I INTRODUCTION

The Aviation Business Act, Aviation Safety Act, Airport Facilities Act, Aviation Security Act and the Aviation/Rail Accident Investigation Act are the main statutes relating to aviation in Korea. The national agency responsible for matters relating to aviation is the Ministry of Land, Infrastructure and Transport (MOLIT).

In order to operate an airline business in Korea, an air operator certificate that permits the operation of an air transport business must be obtained from the MOLIT. The air operator certificate is issued depending on the type of air transport business (e.g., international and domestic air transport business, small-size air transport business and aircraft use business).

Aircraft registration, ownership, security rights and lease rights are regulated by the Aviation Safety Act, Aircraft Registration Decree and Aircraft Registration Rules. Compulsory execution, provisional attachments and provisional dispositions of aircraft are regulated by the Civil Execution Act and Civil Execution Rules. Notably, Korea has not ratified the Rome Convention, the Geneva Convention or the Cape Town Convention and Protocol.

In order for international air transport operators to operate specific international routes, international air transport rights and airspace passage rights must be allocated by the MOLIT in accordance with the Rules on the Allocation of International Air Carriage Rights and Airspace Passage Rights. Allocation of carriage rights is an area requiring aviation policy judgment, which must take into consideration the route and carriage capacity of the airline, level of contribution to route development, market conditions relating to routes and utilisation of allocated routes, promotion of fair competition and the administration thereof, and public interest considerations; therefore a certain level of discretion is afforded to the administrative authority.2

The allocation of slots at international airports is regulated by the Rules for Adjusting and Distributing Flight Times and handled by the head of the Seoul Regional Aviation Administration upon receipt of an application from an airline. If an airline wishes to exchange the flight time allocated by the air transport operator with the flight time allocated to another airline, it must obtain approval from the MOLIT.3

The MOLIT is also in charge of civil aviation matters. The Civil Aviation Office, which is affiliated with the Aviation Policy Department under the MOLIT's Second Deputy, comprises an aviation police officer, an aviation safety officer and an aviation navigation policy officer. The future drone transportation officer is also under the direct supervision of the Second Deputy Department.

In the event of a passenger death in the course of air transportation, the relevant carrier may be found liable for financial damages.

The Aviation Safety Act and the Aviation Security Act requires voluntary reporting systems to be established.4 The MOLIT is prohibited from disclosing to third parties or to the general public information received through voluntary reporting (except in accordance with the law) and must not subject any persons who have provided a voluntary report to disadvantageous treatment.

II LEGAL FRAMEWORK FOR LIABILITY

i International carriage

Korea did not sign up to the Warsaw Convention but ratified the Hague Protocol on 13 July 1967, which came into effect on 11 October 1967. The Supreme Court has held that the term 'Contracting State' (as used in Article 1(2) of the Warsaw Convention, as amended) must be interpreted to include not only those countries that signed up to both the Warsaw Convention and the Hague Protocol but also those countries, like Korea, that did not sign up to the Warsaw Convention but signed up to the Hague Protocol (and thereby effectively acceded to the Warsaw Convention) and those countries that signed up to the Warsaw Convention but have not yet ratified the Hague Protocol.5

Korea is also a party to the Montreal Convention, which took effect on 29 December 2007. In order for the Montreal Convention to apply, both the country of departure and destination must be Contracting States. In a case involving an international freight transport from Korea to Haiti, the Supreme Court held that the Montreal Convention did not apply because Haiti was not a contracting state.6

ii Internal and other non-convention carriage

Part 6 (on 'Carriage by Air')7 of the Commercial Act will apply to domestic transport and international transport where international treaties do not apply and where the lex fori, in accordance with private international law, is Korea.

iii General aviation regulation

Those who operate aircraft, lightweight aircraft (including rotary wing aircraft) for commercial purposes are subject to the liability provisions under Part 6 of the Commercial Act. However, the Commercial Act does not apply to the operation of ultralight flight devices under Article 2(3) of the Aviation Safety Act;8 instead, operators of ultralight flight devices are subject to the Civil Act, and the terms of or contracts for carriage.

iv Passenger rights

An aviation operator must establish damage relief procedures to protect air transport users from failure to transport or delays, loss of or damage to luggage, oversale of airline tickets, delays in the refund of cancelled tickets, and damages resulting from the operator's failure to provide boarding information.9

