The purpose of this Act is to ensure the proper, impartial and rapid
settlement of disputes in private laws by arbitration.
(1) This Act shall apply where a place of arbitration under Article 21
is in the Republic of Korea. The provisions of Articles 9 and 10 shall also
apply even where a place of arbitration has not been determined yet or is not
in the Republic of Korea, and the provisions of Articles 37 and 39 shall also
apply even where a place of arbitration is not in the Republic of Korea.
(2) This Act shall not affect any other Act by virtue of which certain
disputes may not be submitted to arbitration or may be submitted to arbitration
only according to provisions other than those of this Act, nor the treaties
which are valid in the Republic of Korea.
The definitions of terms used in this Act shall be as follows:
1. The term "arbitration" means a procedure to
settle any dispute in private laws, not by the adjudication of a court, but by
the award of an arbitrator or arbitrators, as agreed by the parties;
2. The term "arbitration agreement" means an
agreement by the parties to submit to arbitration all or certain disputes which
have arisen or which may arise between them in respect of defined legal
relationships, whether contractual or not; and
3. The term "arbitral tribunal" means a single
arbitrator or a panel of arbitrators who conducts the arbitral proceedings and
makes an arbitral award.
(1) Unless otherwise agreed by the parties, any written communication
shall be deemed to have been received on the day it is delivered to the
addressee personally.
(2) If there is no way the personal delivery under paragraph (1) is
effected, any written communication shall be deemed to have been received by
the addressee on the day it is properly delivered at his habitual residence,
place of business or mailing address.
(3) In applying paragraph (2), if none of the addressee's habitual
residence, place of business and mailing address can be found after making a
reasonable inquiry, a written communication shall be deemed to have been received
by him on the day it is sent to his last-known habitual residence, place of
business or mailing address by registered mail or any other means which
provides a record of the attempt to deliver it.
(4) The provisions of paragraphs (1) through (3) shall not apply to
communications in court proceedings.
A party who knows that any provision of this Act from which the parties
may derogate or any requirement under the arbitration agreement has not been
complied with and yet proceeds with the arbitration without stating his
objection to such non-compliance without undue delay or, if a time-limit is
provided therefor, within such period of time, shall be deemed to have waived
his right to object.
In matters governed by this Act, no court shall intervene except as
provided in this Act.
(1) Matters as prescribed in any of the following subparagraphs shall
fall under the jurisdiction of the district court or its branch(the both are
referred to as the "court" hereinafter) designated by an arbitration
agreement or, failing such designation, under the jurisdiction of the competent
court of the place of arbitration or, if the place of arbitration has not yet
been determined, under the jurisdiction of the competent court of the
respondent's habitual residence or place of business or, if none of those can
be found, his place of abode or, if it cannot be found, his last-known habitual
residence or place of business:
1. Appointment of an arbitrator under Article 12 (3) and
(4);
2. Decision on the request for challenging an arbitrator
under Article 14 (3);
3. Decision on the request for terminating the mandate of an
arbitrator under Article 15 (2);
4. Decision on the jurisdiction of the arbitral tribunal
under Article 17 (6); or
5. Decision on the request for challenging an expert under
Article 27 (3).
(2) The taking of evidence under Article 28 shall fall under the
jurisdiction of the competent court of a place where it is performed.
(3) Matters as prescribed in any of the following subparagraphs shall
fall under the jurisdiction of the court designated by an arbitration agreement
or, failing such designation, under the jurisdiction of the competent court of
the place of arbitration:
1. Deposit of the original arbitral award under Article 32
(4); or
2. Application for setting aside an award to court under
Article 36 (1).
(4) An application for the recognition or enforcement of an arbitral
award under Articles 37 through 39 shall fall under the jurisdiction of a court
as prescribed in any of the following subparagraphs:
1. Court designated by an arbitration agreement;
2. Competent court of the place of arbitration;
3. Competent court of the place where a respondent's
property is located; or
4. Competent court of the respondent's habitual residence or
place of business or, if none of those can be found, his place of abode or, if
it cannot be found, his last-known habitual residence or place of business.
