SOUTH KOREA Law and Practice Contributed by: Eun Young Park, Zac Sharpe, Joon Won Lee and Yoo Lim Oh, Lee & Ko
1.3 Arbitration Institutions The principal arbitral institution in Korea is the KCAB. Established in 1966, KCAB is Korea’s only arbitral institution designated as a commercial arbitral institu - tion under the KAA. Of course, parties may neverthe - less choose a foreign institution or ad hoc arbitration for arbitrations seated in Korea. KCAB has adminis - tered approximately 7,000 arbitration cases over the past 60 years. In April 2018, KCAB established KCAB International as an independent division to meet the growing demand for cross-border commercial dispute resolution. KCAB has continued to modernise its rules and pro - cedures, most recently through a comprehensive revi - sion of the KCAB International Arbitration Rules (the “KCAB Rules”), which took effect on 1 January 2026. Key changes include the establishment of the KCAB International Arbitration Court, an independent body responsible for key case-administrative functions; the reorganisation of the existing expedited procedure and the introduction of a separate fast-track proce - dure to enhance speed and cost-efficiency; and new provisions addressing the use of technology and arti - ficial intelligence in arbitral proceedings. That said, Korean companies frequently agree to arbi - tration under major foreign institutional rules, including those of the ICC, SIAC, HKIAC and LCIA, depending on the counterparty, governing law, seat, transaction structure and the parties’ relative bargaining power. The active use of foreign institutions by Korean par - ties is illustrated by SIAC’s 2024 statistics, according to which Korean parties ranked first among SIAC’s foreign users, with 295 parties involved in new cases. 1.4 National Courts Korea does not currently have an international com - mercial court or a specialised arbitration court that is established as an independent institution exclusively to hear disputes relating to international or domes - tic arbitration. However, at the lower courts and appeal courts, arbitration-related cases are generally assigned to designated divisions. Arbitration-related court applications are handled by ordinary Korean courts in accordance with the KAA. At first instance, jurisdiction generally lies with the
competent district court, as determined under Article 7 of the KAA by reference to factors such as the seat of arbitration, the location of the relevant evidence or assets, and the respondent’s domicile or place of business, depending on the nature of the application. The nationality of the parties is not itself relevant to this determination. Appellate review is available before a High Court and, ultimately, the Supreme Court, as applicable. This will change in part from 1 March 2028, when Korea’s first specialised maritime and international commercial courts are scheduled to commence operations in Busan and Incheon. Where the dispute submitted to arbitration falls within their jurisdiction, the KAA will direct arbitration-related applications to those courts rather than to the ordinary district courts, unless the parties have designated a different district court or branch court in their arbitration agreement. The scope of the new courts’ jurisdiction, which will extend to certain commercial disputes with a foreign element, remains to be defined by Supreme Court rules. The national legislation governing arbitration in Korea is the KAA. The KAA was first enacted in 1966 and has since been amended on several occasions. The most significant amendments are the comprehensive amendment of 31 December 1999, which substantial - ly adopted the UNCITRAL Model Law, and the 2016 amendment, which reflected key elements of the 2006 amendments to the UNCITRAL Model Law. Before the 1999 amendment, the KAA consisted of only 18 provisions. The 1999 amendment substan - tially revised the entire statute and expanded it to 41 provisions, adopting the UNCITRAL Model Law as the basic framework for Korean arbitration law. The Model Law was not incorporated verbatim; rather, Korea modified and supplemented certain provisions to fit its domestic legal system. One notable feature of the KAA is that it regulates both domestic and inter - national arbitration under a single statute, applying broadly the same standards and procedures to both. 2. Governing Legislation 2.1 Governing Law
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