If an airline rejects passengers due to overbooking but provides the passengers with an alternative flight, the airline may be liable to compensate the passengers between US$200 and US$600 depending on the flight time and wait time of the alternative flight.10

In order to protect mobility-disadvantaged persons under Article 2(1) of the Act on Promotion of Transportation Convenience of Mobility Disadvantaged Persons, the MOLIT may issue an ordinance regarding the type of information that aviation operators must provide to mobility-disadvantaged persons and the method of dissemination, the types of services to be rendered to mobility-disadvantaged persons regarding boarding and alighting, and the types of services to be rendered in-flight to mobility-disadvantaged persons.11 Aviation operators must comply with the standards set by such ordinances.12

Aviation operators must ensure that an aircraft with passengers on board is not waiting in a traffic control area13 for more than three hours for domestic flights or four hours for international flights, unless the head of the relevant authority determines that the alighting of passengers will cause significant disorder to aviation operations, or that it is necessary to keep the passengers on board for reasons of weather, calamity, catastrophe or terror.14 Should a passenger-filled aircraft be delayed in a traffic control area, the aircraft operator must update such passengers of the cause and status of delay every 30 minutes.15

v Other legislation

Competition Law

Under the Aviation Business Act, where an aircraft operator enters into, with another aircraft operator (including foreign aircraft operators), agreements regarding air transportation, such as codeshare agreements or cooperation agreements regarding flight schedules, airfares, marketing and sales, such aircraft operator must obtain the approval of the MOLIT in accordance with the ordinance of the MOLIT.16 Codeshare agreements or cooperation agreements must not (1) substantially restrict competition among aircraft operators, (2) unjustly infringe upon the interests of users or discriminate against specific users, or (3) unjustly restrict the admission or withdrawal of other aircraft operators.17

International carriers and small-scale aircraft operators shall determine airfares for passengers or airfreight fees of cargo (excluding mail) on international routes in accordance with aviation agreements relevant to international routes and obtain the approval of or file a report to the MOLIT. The foregoing applies where the aircraft operator intends to modify airfare or airfreight fees.18

The Supreme Court has held that if agreements between aircraft operators on international routes go beyond simply modifying the fare system to limiting the scope of discounts on certain categories, such agreements fall outside the scope of aviation law, aviation agreements and cannot be deemed 'necessary and minimal action within legislation or orders which specifically recognises exceptions to free competition'.19

Product Liability Act

The Product Liability Act provides for the liability of manufacturers for damages caused by their products. A manufacturer shall compensate for damages to life, body or property of a person caused by a defect in its product (excludes damages arising only in respect of the product itself).20

Environmental Laws

The Act on the Allocation and Trading of Greenhouse-Gas Emission Permits came into force on 17 January 2019. Aviation operators are making a lot of effort to increase fuel efficiency by using fuel-efficient aircraft, periodically cleaning engines, lightening on-board loads such as cabin carts, lowering engine output during ground movement, and using high-fuel-efficient ground power instead of the aircraft's own power during ground operations. In 2019, the first year of the emission trading system, the total quota for seven airline companies was found to have 32.6 million tons in excess.

Under the Aviation Safety Act, no person shall operate an aircraft that has failed to obtain certification of conformity with noise standards or to meet technical standards for aircraft.21 Under Article 39(1) of the Noise and Vibration Control Act and Article 9(1) of its enforcement decree, if the Minister of Environment determines that the noise level of the aircraft exceeds the noise limit of the aircraft (90 WECPNL for areas around the airport; 75 WECPNL for other areas)22 the aircraft operator shall be entitled to undertake all measures necessary to soundproof the aircraft. In practice, it is common for the courts to treat airports and military airfields as establishments under Article 5 of the State Compensation Act and as such to see damages claims in respect of the installation and defects (including functional defects) thereof.23

III LICENSING OF OPERATIONS

i Licensed activities

'Aviation business' means a business conducted after obtaining a licence, permission or approval from the MOLIT or after registering or filing24 and comprises the following: air transport business (domestic carriers, international carriers and small aircraft), aircraft use business (which involves the use of aircraft for the needs of others, in order to, for example, spray pesticides, transport construction materials, photography, flight training and such other activities prescribed by the MOLIT), aircraft maintenance business, aircraft handling business (which involves the refuelling of aircraft, unloading of cargo or baggage from aircraft and such other ground operations as prescribed by the MOLIT), aircraft rental business, use of ultralight flight equipment, aviation leisure or sports business and courier service business.

