The government announced on November 25 that it had sent a letter to the Lone Star side demanding repayment of a total of 7.4 billion won, including costs incurred during the annulment proceedings of the international investment dispute (ISDS) arbitration award related to the sale of Korea Exchange Bank.
The Ministry of Justice stated that, on this day, it had sent a letter through its legal representatives urging voluntary repayment of a total of 7.4 billion won. This amount includes 7.3 billion won in costs incurred by the Korean government during the annulment proceedings, as well as approximately 80 million won and interest recognized by the International Centre for Settlement of Investment Disputes (ICSID) correction decision in May 2023.
The deadline for voluntary repayment is December 18, which is within 30 days from the date of the annulment decision.
In addition, the government announced that the lawsuit filed by Lone Star in June 2023 with the U.S. federal court to enforce the award was fully concluded as it was voluntarily withdrawn on November 21 (local time).
This lawsuit was filed by Lone Star after ICSID ruled at the end of August 2022 that the Korean government must pay 216.5 million dollars in compensation to Lone Star, seeking enforcement of the recognized compensation.
In response, the Korean government filed for annulment of the award and a stay of enforcement in September 2023, arguing that enforcement of the award should be suspended until the annulment proceedings were concluded, without any conditions such as partial payment guarantees. The government succeeded in obtaining a stay of enforcement, preventing forced execution.
Previously, in 2012, Lone Star filed an ISDS claim, arguing that the Korean government had unfairly intervened in the sale of Korea Exchange Bank, causing damages of 4.6795 billion dollars (approximately 6.1 trillion won). Lone Star had acquired Korea Exchange Bank for 1.3834 trillion won in 2003, engaged in negotiations with various companies to sell it, and eventually sold it to Hana Financial Group in 2012 for 3.9157 trillion won. Lone Star claimed that, due to the Korean government's intervention, it lost the opportunity to sell at a higher price and was forced to lower the sale price, and thus demanded compensation for damages.
The Ministry of Justice stated, "We will do our utmost to promptly recover the litigation costs and safeguard the national interest."
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