The Seoul High Court ruled that even if an arbitration award contains ambiguities in its order, Korean courts should enforce it if the award’s details, including the judgment amount, can be determined from its reasoning.
Facts
- On April 8, 2026, the Seoul High Court ruled in an indirect enforcement case filed by the Plaintiff against KCC Corporation. The dispute arose from an Equity Support, Subordination and Retention Agreement entered into by the Plaintiff, KCC, and two Saudi Arabian companies. The agreement concerned capital support obligations for a project to establish a manufacturing plant in Saudi Arabia.
- In November 2020, Plaintiff commenced LCIA arbitration against KCC and the Saudi companies. In August 2022, the LCIA issued an award ordering KCC and the Saudi companies to reactivate secured accounts and take all necessary measures to pay the amounts due under the agreement.
- Plaintiff obtained recognition and enforcement of the LCIA award in Korea. However, when KCC failed to perform, Plaintiff applied for indirect enforcement.
The main issue in the case is whether the award’s direction to “reactivate the secured accounts and take all necessary measures” was sufficiently specific to be enforced in Korea. KCC argued that the award did not clearly define the specific acts required and therefore could not serve as the basis for indirect enforcement.
The Seoul High Court rejects KCC’s argument.
KCC argued that the phrase “all necessary measures” was too vague to support enforcement. The court disagreed. The court noted, in part, that the reasoning of the arbitral award made clear that KCC’s obligation had two parts: first, to reactivate the secured account; and second, to make payment into that account. The court therefore concluded that the award identified the required performance with sufficient certainty.
The Seoul High Court approached the matter from a pro-enforcement standpoint. It noted that arbitral awards, including foreign arbitral awards, are given force in Korea through the Korean Arbitration Act and the New York Convention. Those regimes do not permit a broad review on the merits. They also limit the circumstances in which a Korean court may refuse recognition or enforcement.
The court also recognized a practical reality. Foreign arbitral awards are not drafted by Korean judges and often apply foreign governing law. As a result, the wording of an arbitral award may differ from the form normally used in a Korean judgment. That difference alone, however, does not make the award unenforceable.
The court, thus, held that, when the operative part of an award is unclear, the enforcing court may review the reasoning of the award to determine the actual content of the obligation. If the obligation can be identified with sufficient certainty from the award as a whole, enforcement may be granted. In reaching this conclusion, the court referred to the Korean Supreme Court’s November 28, 2024, decision in Case No. 2023Ma6248.
Applying this approach, the Seoul High Court found that the LCIA award imposed an enforceable obligation on KCC. The award required KCC to take the necessary steps to reactivate the secured account and deposit the required amount into it.
The Seoul High Court accordingly allowed indirect enforcement and imposed a daily payment for continued non-compliance.
The decision is important for parties seeking to enforce foreign arbitral awards in Korea. It confirms that Korean courts will not reject enforcement merely because an award does not mirror the drafting style of a Korean judgment. Where the debtor’s obligation can be determined from the award as a whole, Korean courts are likely to give practical effect to the award.
About the Author
Sean Hayes works for IPG Legal, an international law firm advising and representing foreign companies, investors, and individuals on Korean corporate, dispute-resolution, employment, and cross-border legal matters. Sean is the first non-Korean attorney to work within the Korean court system and has written extensively on Korean law, litigation, arbitration, and foreign investment issues.
You may schedule a call with Sean Hayes at “Schedule a Call.”