Doing Business In: International Arbitration in South Korea: A Guide for Foreign Companies

Jipyong LLC

JIPYONG LLC is a leading South Korean law firm with a strong reputation in international arbitration, representing clients before institutions like ICC, LCIA, SIAC, and HKIAC.

With a global presence, it provides strategic counsel to multinational corporations and government entities in complex cross-border disputes. Known for its expertise in commercial arbitration, JIPYONG is a trusted legal partner in the field of international dispute resolution.

Introduction

South Korea has emerged as a leading destination for international arbitration, offering a robust legal framework, efficient enforcement mechanisms, and a business-friendly environment. Its arbitration infrastructure, strengthened by the Korean Arbitration Act and government initiatives, ensures a streamlined process with an emphasis on neutrality and fairness. The country’s strategic location in Asia, combined with its growing reputation for legal innovation, makes it an attractive choice for foreign businesses seeking reliable dispute resolution. The Korean Commercial Arbitration Board (KCAB) also promptly embraced virtual hearings after the COVID-19 pandemic, allowing for efficient online hearings and expedited proceedings. This guide provides an in-depth look at the advantages South Korea offers to foreign companies, positioning it as a competitive alternative to traditional arbitration venues.

Recent Arbitration Trends in Korea

International arbitration in South Korea has experienced a marked upward trajectory, with notable expansion in IP-related disputes spanning the gaming, life sciences, healthcare, and entertainment sectors. In 2020 alone, gaming and entertainment disputes accounted for 7.4% of all international cases administered by the Korean Commercial Arbitration Board (KCAB).[1] Treaty-based arbitrations, particularly those involving investor-state dispute settlements (ISDS), have similarly seen consistent growth. As of 14 April 2025, 10 ISDS cases involving Korean parties have been filed—3 of which remain pending—while 6 have reached resolution, yielding mixed outcomes for both the State and investors. The most recent ISDS proceeding, Mohammed Reza Dayyani and others v. South Korea (II), was initiated on 18 October 2021, underscoring South Korea’s evolving role as a growing arbitration hub.[2]

Why Choose South Korea for Arbitration?

Key Advantages

Legal Framework: South Korea is a signatory to both the New York Convention and the ICSID, ensuring global enforceability of arbitral awards. Additionally, the country has adopted the UNCITRAL Model Law on International Commercial Arbitration with modifications to enhance procedural efficiency and clarity.
Pro-Arbitration Courts: Korean courts are known for their arbitration-friendly stance and limited intervention. Notably, the Arbitration Industry Promotion Act enacted in 2017 has since given the Korean government the right and the responsibility to proactively support and promote arbitration proceedings in Korea.[3]
Korean Commercial Arbitration Board (KCAB): The country’s leading arbitral institution provides efficient case management and an internationally recognized set of arbitration rules.
- Virtual Hearings: KCAB has been proactive in adopting digital arbitration platforms, allowing parties to engage in virtual hearings and online submissions. This is especially important for businesses dealing with cross-border disputes, as it provides greater flexibility and reduces the logistical challenges of in-person proceedings. The quick adaptation to technology has placed Korea at the forefront of modernizing arbitration procedures.[4]
- Expedited Procedures: KCAB offers expedited arbitration options, providing a faster resolution process compared to traditional legal systems. This is crucial for foreign businesses looking to resolve disputes promptly and efficiently, avoiding the prolonged timelines that can be a drawback in other jurisdictions.[5]

Arbitration Process in South Korea

Below is a simplified diagram illustrating the arbitration process in South Korea:

[6]

The KCAB and other major arbitration institutions follow a similar procedural structure for arbitration, ensuring efficiency and transparency throughout the process:

Recognition and Enforcement of Foreign Arbitral Awards

Korean courts recognize and enforce foreign arbitral awards under the New York Convention. A party seeking enforcement must apply for a recognition judgment from a competent Korean court. The court will enforce the award unless:

The arbitration agreement was invalid.
Proper notice was not given to the party against whom enforcement is sought.
The tribunal exceeded its jurisdiction.
The arbitration process violated due process principles.
The award is against public policy in Korea.

Once recognized, the award can be enforced through compulsory execution against the defendant’s assets. Applications for enforcement must be filed within 10 years of the award date.

