(i)

Article 26-2 (1): The confidentiality of communications is guaranteed. Specifically, confidential communications made between an attorney and a client or a potential client (collectively, “Clients”) for the purpose of providing or receiving assistance in legal matters or proceedings are protected from disclosure.
 

(ii)

Article 26-2 (2): The confidentiality of documents and materials prepared by attorneys is guaranteed. Specifically, an attorney may refuse to disclose any documents or materials (including those in electronic form) prepared in connection with a case for litigation, investigation or inquiry.
 

(iii)

Article 26-2 (3): Notwithstanding the above-mentioned Paragraphs (1) and (2) of Article 26-2, communications, documents or materials may be disclosed if the Clients consent, or if otherwise required by special provisions of other laws.
 

(iv)

Addenda Articles 1 and 2: The Amendment will take effect one year after promulgation. However, it will also apply to communications, documents and materials exchanged or prepared prior to the effective date.
 

1.

Strengthened Legal Basis for Asserting Attorney-Client Privilege in Arbitrations Governed by Korean Law

In international arbitration, it is common for one party to refuse the other party’s requests for disclosure of documents during the document production phase of the proceeding by invoking attorney-client privilege. However, in some cases where Korean law is relevant to document production procedures—for instance, when (i) Korea is the seat of the arbitration, (ii) Korean law governs the merits of the dispute, or (iii) the relevant communications occurred in Korea with a Korean counsel—the scope of protection afforded by attorney-client privilege could be a source of potential disputes, where the requesting party could argue that there should be a limit to the application of attorney-client privilege since there is no general statutory provision recognizing attorney-client privilege in Korea.

With the enactment of the Amendment codifying attorney-client privilege under Korean law, parties will now have a clearer legal basis for asserting attorney-client privilege pursuant to Korean law. This development is expected to reduce the potential for procedural controversies surrounding document production and attorney-client privilege, and provide arbitral tribunals with clearer and more consistent standards for their determinations in disputed issues.
 

2.

Prevention of Indirect Acquisition of Attorney-Client Privilege Materials

In practice, attorney-client communications were routinely afforded protection in international arbitration proceedings involving Korean law and/or parties even before the Amendment, consistent with generally accepted practices in international arbitration.

However, in some cases, it was possible to circumvent such protection because of the absence of a clear statute protecting attorney-client privilege. For example, documents otherwise subject to protection in an arbitration would not be protected if the documents were subsequently seized by Korean investigative agencies, incorporated into criminal case records or investigation records, and later disclosed in court or made available to the other party in the context of a related proceeding.

Under the Amendment, attorneys and clients will be able to exercise the right to refuse seizure or disclosure of protected confidential communications even during investigations conducted by governmental and regulatory authorities. This will provide a substantive legal foundation to prevent the disclosure of such attorney-client privilege materials at the outset of government investigations. And even if the materials somehow end up being included in government investigation records or court records despite the exercise of such right, there will be a clear basis for tribunals and courts to refuse disclosure (or prevent such documents from being introduced as evidence) in subsequent arbitrations or civil court proceedings.
 

3.

Scope of Attorney-Client Privilege and Practical Considerations

Because of the broad language in the wording of the Amendment, intense disputes are expected regarding the precise scope of attorney-client privilege protection in the initial stages of implementation. Key issues will include whether communications/emails that are merely copied (cc’d) to an attorney constitute communications made “for the purpose of legal assistance,” and whether legal advice provided by in-house counsel falls within the scope of protection.

To mitigate such legal uncertainty and help ensure effective protection under attorney-client privilege, it is advisable to (i) label documents clearly with “Privileged & Confidential,” “Attorney-Client Privilege,” or “Attorney Work Product” at the time of creation, and (ii) ensure that the content explicitly indicates that the document has been prepared for the purpose of providing or receiving legal assistance “in legal matters or proceedings,” or in preparation for potential “litigation, investigation or inquiry.”

In conclusion, the codification of attorney-client privilege is an important development to international arbitration proceedings involving Korean parties and Korean law. With ongoing developments related to the interpretation and application of the Amendment, it will be important for parties and practitioners to closely follow emerging practice trends and proactively establish attorney-client privilege-related strategies at the pre-dispute stage, even before a formal arbitration or litigation is initiated.