CHAPTER 2-
ARBITRATION AGREEMENT
(1) An arbitration agreement may be in the form of a separate agreement
or in the form of an arbitration clause in a contract.
(2) An arbitration agreement shall be in writing.
(3) An agreement shall be deemed to be an arbitration agreement in
writing:
1. If it is contained in a document signed by the parties;
2. If it is contained in an exchange of letters, telegrams,
telexes, telefacsimiles or other means of telecommunication which provide a
record of the agreement; or
3. If it is contained in an exchange of statements of claim
and defence in which the existence of an agreement is alleged by one party and
not denied by another.
(4) The reference in a contract to a document containing an arbitration
clause constitutes an arbitration agreement, provided that the contract is in
writing and the reference is such as to make that clause part of the contract.
(1) A court before which an action is brought in a matter which is the
subject of an arbitration agreement shall, if the respondent raises a plea that
an arbitration agreement exists, dismiss the action, unless it finds that the
agreement is null and void, inoperative or incapable of being performed.
(2) The respondent shall raise a plea under paragraph (1) not later than
when submitting his first statement on the substance of the dispute.
(3) Where an action referred to in paragraph (1) has been brought,
arbitral proceedings may nevertheless be commenced or continued, and an award
may be made, while the issue is pending before the court.
A party to an arbitration agreement may request, before or during
arbitral proceedings, from a court an interim measure of protection.
CHAPTER 3 -
ARBITRAL TRIBUNAL
(1) The parties are free to agree on the number of arbitrators.
(2) Failing such agreement referred to in paragraph (1), the number of
arbitrators shall be three.
(1) No person shall be precluded by reason of his nationality from
acting as an arbitrator, unless otherwise agreed by the parties.
(2) The parties are free to agree on a procedure of appointing the
arbitrator or arbitrators.
(3) Failing such agreement referred to in paragraph (2),
1. In an arbitration with a sole arbitrator, if the parties
are unable to agree on the arbitrator within thirty days after a party has
received a request for initiating the procedure for his appointment from the
other party, he shall be appointed, upon request of a party, by the court; or
2. In an arbitration with three arbitrators, each party
shall appoint one arbitrator, and the two arbitrators thus appointed shall
appoint the third arbitrator. If a party fails to appoint the arbitrator within
thirty days of receipt of a request to do so from the other party, or if the
two arbitrators fail to agree on the third arbitrator within thirty days of
their appointment, the appointment shall be made, upon request of a party, by
the court.
(4) Where, under an appointment procedure agreed upon in
paragraph (2), it falls under any of the following subparagraphs, the
appointment shall be made, upon request of a party, by the court:
1. A party fails to act as required under such procedure;
2. The parties or two arbitrators are unable to reach an
agreement expected of them under such procedure; or
3. A third party including an institution, entrusted to
appoint the arbitrator or arbitrators, fails to do so.
(5) A decision of the court under paragraph (3) or (4) shall be subject
to no appeal.
(1) When a person is approached in connection with his possible
appointment as an arbitrator or has already been appointed as such, he shall
without delay disclose all circumstances likely to give rise to justifiable
doubts as to his impartiality or independence.
(2) An arbitrator may be challenged only if circumstances referred to in
paragraph (1) exist, or if he does not possess qualifications agreed to by the
parties. A party may challenge an arbitrator appointed by him, or in whose
appointment he has participated, only for reasons of which he becomes aware
after the appointment has been made.
(1) The parties are free to agree on a procedure for challenging an
arbitrator.
(2) Failing such agreement referred to in paragraph (1), a party who
intends to challenge an arbitrator shall, within fifteen days after becoming
aware of the constitution of the arbitral tribunal or after becoming aware of
any circumstance referred to in Article 13 (2), send a written statement of the
reason for the challenge to the arbitral tribunal. Unless the challenged
arbitrator withdraws from his office or the other party agrees to the
challenge, the arbitral tribunal shall decide on the challenge.
