South Korea Wins $240 Million International Lawsuit Against Schindler

South Korea has achieved a decisive victory in a major international investment dispute, completely fending off a 325 billion won ($240 million) claim from Swiss elevator firm Schindler Holding AG. The Ministry of Justice announced the win on March 14, with prosecutor Yang Jun-yeol, who led the defense team, describing the moment of confirmation as a profound relief after sleepless nights.

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It was important to break the frame of collusion between the government and business that the other side claimed, and the arguments from both sides were fierce.

The case, known as the 'Schindler case,' stemmed from Schindler's accusation that the South Korean government allowed Hyundai Elevator, in which Schindler was the second-largest shareholder, to proceed with a rights offering and a call option transfer. Schindler alleged this was done to strengthen the founding family's control, constituting a breach of fair treatment under investment treaties.

After an eight-year legal battle, the government not only defeated Schindler's compensation demands but also recovered 9.6 billion won in legal costs. This triumph adds to a string of successes for South Korea in investor-state dispute settlement (ISDS) cases. The nation has now secured four consecutive wins, including the dismissal of the Lone Star ruling in November and the Elliott ruling in February, alongside a case brought by a Chinese investor in June 2024.

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We stayed up all night not knowing when the ruling would be emailed.

Government lawyers, including prosecutors, attorneys, and public legal officials, work around the clock to defend against such claims, which can involve trillions of won in national assets. They often operate on schedules dictated by different time zones where arbitration proceedings take place, frequently working late into the night and early morning. Prosecutor Yang Jun-yeol noted that his average sleep time is around four hours a day, with most days involving work until the early morning.

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It was a crisis at a critical moment.

Defending these cases involves meticulous fact-finding, often requiring extensive record reviews within government agencies, similar to criminal investigations. Securing testimony from key witnesses, who may be former employees or reluctant to speak, presents significant challenges. In one instance during the Schindler case, a crucial witness fell ill just before a scheduled oral hearing in The Hague, Netherlands. The defense team successfully obtained permission for a virtual hearing via video conference to overcome this hurdle.

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We obtained permission from the arbitral tribunal for a video hearing after intense written arguments and oral pleadings, and successfully completed the procedure through online video testimony.