Common Questions Regarding Arbitration in South Korea

What are the advantages of choosing arbitration in South Korea over litigation?

Arbitration provides a private, faster, and more flexible dispute resolution process compared to litigation in Korean courts.
Decisions are final and binding, with limited grounds for appeal, reducing prolonged legal battles.
The process allows parties to select specialized arbitrators with industry expertise.
Arbitration proceedings are confidential, preventing public disclosure of sensitive business matters.

Is South Korea a signatory to key international arbitration treaties?

Yes, South Korea is a signatory to the New York Convention (1958), ensuring the recognition and enforcement of foreign arbitral awards.
South Korea has also ratified the ICSID Convention, allowing investors to bring claims against states in international arbitration.

How does the KCAB compare to other arbitration institutions like ICC, SIAC, or HKIAC?

The KCAB is the country’s primary arbitral institution, providing cost-effective and efficient case management. There is no minimum arbitrator’s fee nor a filing fee for cases with less than KRW 200,000,000 in dispute amount (approximately USD 140,080.00), which allows KCAB to offer lower fees compared to ICC, SIAC, and HKIAC.[7]

Disputed Amount (USD)	ICC[8]	SIAC[9]	HKIAC[10]	KCAB[11]
1,000,000	62,714	64,326	36,520	21,270
5,000,000	132,349	136,851	70,376	54,956
10,000,000	170,799	172,526	87,501	70,238
Average numbers, calculated with arbitration organization fee calculators and published reports. Actual costs may vary depending on the number of arbitrators, expedition fee applicable, case complexity, arbitrator hourly rate, currency exchange rate, etc.

How long does arbitration typically take in South Korea?

The duration of arbitration varies but typically takes 12 to 18 months from filing to award issuance.
KCAB offers expedited procedures where cases can be resolved in as little as six months under specific conditions.

What industries frequently use arbitration in South Korea?

Key sectors using arbitration include:
- Technology & Intellectual Property (gaming, software, semiconductors)
- Entertainment & Media (film, music, broadcasting)
- Life Sciences & Healthcare (pharmaceuticals, biotech)
- Construction & Engineering (infrastructure, major projects)

Are emergency arbitrations or expedited procedures available?

Yes, KCAB provides an expedited arbitration process for cases if:
(1) the claim amount does not exceed KRW 500 million (~USD 350,000); or (2) both parties agree to the expedited arbitration process.

Can foreign parties appoint arbitrators freely?

Yes, parties have full discretion to appoint arbitrators, including foreign arbitrators, subject to agreement in the arbitration clause.
KCAB maintains an international panel of arbitrators with expertise in various industries.

What are the grounds for setting aside an arbitral award?

Under Article 36 of the Arbitration Act, awards may be set aside if:
- The arbitration agreement was invalid.
- A party was not given proper notice.
- The tribunal exceeded its jurisdiction.
- The arbitration process violated due process principles.
- The award contradicts South Korean public policy.
An application to set aside an arbitral award must be filed within three months of receipt of the award.

Are third-party funding and contingency fees allowed?

Third-party funding is not explicitly regulated but is generally permissible under Korean law.
Contingency fees are allowed for lawyers in arbitration cases, but fee structures must comply with ethical guidelines.

What role do Korean courts play in arbitration proceedings?

Korean courts generally adopt a non-interventionist approach to arbitration.
They may assist with interim measures, enforcement, and setting aside awards under limited circumstances.

Are mediation and conciliation commonly used before arbitration?

Mediation is encouraged before arbitration, and KCAB provides mediation services as an alternative dispute resolution mechanism.
Many disputes settle through mediation before reaching arbitration hearings.

What are the costs associated with arbitration in South Korea?

Costs include arbitrators’ fees, legal fees, administrative fees, and expert witness fees.
KCAB is generally more cost-effective than ICC, SIAC, and HKIAC.
Fees depend on the claim amount and complexity but are outlined in KCAB’s published fee schedule.

Can arbitration clauses be included in government contracts?

Yes, arbitration clauses are commonly included in public-private partnership (PPP) contracts and other government agreements.
However, proper drafting is essential as sovereign immunity concerns may arise.

What is the role of public policy in enforcing arbitration awards?

Korean courts will refuse enforcement of an arbitral award if it violates public policy or good morals of Korea.
This standard is interpreted narrowly, ensuring most awards are enforced unless there are exceptional circumstances.

