Substantial connection

Substantial connection (실질적 관련/實質的關聯) refers to the relationship between a person and incident, say, the petitioner and the country or territory exercising jurisdiction, as explained below.

Kew words
substantial connection, international jurisdiction, private international law, equity and speed

Statutes
The legal phrase of "substantial connection" is found in several Korean statutes.

The Private International Act (국제사법/國際私法) provides on the subject of international jurisdiction: Article 2 (International Jurisdiction)
 * (1) In case a party or a case in dispute is substantially connected with the Republic of Korea, a court shall have the international jurisdiction. In this case, the court shall obey reasonable principles, compatible to the ideology of the allocation of international jurisdiction in judging the existence of the substantional connection.
 * (2) A court shall judge whether or not it has the international jurisdiction in the light of jurisdictional provisions of domestic laws and shall take a full consideration of the unique nature of international jurisdiction in the light of the purport of paragraph (1).

Court rulings
The Supreme Court declared the substantial connection should be examined in a reasonable manner based upon such objective criteria as the relationship between the forum and the parties or the subject matter of the individual case.
 * The determination of international jurisdiction should follow the basic idea of aiming to achieve impartiality between the parties, and appropriateness, speediness and economy of adjudication, and should, more concretely, take into account not only private interests such as impartiality between the parties, convenience and predictability, but also interests of the court as well as of the state such as appropriateness, speediness and efficiency of adjudication, and effectiveness of judgment. The issue of which interest among such diverse interests deserves protection should be determined reasonably, applying in each individual case the objective criteria of substantial connection between the court and the parties, and substantial connection between the court and the case in dispute.

In 2013, the Supreme Court repeated its previous decisions on the international jurisdiction in the long-awaited Agent Orange case.
 * International jurisdiction is determined based on the fundamental ideology of achieving equity among parties to the lawsuit, propriety of litigation, speediness, and economy. Specifically, personal interests such as equity, convenience, and foreseeability among parties to the lawsuit as well as the court or state interests such as propriety of lawsuit, speediness, efficiency, and effectiveness of the judgment shall be considered together. Selection of a protected interest among diverse ones shall be reasonably determined based on objective criteria of substantial connection between the court location, the parties, or disputed issues in individual cases.
 * Especially in product liability cases against manufacturers making and selling the goods, the court of the place where loss occurred has international jurisdiction if a substantial connection between a manufacturer and a loss occurrence place exists and it reasonably anticipates lawsuit at that court.

Criterion of Subtantial Connection
In the United States where interstate disputes frequently take place, two criteria of 'minimum contacts' and 'purposeful availment' have been established with respect to personal jurisdiction. These two concepts are clearly illustrated by the Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987).

Petitioner manufactures tire valve assemblies in Japan and sells them to several tire manufacturers, including Cheng Shin Rubber Industrial Co. (Cheng Shin). The sales to Cheng Shin, which amounted to at least 100,000 assemblies annually from 1978 to 1982, took place in Taiwan, to which the assemblies were shipped from Japan. Cheng Shin incorporates the assemblies into its finished tires, which it sells throughout the world, including the United States, where 20 percent of its sales take place in California. Affidavits indicated that petitioner was aware that tires incorporating its assemblies would end up in California, but, on the other hand, that it never contemplated that its sales to Cheng Shin in Taiwan would subject it to lawsuits in California. Nevertheless, in 1979, a product liability suit was brought in California Superior Court arising from a motorcycle accident allegedly caused by defects in a tire manufactured by Cheng Shin, which in turn filed a cross-complaint seeking indemnification from petitioner. Although the main suit was eventually settled and dismissed, the Superior Court denied petitioner's motion to quash the summons issued against it. The State Court of Appeal then ordered that the summons be quashed, but the State Supreme Court reversed, finding that petitioner's intentional act of placing its assemblies into the stream of commerce by delivering them to Cheng Shin in Taiwan, coupled with its awareness that some of them would eventually reach California, were sufficient to support state court jurisdiction under the Due Process Clause.

The U.S. Supreme Court ruled that the California Supreme Court judgment should be reversed, and the case was remanded as follows (citation omitted):


 * The Due Process Clause of the Fourteenth Amendment limits the power of a state court to exert personal jurisdiction over a nonresident defendant. "[T]he constitutional touchstone" of the determination whether an exercise of personal jurisdiction comports with due process "remains whether the defendant purposefully established 'minimum contacts' in the forum State." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985), quoting International Shoe Co. v. Washington, 326 U.S., at 316. Most recently we have reaffirmed the oft-quoted reasoning of Hanson v. Denckla, 357 U.S. 235, 253 (1958), that minimum contacts must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." "Jurisdiction is proper . . . where the contacts proximately result from actions by the defendant himself that create a substantial connection with the forum State." Ibid., quoting McGee v. International Life Insurance Co., 355 U.S. 220, 223 (1957).
 * Applying the principle that minimum contacts must be based on an act of the defendant, the Court in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), rejected the assertion that a consumer's unilateral act of bringing the defendant's product into the forum State was a sufficient constitutional basis for personal jurisdiction over the defendant. It had been argued in World-Wide Volkswagen that because an automobile retailer and its wholesale distributor sold a product mobile by design and purpose, they could foresee being haled into court in the distant States into which their customers might drive. The Court rejected this concept of foreseeability as an insufficient basis for jurisdiction under the Due Process Clause.
 * The Court disclaimed, however, the idea that "foreseeability is wholly irrelevant" to personal jurisdiction, concluding that "[t]he forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State."
 * When a corporation 'purposefully avails itself of the privilege of conducting activities within the forum State,' it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owners or to others.
 * We now find this latter position to be consonant with the requirements of due process. The substantial connection, Burger King, 471 U.S., at 475; McGee, 355 U.S., at 223, between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State. The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State. Additional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State. But a defendant's awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State.