Domestic and international flight operators must be licensed by the MOLIT. Operators of an aircraft use business, aircraft maintenance business, aircraft handling business, aircraft rental business, ultralight flight equipment and aviation leisure/sports business must register with the MOLIT. Courier service businesses must file a report with the MOLIT.

ii Ownership rules

Anyone who owns or leases an aircraft, and thereby has the right to use the aircraft, must register the aircraft with the MOLIT.25 The acquisition, loss, or alteration of ownership of an aircraft shall come into effect upon registration,26 and the right to lease an aircraft shall come into effect against a third party upon registration.27

The following persons are exempt from the above rule: (1) a person who is not a citizen of the Republic of Korea; (2) a foreign government or foreign public organisation; (3) a foreign corporation or organisation; (4) a corporation whose majority shareholder is a person falling under any of (1) to (3) above or whose business is substantially controlled by such person; and (5) a corporation whose representative as stated on its business registration certificate is a foreigner or for which foreigners account for at least half of its executives as stated on its business registration certificate, provided that the foregoing exceptions will not apply to an aircraft which citizens or corporations of Korea have the right to lease and use.28 Notwithstanding this proviso, aircraft of foreign nationality are not registrable in Korea.29

The licence standards for domestic air transport business or international air transport business are as follows:

  1. the business must not disrupt the safety of air traffic when ensuring the safety of the aircraft and securing personnel, such as flight attendants;
  2. the business must be for the convenience of users, taking into consideration the status and prospects of the aviation market;
  3. the licence applicant must have the financial capacity to operate the business in accordance with the standards prescribed by the Presidential Decree; and
  4. the business must meet the following requirements:
    • capital must be at least 5 billion won or more than the amount prescribed by the Presidential Decree;
    • must meet the standards (such as having more than one aircraft) prescribed by the Presidential Decree; and
    • such other requirements as prescribed by the MOLIT.
Licence Standards for Domestic Air Transportation and International Air Transportation (related to Article 12)30
Classification Domestic (passenger). Domestic (cargo). International (cargo) International (passenger)
1. Financial Capacity Must have the financial capacity (includes anticipated income and other revenues) to cover operational costs and expenses anticipated during the three years (from the date of commencement of operations under Article 19(1)) of operating the business in accordance with the business plan under Article 7(4) of the Aviation Business Act, provided that for the first three months of operation, the financial capacity must cover operational costs and expenses excluding income and other revenues.
2. Capital or Asset valuation (a) Corporation: capital must be at least 5 billion won
(b) Individual: asset valuation must be at least 7.5 billion won
(a) Corporation: capital must be at least 15 billion won
(b) Individual: asset valuation must be at least 20 billion won
3. Aircraft (a) Number of Aircraft: one or more
(b) Aircraft Specifications:(i) have flight capacity

(ii) have at least twin engines

(iii) the cockpit and the cabin (in the case of passenger carriers) and the cargo compartment (in the case of cargo planes) must be separate

(iv) must have a function which allows for the aircraft's position to be verified automatically

(c) Passenger planes must have at least 51 seats

(d) The maximum take-off weight for cargo planes must exceed 25,000 kilograms

(a) Number of Aircraft: five or more (to be achieved within 3 years of operations commencement date)

(b) Aircraft Specifications:

(i) have flight capacity

(ii) have at least twin engines

(iii) the cockpit and the cabin must be separate

(iv) must have a function which allows for the aircraft's position to be verified automatically

(c) Must have at least 51 seats

iii Foreign carriers

Permit requirements for foreign international air transport businesses

Any of the following persons may, after obtaining MOLIT permission, operate flights described in Article 100(1) of the Aviation Safety Act (including flights between regions in Korea in relation to such flights) for remuneration, in order to provide passenger or cargo air transport services to meet the demands of others. In granting its permission, the MOLIT may restrict the frequency of flights and the type of aircraft to be used to the extent of not interfering with the development of international aviation of domestic air transport services:

