South Korea's Political Battle: Who Gets Credit for $216M Legal Victory?

In 2022, the World Bank's International Center for Settlement of Investment Disputes (ICSID) ordered South Korea to pay the fine over a decadelong dispute over Lone Star's sale of Korea Exchange Bank (KEB), reports Yonhap news agency.

A day after the ICSID's annulment committee ruled in favour of South Korea, overturning the entire award, the ruling Democratic Party (DP) hailed it, while the main opposition People Power Party (PPP) argued it was an achievement made under the previous Yoon Suk Yeol administration.

"I was pleased to hear the good news that South Korea won the case and that we do not have to pay 400 billion won in compensation," DP leader Jung Chung-rae said during a Supreme Council meeting in the southeastern city of Daegu.

Rep. Jeon Hyun-heui, a member of the party's Supreme Council, expressed "deep respect" for the government officials who devoted themselves to earn what she described as a "miraculous" result, calling for their continued efforts amid the possibility of a new arbitration by the private equity fund.

Another Supreme Council member, Rep. Park Jie-won, hailed the ruling as another "major diplomatic feat" of the Lee Jae Myung administration following the successful hosting of the Asia-Pacific Economic Cooperation gathering, stressing that full annulments of ICSID awards are rare.

Former PPP leader Han Dong-hoon, who served as justice minister at the time, demanded the DP apologize for criticizing his move to push ahead with the appeal in 2022.

DP lawmakers dismissed his demand, accusing Han of attempting to claim credit.

"The conservative bloc will try to frame the result as piggybacking or that it was driven by the previous Yoon Suk Yeol administration," Rep. Kang Deuk-gu wrote on his Facebook page. "But this is undeniably an achievement of the Lee Jae Myung administration that cannot be overshadowed by any political framing."

In a commentary, PPP spokesperson Park Sung-hoon also said the DP had long argued there was "zero" chance of winning and had criticized the Yoon administration's decision to pursue the case.

"Now they are trying to claim the victory as their own achievement," he said.

South Korea appealed the ICSID's 2022 ruling to pay the compensation to Lone Star, after the private equity fund filed a suit in 2012 claiming that the South Korean government interfered with the sale of KEB, incurring $4.67 billion in losses.

Lone Star acquired KEB in 2003 for 1.38 trillion won (US$941 million) and later sold it off to a major South Korean banking firm, Hana Financial Group, for 3.92 trillion won in 2012. The fund argued that government interference caused the firm to miss the opportunity to sell KEB at a higher price and ultimately forced it to sell at a reduced price.

In July 2023, Lone Star filed a suit to annul the 2022 ruling, claiming that the compensation was not sufficient. Seoul also lodged a petition to cancel the award and suspend the decision in September of that year, citing the tribunal's overreach and violations of procedural rules.

- IANS