Pacific Law Firm: Consistent Strategy Key to Victory in Lone Star Case
Law firm Pacific explained the core background to the Republic of Korea government's complete victory in the international investment dispute with Lone Star. The Korean government completely refuted Lone Star's claim for compensation, resulting in the cancellation of the $216.5 million compensation ruling. The Annulment Committee of the International Centre for Settlement of Investment Disputes (ICSID) ruled on November 19, 2025, confirming the complete victory of the Korean government. With this ruling, the principal of the compensation of $216.5 million recognized to Lone Star in the arbitration ruling of August 2022 and the obligation to pay interest on it have all disappeared. Pacific has represented the Korean government in cooperation with the US law firm Arnold & Porter since Lone Star applied for arbitration with ICSID in November 2012. Kim Joon-woo, a lawyer at Pacific, emphasized that the background to this victory was close information sharing and data exchange during the dispute period, and a consistent dispute response strategy based on this.
Lone Star filed the ISDS, claiming that it had suffered losses due to the unfair intervention of the Republic of Korea government in the process of acquiring and selling Korea Exchange Bank in the past. In particular, Lone Star argued that the excessive taxation by the National Tax Service of the Republic of Korea and the delay in the sale of Korea Exchange Bank by financial authorities infringed on its rights as an investor. The Republic of Korea government refuted Lone Star's claims, arguing that the taxation was in accordance with legitimate procedures and that the delay in the sale of Korea Exchange Bank was due to Lone Star's own problems and the situation in the financial market at the time. In addition, the government argued that Lone Star was unfairly demanding compensation despite having made substantial profits by selling Korea Exchange Bank at a high price.
In August 2022, the ICSID arbitration tribunal ruled that the Republic of Korea government should compensate Lone Star approximately $216.5 million. At the time, the tribunal partially accepted Lone Star's claims regarding the National Tax Service of the Republic of Korea's taxation and some of the delays in the sale of Korea Exchange Bank. However, the Republic of Korea government appealed against this ruling and filed for annulment, and the ICSID Annulment Committee accepted the Republic of Korea government's annulment request this time and cancelled the original ruling. This cancellation ruling means that all compensation responsibilities for Lone Star ISDS have been completely terminated. The Republic of Korea government does not have to pay the compensation and interest that it was obligated to pay to Lone Star after the 2022 arbitration ruling.
In this lawsuit, Pacific represented the Republic of Korea government and focused on refuting Lone Star's claims point by point and proving that the Republic of Korea government's policy decisions and law enforcement were justified. In particular, it emphasized that the Republic of Korea government was not responsible for the damages claimed by Lone Star. Attorney Kim Joon-woo evaluated, "This victory is the result of the Republic of Korea government actively responding to international investment disputes and being internationally recognized for making legitimate policy decisions in accordance with the rule of law." He also added, "This case reaffirmed how important a consistent strategy and thorough preparation are in international investment disputes." Pacific Law Firm announced that it will continue to actively cooperate with the Republic of Korea government's international investment dispute-related work and do its best to support the overseas investment activities of Korean companies.
