Seoul – The South Korean government has secured a complete victory in an international investment dispute with Swiss elevator manufacturer Schindler Holding AG, averting a potential 3.2 billion won (approximately $2.4 million USD) in damages. The International Centre for Settlement of Investment Disputes (ICSID), operating under the auspices of the World Bank, ruled in favor of South Korea, rejecting all claims made by Schindler, according to a statement released by the Ministry of Justice on Saturday.
Justice Minister Jeong Seong-ho announced the ruling in a briefing, stating the decision affirmed the government’s right to regulate in the public interest. “The Republic of Korea has achieved a 100% victory,” Jeong said, adding that the government would likewise recover approximately 9.6 billion won (approximately $7.2 million USD) in legal costs incurred during the proceedings. Jeong further noted the win on his Facebook page, characterizing it as a success building on previous victories in international investment disputes, including cases involving Lone Star Funds and Elliott Management.
The dispute stemmed from a 2018 claim by Schindler, a major shareholder in Hyundai Elevator, alleging that South Korean regulatory bodies – the Fair Trade Commission, the Financial Services Commission, and the Financial Supervisory Service – had failed to adequately oversee a 2013-2015 rights offering by Hyundai Elevator. Schindler argued that the offering was designed not to bolster the company’s finances, but to allow Hyundai Motor Group, Hyundai Elevator’s parent company, to maintain control through affiliated companies. The company initially sought approximately 500 billion won (approximately $37.5 million USD) in damages, later reducing the claim to 3.2 billion won.
The ICSID tribunal determined that the actions taken by the Korean regulatory agencies were within their legal authority and constituted sufficient investigation and review. Specifically, the tribunal found no evidence of arbitrary or discriminatory practices, concluding that South Korea had not violated any investment treaty obligations and therefore bore no international legal responsibility.
The government views the ruling as a significant affirmation of its regulatory authority, establishing a precedent for the legitimate exercise of state power in the public interest. According to the Ministry of Justice, the decision reinforces the principle that national regulatory rights should be respected under international law.
The case has been ongoing since 2018, with the tribunal’s decision delivered in the early hours of Saturday morning, Korean time. The government has not yet announced any further steps regarding the recovered legal fees, but officials have indicated they will continue to defend national interests in future international investment disputes.
