By Kim Da-ye
A Korean energy firm has won a lawsuit against its estranged Kazakhstan business partner over a failed joint oil development project.
It is the first time that a Korean company has won a lawsuit regarding conflicts over overseas energy development, according to Kim & Chang, which represented the Korean firm, Seha Corp.
Seha initially sued its Kazakhstan partner in the Central Asian country, but lost. However, the firm took the case to the International Court of Arbitration, which belongs to the International Chamber of Commerce (ICC), which overturned the ruling.
The court ordered the Kazakhstan firm to compensate some 17 billion won to Seha. The Kazakhstan firm will also have to pay half of Seha's legal expenses.
Seha will be able to retrieve its investment.
"This is the first lawsuit involving oilfield development abroad that a Korean entity won," Yoon Byung-chol, attorney at Kim & Chang, said.
"This case shows that in a conflict involving huge investment like natural resources development, it is difficult to expect independent, fair rulings by local courts, so it is important to seek arbitration procedures."
Seha and its Kazakhstan set up a joint venture in 2005 with equal stakes. Seha put some 10 billion won ($9.8 million) of its own capital and borrowed 90 billion, investing a total of 100 billion won.
The development, however, was slow, and the subsoil use right of the joint venture was temporarily taken by the Kazakhstan government.
Seha sued the partner, but lost the suit as well as a large part of its stake in the joint venture. It newly hired Kim & Chang, which took the case to the International Court of Arbitration, judging the Kazakhstan court wasn't fair to foreign investors. The contract between Seha and its partner had a clause on arbitration by the ICC.
Seha's attorneys sought compensation for damages from its partner violating the duty to keep the subsoil use right and failing to make efforts for a successful joint investment.
The Kazakhstan partner hired a U.S. law firm. The hearing was held in Paris, France, in November.
A Korean energy firm has won a lawsuit against its estranged Kazakhstan business partner over a failed joint oil development project.
It is the first time that a Korean company has won a lawsuit regarding conflicts over overseas energy development, according to Kim & Chang, which represented the Korean firm, Seha Corp.
Seha initially sued its Kazakhstan partner in the Central Asian country, but lost. However, the firm took the case to the International Court of Arbitration, which belongs to the International Chamber of Commerce (ICC), which overturned the ruling.
The court ordered the Kazakhstan firm to compensate some 17 billion won to Seha. The Kazakhstan firm will also have to pay half of Seha's legal expenses.
Seha will be able to retrieve its investment.
"This is the first lawsuit involving oilfield development abroad that a Korean entity won," Yoon Byung-chol, attorney at Kim & Chang, said.
"This case shows that in a conflict involving huge investment like natural resources development, it is difficult to expect independent, fair rulings by local courts, so it is important to seek arbitration procedures."
Seha and its Kazakhstan set up a joint venture in 2005 with equal stakes. Seha put some 10 billion won ($9.8 million) of its own capital and borrowed 90 billion, investing a total of 100 billion won.
The development, however, was slow, and the subsoil use right of the joint venture was temporarily taken by the Kazakhstan government.
Seha sued the partner, but lost the suit as well as a large part of its stake in the joint venture. It newly hired Kim & Chang, which took the case to the International Court of Arbitration, judging the Kazakhstan court wasn't fair to foreign investors. The contract between Seha and its partner had a clause on arbitration by the ICC.
Seha's attorneys sought compensation for damages from its partner violating the duty to keep the subsoil use right and failing to make efforts for a successful joint investment.
The Kazakhstan partner hired a U.S. law firm. The hearing was held in Paris, France, in November.
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