SOUTH KOREA Law and Practice Contributed by: Eun Young Park, Zac Sharpe, Joon Won Lee and Yoo Lim Oh, Lee & Ko
Lee & Ko 18th Floor 63 Namdaemun-ro Jung-gu Seoul 04532 Republic of Korea Tel: +82-2-772-4000 Fax: +82-2-772-4001~2 Email: mail@leeko.com Web: www.leeko.com
1. General 1.1 Prevalence of Arbitration
government’s policy objective of promoting Korea as an arbitration-friendly jurisdiction and a regional hub for international dispute resolution. Korea also has a dedicated arbitral institution, the Korean Commercial Arbitration Board (KCAB), which was established in 1966. KCAB recently completed a comprehensive revision of its International Arbitration Rules, which took effect on 1 January 2026. Against this background, Korea has also sought to strengthen Seoul’s position as a seat of international arbitration. Although Seoul continues to compete with more established regional seats, its development as an arbitral seat is supported by Korea’s legislative reforms, government policy promoting the arbitration industry, the continued growth of Korea’s arbitration market, and an increasingly arbitration-friendly legal community. 1.2 Key Industries While arbitration is increasingly used across a wide range of industries in Korea, certain industries con - tinue to generate more international arbitration activ - ity than others. Although KCAB’s statistics do not fully capture all arbitration activity in Korea, the most recent 2025 KCAB Annual Report indicates that con - struction, general commercial transaction, IT, trade and maritime were among the major sectors in KCAB- administered cases. These sectors tend to generate more international arbitration activity because they frequently involve cross-border transactions, foreign counterparties, high-value contracts, and technically complex issues.
International arbitration is well established in the Republic of Korea (“Korea”), although its prevalence varies significantly depending on whether a dispute is purely domestic or cross-border. In practice, litigation remains the more commonly used method of dispute resolution for purely domes - tic disputes, and Korean parties continue to make extensive use of the domestic court system. By con - trast, international arbitration is widely used to resolve cross-border commercial disputes involving Korean parties, particularly where the disputes are of sub - stantial value. Its use increased significantly following the Asian financial crisis in the late 1990s, when Korea saw a marked rise in cross-border M&A transactions, foreign investment and related disputes. Since then, Korean companies have frequently included arbitra - tion clauses in their contracts, particularly in those involving foreign counterparties or cross-border per - formance. Korea’s well-established arbitration practice is under - pinned by a long-standing legal and institutional framework. The Korean Arbitration Act (KAA) was first enacted in 1966 and has since been amended several times. Korea also acceded to the New York Conven - tion in 1973, and foreign arbitral awards are gener - ally recognised and enforced in Korea subject to the limited grounds for refusal under the Convention and the KAA. In addition, the Arbitration Industry Promo - tion Act was enacted in 2016, reflecting the Korean
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