The Korean government has fully recovered 9.6 billion won ($6.7 million) in legal costs just one month after winning an investor-state dispute settlement (ISDS) case against Swiss company Schindler.
"We completed the recovery by receiving the full amount of approximately 9.6 billion won in government litigation costs incurred during the ISDS proceedings from Schindler between the 10th and 15th," the government said Thursday.
The recovery came one month after the government won a complete victory on April 14 in the ISDS case filed by Schindler, marking the largest litigation cost recovery among all ISDS cases handled by the Korean government. In addition to successfully defending against Schindler's damages claims of 325 billion to 490 billion won ($227 million to $342 million), the government has now secured additional savings for the national treasury. The government also fully recovered 7.4 billion won in ISDS annulment proceeding costs from Lone Star within one month of winning that case in December last year.
The Ministry of Justice took preemptive action immediately after the ruling was issued. Within five days of the decision, the ministry sent a demand letter and notified Schindler of potential late interest charges and enforcement proceedings if payment was not made by the deadline. As a result, the ministry successfully received the full amount in installments without separate enforcement procedures.
This case is significant in that it achieved swift recovery while avoiding the non-payment and prolonged enforcement procedures that commonly occur in international arbitration.
"In international arbitration, decisions often require each party to bear their own costs, but we actively argued for the 'loser-pays' principle throughout the proceedings," a government official said. "By recovering the full amount, we prevented the waste of taxpayers' money and substantially protected the national interest."
The government plans to deposit the recovered funds into the national treasury in accordance with relevant regulations. It also intends to closely monitor and respond to any follow-up procedures, including the possibility of Schindler filing an annulment suit.
