The results of the international litigation between the Korean government and foreign private equity fund Lone Star, which have been dragging on for 10 years, are expected to come out between the night of the 30th and the dawn of tomorrow.
According to the legal community today (30th), the Lone Star case arbitral tribunal at the International Center for International Investment Dispute Settlement (ICSID) of the World Bank will decide on the Investor-State Dispute Settlement (ISDS) case between tonight and tomorrow morning. The expected.
ISDS is a system that allows overseas investors to receive compensation through international arbitration when they suffer damage due to the laws or policies of the investment country.
Lone Star has filed an ISDS worth $4.679 billion (6.31 trillion won) against the Korean government in November 2012.
Lone Star bought Korea Exchange Bank for 1.3 trillion won in 2003 and was negotiating a sale with several companies. It was sold by way of handing over to the landlord.
However, while negotiating a sale with the Hong Kong and Shanghai Bank (HSBC) in 2007, the Financial Services Commission of the Republic of Korea delayed the approval of the sale without any justifiable reason, and the National Tax Service filed an ISDS claiming that the taxation was arbitrary and contradictory.
Immediately after the filing, the government formed a task force (TF) of the 'International Investment Dispute Response Team' of the relevant ministries headed by the head of the Prime Minister's Office (currently the head of the Office of Government Policy Coordination) to respond to the dispute.
After that, ICSID formed an arbitral tribunal to hear the case in May 2013, and started the written hearing procedure in October of the same year.
The pleadings ended in June 2016, but the decision was delayed due to the resignation of the chairman and arbitrator.
After hearing the case for about a year and a half after the chair arbitrator was replaced, ICSID finally declared the end of the proceedings in June, 10 years after the ISDS was filed.
If the government loses in this judgment, it is expected to inevitably take a hit to the national finances as it will have to pay a huge amount of compensation through taxes.
It is possible to raise an objection through an application for invalidation of the judgment within 120 days after the government receives the judgment, but it may raise the theory of responsibility for those involved in the decision-making at the time.
Minister of Justice Han Dong-hoon said at a general meeting of the Legislative and Judiciary Committee of the National Assembly yesterday (29th) that "there will be no case (we will lose everything)" but "assuming that no conclusion has been reached ( It would not be appropriate to talk about the punishment of those responsible."