South Korea's Victory in Investor-State Dispute with Swiss Elevator Firm Schindler Finalized

The outcome of the investor-state dispute settlement (ISDS) in which the South Korean government won against Swiss-based elevator manufacturer Schindler Holding AG (hereinafter Schindler) has been officially finalized.

The Ministry of Justice announced on September 28 that it was confirmed Schindler did not file a lawsuit with the Paris Court of Appeal in France to annul the arbitral award within the statutory filing period regarding the Schindler ISDS case, in which the government won a complete victory on March 14.

As a result, the decision by the Permanent Court of Arbitration (PCA) tribunal dismissing Schindler's claim for approximately 325 billion won in damages and ordering the recovery of about 9.6 billion won in litigation costs by the South Korean government remains in place.

Schindler filed the ISDS in 2018, claiming that it suffered damages because the South Korean government neglected its investigative and supervisory duties during processes such as Hyundai Elevator's paid-in capital increase and the transfer of call options between 2013 and 2015.

Schindler, which was the second-largest shareholder of Hyundai Elevator, argued that the paid-in capital increase and other measures were carried out to secure funds necessary to maintain management control over affiliates, regardless of business necessity.

In addition, Schindler claimed that it suffered losses as a shareholder because the government failed to faithfully exercise its regulatory and investigative powers, filing an ISDS for approximately 500 billion won, which it later reduced to about 325 billion won.

However, the arbitral tribunal ruled in favor of the South Korean government, recognizing that the government's actions were carried out with sufficient investigation and deliberation within the scope of its legitimate authority.

This completely dismissed the claims made by Schindler, resulting in a 100 percent victory for the South Korean government.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.