The Korean Commercial Arbitration Board (the "KCAB") is introducing a new set of rules to apply specifically to international arbitrations. 

Released in draft form on August 22, 2006, the Rules of International Arbitration for the Korean Commercial Arbitration Board (the "Rules") are intended to bring international arbitrations conducted under the auspices of the KCAB into harmony with the global standards reflected in the UNCITRAL Model Law and the rules and practices of leading arbitral institutions.  Noteworthy provisions of the Rules include the following:

" Definition of "International"

Under the Rules, an arbitration is "international" if (i) the parties have their places of business in different States, or (ii) the parties have their places of business in the same State but the place of arbitration, the place where a substantial part of the commercial relations are performed, or the place with which the subject matter of the dispute is most closely connected is situated in a different State.

" Appointment of Arbitrators

The Rules provide for party autonomy in the appointment of arbitrators, with the KCAB Secretariat stepping in to make an appointment only in limited circumstances such as where the parties request such intervention or have failed to reach agreement on whom to appoint.

" Competence of the Tribunal

The Rules state that the arbitral tribunal is competent to rule on the existence or validity of the arbitration agreement and jurisdiction of the tribunal.  The Rules also provide for an arbitration clause to be treated as separate and autonomous from the contract of which it forms a part.

" Arbitrator's Fees

Arbitrators' fees are to be based on an hourly rate determined by the KCAB Secretariat within the range of USD 250 to USD 500 per hour, depending on the experience of the arbitrator, the amount in dispute and the complexity of the case.  This represents a very substantial increase over current fees.  The higher fees are reportedly intended to attract more experienced arbitrators from abroad, thereby enhancing the quality, consistency, and international stature of KCAB arbitration.

The Rules are expected to take effect in January 2007 and will apply to arbitrations filed with the KCAB under the Rules, or international arbitrations filed with the KCAB in which no particular rules are specified.  In the case of international arbitrations filed with the KCAB prior to the Rules' effective date, the Rules may be applied to the remainder of the proceedings by mutual agreement of the parties.

by Byoung Seon Choe
Partner
Shin & Kim
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Chung-gu, Seoul,
100-712 Korea
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E-mail: bschoe@shinkim.com