- Recent Trends
South Korea is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Award (“New York Convention”) and has ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”).
Arbitration in South Korea is regulated by the Arbitration Act (the “Act”), originally enacted in 1966. The Act was amended in 1999 to align with the 1985 UNCITRAL Model Law on International Commercial Arbitration. In 2016, the Act underwent further amendments to incorporate key provisions of the 2006 Model Law amendments.
The Korean Commercial Arbitration Board (“KCAB”) is the primary arbitral institution under the Act. Recently, KCAB announced its progress on revising the International Arbitration Rules last updated in 2016. Among the many topics under revision is the “early determination procedure”. Through the new rules, KCAB expects to provide parties with a quicker resolution to their disputes compared to the already-existing expedited procedure.
International arbitration in South Korea has steadily increased over the years. IP-related arbitrations, involving the gaming, life sciences and healthcare, and entertainment industries are growing. In 2020, the gaming and entertainment disputes comprised 7.4% of KCAB’s total international arbitration cases.[1]
Treaty-based arbitrations both by Korean investors against foreign States and vice versa has consistently increased as well. As of 31 December 2023, a total of 18 ISDS cases involving Korean parties have been filed – 8 of those cases are still pending. Out of the 10 ISDS cases that have concluded, 4 cases were decided in favor of the State while the others were either decided in favor of the investor, discontinued, or settled. The most recent ISDS case filed against the South Korean government is Mohammed Reza Dayyani and others v. South Korea(II) filed on 18 October 2021.[2]
- Recognition and Enforcement of Foreign Arbitral Awards in South Korea
Korean courts have generally been viewed as pro-arbitration, known to set aside a foreign arbitral award only in limited circumstances under Article 36(2) of the Act, which mirrors Article 5 of the New York Convention.
Under Article 37(1) of the Act, a party that wishes to have an award recognized and enforced in Korea should obtain a recognition or enforcement judgment from the competent Korean court. Article 38 of the Act further provides that the court will recognize or enforce the arbitral award unless one of the limited grounds for challenging an arbitral award set out in Article 36(2) of the Act is shown to apply.
A party seeking to set aside the award must furnish proof that (1) a party to the arbitration agreement was under some incapacity under the law applicable to him or her or the said agreement is not valid; (2) the party making the action to set aside was not given proper notice; (3) the award deals with a dispute not falling within the terms of the submission or contains decisions on matters beyond the scope of submission; or (4) the arbitral tribunal or procedure was not in accordance with the agreement of the parties. The court may also set aside the award in case it finds, on its own initiative, that either (a) the subject-matter of the dispute is not capable of settlement by arbitration under the laws of the Republic of Korea; or (b) the award is in conflict with the good morals and other forms of social order of the Republic of Korea.
Once a judgment recognizing and enforcing an award has been obtained from the Korean court, the court’s judgment can be enforced against the defendant’s assets by means of compulsory execution judgment. Under Article 165 of the Korean Civil Procedure Act, a party’s right to apply for the recognition and enforcement of an award expires after 10 years following the date of the award. For domestic awards, a losing party’s application to set aside an award must be filed within three months from the date that party received a duly authenticated copy of the award or the duly authenticated copy of a correction, interpretation or additional award under Article 34 of the Act.
- Jipyong’s Global Practice Group
Jipyong’s Global Practice Group brings together the expertise of our diverse team of lawyers from across the globe, delivering tailored legal solutions to meet the unique challenges of multinational businesses and organizations.
Our Global Dispute Resolution Team is designed to provide clients with effective, strategic solutions for resolving disputes across borders. With a team of experienced arbitration and litigation professionals, we offer tailored services to manage complex international disputes in a wide range of industries.
Jipyong’s Global Dispute Resolution Team has extensive experience in international arbitration before leading institutions such as the International Chamber of Commerce (ICC), the Hong Kong International Arbitration Centre (HKIAC), the Singapore International Arbitration Centre (SIAC), the American Arbitration Association (AAA), the London Court of International Arbitration (LCIA), and the Korean Commercial Arbitration Board (KCAB). The Team often handles U.S. litigation cases in both federal and state courts mostly in New York, California, and Florida.
