US court ruling bolsters KHNP's drive to sell nuclear reactors overseas

Reactor 4 at the Barakah Nuclear Power Plant in Abu Dhabi, the United Arab Emirates / Courtesy of Korea Electric Power Corp

By Ko Dong-hwan

• Published Sep 19, 2023 4:37 PM KST
• Updated Sep 20, 2023 9:36 AM KST

By Ko Dong-hwan

A U.S. court ruling in favor of two Korean state-run utility companies on Monday (local time) is expected to boost Korea's bid to export nuclear reactors to the Czech Republic and other countries, according to industry officials and experts, Tuesday.

The District Court for the District of Columbia dismissed a lawsuit filed last October by Westinghouse Electric, a Pennsylvania-based American energy firm, against Korea Hydro & Nuclear Power (KHNP), the country's nuclear reactor operator, and Korea Electric Power Corp (KEPCO), the state-run utility firm. The U.S. court, upon the ruling, said Westinghouse lacks a “private cause of action” to enforce Part 810 and thus has failed to state a claim.

Westinghouse filed the suit to prevent KHNP from transferring technical information on reactor designs to other countries including the Czech Republic and Poland. The U.S. firm claimed it has licenses which prevent its Korean rival from the intellectual properties in accordance with the U.S. Department of Energy's export control regulation called “Part 810 ― Assistance to Foreign Atomic Energy Activities” under the U.S. Atomic Energy Act.

Part 810 enforces regulations regarding transfer of technology for development, production or use of nuclear reactors, equipment and materials.

Chung Bum-jin, president of Korean Nuclear Society, said Westinghouse has been trying to dent the public image of KHNP through lawsuits to prevent the Korean firm from increasing its pie in the global nuclear reactor market. He said the latest ruling indicates the court has deterred the American firm's such effort and has removed a hurdle for the Korean firm before the eyes of countries interested in importing nuclear reactor technologies.

“Brookfield Business Partners has been trying to increase Westinghouse's weight before selling it off in the future, so the energy firm deliberately created tensions with its rival companies regarding the intellectual properties to damage their values,” Chung told The Korea Times, mentioning the current owner of the American energy firm since 2018. “But the latest court ruling has tripped on the company's course of action.”

The lawsuit follows an ongoing contention between the U.S. and Korean nuclear reactor developers whether Korea's increasingly advanced nuclear reactor technologies that had originally benefited from the U.S. firm's technical assistance are still subject to U.S. export control regulations.

The U.S. company insisted the legal subjection still holds, whereas the Korean firms said their more recent technological developments no longer used the American technologies and are thus no longer subject to the regulation.

KHNP said the latest court ruling doesn't affect a legal interpretation it is seeking from the Korea Commercial Arbitration Board (KCAB) on whether Korean-type nuclear reactors are still considered to possess Westinghouse's intellectual property and are thus subject to U.S. export regulations. The board hasn't released its judgment on the case.

“Westinghouse may appeal the ruling,” a KHNP official told The Korea Times. “In that case, the appellate court may release a different interpretation.”

KHNP has said the U.S. government's Atomic Energy Act doesn't contemplate private enforcement and delegates the U.S. attorney general the exclusive authority to enforce relevant provisions.