SEOUL: South Korea said Tuesday (Nov 18) it had overturned an order to pay hundreds of millions of dollars to US private equity firm Lone Star after a dispute panel ruled in its favour.
The decision by the International Centre for Settlement of Investment Disputes (ICSID), part of the Washington-based World Bank, effectively nullifies its 2022 ruling in the 13-year dispute.
Texas-based Lone Star argued that alleged government interference in attempts to sell its stake in Korea Exchange Bank (KEB), which it had bought in 2003, caused billions of dollars in losses.
Prime Minister Kim Min-seok (pic) told a press briefing on Tuesday that "the government received a ruling in its favour from an annulment committee" of the ICSID.
The decision "scrapped in full the government's obligation to pay Lone Star the US$216.5 million in principal and all related interest" that had been recognised in a 2022 arbitral award, he said.
The committee also ordered Lone Star to reimburse 7.3 billion won (nearly $5 million) in legal fees incurred by Seoul during the proceedings, Kim added.
In its 2012 claim, the firm sought $4.68 billion in damages, but the ICSID tribunal in 2022 awarded only 4.6 per cent of that amount, a decision Seoul appealed, leading to Tuesday's annulment.
Lone Star brought its claim under the investor-state dispute settlement clause of the US-South Korea free trade agreement. - AFP
