Mirae Asset wins lawsuit against China's Anbang Insurance over US hotel deal

Mirae Asset Financial Group headquarters in central Seoul / Courtesy of Mirae Asset Group

By Anna J. Park

Mirae Asset Global Investments has won a years-long lawsuit against China's Anbang Insurance Group over a $5.8 billion acquisition deal involving luxury hotels in the United States, the Korean company said Friday.

It said the Delaware Supreme Court upheld the state's Chancery Court decision made in December 2020, which ruled in favor of Mirae Asset that the Chinese company was in breach of contract.

With the win, Mirae Asset is expected to receive about 700 billion won ($594 million) from Anbang Insurance, including a pre-paid contract deposit of $580 million as well as legal costs.

The legal battle goes back to September 2019, when Mirae Asset signed a contract with Anbang Insurance to buy 15 U.S. hotels owned by the Chinese insurer. Mirae Asset paid $580 million as a contract deposit for the deal.

The contract was supposed to be implemented by April 2020, yet Mirae Asset decided to withdraw from the contract in May 2020 on the grounds that Anbang had failed to carry out its prerequisite obligations under the contract.

Mirae Asset asserted that Anbang had not revealed that it was being sued in the U.S. over the matter of the hotels' ownership, as well as the fact that Anbang did not respond to Mirae Asset's requests for related information.

The two companies soon became embroiled in lawsuits, with each suing the other over the issue. Anbang sued Mirae Asset, saying that the firm had no justifiable cause for not implementing the contract, while Mirae Asset countersued Anbang in Delaware.

The trial court's ruling sided with Mirae Asset, recognizing that Anbang brought extensive changes to the hotels' management, such as shutting down hotels and firing employees, without Mirae Asset's agreement. This course of events was regarded as Anbang's failure to meet the precedent condition on the contract that business be “conducted in the ordinary course of business,” giving Mirae Asset the right to terminate the contract.

Anbang appealed to a higher court after the ruling last December, yet Delaware's Supreme Court confirmed the ruling of the first trial, bringing victory to Mirae Asset.

Mirae Asset is expected to use the 700 billion won, which will be returned soon, for overseas real estate investments as well as potential M&As.