Kim & Chang successfully defended a Korean manufacturer of automotive parts (“Company A”), involved in a post M&A dispute in an arbitration under the Hong Kong International Arbitration Centre (“HKIAC”) rules. In this case, Company A sold its shares in its subsidiary to overseas Company B. Before and after the closing of the transaction, the subsidiary’s former employees raised claims for unpaid wages and benefits in the Korean court, and eventually the target company had to compensate the employees. Company B, together with the subsidiary, claimed for damages against Company A based on special indemnification provisions and general indemnification provisions for breach of representation and warranties under the share purchase agreement.

While it was a difficult case due to the multiple representations and warranties claims and other contractual breaches being asserted by Company B, our firm was able to successfully defend Company A on all fronts based on a comprehensive and multi-layered interpretation of the contract language and the governing law. The Tribunal recently issued its final award in favor of the respondent (i.e., Company A). All claims were rejected on the merits, and the respondent was awarded all of its arbitration costs and the vast majority of its other legal costs.