Kim Min-seok: "Lone Star's Final Victory, a Triumph Since the New Government Took Office"
The South Korean government has finally won its 10-year international investment dispute with U.S. private equity fund Lone Star. The International Centre for Settlement of Investment Disputes (ICSID) ruled in favor of the South Korean government in the investor-state dispute settlement (ISDS) case filed by Lone Star against the government. With this decision, the South Korean government is completely exempt from paying any compensation to Lone Star. Prime Minister Kim Min-seok hailed this victory as an achievement since the new government took office. The government had previously filed for annulment of the ICSID decision in September 2023, which had ordered South Korea to pay $216.5 million (approximately 280 billion won) in damages. The annulment committee granted the South Korean government's request, ordering Lone Star to pay approximately 7.3 billion won in legal costs to the South Korean government within 30 days.
The dispute with Lone Star began in 2003 when Lone Star acquired Korea Exchange Bank (KEB). Lone Star made huge profits by reselling KEB, but the South Korean government raised suspicions that Lone Star had unfairly profited, leading to legal disputes. Lone Star claimed that the South Korean government unfairly interfered in the sale of KEB, causing them to suffer losses, and filed an investor-state dispute settlement (ISDS) case with ICSID in 2012. Lone Star initially claimed $4.6795 billion (approximately 6 trillion won) in damages, but ICSID ruled in August 2022 that the South Korean government should pay $216.5 million in compensation. However, the South Korean government contested the ICSID ruling and continued the legal battle by filing for annulment. The government emphasized that Lone Star's claims were untrue and that there was no government interference in the sale of KEB.
This final victory means that the South Korean government has completely won its long-standing legal dispute with Lone Star. The government is no longer obligated to pay compensation to Lone Star, and Lone Star must bear the legal costs. The Ministry of Justice stated that this victory is an important achievement that firmly establishes South Korea's judicial sovereignty and protects national interests. The government stated that it will strengthen its ability to respond to international investment disputes and further improve South Korea's investment environment through the resolution of this dispute with Lone Star.
