Korea’s Voice of People website reports that the Korean Government has confirmed investor Lone Star Funds delivered its complaint to the World Bank’s ICSID, the International Centre for Settlement of Investment Disputes. Lone Star claims damage due to “arbitrary and discriminatory taxation measures” and the Korean government’s repeated and persistent delays in approving Lone Star’s sale of its stake in Korea Exchange Bank.
Last May 22, Lone Star’s Belgian holding company LSF-KEB Holdings delivered, through the Belgian Embassy in Seoul, its notice to the Republic of Korea of the investor-state dispute. After a mandatory six-month “cooling-off period” intended for the parties to seek compromise, the dispute is now being taken up for formal resolution by ICSID. It’s on like Donkey Kong.
This is the first time Korea has been involved in an investor-state dispute resolution process under an investor-protection treaty.
Both the EUKOR (European Union) and KORUS (United States) FTAs The KORUS (United States) FTA and many of the existing Bilateral Investment Treaties with EU states including Belgium include investor-state dispute provisions, so it may be expected that such disputes may become commonplace in the future.