Justice ministry to create new bureau to handle international investment disputes

Justice Minister Han Dong-hoon speaks during a press conference at the government complex in Seoul, June 18. Yonhap

By Lee Hae-rin

The Ministry of Justice said, Wednesday, that it will create a new bureau dedicated to handling investment disputes, or investor-state dispute settlements (ISDS), with foreign investment firms.

The ministry unveiled its plan to establish the tentatively titled International Legal Affairs Bureau as part of an upcoming organizational change to strengthen the government's capability to respond to international legal disputes.

The bureau will be comprised of eight members, including a prosecutor or a senior government official who will head the body.

The decision came about a month after Korea was ordered by the Permanent Court of Arbitration (PCA) in the Netherlands to pay nearly $108 million (136 billion won) to U.S.-based hedge fund Elliott Investment Management in an ISDS dispute stemming from the controversial 2015 merger of two Samsung Group affiliates.

In response, the government filed a suit to reverse the international tribunal's order, last week, claiming that the ruling went against the Free Trade Agreement signed between Korea and the United States.

A total of 10 ISDS cases have been filed against the Korean government, with five of them pending.

It is also considering filing a lawsuit to cancel the International Centre for Settlement of Investment Disputes' order to pay the U.S. private equity firm Lone Star Funds $216.5 million plus interest over its selloff of a local bank.