  1. a person who is not a citizen of the Republic of Korea;
  2. a foreign government or foreign public organisation;
  3. a foreign corporation or organisation;
  4. a corporation, who is majority-owned or whose business is substantially controlled by any person under (a) to (c) above; provided that, where an air services agreement entered into by Korea and the relevant country (including the United Nations or an economic community) stipulates otherwise, the air services agreement shall apply; or
  5. a corporation, whose representative, as stated on its corporate registration certificate, is a foreigner or where foreigners account for at least half of the number of executives stated on its corporate registration certificate; provided that where an air services agreement entered into by Korea and the relevant country (including the United Nations or an economic community) stipulates otherwise, the air services agreement shall apply.31

Air Transportation by Foreign Aircraft for Remuneration

Where the user of an aircraft with foreign nationality (excludes aircraft used by a foreign provider of international air transport services) operates flights (including flights operated between regions within Korea in relation to such flights) under Article 100(1)(1) or (2) of the Aviation Safety Act for remuneration, he or she must obtain permission from the MOLIT, as prescribed an ordinance of the MOLIT.32

Prohibition of Air Transportation by Foreign Aircraft in Republic of Korea for Remuneration

No aircraft that has obtained permission under Articles 54 and 55 of the Aviation Business Act or the proviso to Article 101 of the Aviation Safety Act, shall transport passengers or cargo between regions within Korea for remuneration.

IV SAFETY

Certificate of Operation

Before beginning flight operations, an air transportation operator must obtain from the MOLIT the Air Operator Certificate (AOC). As part of this process, the air transportation operator will be subject to document and on-site inspections including inspection of a safe navigation system, such as human resources, equipment, facilities, assistance in flight operations and assistance in maintenance management.33

The following documents and information are reviewed as part of the document inspection process: schedule for implementing the business plan, organisation, manpower, division of roles and responsibilities, regulations compliance statement, contracts or lease agreements relating to aircraft, facilities and equipment or the operation thereof, training programme and operation plan, policy and administration manual, aircraft operation manual, MEL/CDL, accident procedures manual, various manuals and passenger briefing cards, fuelling, refuelling, draining, emergency row seating procedures, drug and alcohol control procedures, emergency evacuation demonstration plan, flight operations inspection plan, environmental assessment, training plan and maintenance regulations.

The on-site inspection process comprises of the following: inspection of fixed and mobile facilities and equipment on the ground, operation of control centres, qualification tests of aviation workers, evaluation of training programs, emergency escape simulation, emergency landing simulation, maintenance of records, flight operations inspection, evaluation of cabin crew, aircraft conformity inspection and interviews with key executives.

Mandatory reporting of aviation safety

A person engaged in aviation, who has caused or has become aware of any aircraft accident or serious incident or safety occurrence prescribed by the ordinance of the MOLIT must report the same to the MOLIT.34 A person who reports breakdowns, defects and malfunctions under Article 33 of the Aviation Safety Act is deemed to have satisfied the mandatory reporting obligation under Article 59.

V INSURANCE

'Aviation insurance' means passenger insurance, airframe insurance, cargo insurance, war risk insurance, third party insurance, aircrew insurance, and such other insurance prescribed by an ordinance of the MOLIT.

An air transport service provider, aircraft rental service provider, air charter operator must not operate an aircraft without purchasing aviation insurance (as prescribed by the ordinance of the MOLIT).35 Aircraft owners (other than those mentioned above) and aircraft operators must also have adequate insurance coverage.36 The limit of coverage shall be decided in accordance with the terms of international conventions of which Korea is a contracting state unless the application thereof is unreasonable, in which case the applicable limit of coverage shall be as prescribed by the MOLIT.37

i Light-weight aircraft, ultralight aircraft

In order to be able to provide compensation to parties injured (in the case of death, to parties entitled to damages) by the operation of lightweight aircraft, a lightweight aircraft owner referred to in 38 Anyone intending to use ultralight aircraft for ultralight aircraft rental service, air charter, and sport and leisure aviation service must also purchase insurance or join a mutual aid organisation prescribed by an ordinance of the MOLIT.39 Insurance or mutual aid agreements prescribed by an ordinance of the MOLIT are insurance or agreements that guarantee more than 150 million won for death and 30 million won for grade 1 injury,40 and includes insurance or agreements for co-travellers.41

ii Third-party liability insurance

Third-party liability insurance is regulated under Articles 930 to 935 of the Commercial Act. As insurance that compensates for bodily harm to a third party or damage to a third party's property caused by the aircraft itself, third-party liability insurance includes coverage for injury arising from mid-air collisions or air crashes, or by objects sprayed from aircraft, such as fuel, pesticides or chemicals.

