Regarding the international dispute worth about 1.4 trillion won involving Korea Electric Power Corporation (KEPCO) and Korea Hydro & Nuclear Power over the United Arab Emirates (UAE) Barakah nuclear power plant, the first project in Korea's nuclear power export program, the government officially recommended moving the arbitration venue from the United Kingdom to Korea.
The Ministry of Trade, Industry and Resources said on the 27th that it recommended the two organizations transfer the arbitration that KHNP filed with the London Court of International Arbitration (LCIA) against Korea Electric Power Corporation to the Korean Commercial Arbitration Board (KCAB).
The dispute between the two sides stems from the "operation support services contract" for the Barakah nuclear plant signed in May 2010. KEPCO was the prime contractor overseeing the nuclear project, and KHNP was responsible for operation support services, but as the schedule was delayed from the plan, additional labor costs and expenses for deploying operation support personnel arose. KHNP billed KEPCO for this expense, but as differences over the scope of payment could not be narrowed, it applied for arbitration with the LCIA in May last year. The claim amount is known to be about 1.4 trillion won.
A government official explained, "Considering that if arbitration overseas is prolonged, the expense burden grows and concerns may be raised about technology leaks in the process of submitting materials related to nuclear plant design and operation to external parties, we recommended switching to domestic arbitration."
However, this step is a nonbinding "recommendation." The two organizations will decide whether to accept it after internal procedures such as board approvals. It was reported that, in light of the principles of autonomous management of public institutions and potential breach of duty concerns, the government chose a recommendation rather than a direct order.
Observers note that this issue goes beyond a simple expense settlement dispute between KEPCO and KHNP and is also intertwined with structural problems across the nuclear export framework. Currently, KEPCO handles marketing and financing, while KHNP performs roles such as construction and operation in a dualized structure. This creates room for repeated conflicts over responsibility and expense sharing when large projects face schedule delays or reach the settlement stage.
Accordingly, the government is reviewing a plan to overhaul the nuclear export framework with the aim of announcing it in the first quarter. Various scenarios are being discussed, including unifying the system under KEPCO, reorganizing it around KHNP, and establishing a separate dedicated entity.