Jipyong’s Global Practice Group

Jipyong’s Global Practice Group brings together the expertise of our diverse team of lawyers from across the globe, delivering tailored legal solutions to meet the unique challenges of multinational businesses and organizations.

Our Global Dispute Resolution Team is designed to provide clients with effective, strategic solutions for resolving disputes across borders. With a team of experienced arbitration and litigation professionals, we offer tailored services to manage complex international disputes in a wide range of industries.

Jipyong’s Global Dispute Resolution Team has extensive experience in international arbitration before leading institutions such as the International Chamber of Commerce (ICC), the Hong Kong International Arbitration Centre (HKIAC), the Singapore International Arbitration Centre (SIAC), the American Arbitration Association (AAA), the London Court of International Arbitration (LCIA), and the Korean Commercial Arbitration Board (KCAB). The Team often handles U.S. litigation cases in both federal and state courts mostly in New York and California.

KEY INTERNATIONAL ARBITRATION CASES

- Prevailed in an ICC arbitration case representing a publicly listed Korean pharmaceutical company against a multinational medical supply exporter
- Prevailed in a SIAC arbitration case representing a Korean private equity investment trust against a Cambodian company, obtaining a damages award of over USD 145 million
- Prevailed in a SIAC arbitration representing a Korean heavy equipment manufacturer against an Omani company
- Successfully defended all claims by solely representing a large Korean company in an ICC construction arbitration case filed by a foreign multinational corporation
- Conducted a KCAB arbitration in a dispute between a domestic company and a US company based on KOR-US FTA on behalf of a US company
- Conducted a KCAB on behalf of a large Korean trading firm in a trade dispute against an Eastern European company
- Conducted a HKIAC arbitration on behalf of Korean medical device manufacturer in a contract dispute against a Chinese company
- Conducted an ICC arbitration in JV contract disputes against Taiwanese companies on behalf of large Korean company
- Conducted a KCAB arbitration on behalf of Korean pharmaceutical company against a Nigerian company and obtained recognition at a Kenyan court/enforcement
- Conducted a SIAC arbitration at the SIAC against Central Asian importing company on behalf of a large Korean company
- Conducted a SIAC arbitration representing an overseas affiliate of a Korean conglomerate against an Indonesian subsidiary of a large French company
- Conducted an ICC arbitration representing a Korean broadcaster against an international sports association
- Conducted a SIAC arbitration representing a Korean broadcaster against an international sports association
- Conducted an LCIA arbitration representing a Korean heavy equipment manufacturer against an Azerbaijani chemical producer-
- Conducted an ad hoc arbitration on unfair dismissal on behalf of a foreign client
- Represented a Korean steel export company in an ICC arbitration against Turkish company
- Represented a Korean conglomerate in an ICC arbitration against a U.S. power equipment maker
- Conducted an ad hoc arbitration in the UK in a ship building contract dispute on behalf of a domestic guarantee financing institution
- Conducted an AAA arbitration in connection with breach of representation and warranty under a corporate M&A contract on behalf of a domestic shareholder
- Represented Hyundai-Vinashin in an arbitration raised by GEMADEPT, a Vietnamese state-run logistics company, before Vietnam International Arbitration Center (VIAC)
- Conducted an arbitration under the International Arbitration Rules of the KCAB against a French company in a dispute involving a combined cycle power plant in Middle East on behalf of a large Korean construction company
- Represented a large Korean construction company in international arbitration regarding building steel mill in Egypt
- Represented a French company in the arbitration hearings before Korean Commerce Arbitration Board regarding Haenam-Jeju submarine cable project

JIPYONG’S PRESENCE IN THE INTERNATIONAL ARBITRATION COMMUNITY

Jipyong’s Global Dispute Resolution Team has steadily established itself as a key player in the international arbitration community both within and outside of Korea. Through our commitment to excellence and our growing portfolio of high-stake cases, we continue to expand our presence and influence in this dynamic field. Our team actively participates in and sponsors international events such as the Seoul ADR Festival, New York State Bar Association Global Conference, and the Asia/Pacific Conference in Seoul.

