Korea's victory in Lone Star case sparks controversy over who deserves credit
Prime Minister Kim Min-seok, fourth from left, gives an emergency briefing at Government Complex Seoul, Tuesday. Kim announced that Korea received a victory in the decision from the International Centre for Settlement of Investment Disputes annulment committee regarding the Lone Star investor-state dispute settlement case. Yonhap
After Korea secured a victory in its 13-year legal battle against U.S.-based private equity fund Lone Star, escaping liability for compensation of $216.5 million plus interest, a political dispute has erupted over which government administration deserves credit for the win.
The controversy intensified after Prime Minister Kim Min-seok and Justice Minister Jung Sung-ho publicly led a briefing on Tuesday, shortly after news broke that the Korean government had won its annulment request in the investor-state dispute settlement case against Lone Star.
The two made comments that appeared to frame the victory as an achievement solely of the Lee Jae Myung administration. In particular, Justice Minister Jung said: “Some may argue that this outcome was achieved before the current administration took office, but this is not an issue of which government it belongs to. After the Dec. 3 crisis last year, when both the president and the justice minister were absent, officials devoted themselves fully to this case, and their dedication led to the victory.”
Regarding the briefing, former main opposition People Power Party (PPP) leader and then-Justice Minister Han Dong-hoon accused the Lee administration of “trying to take credit,” asserting that the ruling Democratic Party of Korea (DPK) had initially opposed the annulment request, questioning its feasibility.
"When I pursued this legal challenge as justice minister, the DPK strongly opposed it, claiming the chances of success were negligible and that it would waste taxpayer money,” he wrote on Facebook Tuesday. “Those who opposed it should apologize instead of trying to take credit now.”
He reiterated his stance the next day, arguing that this was not an “achievement dispute,” but rather a correction of “misleading political narratives.” He claimed that the final hearings concluded in January this year, before the current administration even took office, and that the DPK had been against filing the appeal altogether.
Former Minister of Justice Han Dong-hoon gives a briefing on the Korean government's position to challenge the International Centre for Settlement of Investment Disputes ruling on Lone Star suit at the Ministry of Justice in Gwacheon, Gyeonggi Province, Aug. 31, 2022. Korea Times photo by Ko Young-kwon
With Han’s remarks reigniting debate, the issue has escalated into a broader political dispute. The PPP criticized the current administration’s attempt to claim exclusive credit, stating, “Back then, the DPK dismissed the appeal as unrealistic and wasteful. Now they’re calling it their success. This is beyond absurd.”
The DPK, however, argued that the final oral hearings took place after the emergency martial law crisis, during the early stages of the Lee Jae Myung administration, and therefore the strategic conclusion of the case was led by the current government.
Public opinion, however, appears to lean toward recognizing Han’s role. One online commenter said, “When someone does a good job, we should acknowledge it. The DPK shouldn't try to capitalize on it for political gain. A mature Democratic Party would give Han Dong-hoon credit where it's due.”
Another commenter wrote, “Despite harsh criticism and opposition from the DPK, Han Dong-hoon pushed ahead with the appeal, and the final hearing wrapped up in January 2025. What role did the DPK actually play in this? Have some conscience.”
Amid growing controversy, Justice Minister Jung and Prime Minister Kim uploaded new posts two days after their initial briefing, belatedly recognizing the contribution of former Justice Minister Han, who decided to file the annulment request.
Jung wrote on Facebook that the outcome was a “national victory,” adding, “When we first considered filing for annulment, many doubted its feasibility, warning that the chances of winning were low and the costs too high.” He continued, “But then-Justice Minister Han Dong-hoon chose to proceed, believing in the possibility. It was the right and courageous decision.”
Kim also published a post on his Facebook page Thursday, indirectly acknowledging Han’s role: “When I next meet former Minister Han Dong-hoon, I intend to commend him for deciding to pursue the annulment request.”
This Nov. 11, 2006 file photo shows Lone Star's signboard in a building located in Gangnam, Seoul. Yonhap
The road ahead
The dispute began in 2012, when Lone Star accused the Korean government of deliberately delaying regulatory approval during its sale of Korea Exchange Bank (KEB) to Hana Financial Group. In 2022, the International Centre for Settlement of Investment Disputes (ICSID) tribunal partially sided with Lone Star, ordering Korea to pay $216.5 million plus interest, a ruling considered a significant defeat.
However, in a dramatic turn, the Korean government, under then-Justice Minister Han Dong-hoon, filed an annulment request, arguing that the decision lacked legal validity. The ICSID annulment committee declared a victory ruling for Korea this month, fully relieving the government of its payment obligations.
Meanwhile, legal experts caution that the case may not be entirely over, as Lone Star could potentially initiate a new investor-state dispute settlement proceeding.