(3) If a challenge under the procedure of paragraph (1) or (2) is not
successful, the challenging party may request, within thirty days after having
received notice of the decision rejecting the challenge, the court to decide on
the challenge. While such a request is pending in court, the arbitral tribunal
may continue the arbitral proceedings or make an award.
(4) A decision of the court under paragraph (3) shall be subject to no
appeal.
(1) If an arbitrator becomes de jure or de facto unable to
perform his functions or for other reasons fails to act without undue delay,
his mandate terminates if he withdraws from his office or if the parties agree
on the termination.
(2) If a controversy remains concerning the termination of the mandate
of the arbitrator under paragraph (1), any party may request the court to
decide on the termination of the mandate.
(3) A decision of the court under paragraph (2) shall be subject to no
appeal.
Where the mandate of an arbitrator terminates, a substitute arbitrator
shall be appointed according to the procedure that were applicable to the
appointment of the arbitrator being replaced.
(1) The arbitral tribunal may rule on its own jurisdiction, including
any objections with respect to the existence or validity of the arbitration
agreement. For that purpose, an arbitration clause which forms part of a
contract shall be treated as an agreement independent of the other terms of the
contract.
(2) A plea that the arbitral tribunal does not have jurisdiction shall
be raised not later than the submission of the statement of defence on the
substance of the dispute. A party is not precluded from raising such a plea by
the fact that he has appointed, or participated in the appointment of, an
arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its
authority shall be raised as soon as the matter alleged to be beyond the scope
of its authority is raised during the arbitral proceedings.
(4) The arbitral tribunal may, in either case of paragraphs (2) and (3),
admit a later plea if it considers the delay justified.
(5) The arbitral tribunal may rule a plea referred to in paragraph (2)
or (3) either as a preliminary question or in an arbitral award on the merits.
(6) If the arbitral tribunal rules as a preliminary question that it has
jurisdiction under paragraph (5), any party who is dissatisfied with that
ruling may request, within thirty days after having received notice thereof,
the court to decide on the jurisdiction of the arbitral tribunal.
(7) While a request under paragraph (6) is pending in court, the
arbitral tribunal may continue the arbitral proceedings or make an arbitral
award.
(8) A decision of the court under paragraph (6) shall be subject to no
appeal.
Article 18 (Interim Measure) (1) Unless otherwise agreed by the parties,
the arbitral tribunal may, at a request of a party, decide on such interim
measure of protection as the arbitral tribunal may consider necessary in
respect of the subject-matter of the dispute. The arbitral tribunal may
determine an amount of security to be provided by the respondent in lieu of
such measure.
(2) The arbitral tribunal may require the party requesting the interim
measure to provide appropriate security.
CHAPTER 4-
ARBITRAL PROCEEDINGS
The parties shall be equally treated in the arbitral
proceedings and each party shall be given a full opportunity of presenting his
case.
(1) Subject to the mandatory provisions of this Act, the parties are
free to agree on the arbitral proceedings.
(2) Failing such agreement referred to in paragraph (1), the arbitral
tribunal may, subject to the provisions of this Act, conduct the arbitration in
such manner as it considers appropriate. The power conferred upon the arbitral
tribunal shall include the power to determine the admissibility, relevance,
materiality and weight of any evidence.
(1) The parties are free to agree on the place of arbitration.
(2) Failing such agreement referred to in paragraph (1), the place of
arbitration shall be determined by the arbitral tribunal having regard to the
circumstances of the case, including the convenience of the parties.
(3) Notwithstanding the provisions of paragraphs (1) and (2), the
arbitral tribunal may, unless otherwise agreed by the parties, meet at any
place it considers appropriate for consultation among its members, for hearing
witnesses, experts or the parties, or for inspection of goods, other property
or documents.
(1) Unless otherwise agreed by the parties, the arbitral proceedings in
respect of a particular dispute shall commence on the date when a request for
that dispute to be referred to arbitration is received by the respondent.
(2) In the request referred to in paragraph (1), the parties, the
subject-matter of the dispute and the contents of the arbitration agreement
shall be contained.
