KT to appeal to US federal court over broadcast satellite

By Jun Ji-hye

KT said Thursday it will file a suit to a federal court of New York as it has lost a case filed by a Hong Kong-based company over a broadcast satellite at an arbitration tribunal constituted under the rules of the International Chamber of Commerce (ICC).

A KT official said the company will ask the federal court to nullify the ruling issued by the ICC tribunal that KT and its satellite service arm KT SAT pay a total of $1.03 million to Asia Broadcast Satellite Holdings (ABS) in compensation for losses.

The tribunal adopts a single-trial system, which is why KT needs to file a suit with the federal court.

According to a business report by KT, the final ruling by the tribunal was made March 9 after it delivered a partial award in July that ABS owns the Mugunghwa-3 broadcast and communication satellite.

After the partial award, KT also filed a suit with the federal court in New York, asking for it to be nullified.

“We will file an additional suit to request for nullification of the ruling on compensation,” the official said.

KT, the nation's biggest fixed-line internet operator and the second-largest mobile carrier, launched Mugunghwa-3 in 1999 when it was a state-run firm.

But in 2010, after it became a public enterprise, KT sold the satellite to ABS for 500 million won ($472,000).

But the firm was soon embroiled in controversy over violation of laws as it did not go through the process of securing government approval before selling the satellite, in which 300 billion won of taxpayer money was invested. The incredibly low sale price was also criticized.

In December 2013, the Ministry of Science, ICT and Future Planning, the predecessor of the Ministry of Science and ICT, ordered the firm to return ownership of the satellite to the state before the sale.

KT began negotiations with ABS to repurchase the satellite but failed to reach an agreement due to conflicting opinions on the price. This led the Hong Kong-based company to file a suit with the ICC.