Defeated a US$1.4 billion ICC claim and said goodbye to a long-serving practice head
|People in Who's Who Legal||3|
|People in Future Leaders||1|
|Pending cases as counsel||50|
|Value of pending counsel work||US$18.2 billion|
|Third-party funded cases||0|
|Current arbitrator appointments||4 (3 as chair or sole)|
|Lawyers sitting as arbitrator||2|
South Korean firm Bae Kim & Lee got serious about arbitration in 2002 at the suggestion of young partner Kap-You (Kevin) Kim. Since then, it has gone from being respected co-counsel working with the big international names, to being one of those big names.
It did so in part by creating its own local opposition: each time Kim took part in an international case, he convened an event to share know-how with local rivals. Together, they promoted use of arbitration to their clients and an arbitration culture quickly developed in South Korea.
Nowadays Bae Kim & Lee sits at the heart of Seoul’s impressively busy arbitration scene. With 35 specialist lawyers, including nine at the partner level, qualified in Korea, Australia, England and Wales, Singapore, Pakistan, India, and the US, it is one of the largest dedicated practices in Asia. Its members are highly visible locally and internationally: the firm has a task force aimed at assisting clients caught up in litigation abroad, particularly in the US, and Kim is acknowledged to be a driving force behind Seoul’s effort to become an internationally recognised seat. The quality of its work has been summed up by Jan Paulsson as “worthy of Freshfields”.
Bae, Kim & Lee produced the first English-language textbook on the law and practice of arbitration in Korea (along with a similar volume in Korean), and hosts the annual Seoul Arbitration Lecture, attracting speakers of the calibre of David W Rivkin and Gary Born.
Having led the firm’s international arbitration practice group since its inception and served as head of international and domestic disputes, Kim announced in 2019 that he was leaving Bae Kim & Lee after 24 years to launch a new firm with Swiss practitioner Wolfgang Peter.
The international arbitration practice is now headed by its other co-founder, partner John Bang, whose broad practice covers investor-state disputes, construction and engineering disputes and commercial arbitrations. Bang is a board member of the Korea Council for International Arbitration and a member of the SIAC Court and SIAC Users’ Council.
The international arbitration practice now prides itself on its expertise in two areas that were not previously catered for by Korean law firms: international construction and engineering claims, and investor-state disputes. The firm often acts as sole or lead counsel in large-scale construction claims arising from projects situated abroad and governed by foreign law. In the investor-state arena, after being appointed by South Korea in the first ever ICSID claim against the state, the firm has since gone on to represent several Korean corporations in investment treaty claims against foreign governments. Meanwhile, South Korea has appointed the firm once again to represent it in an investment treaty claim brought by a Swiss company.
The team’s partners have begun to develop specialisms: Seung-Hyeon Kim and Matthew Christensen in construction (Kim has extensive in-house experience in Korean construction and engineering companies including Samsung and Hanwha Engineering, while Christensen is the chair of the International Construction Projects Committee of the Inter-Pacific Bar Association), and David MacArthur in commercial disputes and engineering.
The arbitration practice is overwhelmingly Seoul-based, but the firm has long-standing offices in Beijing and Shanghai, and in recent years has opened in Dubai, Hong Kong, Hanoi, Ho Chi Minh City and Yangon.
Who uses it?
Thanks to its incredibly strong brand, Bae, Kim & Lee is one of the first ports of call for South Korean entities facing foreign arbitration. Many are construction firms and automotive parts makers.
Clients have included Daewoo, Dongkuk Steel, Hyundai Heavy Industries, Doosan Heavy Industries & Construction, Lotte Engineering, Keangnam Enterprises, Korea Exchange Bank, satellite operator KTsat, LG Display, Olympus, Samsung, Stryker Sales, SK Engineering & Construction, Daehan, Woori Bank, Hanwha, POSCO Group, Hyundai Home Shopping, Hyundai Engineering and Steel Industries, Pyunghwa Holdings, Korea Electric Power Corporation, and Korea Hydro & Nuclear Power.
