South Korea: Dispute Resolution: Arbitration Overview

International Arbitration in South Korea: Reform, Complexity and Regional Reach

A market shaped by innovation and reform

Korean corporates remain among the most active users of international arbitration, reflecting the country’s position as a major trading nation. Korea has also embraced institutional and procedural reforms to strengthen Korea’s position as an arbitration seat.

The most significant recent development has been the revised KCAB International Arbitration Rules, which took effect on 1 January 2026. These amendments mark the first comprehensive overhaul of the rules in a decade and represent a deliberate effort to modernise Korea’s arbitration framework and align it more closely with global best practices. The revisions introduce structural reforms, enhance procedural efficiency and formally embrace digitalisation, signalling a shift in how arbitration is administered and experienced by users.

At the centre of the reform is the creation of the KCAB International Arbitration Court (Article 1.3), an independent body tasked with making key procedural decisions, including the appointment and challenge of arbitrators, consolidation of proceedings and certain cost determinations. This institutional change mirrors governance structures adopted by leading international arbitration centres and is intended to enhance consistency and user confidence in the arbitral process.

The revised rules also place a strong emphasis on efficiency. They expand the scope of expedited procedures (Article 45), introduce a fast-track procedure for lower-value disputes (Article 50) and shorten timelines for tribunal constitution and award issuance. In addition, the rules provide for an early determination mechanism (Article 36) allowing tribunals to dismiss claims or defences that are manifestly without merit at an early stage. Mediation is also formally integrated as a complementary option that parties may pursue alongside arbitration (Article 16.6), reflecting a broader trend towards flexible and multi-tiered dispute resolution.

These reforms are widely seen as a significant step in strengthening Korea’s position as an arbitration seat. They reflect sustained engagement with the international arbitration community and a responsiveness to user demand for greater predictability, speed and procedural clarity.

Increasing complexity and diversification of disputes

Korea’s economy remains deeply embedded in global supply chains, particularly in sectors such as manufacturing, energy, construction, shipbuilding, technology and finance. As Korean companies continue to expand overseas, they are increasingly exposed to disputes arising from complex, multi-jurisdictional transactions and long-term cross-border projects.

Consequently, arbitrations frequently arise from multi-layered contractual arrangements involving multiple parties, multiple contracts and assets located across different jurisdictions. It has become increasingly common for arbitration proceedings to run in parallel with related court actions, including applications for interim relief, enforcement proceedings or associated litigation in foreign courts.

Korean courts have consistently supported international arbitration. In a recent decision, the Korean Supreme Court reaffirmed Korea’s pro-arbitration approach by holding that, where a contract contains an arbitration clause, courts should broadly interpret the parties’ intent in favour of arbitration. Even though the clause in question was ambiguously drafted and did not clearly specify the arbitral institution, seat, or governing law, the Court found that the parties had entered into an exclusive arbitration agreement, emphasising that the inclusion of a separate arbitration provision itself is strong evidence of an intention to resolve disputes through arbitration rather than litigation. The Court further clarified that the reference to Korean law in the arbitration clause does not automatically confer court jurisdiction and that deficiencies or ambiguities in arbitration clauses do not negate their validity so long as the parties’ intent to arbitrate can reasonably be inferred. This decision reinforces the Supreme Court’s expansive approach to upholding arbitration agreements and minimising judicial intervention (Supreme Court Decision No 2024Da243172 rendered on 23 January 2025).

Enforcement-related disputes have become more sophisticated. Parties increasingly rely on procedural or jurisdictional challenges rather than broad public policy objections, raising issues such as the scope of tribunal authority, due process concerns and the interaction between arbitral proceedings and domestic court measures. These developments reflect a maturing arbitration environment in which arbitration law and strategy are deployed with increasing precision.

The range of disputes involving Korean parties has also diversified significantly. Alongside traditional construction and infrastructure disputes, there has been a notable increase in arbitrations arising from private equity investments, shareholder arrangements and fund structures. These cases often involve governance rights, valuation disputes, failed exit strategies and disagreements over put or call options, frequently in the context of volatile capital markets and delayed public offerings.

Disputes involving digital assets and emerging technologies have also become more prominent. The evolving regulatory landscape for virtual assets, combined with complex cross-border corporate structures and asset locations, has made arbitration an attractive forum for resolving disputes in this sector. Such cases often raise novel contractual, regulatory, jurisdictional and quantum valuation issues and contribute to the growing diversity of Korea-related arbitration matters.

Investor–state arbitration continues to form part of the broader landscape. As of March 2025, Korea is a party to over 80 bilateral investment treaties, as well as 22 free trade agreements, and remains active in investor–state dispute settlement proceedings. While Korea has traditionally appeared as a respondent state, Korean investors have increasingly been pursuing claims against foreign states as part of their broader dispute resolution strategy, reflecting Korea’s growing role not only as a host state but also as a significant source of outbound investment.

Legal framework, regional engagement and outlook

From a legal perspective, Korea continues to offer a stable and arbitration-friendly framework. The Korean Arbitration Act is based on the UNCITRAL Model Law, and Korean courts have consistently demonstrated a pro-arbitration stance. Courts regularly uphold arbitration agreements, support interim measures and enforce arbitral awards, including foreign awards under the New York Convention. Although Korea does not have a standalone specialist arbitration court, designated divisions within the judiciary handle arbitration-related matters with increasing familiarity and consistency.

Korean parties remain active users of established international arbitral institutions such as the ICC, SIAC, HKIAC and LCIA. For example, South Korean parties emerged as the top users of SIAC, reflecting the institution’s growing presence in Northeast Asia. HKIAC also remains a popular option for disputes involving Chinese counterparties. At the same time, there has been growing engagement with regional arbitral institutions in Southeast Asia – particularly the Vietnam International Arbitration Centre and the Thailand Arbitration Center – reflecting Korea’s expanding commercial presence across the ASEAN region. This trend has required Korean users and counsel to adapt to different procedural approaches and to factor in jurisdiction-specific enforcement considerations.

Technology now plays a central role in arbitration involving Korean parties. Almost all procedural hearings are now conducted virtually. The revised KCAB Rules expressly promote the use of electronic communications and remote proceedings, reflecting both user demand and wider global trends towards more flexible, cost-effective and environmentally conscious dispute resolution. Further, the KCAB has plans to introduce a paperless case management system for the benefit of its users.

Looking ahead, the Korean arbitration market faces challenges associated with increasingly complex multi-party disputes, the co-ordination of arbitration with regulatory and court proceedings and rising expectations around efficiency and cost control. At the same time, recent reforms demonstrate a willingness to address these challenges comprehensively rather than incrementally. The 2026 KCAB International Arbitration Rules mark a decisive step towards greater institutional maturity and international alignment. Combined with a pro-arbitration judiciary and an active base of sophisticated users, these developments position Korea to play an increasingly visible role in the regional and global arbitration landscape.