Enforcement of Arbitral Awards in Korean Courts: Arbitration Law Basics

After an arbitration panel outside of Korea renders an arbitral award against a Korean company or individual, typically, if the non-prevailing party lacks assets outside of Korea or the prevailing party needs to enjoin acts in Korea, the prevailing party chooses to enforce the arbitration award in Korea.  Enforcement is not as easy as just giving arbitral awards to non-prevailing Korean parties.  For enforcement of foreign judgments in Korean courts please see: Enforcement of Foreign Judgments in Korean Courts.  When enforcing foreign arbitral awards in Korea, Article 37(1) & (2) of the Arbitration Act of Korea comes into play, thus, leading to the need to apply Korean Law to the enforcement of the arbitral awards and utilize a Korean court for enforcement. The good news is that in 2016, the Arbitration Act of Korea was amended to, among other things, allow for a quicker and less cumbersome manner of enforcing

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Arbitration against Korean Government Agencies in Korea: Korean Arbitration Law Basics.

The Korean National Assembly amended the Act on Contract to Which the State is a Party, partially, on December 1, 2017.  The amendment was intended to encourage the Korean Government to arbitrate more disputes with parties that have contracted with the Korean Government.  To date, few cases have been resolved via Arbitration when disputes occur between the Korean Government and parties to a contract with the Korean Government.  The reason stems, mainly, from realities within many Korean-based law firms, within in house legal teams at government agencies and the lack of knowldge of the benefits of arbitration for the Korean court system, Korean government agencies and those doing business with the Korean government.  For a general article on Arbitration in Korea, please see: Arbitration in Korea.  ACT ON CONTRACTS TO WHICH THE STATE IS A PARTY Article 28-2 (Settlement of Dispute Resolution) (1) The head of each central office or

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English-speaking Korean lawyers and International Lawyers at International Law Firm in Korea discussing issues of Korean Law

IPG Legal is a leading client-focused international law firm with offices in Korea that is, often, selected over the ubiquitous Korean Law Firms when success is essential and success depends on nuanced street-smart advice, proactive  and unconflicted representation. Our attorneys are, intentionally. different from the crowd.  From our retired judge partners to our junior associates, we are all trained with an intense focus on client success, lawyer proactivity, and to understand the nexus between your commercial and legal needs. Our attorneys shall never push to you useless memos, non-nuanced legal advice or get you into litigation without an honest assessment of the merits and shortcomings of the matter. We are  – intentionally different from the crowd.  Globally Experienced – Locally Connected.  We are IPG.  Korean Legal Practices Korean Antitrust, Competition & FTC Arbitration, Int’l & Domestic Korean Civil Litigation Korean Criminal Defense Korean Corporate Law & Compliance Korean Employment, Labor &

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English-Speaking Arbitration Attorneys in Korea

International arbitration between Korean companies and American, Australian, British, Chinese, Indian, German and other nation companies is on the increase.  Regrettably, few Korean attorneys are capable of handling international arbitration cases in the English language, because of the lack of experience in complex international arbitration and the lack of adequate English language skills.  The reality is Korea has few English-speaking arbitration attorneys capable of handling complex international arbitration matters, thus, many firms have turned to foreign attorneys to fill this glaring gap.   Sean Hayes is the author of the he Korean Law Blog .  English-speaking Korean attorneys contribute to this blog.  Sean Hayes, his retired Korean judge partner, a senior associate and other international attorneys for IPG are engaged in international arbitration at the Korean Commercial Arbitration Board and other international arbitration board for multinational companies for cases against Korean companies.   Clients engaged us for construction, manufacturing, joint venture and

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Involuntary Dissolution of a Company in Korea: Shareholder Disputes in Korean Companies

Shareholder Disputes in Korea: Involuntary Corporate Dissoultion Under Article 520 of the Korean Commercial Act, a minority shareholder, holding at least 10 percent of the total and outstanding shares of a company, may request to the Korean court of competent jurisdiction the dissolution of a company.  Korean court judges consider this procedure an extraordinary procedure and, only, rule in the affirmative, usually, after all other avenues to resolve the shareholder dispute have failed. Article 520 of the Commercial Act of Korea (Judgments for Dissolution) “(1) If, in any of the following cases, there exists unavoidable reasons, any shareholder who holds shares representing no less than 10 percent of the total issued and outstanding shares may request a court to dissolve the company; When the company’s business operation continues to be considerably in deadlock and as a result irreparably damage to the company is caused or threatened; When the management or

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U.S. Court Refuses to Enforce Taiwan Arbitral Award: Lesson for Drafting Arbitration Clauses in Korea

