LG-SK 'Battery Lawsuit'... Winner is Law Firms, Loser is Jobs
[Asia Economy Reporter Hwang Yoon-joo] The final verdict in the electric vehicle battery lawsuit between LG Energy Solution and SK Innovation is approaching on the 26th. Although the U.S. International Trade Commission (ITC) is expected to deliver its final conclusion on the 10th of next month (local time), it is being evaluated that the real winners of this ruling are foreign law firms. This is because the lawsuit has prolonged over two years, causing related expenses to surge into the thousands of billions of Korean won.
According to the industry on the 15th, SK Innovation’s legal fees related to three ITC lawsuits from April 2019 to October 2020 are estimated to be about 200 billion KRW. SK Innovation, which signed a law firm contract with Covington & Burling in the U.S., spends over 10 billion KRW monthly on legal fees. The issue is that the final ruling, originally scheduled for last October, was postponed by four months to February this year, resulting in additional legal expenses. The lawsuit costs SK Innovation must bear due to the four-month extension are estimated to be around 40 to 50 billion KRW.
The industry believes that LG Energy Solution has spent a similar or slightly higher amount on legal fees compared to SK Innovation. Industry insiders point out that with the ITC’s delayed ruling and the prolonged lawsuit increasing uncertainty, both companies face greater burdens in terms of time and costs. Additionally, while the two companies are embroiled in the lawsuit, Chinese and European battery manufacturers are strengthening their future battery businesses, adding to the pressure.
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An industry official said, "No company benefits from prolonged litigation," adding, "It is known that the legal fees both companies have spent so far amount to about 400 billion KRW, and even conservatively including additional costs, it rises to about 500 to 600 billion KRW. This is equivalent to employing approximately 15,000 new college graduates with an annual salary of 40 million KRW."
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