iii Foreign international air transport operator

A foreign international air transport operator must include in its business plan submitted at the time of its permit application a certificate of insurance.42

VI COMPETITION

Where a market-dominant business entity engages in abusive practices, the Fair Trade Commission may impose upon the market-dominant business entity a penalty surcharge not exceeding three percent of the sales prescribed by Presidential Decree (or operating revenues in the case of a business entity prescribed by Presidential Decree (hereinafter the same applies)); provided that the Fair Trade Commission may impose a penalty surcharge not exceeding one billion won in cases prescribed by Presidential Decree where no sales have been made or where it is impracticable to calculate the sales.43

Where a business entity engages in activities that unfairly restrict competition (as further prescribed under Article 19(1) of the Monopoly Regulation and Fair Trade Act), the Fair Trade Commission may order the business entity to stop such illegal cartel conduct, to publish the fact that it has been ordered to stop such conduct, or to implement other corrective measures,44 and may impose on the business entity a penalty surcharge not exceeding 10 per cent of the sales prescribed by Presidential Decree; provided that, the Fair Trade Commission may impose a penalty surcharge not exceeding 2 billion won in the event that no sales have been made.

A person who violates the provisions prohibiting abuse of market-dominant position, or illegal cartel conduct or facilitates the unfair restriction of competition may be subject to imprisonment for not more than three years or a fine not exceeding 200 million won.45

VII WRONGFUL DEATH

i Overview

If a passenger dies, he or she (his or her estate) may claim damages for default or compensation for damages suffered as a result of unlawful acts of the carrier. The Supreme Court has held that there are three types of damages available for personal injury: passive damages, active damages and mental distress.46

ii Loss of earnings (passive damages)

Damages payments for loss of earnings (passive damages) seek to compensate the injured party for profit or income he or she would have earned in the future but for the injury suffered. In principle, loss of earnings for salary earners is calculated based on the amount of salary income that the injured party was earning at the time of injury; however, where the possibility of a future raise in the salary amount is abundantly clear and supported by objective data, that future raise amount must also be taken into account when calculating damages for loss of earnings.47 If the injured party was employed in a certain job but it is not possible to calculate his or her passive damages using his or her income, it may be possible to calculate the same based on income statistics that will highly likely apply in respect of his or her specific skills, qualifications or education.48 If the injured party dies as a result of an unlawful act, the costs of living must be deducted from lost profits for the applicable projected working years. In practice, it is commonly accepted that a third of income is used as costs for living.

iii Active damages

Active damages include medical expenses, nursing expenses, and funeral expenses.

Medical expenses

Historical medical expenses refers to expenses expended prior to the closing of the hearing. Since treatment is aimed not only at improving or curing an illness but also at preventing the worsening thereof or prolonging life, the need for future treatments and related expenses may be recognised by the Court as long as a proximate causal relation can be shown between the unlawful act and the future medical expenses to be incurred. Future medical expenses for ongoing treatment are estimated at the time of medical examination.

Auxiliary tools refer to wheelchairs, special mattresses for preventing bedsores, dental prosthetics and limb prosthetics and their lifespan and price are usually determined based on the opinions of a medical appraiser.

Nursing expenses

Nursing refers to the act of helping an injured party who is so seriously injured that he or she requires the assistance of another person for a certain period of time or even for life after the end of medical treatment due to an incurable after-effect. Expenses related to such acts are nursing expenses and these are deemed active damages by the court. Where nursing is required due to physical disabilities, unless special circumstances exist, nursing expenses are calculated based on daily wages for ordinary urban workers or rural women workers for the whole period during which nursing is required.49

Funeral expenses

In practice, compensable funeral expenses are fixed within a socially acceptable range to about 5 million won, regardless of actual costs expended.

iv Compensation

Generally, compensation for death is usually 100 million won, but for aviation accidents the amount is usually higher, taking into account the special characteristics of aviation accidents.50 According to the guidelines published by the Supreme Court in 2016, in the case of aviation accidents, it is possible to award between 200 and 400 million won in compensation, depending on the nature of the accident.

