Lone Star Fund v. Korea Case: 2022 Arbitral Award May Eliminate Some Koreans' Prejudice and Doubts about the Fairness of ISD and ICSID = Lone Star Fund v. Korea Case: 2022 Arbitral Award May Eliminate Some Koreans' Prejudice and Doubts about the Fairness of ISD and ICSID

다국어 초록 (Multilingual Abstract)

In the face of Lone Star's claim for damages against Korea in ICSID arbitration, some experts expected damages of up to 3 trillion KRW, but the Arbitral Tribunal ordered Korea to pay 289 billion KRW in damages to Lone Star Fund in connection with the prolonged sale of KEB. The amount the Korean government has to pay is only about 5% of what Lone Star claimed.
The Tribunal considered that Lone Star's criminal conviction in relation to the KEB card stock price manipulation case could be seen as so-called cheat and run.
Lone Star Fund v. the Korea case put to rest the concerns of some Koreans who doubted the fairness of ICSID arbitration. Anti-American Koreans objected to the United States-Korea Free Trade Agreement (KORUS), which contains provisions designedto protect foreign investors who may initiate arbitration against Korean or the United States government under the UNCITRAL Arbitration Rules or the ICSID Convention. The anti-American Koreans argued that Korea renounce its judicial sovereignty by the ICSID arbitration jurisdiction clause of KORUS for investor-state disputes (ISD). Contrary to what they claim, the ICSID arbitral tribunal in this case was fairly impartial and was not influenced by the United States.
The Korean government should take this case as an opportunity to thoroughly reflect on its mistake of hastily selling Korea Exchange Bank to Lone Star, a kind of vulture fund, at a bargain price.