(1) The parties are free to agree on the language or languages to be
used in the arbitral proceedings. Failing such agreement, the arbitral tribunal
shall determine such language or languages, and otherwise the Korean language
shall be used.
(2) The agreement or determination referred to in paragraph (1) shall,
unless otherwise specified therein, apply to any written statement by a party,
any hearing and any award, decision or other communication by the arbitral
tribunal.
(3) The arbitral tribunal may, if considered necessary, order a party to
submit any documentary evidence, accompanied by a translation into the language
or languages referred to in paragraph (1).
(1) Within the period of time agreed by the parties or determined by the
arbitral tribunal, the claimant shall state his claim and the facts supporting
it, and the respondent shall state his defence in respect of these particulars.
(2) The parties may submit with their statements of claim or defence all
documents they consider to be relevant or may add a reference to other evidence
they will submit.
(3) Unless otherwise agreed by the parties, either party may amend or
supplement his claim or defence during the course of the arbitral proceedings,
unless the arbitral tribunal considers that such amendment or supplement might
cause the considerable delay in the arbitral proceedings.
(1) Subject to any contrary agreement by the parties, the arbitral
tribunal shall decide whether to hold oral hearings or whether the proceedings
shall be only conducted on the basis of documents or other materials. Unless
the parties have agreed that no hearings shall be held, the arbitral tribunal
shall hold such hearings at an appropriate stage of the proceedings, if so
requested by a party.
(2) The parties shall be given sufficient advance notice of any oral
hearing and of any meeting of the arbitral tribunal for the purpose of taking
evidence.
(3) All statements, documents or other information supplied to the
arbitral tribunal by a party shall be communicated to the other party.
(4) Any expert report or evidentiary document on which the arbitral
tribunal may rely in making its decision shall be communicated to the parties.
(1) If the claimant fails to communicate his statement of claim in
accordance with Article 24 (1), the arbitral tribunal shall terminate the
proceedings.
(2) If the respondent fails to communicate his statement of defence in
accordance with Article 24 (1), the arbitral tribunal shall continue the
proceedings without treating such failure in itself as an admission of the
claimant's allegations.
(3) If any party fails to appear at a hearing or to produce documentary
evidence within a fixed period of time, the arbitral tribunal may continue the
proceedings and make the award on the evidence before it.
(4) The provisions of paragraphs (1) through (3) shall not apply, if
otherwise agreed by the parties, or if the arbitral tribunal considers that
there exists any sufficient cause for the failure.
(1) Unless otherwise agreed by the parties, the arbitral tribunal may
appoint one or more experts to report to it on specific issues to be determined
by it. For this purpose, the arbitral tribunal may require a party to give the
expert any relevant information or to produce, or to provide access to, any
relevant documents, goods or other property for his inspection.
(2) Unless otherwise agreed by the parties, if a party so requests or if
the arbitral tribunal considers it necessary, the expert shall participate in a
hearing where the parties have the opportunity to put questions to him and to
present expert witnesses in order to testify on the points at issue.
(3) The provisions of Articles 13 and 14 shall apply mutatis mutandis
to an expert appointed by the arbitral tribunal.
(1) The arbitral tribunal may, either on its own initiative or upon the
request of a party, request from a competent court assistance in taking
evidence.
(2) When requesting the assistance under paragraph (1), the arbitral
tribunal may, in writing, specify the matters to be recorded in the protocol of
the court and other particulars necessary for investigation.
(3) The court referred to in paragraphs (1) shall, without delay after
taking evidence, send the records on taking evidence such as a certified copy
of protocol for examination of witness or inspection of property to the
arbitral tribunal.
(4) The arbitral tribunal shall pay necessary expenses for taking
evidence to the court referred to in paragraph (1).
CHAPTER 5 - MAKING OF ARBITRAL AWARD
(1) The arbitral tribunal shall decide the dispute in
accordance with such rules of law as are chosen by the parties as applicable to
the substance of the dispute. Any designation of the law or legal system of a
given State shall be construed, unless otherwise expressed, as directly
referring to the substantive law of that State and not to its conflict of laws
rules.