Recently, Jipyong successfully co-hosted a Negotiation Skills Workshop with the Singapore International Mediation Centre (SIMC) during the Seoul ADR Festival 2024. The Workshop brought together professionals from diverse backgrounds, offering insights into advanced negotiation and mediation techniques, conflict resolution, and effective communication strategies. Led and participated by seasoned experts, the interactive sessions provided hands-on experiences and real-world applications, receiving positive feedback that reaffirmed our commitment to fostering growth and excellence within the professional community.

Conclusion

South Korea has solidified its position as a global arbitration hub, offering a modern legal framework, arbitration-friendly courts, and an experienced arbitral institution in KCAB. For foreign companies, arbitration in South Korea presents a compelling option for resolving cross-border disputes efficiently and effectively. By leveraging its legal stability and international enforceability, businesses can benefit from a streamlined dispute resolution process tailored to their industry needs.

AUTHORS

Jipyong’s Global Dispute Resolution Team includes highly skilled and experienced attorneys who have conducted litigations in both Korean and U.S. courts. Our team consists of legal professionals licensed in Korea, California, New York, Illinois, the United Kingdom, New Zealand, and Russia. The broader network of attorneys at our subsidiary offices practice in China, Vietnam, Indonesia, Cambodia, and Hungary.

Jinhee Kim (link to profile)

Director, Global Dispute Resolution Team.

Jinhee Kim is the Global Practice Chair at Jipyong LLC. She also heads the firm’s Global Dispute Resolution Team, specializing in international arbitration and cross-border litigation. She regularly appears as the lead counsel before federal and state courts of the U.S. as well as major arbitral institutions such as the ICC, LCIA, AAA, SIAC, HKIAC, and KCAB. Jinhee has also served as sole arbitrator in many KCAB international arbitration proceedings.

Somin Jun (link to profile)

Senior Foreign Attorney, Global Dispute Resolution Team

Somin Jun is a partner in the Global Dispute Resolution Team. She handles cross-border litigation and international commercial arbitration, specializing in foreign investment, antitrust, energy trading, media and entertainment. She has led multiple complex international arbitration cases across the US and Asia, including Indonesia and Cambodia.

Yong Ik Lee (link to profile)

Senior Foreign Attorney, Global Dispute Resolution Team

Yong Ik Lee is a partner in the Global Dispute Resolution Team. He handles international arbitration, cross-border litigation, and alternative dispute resolution. He regularly advises clients on antitrust, competition, bankruptcy and entertainment matters. He has represented numerous Korean financial institutions, construction companies, heavy equipment and component manufacturers, and entertainment companies in disputes of international nature.

[1] Kluwer Arbitration Blog article.

IP Arbitration: Making Headway in South Korea

[2] Korea, Republic of | Investment Dispute Settlement Navigator | UNCTAD Investment Policy Hub

https://investmentpolicy.unctad.org/investment-dispute-settlement/country/111/korea-republic-of/respondent

[3] Korean Government’s Vigorous Move to Nurture Arbitration “Industry” – Kluwer Arbitration Blog

Korean Government’s Vigorous Move to Nurture Arbitration “Industry”

[4] International Arbitration Rules in Korea. International arbitration law and rules in South Korea | Expert Guides (cms.law)

https://cms.law/en/int/expert-guides/cms-expert-guide-to-international-arbitration/south-korea?

[5] Chapter VI, “EXPEDITED PROCEDURE”. Domestic_Arbitration_Rule_2016.pdf (kcabinternational.or.kr)

http://www.kcabinternational.or.kr/eng/pdf/Domestic_Arbitration_Rule_2016.pdf

[6] KCAB Arbitration Procedure. KCAB INTERNATIONAL.

http://www.kcabinternational.or.kr/arbitration/arbitration_procedure.do

[7] Schedule of Fees and Expenses, KCAB. KCAB INTERNATIONAL
http://www.kcabinternational.or.kr/arbitration/arbitration_fees.do

[8] ICC Arbitration Fee Calculator.

Costs calculator

[9] SIAC Arbitration Fee Calculator.
https://siac-staging.cloudwps.net/fee-calculator

[10] HKIAC Arbitration Fee Calculator.
https://hkiac.org/arbitration/fees/administered-arbitration-fees/fee-calculator-2024

[11] KCAB Arbitration Fee Calculator.
http://www.kcabinternational.or.kr/arbitration/arbitration_fees.do