The High Court allowed KDB Ireland Limited to amend its defence in a dispute over a loan transaction that caused significant losses to Woori Bank and Hanvit LSP Finance Limited.
The proceedings concern a transaction KDB Ireland entered into while managing funds for the plaintiffs. The judgment said it appeared to fall outside the formal authorisation terms for managing those funds. In its existing defence, KDB Ireland said the plaintiffs knew of the transaction by 19 July 2002, or at least knew of it soon afterwards, and either directed or knew about the use of loan interest for a significant period without requiring the transaction to be undone.
The proposed amendments included a plea that the plaintiffs knowingly benefited from higher returns and that any damages should be reduced by the sums accruing to and accepted by them. The other contested amendment concerned HJ Kim, whom KDB Ireland said introduced the transaction and who, it contended, was a Hanvit director at the relevant time.
The plaintiffs opposed that amendment, referring to a petition KDB presented to Korean authorities. The petition recorded suspicions that HJ Kim and others had bribed individuals, but also said the suspicions were based on a statement made during an internal investigation and that no other evidence had yet been found. The court treated those matters as allegations and suspicions, not findings.
Mr Justice Clarke said the plaintiffs had not established significant prejudice from allowing the amendments, including prejudice caused by delay or disruption to the trial. The trial was unlikely to take place before October, and he was not persuaded the amendments would delay it. He also found it was not clear that the proposed defence relying on HJ Kim’s alleged knowledge was bound to fail. Questions about the admissibility of evidence, Kim’s role, and whether his knowledge could be attributed to Hanvit remained for determination before or at trial.
The court’s decision was procedural: it allowed all the amendments so the real issues between the parties could be litigated. It did not determine liability for the loan losses, whether HJ Kim was involved in wrongdoing, or whether KDB Ireland’s amended defence would succeed.