Negotiating a Joint Venture Agreement in Korea: Shareholder Agreements in Korea

We recently had a client with a myriad of joint venture issues with their joint venture in Korea. The issues were primarily caused by the joint venture agreement being drafted in Korean only, without review by a competent lawyer in Korea, and most of the negotiations occurring through a lawyer without adequate English language skills.  

For example, the American company believed that the joint venture agreement stipulated that all disputes were to be resolved through arbitration in Hong Kong and that the American company had the right to appoint a statutory auditor. Both of these proved to be untrue.

The agreement was drafted in Korean, and the American SEVP never reviewed the joint venture agreement in any language other than Korean, a language he was unable to understand. Oddly enough, the Korean law firm drafting the agreement never even mentioned this to the American company.

Please read a few of my posts on drafting joint venture agreements. Please, always, have, at a bare minimum, the governing language of your joint venture agreement as English, and in most cases, it is best to have an arbitration clause.

• Entering into a Joint Venture/ Partnership in Korea
• Bare Essential of a JVA in Korea
• Basic Agreements for Doing Business in Korea
• Due Diligence, Agreements, and Attorneys: Doing Business in Korea

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only a few non-Korean lawyers as a Top Attorney by AsiaLaw,  IPG Legal is consistently ranked a Top Dispute Resolution Law Firm for our litigation, arbitration, and mediation services, and IPG Legal is consistently rated a top-tier law firm in corporate law, litigation, arbitration, franchise law, distribution law, estate law, family law, employment & labor law, and criminal defense.

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