Contract disputes between businesses
International commercial arbitration is the familiar form. Two companies from different countries agree in their contract that disputes will go to arbitration, often under institutional rules such as those of the ICC, ICDR, SIAC, or KCAB, at a seat they choose. The tribunal decides contract and related claims, and the award is generally enforceable in the many countries that have joined the New York Convention. Because the parties' agreement defines the tribunal's authority, whether a claim or a party falls within the clause is often the first issue. Sales contracts between businesses in member countries of the UN Convention on Contracts for the International Sale of Goods, which include the United States and Korea, may be governed by that convention unless the parties excluded it, a point that surprises many companies.
Claims against a state under an investment treaty
Investment treaty arbitration works differently. Many bilateral investment treaties and free trade agreements, including the Korea–U.S. free trade agreement, allow a qualifying investor from one country to bring a claim directly against the host state for breaching treaty protections, such as protection against expropriation without compensation. These cases are often administered by ICSID or conducted under UNCITRAL rules, and they frequently turn on threshold questions about whether the claimant and its investment are covered by the treaty at all. Many treaties also require notice to the state and a consultation period before a claim can be filed, so timing should be planned rather than left to the end.
Sorting out which path applies
When you bring us a cross-border dispute, we look first at the source of any right to arbitrate: a contract clause, a treaty, or both. If a contract governs, we review the clause, the seat, and the rules, and whether related agreements point elsewhere. If government action is at issue, we look at whether a treaty may apply to your investment and what it requires before a claim can be filed, often working alongside counsel in the country concerned. In either case, we discuss enforcement and cost early, because a strong claim against a party or a state with no reachable assets may not be the right use of resources.
