on the condition that the debtor provides adequate security.
In this case, after obtaining an order staying execution, the opposing party submitted, as security, a guarantee certificate issued by a general guarantee company rather than by a bank or an insurance company. Based on that guarantee certificate, the foreclosure court suspended the judicial auction proceedings.

One Law Partners, LLC challenged the stay, arguing that the guarantee certificate did not constitute lawful security under the Civil Procedure Act, and requested that the judicial auction proceedings continue. However, the lower court dismissed the objection.

The firm subsequently filed a special appeal to the Supreme Court. The Supreme Court adopted a stricter interpretation of the scope of acceptable security for a stay of execution than had commonly been accepted in practice, and reversed and remanded the lower court's decision.
 

2. Key Issue

The central issue in this case was:
Whether a guarantee certificate issued by an ordinary company that is neither a bank under the Banking Act nor an insurance company under the Insurance Business Act may constitute valid security under the Civil Procedure Act.

The Civil Procedure Act and the Rules of Civil Procedure recognize the submission of a guarantee commission agreement document as one method of providing security for a stay of execution.

However, in practice, guarantee certificates issued by certain guarantee institutions and guarantee companies had occasionally been accepted as security, and there had been little clear guidance on whether such practices were legally permissible.
 

3. Legal Strategy

Attorneys Ji Heon Oh and Hee Soo Cho structured their arguments around the following points.

· Scope of Permissible Guarantee Commission Agreements Under the Rules of Civil Procedure
Article 22 of the Rules of Civil Procedure limits permissible guarantee commission agreements for purposes of providing security to those entered into with a bank or an insurance company.
Accordingly, the attorneys argued that guarantee certificates issued by ordinary guarantee companies or other non-financial institutions do not constitute legally recognized forms of security.

· Emphasizing the Protection of Judgment Creditors
Because a stay of execution is an exceptional remedy that restricts a judgment creditor's right to enforce a judgment, the accompanying security must be provided by an institution with reliable payment capacity.

The attorneys emphasized that allowing guarantees issued by non-financial institutions would create opportunities for abuse of the stay-of-execution system and could cause substantial delays in the realization of creditors’ rights.

· Importance of Lawful Enforcement Procedures
The attorneys further argued that suspending enforcement without valid security could effectively impair the property rights of a creditor who had already prevailed in litigation through proper judicial procedures.
 

4. Significance of the Decision

The Supreme Court held that where security for a stay of execution is provided through the submission of a guarantee commission agreement document:

“The agreement document must be one entered into with a bank under the Banking Act or an insurance company under the Insurance Business Act. A guarantee certificate issued by any other company does not constitute valid security.”

The Supreme Court further stated that the foreclosure court’s suspension of the judicial auction proceedings based on a guarantee certificate issued by a non-financial institution:

“Infringed the applicant’s constitutional right to have property rights protected through judicial proceedings conducted in accordance with due process.”

Accordingly, the Supreme Court reversed and remanded the lower court's decision.
This decision is significant because it:

• Clearly defines the scope of guarantee commission agreements that may be accepted as security for a stay of execution;

• Reaffirms the principles of stability and reliability underlying the security system;

• Rejects the longstanding practical practice of accepting guarantee certificates issued by non-financial institutions; and

• Emphasizes the protection of creditors’ property rights as a constitutional value.

This case is expected to serve as an important precedent for future enforcement and stay-of-execution proceedings by establishing clear standards for the legality of security provided in connection with a stay of execution. It also reinforces the protection of creditors’ rights and the stability of enforcement procedures.

Related Link
[Key Decisions] Summary of the Supreme Court’s Significant Decision of May 12, 2026

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Attorney Ji Heon Oh | jhoh@onelawpartners.com
Attorney Hee Soo Cho | hscho@onelawpartners.com
 

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Public Relations Team, One Law Partners, LLC | pr@onelawpartners.com