NEW YORK: Arbitration between Lone Star Funds and the Korean government began in Washington, D.C., last week, with the U.S. company demanding billions of dollars in compensation for interference in its business in Korea.
The first hearing began Friday at the International Centre for Settlement of Investment Dispute (ICSID), an international tribunal under the World Bank.
The Korean government sent a group of officials from the Ministry of Justice, Ministry of Strategy and Finance, Financial Services Commission (FSC) and Financial Supervisory Services on Wednesday to oversee the case.
This is the first investor-state dispute (ISD) to be filed against the Korean government under the ISD clause in the Korea-U.S. Free Trade Agreement that took effect in March 2012. The clause allows companies and investors to file for arbitration in the event of a dispute with a foreign government.
Although most information on the arbitration was not revealed to the media, Sim Sang-jeong, the floor leader of the opposition Justice Party, said some high-ranking officials who were previously involved in the case attended the hearing as witnesses.
According to a document we recently received, Han Duck-soo, a former prime minister [who was a finance minister at the time], and Kim Seok-dong, former FSC chief, are going to attend the tribunal,” she said in a speech at the National Assembly on April 13.
According to the ICSID’s website, the U.S. fund sent lawyers from Sidley Austin, a major U.S. firm, as its representatives.
