ARBITRATION LAW OF KOREA: Practice and Procedure
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1 ARBITRATION LAW OF KOREA: Practice and Procedure General Editors Kap-You (Kevin) Kim John P. Bang Contributors Seungwoo (Sean) Cho Matthew J. Christensen Kyongwha Chung Seungil Hong Woochul Hwang Eunah Jeung Byoung-Pil Kim Hongjoong (H.J.) Kim Junu Kim Sue Hyun Lim David W. MacArthur James Morrison Jong Kwon Ryoo Yunsoo Shin Sung Woo Yang Seokchun Yun of THE INTERNATIONAL ARBITRATION & LITIGATION PRACTICE GROUP of BAE, KIM & LEE LLC JURIS
2 Questions About This Publication For assistance with shipments, billing or other customer service matters, please call our Customer Services Department at: To obtain a copy of this book, call our Sales Department: Fax: Toll Free Order Line: (United States & Canada) See our web page about this book: COPYRIGHT 2012 by JurisNet, LLC All Rights Reserved Printed in the United States of America ISBN: JurisNet, LLC 71 New Street Huntington, New York USA
3 TABLE OF CONTENTS About the Editors... xiii About the Authors xv Preface xix Chapter 1 Introduction Korea s Emergence as an Arbitration Power Current Status of Arbitration in Korea The Rise of Arbitration in Korea: A Brief Historical Sketch Historical Precursors Enactment of the Arbitration Act of Establishment of a Korean Arbitral Institution Accession to the New York Convention Amendment of the Arbitration Act: Adoption of UNCITRAL Model Law Korean Arbitration Undergoes a Rapid Growth Phase Development of KCAB International Arbitration Rules Seoul as a Safe Place of Arbitration and Competitive Regional Arbitration Center The Lex Arbitri Strong and Supportive National Courts A Reliable Arbitration Institution Capable and Experienced Arbitrators and Arbitration Practitioners Convenience Future Prospects Scope and Organization of this Book Chapter 2 Overview of Civil Litigation in Korea Introduction Structure of Korean Courts Necessary Documents for Litigation Fees, Costs and Security Deposit Confidentiality iii
4 ARBITRATION LAW OF KOREA: PRACTICE AND PROCEDURE 2.6 Pre-trial Procedures and Discovery Timing Early Disposition Document Production Trial Procedure Timing Timely Submissions Presentation of Evidence and Examination of Witnesses Proving the Case Judgments Appeals Duration Enforcement Enforceable Judgments General Enforcement Procedure Disclosure of Assets Enforcement of Foreign Judgments Interim Relief Recovery of Litigation Expenses Chapter 3 The Arbitration Agreement Preliminary Matters Definitions Types of Arbitration Agreements Arbitration Clauses and Submission Agreements Standing Offers to Arbitrate under Investment Treaties A Defined Legal Relationship Subject Matter Capable of Settlement by Arbitration Separability of Arbitration Agreement Law Applicable to Arbitration Agreement Law Applicable to Procedural Matters Substantive Law Governing the Contract as a Whole Substantive Law Governing the Arbitration Agreement iv
5 TABLE OF CONTENTS 3.3 Parties to an Arbitration Agreement Capacity of Parties to Enter into an Arbitration Agreement Individuals Legal Persons State Entities Agents Insolvency Determining the Parties to the Arbitration Agreement Implied Consent to Arbitrate by Third Parties Succession and Delegation Scope of an Arbitration Agreement Disputes Covered by the Arbitration Agreement Counterclaims and Set-off Effects of a Valid Arbitration Agreement Positive Effects Negative Effects Validity of Arbitration Agreements under Korean Law Formal Validity: Writing Requirement Writing Requirement under the Arbitration Act Relevant Court Precedents No Other Requirements of Form under Korean Law Substantive Validity: Intent to Submit Dispute to Arbitration References to Standard Terms and Conditions Containing an Arbitration Clause Multi-tier Dispute Resolution Clauses No Requirement that Recourse to Court Litigation Be Expressly Waived Pathological Arbitration Clauses The Unwilling Arbitrator The Non-existent Arbitral Institution The Split or Elective Dispute Resolution Clause Basic Elements of an Arbitration Agreement v
6 ARBITRATION LAW OF KOREA: PRACTICE AND PROCEDURE Place of Arbitration Arbitral Institution Number of Arbitrators Language of Arbitration Confidentiality Termination or Revocation of an Arbitration Agreement Chapter 4 Arbitrators Introduction Requirements to Serve as Arbitrator Number of Arbitrators Number of Arbitrators under the Arbitration Act Number of Arbitrators under the KCAB rules Choosing the Arbitrators Method of Appointing Arbitrators Method of Arbitrator Appointment under the Arbitration Act Court Involvement in the Appointment of Arbitrators Method of Arbitrator Appointment under the KCAB Rules Party Agreement on Method of Arbitrator Appointment Lack of Party Agreement on Method of Arbitrator Appointment Appointment of Arbitrators in Multiparty Cases Duties of Arbitrators General Duties of Arbitrators Duty of Independence and Impartiality Duty to Disclose Duty to Disclose under the Arbitration Act Duty to Disclose under the KCAB Rules Duty to Render an Award Powers of Arbitrators Powers of Arbitrators under the Arbitration Act Powers of Arbitrators under the KCAB Rules Liabilities of Arbitrators Challenges to and Replacement of Arbitrators vi
