Domestic Commercial Arbitration Procedure

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1. 1Filing of the request for arbitration and notice of filing
2. 2Submission of answer and counterclaim
3. 3Objection to jurisdiction (validity of the arbitration agreement)
4. 4Appointment of arbitrators
5. 5Notice of tribunal constitution and challenge
6. 6Hearings (dates and evidence)
7. 7Closing of hearing and arbitral award
8. 8Application for correction, interpretation or additional award
9. 9Action to set aside the arbitral award / recognition and enforcement

• Basic step
• Additional action / option
• Rejection / objection
• End of procedure

Time required

Ordinary procedure varies by case, so check the schedule with the Secretariat; under expedited procedure the award is made within 100 days after notice of the tribunal's constitution; actions to set aside and enforcement procedures are separate

Cost

Notice of filing proceeds only after arbitration costs (administrative fee, expenses and arbitrators' fees) are paid to the Secretariat; the administrative fee follows rates by bracket of the amount claimed (e.g., 2% for KRW 50 million or less, minimum KRW 100,000), and the arbitrators' fees are set by the Secretariat between minimum and maximum amounts by amount claimed; costs incurred by the parties, such as attorney fees, are borne according to the ratio set in the award; court litigation costs are separate

Procedure guide

Read from start to finish in order. Red text marks deadlines set by law.

1. 1

   When the claimant submits a request for arbitration to the Secretariat of the Korean Commercial Arbitration Board, the arbitral proceedings begin on the date the Secretariat receives it (Domestic Arbitration Rules §14(3)). Once the arbitration costs are paid, the Secretariat notifies the respondent of the filing along with a copy of the request. If the company is the claimant, first check the wording of the arbitration clause in the contract and the amount claimed. If the amount claimed is KRW 100 million or less, the case proceeds under expedited procedure and the preparation time is shorter.

2. 2

   The respondent submits an answer within 30 days of receiving the notice (Domestic Arbitration Rules §15(1)). The proceedings continue even if no answer is submitted, so if you miss the deadline the hearing may proceed without the company's rebuttal. If the company also has claims against the other party, file a counterclaim together. A counterclaim can be filed until the close of the hearing, but if late it may be rejected on grounds of delay (§16(1)). Having them decided together by the same tribunal lets you settle the dispute all at once.

3. 3

   If you believe the arbitration agreement is invalid or the dispute is outside the scope of the arbitration clause, raise an objection to the tribunal's jurisdiction by the time you submit your answer on the merits (Arbitration Act §17(2)). If the tribunal decides that it has jurisdiction, you can apply to the court for review within 30 days of receiving notice (§17(6)). Conversely, if the other party files a lawsuit in court instead of arbitration, you must raise the arbitration agreement defense by your first pleading on the merits for the lawsuit to be dismissed (§9).

4. 4

   When the Secretariat sends a list of candidate arbitrators (Korean Commercial Arbitration Board guidance: 5 candidates if the amount claimed is KRW 500 million or less, 10 if over KRW 500 million), submit your order of preference within 10 days of receiving the list (Domestic Arbitration Rules §20(2)). If you do not submit it within the deadline, all candidates are treated as ranked equally and the company's preferences are not reflected. If the method is direct appointment by the parties, appoint within 10 days of receiving the notice; if you do not, the Secretariat appoints directly (§21(3)). Check each candidate's industry experience and relationship with the other party in advance.

5. 5

   When you receive notice of the tribunal's constitution, check whether there are circumstances that cast doubt on an arbitrator's impartiality. If there are, file a written challenge with the Secretariat within 15 days of the date the arbitrator was appointed or the date you learned of the ground (Domestic Arbitration Rules §23(2)). If the challenge is not accepted, you can file a challenge with the court within 30 days of receiving notice of the result (Arbitration Act §14(3)).

6. 6

   The tribunal sets the date, place and method of hearings, and the Secretariat notifies them without delay (Domestic Arbitration Rules §28). Unless otherwise agreed, the case proceeds by oral hearing (§32(2)). Arbitration is a single award with no higher instance, so prepare your written submissions and evidence fully at this stage. If there is a risk that assets will be hidden, you can apply for interim measures from the court even while the proceedings are under way (Arbitration Act §10). If both sides agree in writing, the case can also be converted to mediation (Domestic Arbitration Rules §39).

