Seoul High Court Rules in Favor of Fantom Foundation Against SikSin CEO Byung-Ik Ahn and SikSin Corporation

Seoul High Court Decision

A three-judge panel of the Seoul High Court’s Civil Division 19-3 has ruled in favor of the Fantom Foundation (the “Defendant” or “Fantom”) against Korean food technology startup SikSin (식신 주식회사) and SikSin’s CEO Byung-Ik Ahn (안병익) (collectively referred to as the “Plaintiffs”). This decision overturns the earlier judgment by the Seoul Central District Court, which had granted the Plaintiffs relief for payment of over 198 million FTM in full. The Seoul High Court has dismissed all relief sought by the Plaintiffs and ordered them to bear all litigation costs.

Background of the Dispute

On July 23, 2019, Ahn and SikSin filed a lawsuit against Fantom, a company based in the Cayman Islands. They alleged that they had delivered several services according to the service agreements (the “Service Agreements”) with Fantom, which included technical implementation of the Fantom Project and the application of Fantom’s technology to the food technology industry in South Korea. The first instance proceedings proceeded without Fantom’s knowledge.

On May 27, 2022, the Seoul Central District Court awarded Ahn and SikSin a judgment in their favor, which Fantom only became aware of on July 11, 2022. Fantom appealed within the subsequent completion appeal period of 30 days. The subsequent completion appeal system allows an additional opportunity to appeal when the initial appeal was missed due to circumstances beyond one’s control.

Details of the Appeal

The dispute arose from the Service Agreements where Fantom relied on Ahn’s claims about the superiority of the Fantom Project’s underlying technology, the Lachesis protocol. However, the appellate court found these claims to be unrealistic. Key points from the court’s findings include:

• The Lachesis Protocol was critical to the success of the Fantom Coin offering but was not realized as promised.
• SikSin’s technical paper was found to be plagiarized from a paper by Swirlds Labs.
• Ahn’s application for a patent on the Lachesis Protocol led to distrust towards him.

Ruling and Implications

The appellate court concluded that Fantom’s decision to establish its own development team, led by Andre Cronje and Quan Nguyen, was justified. The court noted that Ahn and SikSin did not actively participate in or contribute to the technical development of the Fantom Project. Furthermore, SikSin failed to integrate the Fantom Coin with their application as required.

As a result, all of the Plaintiffs’ claims were deemed meritless, leading to the reversal of the first instance court’s judgment. Fantom’s appeal was granted, and all relief sought by the Plaintiffs was dismissed.

Statements from the Parties

Michael Kong, CEO of Fantom, commented: “The Seoul High Court’s ruling confirms our long-held position that our development team, led by Andre Cronje and Quan Nguyen, was instrumental to our success. We appreciate the court’s thorough review of the facts and our legal team’s dedication.”

Lawyers Young Seok Lee and Jeong Min Lee from RosettaLegal, who represented Fantom, added: “We took over the case in November 2023 and faced the challenge of reviewing extensive materials and presenting arguments within a short time. We are pleased that the appellate court’s decision reflects the complete picture of Fantom’s arguments.”