7 TABLE OF CONTENTS Challenges to Arbitrators Challenges to Arbitrators under the Arbitration Act Termination of an Arbitrator s Mandate Challenges to Arbitrators under the KCAB Rules Replacement of Arbitrators Replacement of Arbitrators under the Arbitration Act Replacement of Arbitrators under the KCAB Rules Fees and Expenses of the Tribunal Tribunal Fees and Expenses under the Arbitration Act Tribunal Fees and Expenses under the KCAB Rules Challenges to the Jurisdiction of the Tribunal Chapter 5 Arbitration Procedure Introduction KCAB and Its Arbitration Rules KCAB Arbitration Rules of the KCAB Overview of Available Arbitration Rules Special Features Main Stages of the Arbitration General Principles Party Autonomy Equality of Treatment Discretionary Powers of Arbitrators Rule of Waiver and Duty to Object to Procedural Errors Place of Arbitration Language Party Default Representation Commencement of Arbitration Proceedings Requirements of the RFA vii
8 ARBITRATION LAW OF KOREA: PRACTICE AND PROCEDURE Common Requirements under Both the Arbitration Rules and International Rules Other Special Requirements under the Arbitration Rules Other Special Requirements under the International Rules Number of Copies and Filing Fee Answer and Counterclaims Requirements for the Response to the RFA Timing and Failure to File an Answer Request for an Extension of Time to File an Answer Counterclaims Conciliation and Settlement The Tribunal Preliminary Steps Objections to Jurisdiction Procedure and Practice Court Involvement Preliminary Meeting Written Submissions Overview Format Documents Overview Voluntary Production of Documents Specific Requests for Documents Legal Privilege and Professional Secrets Practicalities Electronic Disclosure and Future Trends Fact Witnesses Overview Format Practicalities Court Assistance Expert Witnesses Overview Party-appointed Experts viii
9 TABLE OF CONTENTS Tribunal-appointed Experts Challenges to Experts Area of Expertise Interlocutory Applications Evidentiary Principles The Hearing Opening Statements Procedure and Practice Practicalities Confidentiality Chapter 6 Arbitral Awards Introduction Decision-making Process of the Tribunal Exercise of Discretion Amiable Compositeur and Ex Aequo Et Bono Remedial Powers of a Tribunal Remedies in General Remedies under the KCAB Rules Types of Arbitral Awards Final Awards Partial, Interim and Interlocutory Awards Default Awards Consent Awards Costs Awards Costs Awards Generally Costs Awards under the KCAB Rules Categories of Arbitration Costs under the Arbitration Act Categories of Arbitration Costs under the KCAB Rules Legal Fees and Expenses Filing Fees Administrative Fees Fees and Expenses of Arbitrators Other Expenses KCAB Procedures Regarding Advance on Costs and Refunds Challenges to Costs Awards ix
10 ARBITRATION LAW OF KOREA: PRACTICE AND PROCEDURE 6.5 Formal Requirements of Arbitral Awards Arbitration Act KCAB Rules Time Limits, Notification, Registration and Deposit of Awards Arbitration Act KCAB Rules Time Limit for Rendering Award Delivery and Assistance with Required Formalities Effects of Arbitral Awards Correction and Interpretation of Arbitral Awards Chapter 7 Court Involvement in the Arbitral Process Introduction Court Role in Maintaining the Effectiveness of the Arbitral Process Court-ordered Interim Measures Court Assistance in the Taking of Evidence Court Assistance in Challenges to Experts Deposit of the Original Copy of an Arbitral Award with the Court Court Review and Approval of KCAB Arbitration Rules Court Assistance in the Formation and Composition of the Arbitral Tribunal Court Review of the Existence, Validity or Scope of an Arbitration Agreement Court Review of a Tribunal s Jurisdiction Applications to Dismiss a Lawsuit Due to the Existence of an Arbitration Agreement Chapter 8 Interim Measures Overview Provisional Attachment Provisional Injunction / Disposition Interim Measures through the Courts Interim Measures through an Arbitral Tribunal x
11 TABLE OF CONTENTS 8.6 Comparative Advantages of Court-ordered Interim Measures Comparative Advantages of Tribunal-ordered Interim Measures Chapter 9 Setting Aside and Recognizing and Enforcing Awards in Korea Introduction Structure of the Arbitration Act Domestic Awards vs. Foreign Awards Setting Aside vs. Recognition and Enforcement Setting Aside Recognition and Enforcement Procedures for Setting Aside and Recognizing and Enforcing Awards Generally Setting Aside Domestic Awards Recognizing and Enforcing Awards Domestic Awards NYC Awards Non-NYC Awards Grounds for Setting Aside and Recognizing and Enforcing Awards Generally Domestic Awards NYC Awards Non-NYC Awards Korean Court Precedents concerning Domestic Awards and NYC Awards Invalidity of the Arbitration Agreement Breach of Due Process Exceeding the Tribunal s Authority/Scope of Arbitration Agreement Breach of the Applicable Procedural Rules Non-arbitrable Subject Matter Breach of Public Policy Domestic Awards NYC Awards xi
12 ARBITRATION LAW OF KOREA: PRACTICE AND PROCEDURE Appendices Appendix A: Arbitration Act Appendix A: Arbitration Act (Korean) Appendix B: Korean Commercial Arbitration Board Domestic Arbitration Rules Appendix B: Korean Commercial Arbitration Board Domestic Arbitration Rules (Korean) Appendix C: Korean Commercial Arbitration Board International Arbitration Rules Appendix C: Korean Commercial Arbitration Board International Arbitration Rules (Korean) Index xii
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