BAE, KIM & LEE LLC said on the 14th that in connection with the Korean government's victory in the investor-state dispute settlement (ISDS) brought by Swiss elevator company Schindler Holding AG (hereinafter Schindler), it "did our utmost to respond and was able to protect the public treasury from loss."
BAE, KIM & LEE LLC stated accordingly in materials released after Minister Jung Sung-ho of the Ministry of Justice announced the ISDS win at Government Complex Seoul on the afternoon of the same day, saying it "proved that there was no issue under international law with the government's exercise of regulatory authority."
Earlier, Schindler filed an ISDS case against the government in 2018. BAE, KIM & LEE LLC represented the government side for eight years. It formed a special response team of experts in international arbitration, finance, and fair trade, including attorneys Kim Jun-woo (34th class of the Judicial Research and Training Institute), Kim Woo-jae (38th class), Kim So-dam (44th class), Byun Chae-young (2nd bar exam), and foreign attorney Kim Young-mo.
The response team argued that the government's exercise of regulatory authority related to Hyundai Elevator conformed to international legal standards, and after reviewing the pleadings, the arbitral tribunal found no violation of international legal standards in the actions of the financial and fair trade authorities. The arbitral tribunal also ordered Schindler to compensate 9.6 billion won in legal expense that the government incurred over eight years responding to the ISDS brought by Schindler.
Attorney Kim Jun-woo, who led the response team, said, "This dispute was a high-difficulty case entangled with three complex issues—international arbitration, finance, and fair trade regulation," adding, "This award will be a very important milestone in that it successfully defended the state's legitimate policy judgments in a major investment dispute."
Chief attorney Lee Jun-ki of BAE, KIM & LEE LLC said, "Following the Lone Star ISDS lawsuit, contributing to the state's risk management in the Schindler case once again demonstrated our law firm's capability to respond to compound crises."
Schindler was the No. 2 shareholder of Hyundai Elevator in 2013. At the time, Hyundai Elevator's paid-in capital increase was carried out to defend Chair Hyun Jeong-eun's control of Hyundai Group, but it argued that because the financial supervisory authorities did not properly sanction it, it suffered damage from the dilution of its equity.
It also claimed that the 2016 transfer of a call option by Hyundai Elevator was an unfair transaction executed at a price favorable to Chair Hyun, but because the Korea Fair Trade Commission (FTC) did not sanction it, the duty to protect investors was violated, and in 2018 it filed for international arbitration.
It argued that because the financial and fair trade authorities did not faithfully exercise their regulatory and investigative powers, the stock price fell and 500 billion won in damage occurred. Over the eight-year battle, the damages claim decreased from 500 billion won to 320 billion won.