Kim & Chang’s International Arbitration & Cross-Border Litigation Practice (“Arbitration Team”) successfully defended Korea’s state-owned entity in an arbitration in China conducted under the Rules of the China International Economic and Trade Arbitration Commission (“CIETAC”).
Background / Significance:
The case involved a dispute that arose between a Korean investor and its Chinese joint venture partner when the parties decided to sell their joint venture company to a third party. The parties’ dispute centered around the allocation of the joint venture company’s existing loans and liabilities prior to the sale.
This was a significant case, because it was one of the few CIETEC arbitration cases where a Korean entity was successful in defending against the claims brought by a Chinese entity, where the governing law was Chinese law, and where the tribunal was comprised entirely of Chinese nationals.
Our Representation:
Kim & Chang’s Arbitration Team successfully defended the Korean joint venture partner by working effectively with a Chinese co-counsel, in particular, on the appointment of the party-appointed arbitrator, and by closely coordinating with Korea’s state-owned entity regarding all aspects.
- Appointment of co-counsel
Because the arbitration was governed by the laws of China, and the arbitration was conducted under the CIETAC Rules, appointing a Chinese co-counsel with the relevant experience and expertise from the outset was key. Our Arbitration Team was able to utilize its wide-ranging experience and global network accumulated from working with various leading law firms around the world to make the recommendation on appointing a Chinese co-counsel with the appropriate background and experience for the case as well as an established expertise in international arbitration.
- Appointment of the CIETAC arbitrator
The tribunal consisted of three arbitrators, with each party appointing one arbitrator and the chair arbitrator being appointed by CIETAC.
From the early stages of the arbitration, our Arbitration Team, in close discussions with its Chinese co-counsel, was able to assess the scope and pool of potential arbitrators from which the opposing party would select its party-appointed arbitrator. Based on close collaboration, we were able to effectively strategize in appointing someone with a good understanding of the commercial aspects of the international transactions of this case as the client’s party-appointed arbitrator.
Also, for the appointment of the chair arbitrator, our Arbitration Team specifically emphasized the fact that the respondent in the case was a foreign company, and formally requested CIETAC to appoint someone who had experience in international disputes between commercial entities and could hear the case in a neutral manner. As a result, CIETAC chose a chair reflecting our request, and the parties were able to present their case before a tribunal well equipped to hear the case.
- Coordination between the Chinese co-counsel and Korean client
As lead counsel, Kim & Chang’s Arbitration Team consisted of both Chinese and Korean attorneys, who seamlessly and effectively worked together with our Chinese co-counsel and our Korean client.
As a result of these efforts, the tribunal dismissed all of the Chinese entity’s claims and ordered the Chinese entity to bear all arbitration costs, such as administrative fees and arbitrator fees.