US Jurisdiction
The lawsuit between the Korean government and Lone Star, in which no less than 5 trillion won (US$4.6 billion) is at stake, kicks off on May 15 in Washington D.C. The litigation is drawing huge attention in that it is the first ever investor-state dispute (ISD) case.
The Korean government recently sent a joint response team to Washington D.C. The team’s members include about 10 working-level officials from the authorities concerned such as the Ministry of Justice, the Financial Services Commission, the Financial Supervisory Service, and the Ministry of Strategy and Finance. They are scheduled to participate in the first hearing led by the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank, which takes place for 10 days from May 15.
The lawsuit was triggered in November 2012, when the American private equity fund claimed that the Korean government had incurred losses by delaying the approval of the sale of Korea Exchange Bank and levying undue taxes. Intense competition is expected during the litigation. The Korean government is going to work with Arnold & Porter, and Sidley Austin is to side with Lone Star as its legal representative. Arnold & Porter and Sidley Austin are two of the leading law firms in the United States.