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President Lee Jae-myung speaks during a meeting with senior secretaries and aides at Cheong Wa Dae on the 3rd. / Yonhap News

President Lee Jae-myung stated on the 13th, following the confirmation of the South Korean government's final victory in an investor-state dispute settlement (ISDS) suit worth approximately 260 billion won against a Chinese investor, that "being a foreign investor does not entitle illegal investments that violate the laws of the Republic of Korea to protection."

In a post on his X (formerly Twitter) account that day, President Lee wrote, "This is the principle confirmed in international arbitration proceedings through the victory in this ISDS annulment proceeding."

President Lee emphasized, "I express my gratitude to the officials at the Ministry of Justice who worked tirelessly to protect our national interest," adding, "We will continue to respond sternly to unjust claims going forward."

Earlier, the annulment committee of the International Centre for Settlement of Investment Disputes (ICSID) under the World Bank dismissed all applications for annulment of the arbitral award filed by the Chinese businessman, identified by his surname Min.

Accordingly, the original arbitral award of May 2024, which entirely dismissed Min's claim for compensation of approximately 264.1 billion won, became final and conclusive. Min was also ordered to bear approximately 1.5 billion won in legal costs incurred by the South Korean government during the annulment proceedings.

Combined with the original arbitration costs of approximately 4.9 billion won, the total amount to be recovered by the government exceeds 6.4 billion won. Min was previously sentenced to a finalized prison term of six years on charges including embezzlement and fraud after unlawful acts were uncovered in the process of taking out loans through a domestic corporation he established.

In 2020, Min filed the ISDS claim against the South Korean government, arguing that the enforcement of collateral rights by a domestic bank and subsequent court trials were unlawful. The Ministry of Justice countered that Min's investment activities were illegal and thus not subject to protection under the South Korea-China bilateral investment treaty (BIT). Both the arbitral tribunal and the annulment committee accepted the government's arguments.

                                                                                                       Park Young-hoon