7. 7

   When the tribunal declares the hearing closed, unless otherwise agreed, the award is issued within 30 days of the date the hearing closed (Domestic Arbitration Rules §40(2)). An arbitral award has the same effect as a final court judgment (Arbitration Act §35). The date you receive the authenticated copy of the award is the starting point of all subsequent deadlines, so record it right away.

8. 8

   If the award contains calculation errors or typos, or a claim was left undecided, apply through the Secretariat for correction or an additional award within 30 days of receiving the authenticated copy (Arbitration Act §34(1), Domestic Arbitration Rules §43(1)). Interpretation of the award can be requested only if both sides agree. The deadline for an action to set aside is also counted from the date you receive the authenticated copy of the correction, interpretation or additional award (Arbitration Act §36(3)), so manage both deadlines together.

9. 9

   The only way to challenge the award is an action to set aside the arbitral award filed within 3 months of receiving the authenticated copy (Arbitration Act §36). The grounds for setting aside are limited to invalidity of the arbitration agreement, procedural violations, violation of public policy, etc., and a claim that the award's content is wrong is not enough. The winning side can apply to the court for an enforcement decision and carry out compulsory execution (§37), and the losing side disputes it on the grounds for refusal in §38. Once a Korean court's enforcement decision becomes final, an action to set aside can no longer be filed.

   Current step

Frequently asked questions

Practical questions that come up right away in this procedure.

QHow is arbitration different from a court lawsuit?

Arbitration is a procedure in which arbitrators chosen by the parties, instead of a court, make the award. An arbitral award (the arbitrators' decision) has the same effect as a final court judgment, and there is no higher instance such as an appeal or final appeal.So the conclusion is fixed by a single award, and you must prepare your arguments and evidence thoroughly from the start.

QHow is expedited procedure different from ordinary procedure?

Expedited procedure applies if the parties have agreed to it or the amount claimed is KRW 100 million or less. You cannot split a claim and claim only part of it in order to get expedited procedure.Unless otherwise agreed, the Secretariat directly appoints 1 arbitrator. In principle, the hearing is completed in 1 hearing date.The tribunal (the arbitrators handling the case) must make the award within 100 days of receiving notice of its constitution. Because the preparation time is short, you must submit nearly all your arguments and evidence at the answer stage.If the respondent wants to file a counterclaim exceeding KRW 100 million, it must do so before the period for submitting the answer expires. In that case, unless otherwise agreed, expedited procedure does not apply.

QThe other party filed a lawsuit in court despite an arbitration clause. What should we do?

You can ask the court to dismiss the lawsuit by raising the defense that "there is an arbitration agreement." This defense must be raised by the time of your first pleading on the merits (the substance of the dispute itself).If you plead on the merits first, you may lose the chance to raise the defense. So when you receive the complaint, check the arbitration clause first.

QIf the arbitral award goes against us, can we dispute it again?

The only way is to file an action to set aside the arbitral award with the court within 3 months of receiving the authenticated copy of the award. The grounds for setting aside are limited to those set by law.These include invalidity of the arbitration agreement, not being given an opportunity to present your case, and going beyond the scope of the arbitration agreement. They also include violations in the constitution of the tribunal or the procedure, a dispute that cannot be resolved by arbitration, and violation of public policy (social order and morals).A claim that the award's content is factually wrong is not enough to set it aside. So when you receive the award, first review whether there were procedural defects.

QWhat if the other party does not comply with the award?

Apply to the court for an enforcement decision on the arbitral award. Once an enforcement decision is issued, you can carry out compulsory execution (seizing property to collect) against the other party's property based on that decision. The other party can dispute it by citing grounds for refusal set by law.An immediate appeal (a challenge within a short deadline) can be filed against the decision, but an immediate appeal alone does not stop enforcement. The Arbitration Act has no separate provision on the period for an immediate appeal.The Civil Procedure Act sets the period for an immediate appeal at 1 week from the date the decision is announced. So decide on your response as soon as you receive the decision.