The firm launched what it suggests is the first ever investment treaty claim by a Korean investor against an African state. It is also co-counsel to the Korean government (alongside Arnold & Porter Kaye Scholer) in the first investment treaty claim against South Korea at ICSID, filed by US-Belgian private equity fund Lone Star.
It was counsel to the organising committee of the 2018 Winter Olympics, which took place in the Korean resort of Pyeongchang.
Along with Debevoise & Plimpton, the firm picked up a GAR Award in 2010 for its work on behalf of Hyundai Heavy Industries in an ICC dispute worth US$2.3 billion. It helped the client to enforce a punitive call-option in a joint venture agreement, thus allowing it to obtain full ownership of an oil refinery at a sizeable discount.
There have been plenty of favourable awards since. In 2011, the firm secured a victory for LG Display in an ICC claim worth over US$100 million brought by a well-known Japanese company over intellectual property. The firm succeeded in having the claims against its client dismissed and the majority of arbitration costs awarded.
With co-counsel Addleshaw Goddard, it prevailed in 2015 in a US$100 million ICC case relating to a power plant project in the Middle East after succeeding in an interim application to restrain a threatened bond call.
The same year, it successfully defended a subsidiary of Korea’s largest electric utility against a US$50 million claim by a US supplier of nuclear power plant components, winning full costs.
In 2016, it defended a Korean state-owned enterprise from a US$180 million claim over its alleged failure to perform obligations under a government procurement programme.
The firm won a SIAC arbitration for a longtime engineering client in 2017 over a high-rise construction project in Mongolia, acting as sole counsel. Again as sole counsel, it achieved a favourable settlement in a three-party shipbuilding dispute heard at the LCIA; and in a Singapore-seated ICC case, the firm won a US$53 million award for a Lotte entity in a post-M&A dispute relating to a Chinese hypermarket chain.
Bae Kim & Lee scored a string of favourable results for its clients in 2019, particularly in commercial disputes. The firm served as co-counsel to Arnold & Porter, helping Korean banking group Hana defeat an ICC claim reportedly worth US$1.4 billion. The tribunal rejected all claims bought by the holding company of US distressed debt-investor Lone Star, which arose over the sale of the investor’s stake in Korea Exchange Bank to Hana. The firm continues to defend the state of South Korea in a separate US$5 billion ICSID claim filed by Lone Star, which is now awaiting an award.
It successfully defended state-owned entity Korea Electric Power Corporation in a LCIA dispute with a Hyundai-Samsung joint venture over the construction of a nuclear power plant in the UAE. While the joint venture prevailed on most of its claims, the tribunal dismissed the highest-value claim and granted the corporation’s counterclaim.
The firm says that other victories include helping the Hong Kong subsidiary of UK private equity firm CVC Capital Partners obtain a partial HKIAC award on liability in a US$270 million dispute with another private equity firm. Quantum was later decided through mediation.
Bae Kim & Lee has continued to attract new instructions. Korean steelmaking group Posco retained the firm and co-counsel Clifford Chance to defend it from a US$2 billion ICC claim filed by a US real estate investment company. The arbitration, which is seated in Singapore, relates to the development of the Songdo International Business District and includes allegations that Posco overcharged for hundreds of millions of dollars for construction work.
The firm was instructed by Hong Kong-based private equity firm, Affinity Equity Partners, to file a US$1.7 billion ICC claim on behalf of a consortium in a shareholder dispute. The arbitration is seated in Seoul and concerns the shares in a life insurance company.
On the people front, the firm said farewell to pioneering partner Kevin (Kap-You) Kim after three decades. Kyongwha Chung, who joined the firm as an associate in 2010, was promoted to partner.
An IP client that hired the firm for a complex arbitration spanning multiple jurisdictions says the firm’s “extensive experience” allowed it to manage the nuances of the case, which was “fundamental” to the company’s future business strategy. “They did an outstanding job,” the client says.
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