ROK Prevails in Full in the Second ISDS Case Brought by Iran's Dayyani Family

- The Tribunal Dismisses Entire KRW 770 Billion Damages Claim by the Founding Family of Iran’s Largest Home Appliance Company -

■ The Government of the Republic of Korea prevailed in full, by a unanimous decision of the Tribunal, in the second investor-State dispute settlement (ISDS) case brought against the Government in October 2021 by six Iranian members of the Dayyani family, pursuant to the Korea-Iran investment agreement. The award was rendered at around 22:00 on Monday, September 28 (KST).

   - The Tribunal also ordered the Claimants to reimburse the Government for approximately KRW 4 billion, representing 75% of the legal costs, as well as approximately KRW 800 million in arbitration administrative costs, both incurred by the Government.

■ The Claimants, members of the Dayyani family (represented by Reza Dayyani), paid approximately KRW 57.8 billion to the creditors of Daewoo Electronics in November 2010 as a deposit under a contract to acquire Daewoo Electronics, which was then undergoing a debt workout. After the deposit was forfeited, they commenced the first ISDS case against the Government in September 2015 and obtained an award in their favor in June 2018.

   - Around April 2022, the Government paid approximately KRW 62.2 billion to the Claimants out of the total amount of approximately KRW 85.8 billion due under the first ISDS award, and deposited approximately KRW 23.6 billion into court pursuant to a court order. The Claimants had initiated the present second ISDS case around October 2021, alleging that they had suffered losses due to the Government’s delay in paying the compensation awarded in the first case.

■ The Government established an inter-agency response system and presented the Tribunal with arguments from multiple perspectives demonstrating that it had made every effort to discharge its payment obligations arising from the first case in accordance with international and domestic law. These efforts resulted in a unanimous award in the Government’s favor on all claims.

  -  The outcome thwarted the Claimants’ attempt to misuse ISDS to bypass the procedures for enforcing the first award. It also secured international recognition that the Government had faithfully performed its obligations concerning foreign investment.

<※ For more details, please refer to the attached file>