SOUTH KOREA Law and Practice Contributed by: Choon Won Lee and Dahee Kim, Jipyong LLC
6. Enforcement of Law and Jurisdiction and Arbitration Clauses 6.1 Enforcement of Law and Jurisdiction Clauses Stated in Bills of Lading Under the Act on Private International Law of Korea, the parties’ autonomy regarding the gov - erning law is granted, and thus a contract shall be governed by the law of the country on which the parties have agreed. Further, the internation - al jurisdiction of a court shall be acknowledged when the underlying case is substantively rel - evant to the country. In light of the aforementioned principles, the South Korean courts generally recognise and enforce law and jurisdiction clauses stated in bills of lading. 6.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading With regard to the incorporation of an arbitra - tion clause in a charterparty into a bill of lading, the South Korean courts’ position is that certain requirements should be satisfied in order for any such incorporation to be valid and effective. In the case of a general incorporation clause (ie, in a case where the wording of the clause generally incorporates all of the terms of the charterparty into a bill of lading, without pointing out its arbi - tration clause in particular), the requirements are: • a holder of the bill of lading must be aware or could have been aware of the existence of such an arbitration clause in the charterparty to be incorporated; • the arbitration clause should not contradict the other terms and conditions of the bill of lading to be incorporated; and • the arbitration clause of the charterparty should state comprehensively that the arbitra -
tion clause of the charterparty not only covers disputes arising between the parties of the charterparty but also may apply to another third party, such as the holder of the bill of lading. As regards the governing law, while there are no clear case precedents of incorporation of the arbitration clause by the Korean Supreme Court, there is a lower instance court case where the court found that the requirements for incorpora - tion into the bill of lading of the governing law clause in the charterparty could be less strict than incorporation of the arbitration clause in light of the underlying circumstances. For instance, considering it is general international practice that the majority of charterparty con - tracts contain the English governing-law clause, the charterparty’s English governing law may be likely to be applied more easily than the arbitra - tion clause. 6.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards South Korea is a member state of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Accord - ingly, the Arbitration Act of Korea has provisions on the recognition and enforcement of foreign arbitral awards in accordance with the Conven - tion. 6.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction In so far as the requirements for the relevant type of ship arrest are satisfied, the South Korean courts will grant a ship arrest where the relevant claim is subject to the foreign court’s jurisdic - tion, due to the jurisdiction clause in the relevant contract or bill of lading or charterparty.
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