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Newsletter | November 2015, Issue 3
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International Arbitration & Cross-Border Litigation
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Korean Buyer Wins a KRW 25 Billion Arbitral Award
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Kim & Chang successfully represented a Korean company in a post-M&A International Chamber of Commerce (“ICC”) arbitration before a panel of three renowned arbitrators from three different nationalities. The dispute was governed by Japanese law, and was seated in Singapore.
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Facts
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The dispute involved a share purchase agreement concerning a Korean company’s acquisition of a Japanese telemarketing company. The agreement included a provision regarding the method for determining the prices of certain shares subject to the transfer. The dispute arose when the seller argued that the share price calculated by the Korean buyer was incorrect, claiming that it should be much higher.
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Kim & Chang filed the arbitration at the ICC, seeking confirmation that the share price calculated by the Korean company was correct. Immediately prior to filing the arbitration, we discovered that the seller had violated the representations and warranties clause of the agreement, and brought additional claims for damages amounting to KRW 25 billion.
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The Hearing
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During the four-day hearing in Singapore, Kim & Chang systematically argued and proved that the seller’s method for calculating the share prices was incorrect, and that the Korean company had suffered damages due to the seller’s violation of the representations and warranties clause.
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Outcome
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In its award, the tribunal deducted a substantial amount from the price argued by the seller, while awarding as damages, the entire KRW 25 billion we sought on behalf of our client, the Korean buyer.
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These issues involving the determination of share prices are common in international share transfer agreements.
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Although the governing law of the agreement was Japanese law, our in-depth experience and understanding of the background, structure, and issues helped us to bring about a successful outcome for our client with limited assistance from the local counsel (a Japanese law firm).
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