The 16th Civil Division of the Seoul High Court has dismissed an appeal by HDC Hyundai Development Company against a lower court's decision to let Asiana Airlines (OZ, Seoul Incheon) retain a KRW200 billion won (USD149 million) deposit connected to an aborted 2019 acquisition bid.
The court handed down its decision on March 21, 2024, upholding previous rulings that Asiana had legally terminated the KRW2.5 trillion (USD1.86 billion) and allowing the airline to retain the deposit, per the contract's terms, was effectively a penalty for breach of contract.
The 2019 buyout bid was followed by Covid-19 and a worsening of Asiana's financial position, which caused HDC and its then partner, Mirae Asset Securities, to request a second round of due diligence, saying Asiana's operating environment had changed. However, the airline and its key creditors, including the Korea Development Bank and Kumho Industrial, declined, saying it was outside the acquisition contract's terms. The stand-off led to Asiana cancelling the acquisition contract in September 2020. The airline then declined to return the 10% deposit, sparking a long-running round of litigation.
HDC's joint venture partner, Mirae, did not participate in this appeal. It ended its legal pursuit of the airline after a court room loss last year.
Last week, presiding appeal judges Kim In-gyeom, Lee Yang-hee, and Kim Gyu-dong said HDC's request for renegotiation is "equivalent to refusal to perform, and the cancellation of the acquisition contract by Asiana Airlines and others on this grounds is lawful."
