Shipping 2026

SOUTH KOREA Law and Practice Contributed by: Woorin Sung and Hee Kyung Jeong, D&A LLC

9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration A mere delay in the delivery of cargo, or a significant delay in loading or discharging operations, is not auto - matically regarded as force majeure. In general, force majeure is recognised only where certain require - ments are satisfied, including: • the relevant circumstance was unforeseeable at the time the agreement was entered into; • the circumstance arose from an external cause beyond the parties’ control and management; and • performance became impossible despite the tak - ing of reasonable measures. For instance, events such as war, port closure imposed by the state or large-scale natural disasters may constitute force majeure in South Korea. 9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil South Korea has implemented IMO 2020 and incor - porated its sulphur content limits for fuel oil used on board ships into domestic law by amending the Marine Environment Management Act. Accordingly, South Korea applies the sulphur content restrictions not only to vessels engaged in international naviga - tion, but also to vessels calling at South Korean ports or navigating within South Korea’s territorial waters or other areas under its jurisdiction. The sulphur content of fuel oil used on board ships operating in South Korea’s maritime jurisdiction is capped at 0.5% m/m, which corresponds to the global standard under IMO 2020. Meanwhile, South Korea has enacted and implemented the Special Act on the Improvement of Air Quality in Port Areas with the aim of improving air quality in and around port areas. Pursuant to this Act, South Korea has designat - ed emission control areas (ECAs) for sulphur oxides (SOx) and particulate matter, primarily around major ports, including Busan, Incheon and Ulsan. For ves - sels navigating or anchoring in such ECAs, a more stringent sulphur content limit of 0.1% m/m applies.

from the availability of preservative measures, and South Korean courts therefore permit the provisional attachment of vessels or other assets located in South Korea for the purpose of preserving claims, even where foreign arbitration is contemplated or ongoing. 7.5 Domestic Arbitration Institutes The primary arbitration institution in South Korea is the Korean Commercial Arbitration Board (KCAB), which administers a broad range of commercial and international arbitration cases. The KCAB operates a specialised institute dedicated to maritime, shipbuild - ing and shipping-related disputes. 7.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses Where court proceedings are commenced in breach of a foreign jurisdiction or arbitration clause, the defend - ant may raise an objection based on lack of jurisdic - tion or the existence of a valid arbitration agreement. Such objections are procedural in nature, and if the court upholds the defendant’s objection, the action filed by the plaintiff may be dismissed without preju - dice. 8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies The Act on Restriction on Special Cases Concerning Taxation provides special rules for the calculation of the corporate tax base applicable to shipping compa - nies, under which shipping companies in South Korea are subject to the tonnage tax system until 31 Decem - ber 2029. The tonnage tax system was introduced in 2005 to enhance the international competitiveness of the shipping industry, and its extension has been reviewed and determined every five years.

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