"Embarrassed" Jeong Sye-gyun's Rebuke: Will 'K-Battery Lawsuit' Under-the-Table Negotiations Accelerate?

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyewon] Prime Minister Chung Sye-kyun has expressed a message hoping for a "quick resolution" to the domestic and international lawsuits related to electric vehicle batteries between LG Energy Solution and SK Innovation, drawing attention to whether the two companies will reach a dramatic agreement two weeks before the final ruling by the U.S. International Trade Commission (ITC).

At a press club debate on the same day, Prime Minister Chung responded to the question, "As a prime minister with a business background, are you willing to intervene in the battery lawsuits between LG and SK overseas?" by saying, "The litigation costs amount to hundreds of billions of won, which is an economic issue, but if the two companies fight, it only benefits others."

He continued, "Even the U.S. political circles are urging for a quick resolution," adding, "It is truly embarrassing." Prime Minister Chung said he had directly discussed the litigation with the top executives of both companies, stating, "Isn't it shameful? Should we cause worry to the people? Please resolve it quickly," urging them to do so.

He also appealed, "The future of Korea's battery industry will greatly open up, so I hope the two companies stop fighting over a small piece of the pie among themselves and actively move toward the large global market."

This is the first time a senior government official has officially urged the two companies to reach an agreement in the third year of their ongoing lawsuit.

Since April 2019, when LG Chem first filed a trade secret infringement lawsuit against SK Innovation at the ITC, the two companies have been engaged in various disputes over battery trade secrets and patents both domestically and internationally.

LG Energy Solution and SK Innovation have maintained that "the door for dialogue toward a settlement is open," but have struggled to narrow their differences over the amount of compensation.

Following Prime Minister Chung's remarks, both LG Energy Solution and SK Innovation expressed their intention to work toward an amicable settlement, while not hiding their discomfort toward the other party.

LG Energy Solution stated, "We are currently making our best efforts to reach a settlement regarding the battery lawsuit," and added, "We will actively work toward a smooth resolution. However, until recently, SK Innovation's proposals have shown no willingness to negotiate, so we hope for proposals worth discussing."

Ji Dong-seop, head of SK Innovation's battery business, released a statement titled "Regarding the Prime Minister's Concerns on the Battery Lawsuit," saying, "Despite having sincerely engaged in all litigation processes so far, we deeply regret not being able to resolve the matter amicably and apologize to the public."

Ji explained, "SK Innovation believes that the battery industry not only drives our company's growth but also significantly contributes to the national economy and the development of related industrial ecosystems as a second semiconductor, so we are focusing on nurturing it. Meanwhile, LG Chem (now LG Energy Solution) filed a trade secret infringement lawsuit, and the litigation has now entered its third year."

He added, "We take the Prime Minister's strong expression of concern about the battery lawsuit during the live broadcast at the Press Club as a reflection of the public's wishes. We fully recognize these public concerns and hopes and will do our best to resolve the issue amicably through cooperative and constructive dialogue with the opposing party." He also said, "We will strive to ensure that K-battery contributes to the national economy and industrial ecosystem development as the public expects."

Industry insiders are paying close attention to whether Prime Minister Chung's remarks will change the deadlocked negotiation atmosphere. Although the differences between the two companies are significant and an agreement may not be easy, there is also hope for a dramatic settlement within two weeks, given that the Prime Minister revealed he had direct communication with the top executives of both companies.