SOUTH KOREA Law and Practice Contributed by: Yun Jae Baek, Jeonghye Sophie Ahn, Hyunah Park and Seyoung Choe, Yulchon LLC
12.2 Enforcement Procedure Article 37 Article 37 of the KAA provides general procedures for the enforcement of an arbitral award. Under Article 37 (2), an arbitral award may be enforced only by a court’s decision to enforce it upon the request of the parties. The party applying for recogni - tion or enforcement of an arbitral award must submit the authentic award or a copy of the award (Article 37 (3). A South Korean translation must also be provided if the award is in a foreign language. Once the application for recognition or enforcement of an award is filed with the court, it will set a hear - ing date for both parties to present their case. The court’s decision on the recognition or enforcement of an award must contain the reasons for the decision (Article 37 (4)(5)). The 2016 amendments to the KAA allowed enforce - ment based on a “decision” of the district court rather than a “judgment”. The purpose of this amendment was to expedite enforcement proceedings as the “decision process” takes less time than the “judg - ment process”. Articles 38 and 39 provide the grounds to refuse the recognition or enforcement of an arbitral award – more specifically, Article 38 for an award made within South Korea, and Article 39 for an award made outside of South Korea. Article 38 Article 38 of the KAA provides that an arbitral award made in South Korea must be recognised and enforced unless a party proves that: • there are grounds for setting aside the award under Article 36 (2) 1 of the KAA; • the award is yet to be effective and binding upon the parties; or • the award has already been set aside by a national court. The court can also, at its own discretion, refuse to rec - ognise and enforce the arbitral award made in South Korea if the dispute is not arbitrable under South
• The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or the KAA. The court may also set aside the award if it finds, on its own initiative, that the subject matter of the dispute is not arbitrable under South Korean law, or that the award is in conflict with the public policy of South Korea. South Korean courts tend to interpret such grounds for setting aside narrowly. An application to set aside an arbitral award is filed at a district court of first instance within three months from the receipt of the award (Article 36 (3) of the KAA). Thereafter, an appeal of the district court’s judgment may be pursued at the applicable appellate court, fol - lowed by the Supreme Court. Generally, however, an enforcement order issued by the district court will be provisionally enforceable even if an appeal is pending. 11.2 Excluding/Expanding the Scope of Appeal The grounds for setting aside an arbitral award are limited to the grounds explicitly provided in Article 36 of the KAA. To date, no precedent exists as to whether the parties may agree to expand or limit such a scope. 11.3 Standard of Judicial Review The merits of the final award are not reviewable by the courts because they cannot review the arbitral tribu - nals’ findings of law and facts. This means that errors of law or fact made by an arbitral tribunal generally do not qualify as grounds for setting aside an arbitral award by the courts.
12. Enforcement of an Award 12.1 New York Convention
South Korea signed the New York Convention on 8 February 1973, which came into effect on 9 May 1973. South Korea is also a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Con - vention”) on 21 February 1967, which came into effect on 23 March 1967.
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