SOUTH KOREA Law and Practice Contributed by: Yun Jae Baek, Jeonghye Sophie Ahn, Hyunah Park and Seyoung Choe, Yulchon LLC
to hear arbitrations administered by the KCAB must accept and abide by.
tral tribunal’s decision on its own jurisdiction within 30 days of receiving notice of such decision. 5.3 Timing of Challenge Although the arbitral tribunal may rule on its own jurisdiction under the competence-competence rule, Article 17 (6) of the KAA bestows the final decision- making authority on the South Korean courts by allow - ing a party to appeal an arbitral tribunal’s jurisdictional ruling. Prior to the 2016 amendments to the KAA, only affirmative decisions (eg, an arbitral tribunal’s deci - sion that jurisdiction exists) were subject to appeal before the Korean court. However, Article 17 (6) has been amended to allow parties to challenge not only affirmative jurisdictional decisions but also an arbitral tribunal’s negative decision (eg, denying its jurisdic - tion). The provision, however, is not often invoked in prac - tice. The South Korean courts are generally reluctant to intervene and overturn the decision of the arbitral tribunal on its jurisdiction. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility Pursuant to Article 17 (2) of the KAA, a challenge to the jurisdiction of the arbitral tribunal must be raised with the arbitral tribunal no later than when the state- ment of defence on the merits is submitted. A party disputing the arbitral tribunal’s jurisdiction can raise such an objection even after the party has participated in the process of constituting the arbitral tribunal. An appeal against the arbitral tribunal’s jurisdictional ruling before the national court under Article 17 (6) of the KAA must be filed within 30 days of receiving notice of such ruling. 5.5 Breach of Arbitration Agreement South Korean courts conduct a de novo review of an arbitral tribunal’s jurisdiction. Therefore, courts are not bound by the arbitral tribunal’s decision on its own jurisdiction. However, the South Korean courts gener - ally tend to respect the arbitral tribunal’s decision on its own jurisdiction.
5. Jurisdiction 5.1 Challenges to Jurisdiction
The KAA does not address subject matter arbitrability. Article 3 (1) of the KAA nonetheless sheds some light on the scope of arbitration by defining the term “arbi - tration” as a procedure to resolve property/monetary or non-property/non-monetary disputes that can be settled between parties. Therefore, as in most other jurisdictions, matters that are not capable of being settled by agreement between the parties – such as matters of criminal law, family law and administrative law – are generally considered non-arbitrable. On the other hand, the arbitrability of matters relat- ing to IP, insolvency, and antitrust remains unclear under South Korean law. Although IP licensing dis - putes (claims for violation of IP licenses) are gener - ally considered arbitrable, there are conflicting views on whether validity claims of registered IP rights (eg, patents) can be referred to arbitration. 5.2 Circumstances for Court Intervention The principle of competence-competence is recog - nised in Article 17 (1) of the KAA, under which an arbi - tral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. Pursuant to Article 17 (1), the challenging party must raise its jurisdictional objections to the arbitral tribu - nal no later than its submission of the statement of defence on the merits. However, if the party’s jurisdic - tional objection is that the arbitral tribunal exceeded the scope of its authority, the objection can be raised as soon as it occurs. The arbitral tribunal may rule on the jurisdictional challenge either as a preliminary matter or as a final award on the merits. However, Article 17 (6) of the KAA authorises South Korean courts to review the arbitral tribunal’s decision on its own jurisdiction when the arbitral tribunal made the decision as a preliminary matter. A party can make an appeal to the South Korean court against the arbi -
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