Lone Star Victory: Politicians Vie for Credit
The South Korean government has achieved a final victory in the international investment dispute with U.S. private equity firm Lone Star. The ₩6.86 trillion (approx. $5 billion USD) compensation claim has been dismissed, drawing attention to the decision by the International Centre for Settlement of Investment Disputes (ICSID). The case originated from an ISDS claim filed by Lone Star against the South Korean government. Lone Star argued that it suffered losses due to unfair intervention by the South Korean government during the acquisition and sale of Korea Exchange Bank (KEB), demanding $4.6795 billion (approximately ₩6.86 trillion) in compensation. In August 2022, ICSID ruled that the South Korean government should pay $216.5 million (approximately ₩317.3 billion). The South Korean government contested the ICSID ruling and filed for annulment in September 2023. Following an oral hearing on the annulment application in London, UK in January 2025, on November 18, 2025, ICSID ultimately annulled the previous compensation ruling in the Lone Star investor-state dispute (ISDS) case. Prime Minister Kim Min-seok held an emergency briefing at the Government Complex Seoul on November 18th to announce the government's position on the Lone Star ISDS annulment decision. Prime Minister Kim stated, "This victory will solidify South Korea's sovereignty and contribute to enhancing South Korea's standing in the international community." Justice Minister Chung Sung-ho also emphasized the significance of the decision during a briefing at the Government Complex Seoul on the same day.
The role of former People Power Party leader Han Dong-hoon is also garnering attention. As Minister of Justice, Han directly oversaw the filing of the ICSID annulment lawsuit against Lone Star. He reportedly highlighted the unfairness of the Lone Star case and ordered an active response.
Political circles are paying attention to the impact the Lone Star ISDS victory will have on future political evaluations. The government plans to view this victory as an achievement for the national interest, rather than using it as a political issue, and will focus on strengthening its ability to respond to similar international disputes in the future. Despite this victory, the controversy surrounding Lone Star's unjust enrichment has not been resolved. Continued vigilance is also required regarding the possibility of future international disputes. Despite the Lone Star ISDS victory, the government still has tasks to address. First, a clear explanation is needed regarding the controversy surrounding Lone Star's unjust enrichment. Lone Star is suspected of obtaining unjust profits through illegal lobbying during the acquisition and sale of KEB. The government must conduct a thorough investigation into these allegations and transparently disclose the results to the public. Furthermore, the government must further strengthen its capacity to respond to similar international disputes in the future. Investor-state disputes (ISDS) have been occurring frequently in the international community recently, and South Korea is no longer a safe zone. The government must train ISDS-related experts and systematically manage international law and investment-related information to prepare for potential international disputes in the future. An official from the Ministry of Foreign Affairs stated, "We plan to comprehensively review and improve South Korea's international dispute response system in light of this Lone Star ISDS victory." They also added, "We will continue to promote efforts to prevent and resolve international disputes by strengthening cooperation with the international community." The government plans to enhance the stability of the South Korean economy and further strengthen South Korea's standing in the international community based on this Lone Star ISDS victory.
