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Kim et al. v. KOGAS - decision

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On February 7, 2025, a group of South Korean youths and shareholders of Korea Gas Corporation (KOGAS), a state-owned gas company, filed an injunction application to block KOGAS’s board resolution to invest USD 562 million in the Mozambique Area 4 Coral II (North) FLNG project. The plaintiffs argued that the investment violated their rights, including environmental rights under the Constitution and related statutes, as well as shareholder rights to dividends, and posed risks of irreparable economic and environmental harm. They emphasized the urgency of intervention due to Mozambique’s political instability, weak governance, declining global LNG demand, and prior project failures.

The plaintiffs contended that the board resolution exceeded the company’s proper authority and breached directors’ fiduciary duties. They argued that environmental rights require protection against overseas investments that create substantial ecological risks, the resolution constituted mismanagement threatening company value and dividends, and urgent relief was needed because the investment could not easily be undone once executed. They also highlighted that participation of other international companies made unilateral reversal difficult and that the project’s continuation could exacerbate environmental harm and international disputes.

On July 17, 2025, the Daegu District Court dismissed the plaintiffs’ application, finding that they did not have a legally recognized right to challenge the board resolution. It held that environmental rights and statutory provisions did not create enforceable claims for the board resolution at issue and that the plaintiffs failed to demonstrate sufficient urgency to justify injunctive relief, as potential economic and environmental harms were either speculative or addressable in the main litigation.

Kim et al. v. KOGAS

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