SOUTH KOREA Law and Practice Contributed by: Eun Young Park, Zac Sharpe, Joon Won Lee and Yoo Lim Oh, Lee & Ko
13.3 Third-Party Funding There is currently no legislation or other regulatory framework governing third-party funding in arbitra - tion in Korea. The 2026 KCAB Rules, however, contain disclosure requirements relating to third-party funding. Under Article 10.5, a party must promptly disclose the exist - ence and identity of any third-party funder to the Sec - retariat, the tribunal, and the other parties, and must also notify them of any subsequent changes to the funding arrangement or the identity of the funder. In addition, the tribunal may, either at the request of a party or on its own initiative after consulting the par - ties, order the disclosure of further information regard - ing the funding arrangement or the third-party funder. 13.4 Consolidation The KAA does not contain any provisions governing the consolidation of arbitral proceedings or the joinder of additional parties. Accordingly, the parties’ agreement on consolidation or other forms of co-ordinated proceedings will gen - erally be respected. Likewise, where the parties have agreed to arbitrate under institutional rules, the availa - bility of joinder, consolidation, or concurrent proceed - ings will depend on whether the applicable institu - tional rules provide for such procedures and whether the relevant requirements are satisfied. For example, the 2026 KCAB Rules address these issues in provi - sions on the joinder of additional parties (Article 21), single arbitration under multiple contracts (Article 22), consolidation of arbitrations (Article 23), and concur - rent proceedings (Article 24). 13.5 Binding of Third Parties Article 35 of the KAA provides that an arbitral award has the same effect as a final and binding court judg - ment “between the parties”. Otherwise, the KAA does not contain any specific provisions addressing the effect of an arbitration agreement or an arbitral award on persons who are not parties to the arbitra - tion agreement. Under the prevailing view, however, the res judicata effect of an arbitral award may extend to persons who are treated as equivalent to the parties under the Kore -
cifically at the enforcement stage of an arbitral award, and the KAA is silent on the issue. 12.3 Approach of the Courts Korean courts generally recognise and enforce arbitral awards unless one of the statutory grounds for refusal of recognition or enforcement under the KAA or the New York Convention applies. For arbitral awards seated in Korea, Article 38 of the KAA provides that recognition or enforcement may be refused where the award is contrary to the good morals or other forms of public policy of Korea. This ground corresponds to the public policy ground for setting aside an arbitral award under Article 36 of the KAA. For arbitral awards seated outside of Korea and falling within the scope of the New York Convention, enforce - ment may be refused on public policy grounds pursu - ant to Article V(2)(b) of the Convention. The Korean court’s view of public policy grounds under the New York Convention is that it must be interpreted rather narrowly, in consideration of not only domestic cir - cumstances but also the stability of the international commercial order. Issues of public policy grounds may arise in matters related to the award of punitive damages, statute of limitations longer than prescribed under Korean law, etc. 13. Miscellaneous 13.1 Class Action or Group Arbitration Neither the KAA nor Korean statutory or case law addresses class arbitration or group arbitration. 13.2 Ethical Codes Korean law does not prescribe any specific ethical rules or professional standards applicable to counsel or arbitrators conducting arbitral proceedings. Meanwhile, the KCAB Code of Ethics for Arbitrators applies to arbitrators appointed in KCAB-administered arbitrations. The Code sets out standards relating to, among other things, impartiality and independence, disclosure, communications with the parties, dili - gence, fairness, and confidentiality.
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