SOUTH KOREA Law and Practice Contributed by: Yun Jae Baek, Jeonghye Sophie Ahn, Hyunah Park and Seyoung Choe, Yulchon LLC
Yulchon LLC Parnas Tower 38F 521 Teheran-ro
Gangnam-gu Seoul 06164 South Korea
Tel: +82 2 528 5200 Fax: +82 2 528 5228 Email: yjbaek@yulchon.com Web: www.yulchon.com
1. General 1.1 Prevalence of Arbitration Arbitration in South Korea
• alleviating the requirement for arbitration agree - ments to be in writing; • the granting of interim measures by a tribunal; • the Korean court’s assistance in taking evidence for the arbitration; and • simplifying the process for the recognition and enforcement of arbitral awards. In the same year, the Korean Commercial Arbitration Board (KCAB) adopted significant revisions to both its international arbitration rules and domestic arbitration rules. Trends in South Korean Arbitration Since the 2016 amendments to the KAA and KCAB International and Domestic Arbitration Rules, South Korea has seen substantial developments in various legal issues related to arbitration. In addition, as of 1 January 2024, the KCAB enacted and implemented the KCAB International Mediation Rules to bolster dispute resolution through interna - tional mediations, further strengthening South Korea’s position as an attractive hub for alternative dispute resolution. Moreover, the South Korean government is eager to promote arbitration in the hope of making Seoul the new Asian hub for international arbitration. The Arbitration Industry Promotion Act came into effect in 2017, the aim of which is to provide for long-term planning and government financial support for the promotion of international arbitration in South Korea.
The Republic of Korea (“South Korea” or “Korea”) rati - fied the New York Convention in 1973. Until the late 1990s, however, there was very little arbitration activ - ity in South Korea owing to its efficient court system, non-litigious culture, and relatively insulated economy. The Asian financial crisis in 1998 was a watershed moment for international arbitration in South Korea. As foreign investors flooded the market and bought South Korean companies in fire sales, arbitration clauses were introduced in M&A transactions. With the drastic increase in the number of contracts con - taining arbitration clauses, international arbitration quickly became a well-known mechanism for dispute resolution for South Korean practitioners and mem - bers of the business community. Enacting an arbitration act With the sudden and rapid growth of arbitration, insti - tutional support and the legal infrastructure for inter - national arbitration also began to grow in parallel. The Korean Arbitration Act (KAA), which was first enacted in 1966, was completely revised in 1999 to adopt the 1985 United Nations Commission on International Trade Law Model Law (the “UNCITRAL Model Law”). In 2016, further amendments to the KAA were made, incorporating the 2006 amendments to UNCITRAL Model Law into domestic law. The most significant changes in 2016 were:
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