Kim & Chang has obtained a winning award for an energy sector company (the “Respondent”) in an arbitration case before the Korean Commercial Arbitration Board (the “KCAB”). The dispute involved a monetary claim among the members of a domestic consortium formed for the purpose of investing in overseas resource development.

The Respondent, along with other Korean companies including the Claimant, formed a consortium to participate in a mining development project in Africa (the “Project”). The consortium, through prescribed procedures, subsequently acquired the shares and related debts of a foreign major shareholder who was exiting the Project. However, the Claimant later argued that the consortium’s internal decision-making process for the Project’s shareholding restructuring was null and void and filed a KCAB arbitration, seeking payment from the Respondent for a loan that it held against the Project’s major shareholder and others.

Our firm focused its efforts on explaining the legitimacy of the consortium’s decision-making process based on relevant contract documents, including the joint investment agreement and other contracts among consortium members, as well as the results of the three prior arbitrations among the consortium members. This involved an in-depth analysis of relevant legal principles, such as the legal principles of “partnership” under Korean law and the doctrine of piercing the corporate veil under both Korean and BVI law.

As a result, our firm secured a winning arbitral award that dismissed all of the Claimant’s claims. We also successfully obtained an order requiring the Claimant to pay the majority of the Respondent’s legal fees.