VIII ESTABLISHING LIABILITY AND SETTLEMENT

i Procedure

Claims for liability against carriers are subject to civil proceedings. Civil proceedings are initiated in the first instance district court, appealed in the first district court of appeals, the high court and then the Supreme Court.

A carrier's liability to its passengers, its shipper or consignee will expire within two years from the date the passenger or cargo arrived at the place of destination or the date the carrier was scheduled to arrive or the date on which transportation was suspended, whichever occurs last, if proceedings are not initiated within that time, regardless of who the claimant is.

In a damages claim, the defendant may be the carrier, the manufacturer, the seller of the aircraft or cabin crew. Where there are multiple defendants, they will be jointly liable. The court will not determine the ratio of liability between the defendants of an indemnity claim; but will determine the ratio as between the defendants where some of the defendants claim against other defendants.

ii Carriers' liability towards passengers and third parties

A carrier will only be liable for damages resulting from the death or injury of its passengers if the accident that caused the death or injury took place on board the aircraft or in the course of embarking or disembarking operations. A carrier will be strictly liable within the scope of the Montreal Convention and the Commercial Act. Thus, intention or negligence is not required in order for such liability to be recognised. A carrier will not be liable for the portion of liability that exceeds the limitation of liability amount if it is able to prove that the damage (1) was not caused by the negligence or other unlawful act or omission of the carrier or its user or agent, or (2) was solely caused by the negligence or other unlawful act of omission of a third party. The liability of a carrier is strictly civil liability. Korea does not recognise punitive damages. Therefore, a ruling of a foreign court that recognises punitive damages will not be approved by51 or enforceable52 in the Korean courts.

iii Product liability

Product liability is imposed on the manufacturer if the product is found to be defective and unsafe such that it infringes on life, personal safety, health and damages property. The burden is on the injured party to prove that a product was defective. Furthermore, even if the injury or damage arose as a result of a defect in the product, any resultant damage to the product itself due to its own failings as a product cannot be the subject of a product liability claim.53

In the case involving the crash of the UH-60 'Blackhawk' helicopter, the Supreme Court held as follows:

Even if a manufactural defect or design defect of a product is not recognised, if the damage or injury caused by the product could have been reduced or avoided had the manufacturer provided reasonable explanation, instructions, warnings and other indications, liability for the unlawful act of failing to properly indicate or to provide markings may be recognised and when deciding whether such defects in markings/indications exist, the Court will look to various factors such as the product's characteristics, its common use, user's expectations of the product, anticipated risks, the user's awareness and ability to avoid such risk, all in the context of social norm.54

iv Compensation

Where the Montreal Convention applies, a carrier's strict liability for death or bodily injury is 128,821 SDR per passenger, 5,346 SDR for delay, 1,288 SDR per passenger for loss or damage to baggage and 22 SDR per kilogram for the transportation of international goods.

Where the Commercial Act applies to domestic and international transportation, a carrier's strict liability for death or bodily injury is 113,100 SDR per passenger, 4,694 SDR for delays in international flights, 1,000 SDR for delays in domestic flights, 1,131 SDR per passenger for loss or damage to baggage, 19 SDR per kilogram for international transportation of goods and 15 SDR per kilogram for domestic transportation of goods.

When the National Health Insurance Service (NHIS) has provided an insurance benefit to the insured or dependent because the grounds for the insurance benefit have arisen due to the act of a third party, the NHIS shall have the right to claim compensation from the third party up to the amount of the expenses incurred for the benefit concerned.55 The NHIS' right of claim through subrogation is limited, out of the whole amount of damages receivable by the injured party (the insured), to the amount that equates to the health insurance amount.56

IX DRONES

The general rules for aircraft (including drones) safety are stipulated by the Aviation Safety Law. According to the Act on Promotion of Drone Utilisation and Infrastructure Development, drones are classified as (1) 'unmanned aerial vehicles' under Article 2(3) of the Aviation Safety Act, (2) 'unmanned aircraft' under Article 2(6) of the Aviation Safety Act, and (c) vehicles that navigate remotely, automatically, autonomously and in such other ways as prescribed by the ordinance of the MOLIT under the Drone Act, Article 2(1).

