Int’l tribunal reduces damages S. Korea owes to Lone Star by 600 mln won: ministry

Yonhap | 9 May 2023

Int’l tribunal reduces damages S. Korea owes to Lone Star by 600 mln won: ministry

SEOUL, May 9 (Yonhap) — An international tribunal has accepted the South Korean government’s request and reduced the damages it has to pay to the U.S. private equity firm Lone Star Funds by about 600 million won (US$452,898), the justice ministry said Tuesday.

In August last year, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ordered South Korea to pay US$216.5 million plus interest to Lone Star, ending a decadelong legal battle over the U.S. fund’s sell-off of the now-defunct Korea Exchange Bank (KEB).

The payment represents about 4.6 percent of what Lone Star demanded in the investor-state dispute settlement suit it filed against South Korea in 2012, claiming its 2007 plan to sell a controlling stake in KEB fell through because Seoul’s financial authorities delayed approving the deal.

Including the interest accrued since December 2011, the time when Lone Star began sustaining damage, the total payment the South Korean government had to pay was estimated at around 300 billion won.

The government has since asked ICSID to reduce the amount of the compensation, saying the interest payment was overcalculated because part of the interest was already reflected in the damages.

On Tuesday, the Justice Ministry said it has been notified of ICSID’s decision to correct the damages to US$216.01 million, US$481,318 less than the initial verdict.

Officials said the ministry also plans to review whether to file a suit to reverse the compensation order altogether.

source: Yonhap