SOUTH KOREA Law and Practice Contributed by: Yun Jae Baek, Jeonghye Sophie Ahn, Hyunah Park and Seyoung Choe, Yulchon LLC
Korean law, or the recognition or enforcement of the award is in violation of public policy, as stipulated in Article 36 (2) 2 of the KAA. Article 39 Article 39 (1) of the KAA provides that arbitral awards made outside of South Korea shall be recognised or enforced according to the requirements under the New York Convention where it applies. Under Article 39 (2) of the KAA, arbitral awards made outside of South Korea where the New York Conven - tion does not apply shall be recognised or enforced in the same manner as a foreign court judgment pursu - ant to the Civil Procedure Act and the Civil Execution Act regarding the recognition and enforcement of a foreign court judgment (Article 39 (2) of the KAA). Lastly, there is no clear indication of whether South Korean courts would enforce an award that is sub - ject to ongoing set-aside proceedings at the seat of arbitration. Presumably, however, the South Korean courts would adjourn the enforcement proceedings per Article 6 of the New York Convention. 12.3 Approach of the Courts South Korean courts will generally recognise and enforce arbitral awards unless there are clear grounds for setting aside the award under the KAA. Further - more, courts tend to interpret the grounds for set - ting aside very narrowly and are generally reluctant to refuse enforcement of foreign arbitral awards based on public policy grounds. In particular, recently, on 28 November 2024, the Korean Supreme Court issued a notable decision in Supreme Court Case No 2023Ma6248, further affirm - ing the Korean judiciary’s pro-enforcement and pro- arbitration stance toward foreign arbitral awards. The decision provides important guidance on the enforce - ability of awards whose dispositive sections appear ambiguous or incomplete. The Supreme Court held that even if the dispositive portion of an arbitral award lacks clarity or completeness, enforcement may none - theless be granted where the reasoning section suf - ficiently clarifies the intended outcome. However, the Supreme Court also emphasised that the enforcement decision should be solely based upon the content of
the dispositive section and the reasons stated within the award. The courts are not permitted to supple - ment or alter the award by reassessing the arbitral tribunal’s factual findings or legal conclusions. Where the content of the award is clear, the court may not expand, interpret by analogy, or alter its content based on other materials. This decision serves as yet another precedent reinforcing the Korean judiciary’s commit - ment to supporting arbitration and promoting the enforceability of arbitral awards. 13. Miscellaneous 13.1 Class Action or Group Arbitration The KAA is silent on the issue of class action arbitra - tion or group arbitration. Also, there is no precedent from the South Korean courts on class action arbitra - Under the KAA, there are no mandatory ethical codes or professional standards applicable to either counsel or arbitrators. The KAA does, however, require arbitra - tors conducting proceedings in South Korea to dis - close whether there are any circumstances likely to give rise to justifiable doubt about their impartiality or independence in advance (Article 13 (1)). Arbitrators are subject to challenge if any such circumstances exist. tion or group arbitration. 13.2 Ethical Codes The KCAB has also issued a Code of Ethics for Arbi - trators, which must be accepted by all arbitrators appointed to hear arbitrations administered by the KCAB. 13.3 Third-Party Funding With the growth in acceptance and use of third-party funding in international arbitration around the globe, many third-party funders have also begun to express their interest in entering the South Korean market. Although third-party funding remains an issue of increased interest in South Korea, no legislation has been introduced so far in order to directly address this issue. There is currently no express rule or restriction on third-party funders in South Korea, nor is there a law
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