The Proper, Impartial and Rapid Way to Settle Disputes

BusinessKorea held an interview with Doh Jae-moon, President of the Korean Commercial Arbitration Board (KCAB), an institution established in 1966 to assist international parties who find themselves in a conflict while conducting business. The KCAB is the only authorized institution of its kind in Korea, statutorily empowered to settle any kind of commercial dispute.

The trade environment has been continuously changing. How has KCAB been changing and improving accordingly since its establishment?

The number of arbitration, mediation and conciliation cases has been continuously increasing and international arbitration cases are especially increasing in terms of both number of cases and monetary amount involved. Areas of arbitration are becoming more diverse, therefore in 2007, the Ministry of Commerce, Industry and Energy established a “Center for Investment Arbitration Monitoring” within the KCAB and committed the KCAB to solely monitor and resolve disputes between investors and the nation. In the same year, a North and South Korea commercial arbitration center was also established. The KCAB reorganizes and reforms the organization and expands its service sector according to the rapidly changing environment and needs of the clients.

What is the foremost thing that business people should keep in mind in order to prevent disputes when doing businesses?

Every business deal starts with a written contract, and it is important to insert an arbitration clause in the contract to prevent unnecessary disputes as follows: “Any dispute arising out of or in connection with this contract shall be finally settled by arbitration in Seoul in accordance with the Arbitration Rules of the Korean Commercial Arbitration Board.” With this clause inserted in every contract, the parties involved will seek an amicable and quick way to resolve disputes if they arise.

Once disputes arise, the role of the KCAB is vitally important. What does the KCAB focus on the most when resolving disputes?

We conduct every case under our domestic and international arbitration laws and rules which reflect the arbitration rules of international arbitration boards so that all parties concerned, including overseas companies, can utilize our services. We also focus on education, and benchmark renowned international arbitration boards to educate and train our employees.

Not many people are aware that the KCAB handles more than just international trade cases. Tell us about KCAB’s extensive services.

The KCAB strives to foster arbitration experts by offering educational classes such as courses for construction claims experts and training courses for attorneys. We also offer legal consulting services for international contracts, international contracts writing and supervision services and dispute preventing classes for enterprises. Most civil and commercial disputes can be resolved by arbitration. The areas of disputes KCAB covers include sales of commodities, construction, joint venture agreements, technical assistance, agency agreements and maritime transport. Mediation is another popular and effective way and cost-free administrative process that encourages both parties to communicate, negotiate and reach their own mutually agreed conclusion. It is requested as a claim without arbitral agreement between parties in disputes. KCAB also offers conciliation services where proceedings are conducted before a dispute is presented for arbitration. It’s a “last-chance” proceeding, giving both parties the ability to work out an agreement before much more formal arbitration processes begin.

Tell us about KCAB’s goals and plans for the upcoming year?

As international disputes are increasing, Korea is emerging as the East Asia’s stronghold for arbitration settlement. This year KCAB hosted several international conferences including the 10th International Arbitration Conference and Asia Pacific Regional Arbitration Group Conference. We will continue to fulfill our leadership role as the growth engine for Korea’s trade and to serve those in trouble in times of need.