LG and SK agree to settle battery dispute

Apr 12, 2021, 08:48 am

LG and SK have finally ended their legal battle. The agreement comes hours before the Sunday night deadline for the U.S. International Trade Commission (ITC)’s import ban on SK. The two companies announced Sunday that they settled the battery dispute and will withdraw all their battery-related lawsuits at home and abroad. The last-minute settlement clears the prolonged legal risks to focus on their business in the United States.

LG Energy Solution and SK Innovation issued a joint statement, saying, “The two companies agreed to end all battery dispute in the USITC.”

Under the agreement, SK Innovation agreed to pay 2 trillion won (US$ 1.78 billion) in compensation to LG Energy Solution, half in cash and half in royalty.

The two companies also decided to withdraw all other legal disputes at home and abroad and will not lodge further complaints in the next decade.

In April 2019, LG Energy Solution filed a complaint to ITC against SK Innovation for infringing the trade secret of electric vehicle batteries. In February 2020, the two companies made a preliminary decision and made a final decision in February 2021. However, they failed to reach a deal since then. In February, the USITC gave a final ruling in favor of LG Energy Solution while issuing a 10-year exclusion order prohibiting SK Innovation from importing some batteries into the United States.

With the agreement nullifying ITC’s import ban, SK Innovation’s U.S. business is expected to operate smoothly. SK had previously said it was considering all options including pulling its battery business out of the United States and moving it to Europe if ITC’s decision was not overturned. LG Energy is also expected to ease burden of prolonged lawsuits.

The last-minute settlement comes in the face of such risks and increased U.S. pressure. LG Energy Solution CEO Kim Jong-hyun and SK Innovation CEO Kim Jun, who is staying in the United States, have reportedly reached an agreement through ‘video conference’ on the weekend.

“The two companies agreed on sound competition and friendly cooperation for development of the EV battery industry in South Korea and the United States,” the two company CEOs said in a joint statement. “(The two companies) agreed to make joint efforts for the Biden administration’s push to bolster the EV battery supply chain and its eco-friendly policy.”

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