1. Korea’s Potential as a Preferred Place of Arbitration and the Vision of KCAB
Yun Jae Baek
Board Director, KCAB
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2. Korea’s Potential as a Preferred Place of Arbitration
Introduction
Background of Arbitration in Korea
Arbitration Friendly System
Amendment of Arbitration Act
Recent Trend in Court Decisions Concerning Arbitration
Arbitration Industry Promotion Act (pending)
Arbitration Institution: KCAB
New KCAB International Arbitration Rules
New KCAB Code of Ethics for Arbitrators
Arbitration Facility: SIDRC

3. Introduction Increase of Korean parties in arbitration Why?
In recent years, Korean parties have been the 3rd most represented parties in ICC arbitration in the South & East Asia region (after China and India) (source: ICC statistical data)
Significant number of cases in SIAC and other international arbitration institutions
More than 400 cases with the Korean Commercial Arbitration Board in 2015
Why?
Exponential economic growth since the 1950s based notably on cross-border transactions:
In 2014: 7th largest exporter of merchandise in the world (before Hong Kong, Russia or Singapore) (source: WTO)
Korean companies have business activities throughout the world (Samsung, Hyundai, Daewoo, LG, Hanwha, etc.)

4. Background of Arbitration in Korea
1966
Enacted the Arbitration Act
Established the KCAB
1967
Ratified the ICSID Convention
1973
Ratified the New York Convention
1999
Amended the Arbitration Act largely based on UNCITRAL Model Law on Int’l Commercial Arbitration of 1985
⇒ First in East Asian jurisdiction to adopt the UNCITRAL Model Law
2013
Established Seoul IDRC (SIDRC)
2016
- Marks 50th Anniversary of KCAB
- Amendment of Arbitration Act (just passed legislation)
- Amended KCAB International Arbitration Rules (effective on June 1, 2016)
- KCAB Code of Ethics for Arbitrators (effective on June 1, 2016)

5. Arbitration Friendly System
Supervision of Court
Arbitrations seated in Korea are supported by neutral, efficient and arbitration friendly judiciary
Judicial Assistance
Provided promptly where required
Enforcement of Award
per 1) New York Convention or 2) Civil Procedure Act & Civil Enforcement Act
Harmonization of Civil Law and Common Law
Traditional civil law country open to common law influence
Appropriate neutral forum for countries with civil law background in Asia Pacific

6. Amendment of Arbitration Act
Amended in 2016, will enter into effect on November 30, 2016
Focuses of the amendments
Implementation of major features of 2006 version of the UNCITRAL Model Law
Form of the arbitration agreement
Enforcement of Tribunal’s interim measures
Court’s assistance in Tribunal’s examination of evidence
Tribunal’s authority to allocate costs and order penalties for delay
Enforcement of award through court decision or court order, not a judgment

7. Recent Trend in Court Decisions Concerning Arbitration
Continuing trend of the court’s pro-arbitration decisions in approving and enforcing arbitral awards
Broad recognition of the existence of arbitration agreements and of the scope of disputes covered by arbitration agreements
Arbitral Tribunal’s determinations on questions of fact and law are not reexamined at the trial court’s level and such non- reexamination is not grounds for refusing enforcement
Argument that enforcement of (foreign) arbitral award violates public order and good morals in Korea is rarely accepted by the courts

8. Arbitration Industry Promotion Act (pending)
Purpose - To promote the use of arbitration in resolving
domestic and international disputes and to attract
international arbitration to Korea
Key Components
Basic legislation for long-term planning and financial support to promote arbitration
Provides a basis for promotion of the arbitration industry and for supporting the attracting of international arbitration to Korea
Ensures independence and autonomy of arbitral institutions
Envisions of consolidation of arbitration facilities
Cultivation of experts in the area of arbitration

9. Arbitration Institution: KCAB
Services
Administration of arbitration proceedings
Facilities with fully equipped hearing rooms and preparation rooms
Assistance from experienced staff members
Average duration of proceedings: 9 months
Cost competitive ad valorem system (based on value of the claim)
Assistance in appointment of arbitral tribunal
General Panel of arbitrators (1108 arbitrators)
Panel of International arbitrators (332 internationally renowned professional arbitrators of 27 different nationalities)
Claim Amount: USD 5 Million
Avg. ICC Arbitration Cost: USD 132,349
Avg. KCAB Arbitration Cost: USD 62,225*
(*Currency rate: 1USD = 1,190.40KRW)

10. New KCAB International Arbitration Rules
Purpose - To reflect the needs of parties and recent
trends in the arbitration industry
Key Components
Emergency arbitrator
Joinder of parties
Consolidation of claims
Confirmation of arbitrators
Expedited procedure
Effective as of June 1, 2016

11. New KCAB Code of Ethics for Arbitrators
Purpose - To enhance the reliability of arbitration by securing
arbitrators’ impartiality and independence
Key Components
Appointment of Arbitrators
Impartiality and Independence of Arbitrators
Duty of Disclosure
Communication with Parties
Arbitrators’ Fees
Duty of Diligence and Fairness
Confidentiality
Effective as of June 1, 2016

12. The Vision of KCAB Vision 1
World’s Top 5 international arbitration institutions
Vision 2
ADR-specialized comprehensive legal service provider
Vision 3
Infrastructure for continuous growth

13. Vision 1: World’s Top 5 international arbitration institutions
Global top 5 arbitration institutions on a par with ICC and AAA
Arbitrators with international reputation
Hiring the world’s top international arbitration experts
Overseas network for international PR
Planning to open more desks (offices) in Tokyo and Hanoi in addition to existing bases in Shanghai and LA
Operating KCAB promotion commission (centering on KCAB arbitrators) in major regions around the world

14. Vision 2: ADR-specialized comprehensive legal service provider
Comprehensive dispute resolution service provider
Domestic arbitration case volume grows by over 20% annually
Expansion of the service areas
Disputes over the shop key money, housing lease and rental, deposit, the insurance, the guarantee, noise complaint issues, and medical accidents, etc.
Arbitration services for disputes that may arise from our daily life
Specialized arbitration service in specific fields
Arbitration in the fields of sports, culture content and patent
Dispute resolution service through mediation
Laying the foundation for active mediation (by establishing the related laws as basis)
Identity as a specialized legal service provider
Changing its traditional identity as a trade support organization which may give an impression that the KCAB’s roles are limited to commerce

15. Vision 3: Infrastructure for continuous growth
IT-based processes
Digital transmission of documents, digital approval system of the arbitration decision, on-line system to update the on-going progress of cases
Workforce expansion, specialization and globalization
Establishment of the international arbitration unit, taking after the ICDR of AAA
Improved workforce diversity (China, Japan, Vietnam, the U.S)
Financial stability through profit increase and diversification
Increase of arbitration fees by attracting more expensive cases
Profit diversification besides the arbitration fee
Legal competitiveness improvement
Improve international competitiveness by providing the best service to clients and their representatives
Virtuous cycle : Clients’ high satisfaction → Revisiting for the service
Top 3 customer satisfaction ranking in surveys by GAR, Queen Mary University, etc.