(2) Failing the designation referred to in paragraph (1), the arbitral
tribunal shall apply the law of the State with which the subject-matter of the
dispute is most closely connected.
(3) The arbitral tribunal shall decide ex aequo et bono or as amiable
compositeur only if the parties have expressly authorized it to do so.
(4) The arbitral tribunal shall decide in accordance with the terms of
the contract and shall take into account the usages of the trade applicable to
the transaction.
Unless otherwise agreed by the parties, in arbitral proceedings with not
less than three arbitrators, any decision of the arbitral tribunal shall be
made by a majority of all its members. However, questions of procedure may be
solely decided by a presiding arbitrator, if so agreed by the parties or if so
authorized by all members of the arbitral tribunal.
(1) If, during the arbitral proceedings, the parties settle the dispute,
the arbitral tribunal shall terminate such proceedings. The arbitral tribunal
may, if requested by the parties, record the settlement in the form of an
arbitral award on agreed terms.
(2) An award on agreed terms under paragraph (1) shall be made in
accordance with the provisions of Article 32 and shall state that it is an
award.
(3) The arbitral award referred to in Paragraph (2) shall have the same
effect as any other award on the merits of the case.
(1) The award shall be made in writing and shall be signed by all
arbitrators. However, if, in arbitral proceedings with not less than three
arbitrators, there exist circumstances where less than half members of the
arbitral tribunal cannot sign, other arbitrator may, instead of them, sign with
reason therefor.
(2) The award shall state the reasons upon which it is based, unless the
parties have agreed that no reason are to be given or the award is an award on
agreed terms under Article 31.
(3) The award shall state its date and place of arbitration. The award
shall be deemed to have been made on that date and at that place.
(4) The duly authenticated award made and signed in accordance with
paragraphs (1) through (3) of this Article shall be delivered to each party in
accordance with paragraphs (1) through (3) of Article 4, and the original award
shall be sent to and deposited with the competent court, accompanied by a
document verifying such delivery.
(1) The arbitral proceedings are terminated by the final award or by a
decision of the arbitral tribunal in accordance with paragraph (2) of this Article.
(2) The arbitral tribunal shall make a decision for the termination of
the arbitral proceedings when it falls under any of the following
subparagraphs:
1. The claimant withdraws his claim, unless the respondent
objects thereto and the arbitral tribunal recognizes a legitimate interest on
his part in obtaining a final settlement of the dispute;
2. The parties agree on the termination of the proceedings;
or
3. The arbitral tribunal finds that the continuation of the
proceedings has for any other reason become unnecessary or impossible.
(3) The mandate of the arbitral tribunal shall terminate with the
termination of the arbitral proceedings, subject to the provisions of Article
34.
(1) Within thirty days of receipt of the award, unless another period of
time has been agreed upon by the parties, a party may request the arbitral
tribunal:
1. To correct in the award any errors in computation, any
clerical or typographical errors or any errors of similar nature;
2. To give an interpretation of a specific point or part of
the award, if so agreed by the parties; or
3. To make an additional award as to claims presented in the
arbitral proceedings but omitted from the award, unless otherwise agreed by the
parties.
(2) When making any request in accordance with paragraph (1), a party
shall give notice to the other party to that effect.
(3) The arbitral tribunal shall decide on the issue within thirty days
of the receipt of the request under subparagraphs 1 or 2 of paragraph (1) and
within sixty days of the receipt of the request under subparagraph 3 of
paragraph (1) respectively. The interpretation under subparagraph 2 of
paragraph (1) shall form part of the award.
(4) The arbitral tribunal may, on its own initiative, correct any error
of the type referred to in subparagraph 1 of paragraph (1) within thirty days
of the date of the award.
(5) The arbitral tribunal may extend, if necessary, any period of time
as referred to in paragraph (3).
(6) The provisions of Article 32 shall apply mutatis mutandis to
the form of a correction or interpretation of the award or to an additional
award.
