34 IN CONVERSATION WITH SUNGBAE JI
JUNE Cost is certainly amaterial consideration for any partywhen choosing the institution for arbitration. What do you think about the cost of arbitration in the Asia-Pacific region or at the KCAB? SUNGBAE J I I believe that the KCAB provides a relativelymoderate cost of arbitration (in both administrative and arbitrator cost) compared to other arbitration institutions. In fact, we are highly competitive in this area, as our arbitration rules set amaximumof USD 150,000 as administrative cost per case, regardless of the amount in dispute and they apply very low fees in cases where the amount in dispute doesn’t exceed USD 200,000. JUNE It’s good to hear that the KCAB is being proactive in addressing issues of cost in arbitration. Could you also tell memore about the kind of disputes coming through the KCAB? Have you noticed any trends over the past fewyears? SUNGBAE J I The KCAB saw its largest caseload in 2014, at 382. Themajority of themdeal with construction, domestic business transaction, andmaritime affairs, which account for about 62% (242 cases) of our overall caseload. However, we have also seen an increase in claims in fields such as international trade, real estate, finance, intellectual property and labour. We have noticed that the amounts in dispute as well as the number of arbitration cases have been increasing. It may reflect the fact that the KCAB is nowhandling complicated international disputes. The industries concerned vary from shipbuilding, to finance and investment, to intellectual property. In terms of nationality, themajority of disputes that we see involve at least one party of Chinese nationality. JUNE Besides cost, have you observed any other differences in the conduct of arbitration across Asia? SUNGBAE J I It seems that arbitration institutions in Asia focus on the speed of the procedures. The application of emergency arbitrator provision according to SIAC rules is known to be successful. It will help arbitration institutions counter the criticism that arbitration is losing its advantage over litigation in terms of the time period.
Whilst we do not think that this is a cause for concern yet, we are hoping that the upward trend in average duration does not go unabated. Considering that one of the objectives of arbitration is to save time andmoney for dispute resolution, we are continually reviewing our rules to ensure that we manage cases efficiently. JUNE Since we are on the topic of change, have you noticed a difference in the options available for parties seeking arbitration in this region as compared to the past? SUNGBAE J I While there are nomajor differences between the past and the present, parties havemore choices now. They are nowable to employ the service and facilities of international arbitration institutions on top of the local arbitration institutions. For instance, the American Arbitration Association (AAA) and the International Chamber of Commerce (ICC) have both established regional offices for that very purpose with the International Center for Dispute Resolution (ICDR) and International Court of Arbitration, respectively. Other international institutions such as HKIAC and SIAC have also opened offices in Korea or deployed staff to be based in the SIDRC. The array of choices available and the healthy competition which it brings, I believe, will vastly improve the standards of international arbitration in the region. Everyone will feel the benefits asmore arbitration business continues to be drawn to the entire Asia-Pacific region. JUNE In the Asia Pacific region, some have observed that Korean corporations take an active interest in arbitration, especially in international transactions. Many of them participate in arbitration in the SIAC or HKIAC. Does the KCAB aim to woo these parties? SUNGBAE J I I believe that the relationships between the KCAB and other international arbitration institutions such as SIAC or HKIAC are relationships of cooperation rather than rivalry. It is not a zero sumgame. Such cooperation between arbitration institutions will enlarge the pie. The KCAB’s recent efforts in establishing the SIDRC and the proposed amendments of arbitration rules should be seen in that light.
In general, arbitration institutions in Asia are gaining popularity. Many prestigious global law firms are enhancing their arbitration teams in Asianmarkets. Individual practitioners are reacting too; an Australian arbitrator recently opened his office in Seoul. JUNE What do you see as themajor challenges for dispute resolution in the Asia-Pacific region nowand over the next five years? SUNGBAE J I With the globalisation of business transactions, disputes are also becomingmore globalised and diversified. Traditionally, most of the disputes between transnational parties were resolved by the decision of the court in one party state. These days, however, the parties to international disputes tend to resolve the disputes through arbitrations which are seen to bemore neutral than litigation in the jurisdiction of either party. As a result of this trend, many countries in Asia are rushing to establish brand newarbitration hearing facilities. At the same time, world renowned international arbitration institutions have also extended their operations into Asia. Besides Singapore, other Asian countries like Hong Kong andMalaysia are also vying to become regional hubs for international arbitrationwith institutional improvements and the installation of high-tech arbitration hearing facilities. In this regard, the KCAB is also striving to become an advanced international arbitration institution and tomake Korea a recognised hub for international arbitration.
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