KEY INTERNATIONAL ARBITRATION CASES
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- Prevailed in an ICC arbitration case representing a publicly-listed Korean pharmaceutical company against a multinational medical supply exporter
- Prevailed in a SIAC arbitration case representing a Korean private equity investment trust against a Cambodian company, obtaining a damages award of over USD 145 million
- Prevailed in a SIAC arbitration representing a Korean heavy equipment manufacturer against an Omani company
- Successfully defended all claims by solely representing a large Korean company in an ICC construction arbitration case filed by a foreign multinational corporation
- Conducted a KCAB arbitration in a dispute between a domestic company and a US company based on KOR-US FTA on behalf of a US company
- Conducted a KCAB on behalf of a large Korean trading firm in a trade dispute against an Eastern European company
- Conducted a HKIAC arbitration on behalf of Korean medical device manufacturer in a contract dispute against a Chinese company
- Conducted an ICC arbitration in JV contract disputes against Taiwanese companies on behalf of large Korean company
- Conducted a KCAB arbitration on behalf of Korean pharmaceutical company against a Nigerian company and obtained recognition at a Kenyan court/enforcement
- Conducted a SIAC arbitration at the SIAC against Central Asian importing company on behalf of a large Korean company
- Conducted a SIAC arbitration representing an overseas affiliate of a Korean conglomerate against an Indonesian subsidiary of a large French company
- Conducted an ICC arbitration representing a Korean broadcaster against an international sports association
- Conducted a SIAC arbitration representing a Korean broadcaster against an international sports association
- Conducted an LCIA arbitration representing a Korean heavy equipment manufacturer against an Azerbaijani chemical producer-
- Conducted an ad hoc arbitration on unfair dismissal on behalf of a foreign client
- Represented a Korean steel export company in an ICC arbitration against Turkish company
- Represented a Korean conglomerate in an ICC arbitration against a U.S. power equipment maker
- Conducted an ad hoc arbitration in the UK in a ship building contract dispute on behalf of a domestic guarantee financing institution
- Conducted an AAA arbitration in connection with breach of representation and warranty under a corporate M&A contract on behalf of a domestic shareholder
- Represented Hyundai-Vinashin in an arbitration raised by GEMADEPT, a Vietnamese state-run logistics company, before Vietnam International Arbitration Center (VIAC)
- Conducted an arbitration under the International Arbitration Rules of the KCAB against a French company in a dispute involving a combined cycle power plant in Middle East on behalf of a large Korean construction company
- Represented a large Korean construction company in international arbitration regarding building steel mill in Egypt
- Represented a French company in the arbitration hearings before Korean Commerce Arbitration Board regarding Haenam-Jeju submarine cable project
JIPYONG’S PRESENCE IN THE INTERNATIONAL ARBITRATION COMMUNITY
Jipyong’s Global Dispute Resolution Team has steadily established itself as a key player in the international arbitration community both within and outside of Korea. Through our commitment to excellence and our growing portfolio of high-stake cases, we continue to expand our presence and influence in this dynamic field. Our team actively participates in and sponsors international events such as the Seoul ADR Festival, New York State Bar Association Global Conference, and the Asia/Pacific Conference in Seoul.
Recently, Jipyong successfully co-hosted a Negotiation Skills Workshop with the Singapore International Mediation Centre (SIMC) during the Seoul ADR Festival 2024.�� The Workshop brought together professionals from diverse backgrounds, offering insights into advanced negotiation and mediation techniques, conflict resolution, and effective communication strategies. Led and participated by seasoned experts, the interactive sessions provided hands-on experiences and real-world applications. Positive feedback was received, reaffirming our commitment to fostering growth and excellence within the professional community.
PROFESSIONALS
Jipyong’s Global Dispute Resolution Team includes highly skilled and experienced attorneys who have conducted litigations in both Korean and U.S. courts. Our team consists of legal professionals licensed in Korea, California, New York, Illinois, the United Kingdom, New Zealand, and Russia. The broader network of attorneys at our subsidiary offices practice in China, Vietnam, Indonesia, Cambodia, and Hungary.
Jinhee Kim, Head of Global Dispute Resolution Team, worked as a trial attorney at renowned international law firms such as Paul Hastings before joining Jipyong. She handles international litigation for Korean conglomerates and is an unrivalled arbitration and negotiation expert who has resolved 30 cases over the last 3 years.
Somin Jun, Senior Foreign Attorney at the Team, worked at Chicago-based law firms handling a wide variety of litigation matters and second-chairing jury trials in the Circuit Court of Cook County. At Jipyong, she advises and represents both domestic and international clients in international arbitration and cross-border litigation cases. Yong Ik Lee, Senior Foreign Attorney at the Team, primarily focuses on complex international arbitration and overseas litigation cases. He has handled numerous cases requiring a deep understanding of advanced technologies and has appeared before leading international institutions such as ICC, LCIA, and SIAC.
Footnotes
[1] IP Arbitration: Making Headway in South Korea – Kluwer Arbitration Blog
[2] Korea, Republic of | Investment Dispute Settlement Navigator | UNCTAD Investment Policy Hub