Due to recent rise in foreign exchange rate, many companies which transacted Knock-In Knock-Out (KIKO) FX options products with banks suffered loss and more than 100 small and medium sized companies filed lawsuits against banks. While the main lawsuits are in progress, the courts ruled on the preliminary injunction cases which were filed by the companies to seek suspension of the effect of the KIKO contacts. On December 30, 2008, Seoul Central District Court (the "Court") ruled partially in favor of companies and consequently approved the termination of the KIKO contracts. The Court found nothing inherently unfair in the structure of the KIKO transactions. Particularly, the KIKO contracts did not involve any unfair terms or conditions prohibited by the Standard Terms and Conditions Act. The Court also mentioned that the counterparties` ignorance or lack of experience in derivatives transactions did not the make the KIKO contracts substantially unfair and, consequently, is not an appropriate basis to challenge the effectiveness of the KIKO contracts pursuant to the Civil Code. The Court also made it clear that the KIKO transactions were not based on any fraud or misunderstanding, which the companies also claimed to invalidate the KIKO contracts pursuant to the Civil Code. However, the Court held that there have been substantial changes in the underlying circumstances, which had originally led the parties to enter into the KIKO transactions. Specifically, the Court mentioned that the abrupt rise in the foreign exchange rate, which was unforeseeable at the time of entering into the KIKO transactions, changed the dynamics of what the parties had originally bargained for. As a result, the Court rendered its preliminary injunction ruling based upon a non-codified principle of "changes in the circumstances". After the ruling, there was a court reshuffling whereby the judges of the bench handling the preliminary injunction cases involving KIKO were changed and on April 24, 2009, the new bench announced its position through rulings. The Court rejected the fraud claim, the alleged breach of the principle of good faith and fair dealing, the alleged breach of the Standard Terms and Conditions Act, the alleged breach of the Civil Code, and others. Especially, the Court rejected the change-in-circumstance theory based on which the previous bench had ruled in favour of the companies. The Court, however, considered whether the banks complied with their duty to protect the applicants by satisfying the disclosure and customer suitability requirements. In the cases where the Court partially granted preliminary injunctions, the Court mentioned that banks failed to comply with the risk disclosure and customer suitability requirements. Even in those cases, however, the court still upheld the right of the respondent banks to receive payments up to 130% of the applicable KIKO contract amount, which the Court mentioned were the foreseeable rise of the foreign exchange rate based on the historical data.