By Jung Min-ho
Korean lawyers have asked the International Center for Settlement of Investment Disputes (ICSID) for permission to attend a 5-trillion-won international litigation between the Korean government and Lone Star Funds in Washington D.C. scheduled to begin on Friday.
Industry sources said Sunday that Lawyers for a Democratic Society, or Minbyun, an association of progressive lawyers, applied on Thursday to watch Lone Star’s Investor-State Dispute Settlement (ISDS) case against the government.
According to sources, in its application sent to ICSID Secretary-General Meg Kinnear, Minbyun said, “For the arbitration to ensure fairness and transparency, it needs to have observers with knowledge of law.”
In most cases, investment tribunals are composed of three arbitrators ― one is appointed by the investor, one by the state, and the third is usually chosen between the parties.
Under ICSID regulations, if all three arbitrators agree and the ICSID Secretary-General permits, visitors can attend part or all of the hearings. Attendance is not allowed if any of the two parties involved ― in this case, either the Korean government or Lone Star Funds ― opposes it.
It is unclear if the application will be accepted. A government official close to the case would not comment, saying it could affect ICSID’s ruling.
The Dallas-based buyout company filed an ISDS suit in 2012 for 5.13 trillion won ($4.7 billion), arguing that the government had caused it serious financial damage by delaying its approval for the company to sell the Korea Exchange Bank from 2007 to 2012.
Since then, Minbyun has pressured the government to reveal more information about the case. Some members suspect that the Korean government is trying to keep it under the radar to try to hide the government’s faults in handling the matter.
In a statement last month, Minbyun claimed the government had remained quiet.
“Facing the enormous sum of money they might have to pay, taxpayers have the right to know what it is about,” Minbyun said.
The group added that the government’s secretive approach was different from that of other governments’ such as in the U.S. and Canada, where more information was available to those who might have to bear the costs.