Shipping 2026

SOUTH KOREA Law and Practice Contributed by: Woorin Sung and Hee Kyung Jeong, D&A LLC

In a loan structure, the borrower retains ownership of the vessel, and the lender structures its recovery through security interests such as a ship mortgage. In a lease structure, on the other hand, ownership of the vessel is held by a separate owner, with the shipping company holding the right to use and operate the ves - sel. While a mortgagee is entitled to priority repayment upon compulsory execution against the vessel under applicable law, compulsory execution in the event of a lease default depends on the contractual structure of the transaction. Sale and leaseback transactions have been on the rise in Korea. 3. Marine Casualties and Owners’ Liability 3.1 International Conventions: Pollution and Wreck Removal International conventions applicable in South Korea with respect to oil pollution include the International Convention on Civil Liability for Oil Pollution Dam - age (CLC, 1992), the International Convention on the Establishment of an International Fund for Compen - sation for Oil Pollution Damage (FUND, 1992) and the International Convention on Civil Liability for Bunker Oil Pollution Damage (2001). In addition to these con - ventions, South Korea has enacted and enforces the Compensation for Oil Pollution Damage Guarantee Act, which is in force and governs matters related to oil pollution damage caused by oil tankers. With respect to wreck removal, the Marine Environment Management Act and the Sea Traffic Safety Act pro - vide the legal basis for the rights and obligations of relevant parties. 3.2 International Conventions: Collision and Salvage South Korea applies standards for vessel navigation methods and duties of care in navigation in accord - ance with the Convention on the International Regu - lations for Preventing Collisions at Sea (COLREGs, 1972). Certain provisions of COLREG are directly incorporated into domestic legislation in force in South Korea, including the Ship Safety Act, and South

Korea’s maritime safety laws generally reflect COL - REGs’ navigation rules in regulating vessel navigation. The Commercial Act of South Korea also provides for matters relating to vessel collisions in its maritime chapter. In addition, where a vessel collision is not governed by the Commercial Act, the provisions on tort liability under the Civil Act may apply. While South Korea is not a party to the International Convention on Salvage (1989), its principles are large - ly reflected in the basic framework governing salvage under the Commercial Act, which sets out key aspects of salvage relationships, including the constitutive requirements for the establishment of salvage, and the calculation methods and limits related to salvage remuneration. 3.3 Convention on Limitation of Liability for Maritime Claims South Korea is not a party to the 1976 Convention on Limitation of Liability for Maritime Claims (LLMC) and its 1996 Protocol. Nevertheless, the Commercial Act of South Korea establishes a regime governing the limitation of ship-owners’ liability, and the Act on the Procedure for Limiting the Liability of Shipowners sets out the matters necessary for limitation proceed - ings. More specifically, South Korean law provides for, inter alia, the scope of limitation, the applicable limits of liability, the constitution of a fund and related pro - cedures. 3.4 Vienna Convention on the Law of Treaties As South Korea is a party to the Vienna Convention on the Law of Treaties, the Convention constitutes an international treaty that is applicable and binding in South Korea. Treaties that are duly concluded and promulgated have the same legal effect as domestic laws in South Korea; accordingly, the Vienna Conven - tion operates within the South Korean legal order as a governing norm setting out the general principles of treaty interpretation. However, as South Korea is not a party to the LLMC, it is difficult to conclude that the reasoning and holdings of the UK Supreme Court in a relevant case would be applied in the same or a similar manner in South Korea.

560 CHAMBERS.COM