"Attracting the Foreign Currency-Earning Arbitration Industry: The Path to a Legal Surplus and National Interest"[LES 2025]

Shenzhen Arbitration Center Handles 14,000 Cases a Year
Korea Manages Only 400 ? A 35-Fold Gap
Hong Kong, Singapore, and London Earn Foreign Currency Through Arbitration
Arbitration Costs Flow Entirely Overseas
Arbitral Awards Are Equi

Shin Hyunyoon, President of the Korean Commercial Arbitration Board, delivering a presentation on the theme of "Roadmap for Revitalizing the Korean Arbitration Market."

"The Shenzhen Court of International Arbitration in China handles 14,000 cases annually. We process only about 400 cases a year. If we recognize arbitration as an industry, we can improve our legal balance of payments and connect it to the national interest," he said.

Shin Hyunyoon, President of the Korean Commercial Arbitration Board, made these remarks on December 4 at the LES 2025 "From Litigation to Arbitration" seminar, hosted by the Law Times at the aT Center in Yangjae, Seoul.

Korea's disadvantage in the arbitration market is evident. In terms of both the scale of cases and the number of international arbitration cases, Korea lags behind Hong Kong, Singapore, and London. In fact, Korea records a trade deficit in the legal services sector, with a significant portion of this deficit attributed to overseas arbitration costs and payments to foreign law firms, according to President Shin.

He pointed out, "Due to the misguided practice of entrusting most international arbitration cases to foreign jurisdictions, we are wasting foreign currency. Hong Kong, Singapore, and London earn enormous amounts of foreign currency through arbitration, whereas we have failed to see arbitration as an industry." He emphasized, "Arbitration is a service industry that generates foreign currency beyond just trade and investment. We need to recognize it as an industry."

In fact, the Ministry of Justice is promoting the "K-Arbitration" activation policy, which includes strengthening the foundation of the arbitration industry, expanding the base of the arbitration system, revitalizing international arbitration, and enhancing the internal capabilities of arbitration institutions.

President Shin stated, "An arbitral award is recognized in the same way as a final court judgment. Unlike litigation, arbitrators can be selected by the parties, and the process is concluded in a single instance, allowing for swift resolution of disputes." He particularly highlighted confidentiality as a key advantage, saying, "The more sensitive or delicate the dispute, the more companies can use arbitration with peace of mind." Regarding the difference from mediation, he explained, "A mediation agreement is legally just a settlement contract, and if it is not reached, the parties must return to litigation. In contrast, an arbitral award is immediately enforceable, so the process ends much more quickly."

He also provided specific details about the domestic arbitration situation. President Shin said, "Over the past five years, the Korean Commercial Arbitration Board has handled about 300 cases annually, and even in the busiest years, the number has not exceeded 500." By sector, "The construction sector accounts for the largest number, with 129 out of 349 cases, followed by general commercial transactions and other commercial cases," he explained. Regarding the scale of awards, he noted, "They usually range from 580 billion won to as much as 1.5 trillion won." As for how cases are concluded, he added, "Most end with a general award, but some are resolved through settlement or withdrawal by the parties."

President Shin once again emphasized the essential value of arbitration. He said, "Arbitration enables parties to quickly escape the cycle of disputes, reducing social costs. The benefits are significant for the entire public in terms of cost and efficiency." He added, "Arbitration is now a service industry that goes beyond resolving trade and investment disputes. We need an upgraded perspective."

This content was produced with the assistance of AI translation services.