Drones for commercial use or drones weighing 12 kilograms or more, excluding fuel weight, must be reported to the MOLIT and must receive a pilot certificate. Businesses using drones must have insurance coverage or a mutual aid agreement in accordance with the ordinance of the MOLIT. A drone's flight altitude is limited to 150 metres or less and, in principle, drones must not enter the airport airspace, restricted areas and state airspace; however, there is no limit to flight speed.

X VOLUNTARY REPORTING

A person who has caused or becomes aware of or expects the occurrence of a reportable event, situation, condition that jeopardises or is likely to jeopardise aviation safety may report the same to the MOLIT in accordance with the ordinance of the MOLIT.57 The MOLIT shall neither disclose the identity of the person who has voluntarily filed a report to third parties or to the general public against his or her will, nor use the voluntary report for purposes other than to prevent any accident and to ensure aviation safety.58 No person shall dismiss, transfer, reprimand, or unjustly treat the person who has made a voluntary report or impose measures unfavourable to him or her in relation to his or her status or treatment for voluntary reporting.59 Where the person who causes the relevant event, situation or condition, makes a voluntary report himself or herself within 10 days of the date on which the relevant event, situation or condition occurred, the MOLIT may not impose measures under the Aviation Safety Act and Airport Facilities Act if this person was not grossly negligent or intentionally reckless in causing the occurrence.60

As Article 5.12 of Annex 13 Aircraft Accident Investigation (one of the annexes adopted by the International Civil Aviation Organisation pursuant to Article 54 of the International Civil Aviation Treaty) is a regulation that imposes certain obligations only on the country that conducts the investigation of aircraft accidents, other countries may use the accident investigation reports as evidence against the accused in criminal proceedings.61

XI THE YEAR IN REVIEW

The details, type and scope of damages for delay are not covered by Article 19 of the Montreal Convention, and, therefore, it is up to the court to decide on what damages (in terms of detail, type and scope) are applicable to the delay events under Article 19 of the Montreal Convention. In other words, the lex fori will be relevant for determining what damages are applicable for delay under Article 19 of the Montreal Convention. In a case where a flight from Korea made an emergency landing in Japan due to engine failure, the court found that the details, type and scope of damages payable for delay under Article 19 of the Montreal Convention were subject to the law on compensation for damages in Korea, which provides for not only economic and property loss resulting from unlawful acts but also damages for mental distress and in accordance with domestic law, the court held that the airline must compensate its passengers for damages for mental distress as well as for property loss resulting from the significant delays (19 hours) in transportation.62

A flight that was scheduled to depart from Incheon International Airport on 23 December 2017 at 11:30 and arrive at Okinawa International Airport on the same day at 14:00 was cancelled due to heavy fog. The cancellation was found to be a cancellation of operation or failure to provide freight transport as opposed to falling within the scope of 'delay' under Article 19 of the Montreal Convention. It was further held that the Montreal Convention was not applicable to the case because the Convention itself does not provide for 'cancellation of flights'. Domestic law will apply in respect of international flight operations to the extent the Montreal Convention is not applicable and, in this case, the court, applying domestic law, decided that the defendant was not responsible for tort liability under the Montreal Convention.63

The claimant in the case was in the business of repairing mobile phones and the wholesale and retail of mobile phone parts, and the defendant was in the business of international transportation operations. On 4 June 2013, the claimant asked the defendant to transport (including customs clearance) liquid crystal displays to Shenzhen, China. On 9 June 2013, the defendant transported the LCDs by air from Korea to Qingdao, China, but the Chinese customs office at Qingdao, noting that the cargo appeared to be second-hand, suspended clearance and requested more information on the intended use. When that information was not forthcoming, the Chinese customs office notified the company responsible for clearing the Chinese customs and had the cargo destroyed in December 2013. Article 18(2)(d) of the Montreal Convention exempts the air carrier where cargo is destroyed, lost or damaged as a result of a public agency's action during the entry or exit of the same or during customs clearance or where loss of or damage to cargo is caused by 'action taken by a public organisation that is associated with the arrival and departure of cargo, quarantine or customs procedures', respectively. In the case, the cargo was found to have been discarded after being held for customs clearance by the Qingdao Customs Office in China and so the carrier may be exempt from liability for loss or damage of the same.64

XII OUTLOOK

The courts continue to see an increase in claims for damages due to delays. In addition, research and legislation on drone industry activation and anti-drone regulations are continuing.


Footnotes

1 Chang Young Kwon is a partner, Marc Kyuha Baek is an associate and Jane Young Sohn is a senior foreign attorney at Jipyong LLC.

