This week, a South Korean property developer (“Ansung”) became the second ever investor to request ICSID arbitration against the People’s Republic of China (“PRC”) (Ansung Housing Co., Ltd. v. People’s Republic of China (ICSID Case No. ARB/14/25)). Little is known about the claims, which are reported to arise from the alleged actions of the provincial government in relation to Ansung’s investment in the construction of a golf and country club. Ansung’s counsel has told the publication Global Arbitration Review that:
“The case is about a development project for a golf country club and condominiums in Sheyang-Xian, Jiangsu province. Ansung made investments in late 2006. Due to the various arbitrary and illegal actions and omissions of the Sheyang-Xian government, Ansung has been deprived of the use and enjoyment of its investment as its investment plan has been frustrated. As a consequence, in October 2011, Ansung was forced to dispose of its entire investment to a Chinese purchaser at a price significantly lower than the amount Ansung had invested toward the project. Ansung suffered more than CNY100 million and is seeking an award of damages.“
The claims were registered by the Secretary-General of ICSID on 4 November 2014. The Tribunal has not yet been constituted.
In our two previous blogs¹ on South Korea we commented on the opening of the Seoul International Dispute Resolution Centre and noted that this, together with the liberalisation of its legal market and the introduction of the Korean Commercial Arbitration Board’s (KCAB) International Arbitration Rules, meant that a new phase for international arbitration in South Korea was beginning. We further commented on the possibility that Seoul could become a hub for international arbitration in East Asia if the local courts are supportive of international arbitration.
However, this year the South Korean courts have twice refused to allow the enforcement of international arbitral awards. This is contrary to their usual approach where they have generally refused to query awards and have instead recognized and enforced them in accordance with the New York Convention.
The new Seoul International Dispute Resolution Centre (IDRC) opened its doors in Korea last month, signalling the rising trend in international arbitration in Asia.
Attending the official launch were Herbert Smith Freehills’ disputes partners Tony Dymond, based in Seoul, and Justin D’Agostino, based in Hong Kong and Greater China, both of whom have specialist experience in international arbitration.
The Seoul IDRC offers a neutral facility, designed to host hearings for arbitrations seated around the region, as well as conferences and seminars on international arbitration. It was established by the Korean Bar Association and the Korean Commercial Arbitration Board, with support and funding from the Seoul Metropolitan Government and the Korean Ministry of Justice.
The Seoul IDRC operates on a similar model to Singapore’s Maxwell Chambers, and is expecting to host several international arbitral institutions at its premises. These include the HKIAC – which celebrated the launch of its first overseas office in Seoul on 27 May 2013 – as well as SIAC, LCIA, ICC and AAA/ICDR.
The Centre is equipped with state-of-the-art technology and equipment and is centrally located in the prestigious Seoul Global Tower Building. The aim of the facility is to position Seoul as another international arbitration “hub” in Asia, with particular focus on disputes involving Korean and Japanese parties.
The proliferation of arbitration in Korea is also important to the Seoul IDRC’s success, a topic which we covered in a previous blog. The latest signs indicate that arbitration is increasing in the region and, in fact, the Centre has already hosted its first case.
Herbert Smith Freehills was one of the first foreign law firms to receive approval from the Korean Ministry of Justice to open an office in Seoul, following the liberalisation of Korea’s legal market to foreign entrants.
To mark the opening of Herbert Smith Freehills’ new office in Seoul today, we examine arbitration in South Korea.
Whilst the Korean Commercial Arbitration Board (KCAB) has reported growth in the number of international arbitrations, South Korea is seldom considered as a seat of international arbitration and use of the KCAB’s International Arbitration Rules has been limited so far (the International Rules). But is this about to change, and might it be heralded by the recent increase in foreign law expertise in Seoul?
A growing number of Asian economies are looking to each other for trade and investment. This note takes a look at such a strategic trade partnership pact – the Comprehensive Economic Cooperation Agreement (the “CEPA“) entered into between India and South Korea. Signed in August 2009, the CEPA came into force officially on 1 January 2010.
The CEPA is an agreement adopted to facilitate comprehensive economic relations including merchandise and service trade, investment and economic cooperation. It is a de facto free trade agreement. The pact is expected to increase existing trade between India and Korea (USD 15.6 billion as of 2008) by as much as USD 3.3 billion annually. It aims to grow bilateral trade primarily by decreasing tariffs, encouraging investment and promoting the exchange of skills between the two countries. Ultimately the CEPA calls for barriers to fall in the investment field, improving the investment environment between India and South Korea and offering opportunities to expand trade and investment ties.