Kim & Chang’s International Arbitration & Cross-Border Litigation Practice represented the seller in an international arbitration case related to a post-M&A dispute in the automotive manufacturing industry. This case was recognized for the strategic and creative methods taken to address the issues related to the case, resulting in our firm receiving the “Arbitration Award” at the seventh Korea Legal Awards hosted by Money Today.
 
Various issues were in dispute in the case, including (i) the violation of Korean labor laws, (ii) breach of representation and warranty related to the accuracy of financial statements in the sale and purchase of shares in an M&A transaction, (iii) breach of a special indemnification provision provided under the contract for the purchaser, and (iv) compliance with Korean labor laws, among others.

In particular, regarding the breach of the special indemnification provision contractually provided for the purchaser, our firm was able to obtain the Tribunal’s decision that there was no breach of the provision claimed by the claimant despite the additional losses incurred by the selling company as a result of the employee lawsuits regarding the inclusion of regular bonuses in ordinary wages. This was achieved through practical and logical analysis of the language and structure of the provision, as well as by explaining the realities of labor disputes in Korea around the time the contract was negotiated during the M&A transaction.

In the end, our firm successfully defended all claims against the client, and the client was able to recover most of its legal costs as well.