Newsletter | July 2016, Issue 2
	International Arbitration & Cross-Border Litigation
	Kim & Chang Successfully Represents a Foreign Ship Components Supplier in a KCAB International Arbitration
	In a hearing that took place in Seoul before a sole arbitrator (a U.S. national), our International Arbitration & Cross-Border Litigation Practice Group successfully represented a foreign ship components supplier in a KCAB international arbitration.
	Background
	The arbitration was filed by a ship engine builder for damages incurred from alleged defects in supplied components that were incorporated into its engine system and a number of vessels. The underlying contract was governed by Korean law. The foreign supplier designed, manufactured, and supplied components based on the specifications provided by the engine builder. However, at the commissioning stage of one of the vessels, it was discovered that the vessel and the engine were built to different specifications, and that the relevant class limits could not be met.
	The engine builder sought damages based on a general product warranty clause in the supply contract, which provided that the component had to be fit for purpose.
	The engine builder argued that the component supplier had the obligation to check whether the specifications provided by the client were appropriate and should have designed its components accordingly, or, at least should have designed the components so that it could cover a substantial margin of error in the specifications.
	Details
	Along with our client and industry experts, Kim & Chang’s International Arbitration & Cross-Border Litigation Practice Group attorneys conducted intensive analysis to identify the distinctive technical features of the components in question, and the current practice of the shipbuilding industry.
	After a four-day-hearing at the Seoul International Dispute Resolution Center, the arbitrator rejected all claims of our opponent (the engine builder), and recognized our client’s (the supplier’s) counterclaim for unpaid portions of the contract.
	Our client was awarded arbitration costs and most of the legal fees.
	This case involved specialized and complicated technical issues regarding alleged defects in made-to-order products and the interaction of various system components.
	Kim & Chang was able to achieve a successful outcome for the client through an accurate understanding of the technical details and related industry practices.
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	www.kimchang.com International Arbitration & Cross-Border Litigation