Government Wins ISDS Case Against Schindler, Avoids Paying 320 Billion Won in Damages

[Financial News] The Korean government has won an Investor–State Dispute Settlement (ISDS) case brought against it by Swiss elevator company Schindler.
The Ministry of Justice announced on the 14th that at 2:03 a.m. the arbitral tribunal of the Permanent Court of Arbitration (PCA) dismissed all claims filed by Schindler Holding AG.
As a result of the ruling, Schindler's claim for damages of about 320 billion won was rejected in full. The government will also be reimbursed approximately 9.6 billion won in litigation costs it incurred.
The ministry stressed that this was "a ruling in which the Korean government prevailed 100%."
The dispute arose from rights offerings carried out by Hyundai Elevator Co., Ltd. between 2013 and 2015. At the time, Schindler, then the second-largest shareholder of Hyundai Elevator, argued that the capital increases were not driven by business needs but were intended to maintain control over affiliates such as Hyundai Merchant Marine Company Limited (HMM).
Schindler filed an international claim in 2018, asserting that the Korean government had failed to properly exercise its investigative and regulatory authority over the rights offerings, causing it harm as a shareholder. It initially claimed at least 259 million Swiss francs (about 500 billion won) in damages, and during the arbitration process the final amount sought was adjusted to roughly 320 billion won.
The arbitral tribunal found that "the Korean government's actions were taken within the scope of its lawful authority and that it conducted sufficient investigation and review." It went on to state, "Accordingly, no breach of the investment treaty is established, and no state responsibility arises under international law."
dschoi@fnnews.com Choi Doo-seon Reporter