2 Supreme Court Decision 2003Du3212, 26 November 2004.

3 Aviation Business Act, Article 18(7).

4 Aviation Safety Act, Article 61; Aviation Security Act, Article 33-2.

5 Supreme Court Decision 82DaKa1372, 22 July 1986.

6 Supreme Court Decision 2013Da81514, 24 March 2016.

7 Came into force on 24 November 2011.

8 Commercial Act, proviso to Article 896.

9 Aviation Business Act, Article 61(1).

10 The Fair Trade Commission Notice No. 2019-3 on Consumer Dispute Resolution Standards. Note, these standards are only a recommendation.

11 Aviation Business Act, Article 61(11).

12 Aviation Business Act, Article 61(12).

13 Means those areas, such as the runway, the taxiway or mooring sites, used for take-off, landing and parking of aircraft.

14 Aviation Business Act, Article 61-2(1).

15 Aviation Business Act, Article 61-2(2).

16 Aviation Business Act, Article 15(1).

17 Aviation Business Act, Article 15(3).

18 Aviation Business Act, Article 14(1).

19 Supreme Court Decision 2012Du13689, dated 16 May 2014.

20 Product Liability Act, Article 3(1).

21 Aviation Safety Act, Article 25(2).

22 In the case of aviation noise, a special noise measurement unit called the aircraft noise impact (WECPNL, Weight Equivalent Continuous Perceived Noise Level) is used. The Ministry of Environment amended the enforcement decree of the Noise and Vibration Control Act to use Lden (day, evening, night) from 2023.

23 Supreme Court Decision 2013Da23914, 15 October 2015.

24 Aviation Business Act, Article 2(1).

25 Aviation Safety Act, Article 7

26 Aviation Safety Act, Article 9(1).

27 Aviation Safety Act, Article 9(2).

28 Aviation Safety Act, Article 10(1).

29 Aviation Safety Act, Article 10(2).

30 Enforcement decree to the Aviation Business Act, Table 1 (as of 30 October 2018).

31 Aviation Business Act, Article 54(1).

32 Aviation Business Act, Article 55(1).

33 Aviation Safety Act, Article 90(1); Table 33 of its enforcement decree.

34 Aviation Safety Act, Article 59(1).

35 Aviation Business Act, Article 70(1).

36 Aviation Business Act, Article 70(2).

37 Enforcement Decree to the Aviation Business Act, Article 70(2).

38 Aviation Business Act, Article 70(3).

39 Aviation Business Act, Article 70(4).

40 Article 3(1) of the Enforcement Decree to the Automobile Damages Compensation Act.

41 Enforcement Decree to the Aviation Business Act, Articles 70(3) and (4).

42 Enforcement decree to the Aviation Business Act, Article 55(3)(b).

43 Monopoly Regulation and Fair Trade Act, Article 6.

44 Monopoly Regulation and Fair Trade Act, Article 21.

45 Monopoly Regulation and Fair Trade Act, Article 66.

46 Supreme Court Decision 2017Da231119, 12 October 2017.

47 Supreme Court Decision 2004Da48829, 8 February 2007.

48 Supreme Court Decision 2003Da60365, 13 February 2004.

49 Supreme Court Decision 90DaKa 15171, 23 October 1990.

50 Supreme Court Decision 2008Da3527, 24 December 2009.

51 Supreme Court Decision 2015Da207747, 28 January 2016.

52 Seoul High Court Decision 2017Na2057753, 23 March 2018.

53 Supreme Court Decision 2017Da1448, 17 January 2019.

54 Supreme Court Decision 2002Da17333, 5 September 2003.

55 National Health Insurance Act, Article 58(1).

56 Supreme Court Decision 2017Da233276, 25 April 2019.

57 Aviation Safety Act, Article 61(1).

58 Aviation Safety Act, Article 61(2).

59 Aviation Safety Act, Article 61(3).

60 Aviation Safety Act, Article 61(4).

61 Supreme Court Decision 92Do373, 12 October 1993.

62 Seoul Central District Court Decision, 2018GaDan5222511, 11 October 2019.

63 Seoul Central District Court Decision, 2018GaDan5044186, 30 January 2019.

64 Supreme Court Decision, 2019Da14998, 17 October 2019.