My friends over at the publication The International Law Office directed me to an interesting case involving the enforcement of arbitral awards that brings light to the fact that, in most cases, arbitration should not be held in a nation that is not a signatory to the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Award (“New Convention”). U.S. Court Reuses to Enforce Taiwan Arbitral Award In Clientron Corp. v. Devon IT, Inc. a U.S. Federal Court in Pennsylvanian refused to enforce a US$ 6.5 million award rendered at the Chinese Arbitration Association in Taiwan.  A Taiwanese Court accepted the award for enforcement in Taiwan.  The U.S. Court in Clientron refused to enforce the judgment under the New York Convention and Pennsylvania’s version of the U.S. Uniform Foreign Money Judgment Recognition Act based on the argument noted below. Likely, Korean courts would come to the same

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Liquidated Damages Clauses Upheld by Korean Courts

When drafting an agreement with a Korean party, it is, generally, advisable in a case when a breach is not easy to quantify (e.g. Damages for violation of IP Rights) to include a liquidated damages clause. Liquidate damages are monetary awards where a violation is agreed to be, at a minimum, a certain sum of money.  Thus, a liquidated damage clause may note that revealing of the intellectual property shall result in damages that will not be less than USD 100,000. Korean Civil Act Article 398 (1)- (4)(1) The parties may determine, in advance, the amount of damages payable in the event of the non-performance of an obligation. (2) Where the amount of damages determined in advance is unduly excessive, a court may reduce the amount to a more reasonable and appropriate sum. (3) The determination in advance of the amount of damages shall not affect the obligee’s demand for

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Liquidated Damages, Penalties, and Confusion in Korean Contracts

As an American attorney, it’s a bit strange for me to read a Korean contract and see how the word “penalty” is used. In the United States (as well as other common law jurisdictions), when a contract contains a “penalty,” the clause is invalidated. Korea, however, allows “penalties” in contracts. Cutting to the chase, this is merely an issue of confusing, overlapping terminology. But since its confusing, its worth explaining. To start with, a bit of background on liquidated damages. Liquidated damages refer to damages the amount of which the parties designate during formation of a contract as compensation for non-breaching parties in the event of breach. to collect as compensation. In the US and other common law jurisdictions, liquidated damages clauses are invalidated if the purpose is to punish the breaching party, rather than to compensate the injured party. These clauses are referred to by the court as “penalties.”

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Sean Hayes to give Speech at American Bar Association Conference in LA

Sean Hayes will give a presentation entitled Mickey Mouse, Sports Stars, Celebrities, Billions of Dollars at Stake. Who Owns the Rights to an Individual’s or a Character’s Image? 10:30 – 12:30 April 11, 2014. The speech is part of the ABA Business Law Spring Meeting in LA.  More information can be found at: ABA ___info@ipglegal.com (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. info@ipglegal.com.

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Investor-State Disputes/Arbitration in Korea: ABA Dispute Resolution Magazine

The American Bar Association Dispute Resolution Magazine has an interesting article on Investor-State Disputes that is relevant to Korea.  The article appears in the Fall 2013 edition of the magazine. Some of the “top” law firms in Korea have been notoriously conflicted – thus leading to choices made in agreements that are less than favorable to clients.  This has led, in part, to South Korea being perceived as not a foreign-friendly destination for direct investment.  Additionally, the courts, recently, invalidated an arbitration award against the Korean government – thus frightening more investors from the Korean shores.  Hopefully, Korea has learned from these mistakes.  Korea is a developed market with a vibrant local economy.  Protective measures are no longer needed.  Enforcement of the next arbitration award against the Korean government can be a way to enhance the international reputation of the Korean courts and, thus, increase investor confidence.    The article

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Arbitration in Korea under the Korean Commercial Arbitration Board: International Arbitration Rules

Prior to the revision of the Korean Commercial Arbitration Board’s International Arbitration Rules, all cases submitted to the board under arbitration clauses that did not specify “International Arbitration Rules” govern the arbitration -would lead to the local arbitration rules being applied and the language of the arbitration being English. A client that was working with one of the other law firms in Korea, got caught up in this issue and, luckily, we were able to amend a joint venture agreement (amended for a variety of reasons) to take into account the disadvantage that could have been appreciated if arbitration was required. Many foreign companies, prior to this amendment, quickly realized that they hired attorneys that were not aware that the local arbitration rules would apply. We recommend, always, having multiple internationally-experienced attorneys looking at your agreements or you, also, may be stuck with an agreement that may not adequately protect

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