CHAPTER 6
- EFFECT OF AWARD AND RECOURSE THEREAGAINST
The arbitral award shall have the same effect on the
parties as the final and conclusive judgement of the court.
(1) Recourse against an arbitral award may be made only by an
application for setting aside to a court.
(2) An arbitration award may be set aside by the court only if:
1. The party making the application furnishes proof that:
(a) a party to the arbitration agreement was under some
incapacity under the law applicable to him; or the said agreement is not valid
under the law to which the parties have subjected it, or failing any indication
thereon, under the law of the Republic of Korea; or
(b) a party making the application was not given proper
notice of the appointment of the arbitrator or arbitrators or of the arbitral
proceedings or was otherwise unable to present his case; or
(c) the award deals with a dispute not contemplated by or
not falling within the terms of the submission to arbitration, or contains
decisions on matters beyond the scope of the submission to arbitration. If the
decisions on matters submitted to arbitration can be separated from those not
so submitted, only that part of the award which contains decisions on matters
not submitted to arbitration may be set aside; or
(d) the composition of the arbitral tribunal or the arbitral
procedure were not in accordance with the agreement of the parties, unless such
agreement was in conflict with any provision of this Act from which the parties
cannot derogate or, failing such agreement, were not in accordance with this
Act; or
2. The court finds on its own initiative that:
(a) the subject-matter of the dispute is not capable of
settlement by arbitration under the law of the Republic of Korea; or
(b) the recognition and enforcement of the award is in
conflict with the good morals or other public policy of the Republic of Korea.
(3) An application for setting aside the award shall be made
within three months of the date on which the party making that application has
received the duly authenticated award or, if a request has been made under
Article 34, the duly authenticated copy of a correction or interpretation or an
additional award.
(4) An application for setting aside the award may not be
made after the judgement for recognition or enforcement of the award rendered
by a court of the Republic of Korea becomes final and conclusive.
CHAPTER 7 -
RECOGNITION OR ENFORCEMENT OF AWARD
(1) Enforcement of an arbitral award shall be granted by the judgment of
a court.
(2) The party applying for the recognition or enforcement of an award
shall submit the following documents. If the award or the arbitration agreement
is not made in the Korean language, a duly certified translation thereof into
the Korean language shall be accompanied:
1. The duly authenticated award or a duly certified copy
thereof; and
2. The original arbitration agreement or a duly certified
copy thereof.
An arbitral award made in the territory of the Republic of Korea shall
be recognized or enforced, unless any ground referred to in Article 36 (2) can
be found.
(1) Recognition or enforcement of a foreign arbitral award to which the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of
1958 applies shall be granted in accordance with the Convention.
(2) The provisions of Articles 203, 476 (1) and 477 of the Korean Code
of Civil Procedure shall apply mutatis mutandis to the recognition or
enforcement of a foreign arbitral award to which the Convention referred to in
Paragraph (1) does not apply.
CHAPTER 8 -
SUPPLEMENTARY PROVISIONS
In order to secure the impartial and rapid settlement of domestic or
international commercial disputes and to establish the international
transaction order by this Act, the Government of the Republic of Korea may
provide all or part of necessary expenses for an incorporated association
conducting the commercial arbitration and designated by the Minister of
Commerce, Industry and Energy.
Article 41 (Establishment and Approval of Arbitration Rules)
The incorporated association designated as a commercial arbitration
institution under Article 40 shall obtain the approval of the Chief Justice of
the Korean Supreme Court to establish or amend its arbitration rules.
ADDENDA
(1) (Enforcement Date) This Act shall
enter into force on the date of its promulgation.
(2) (Transitional Measures on Arbitration Cases in Process) Cases
for which the arbitral proceedings have been in process before this Act enters
into force shall be governed by the previous pertinent provisions.
(3) (Transitional Measures on Designation of Commercial Arbitration
Institution) The Korean Commercial Arbitration Board, Incorporated
Association which has been established when this Act enters into force, shall
be deemed to be designated as an incorporated association conducting the
commercial arbitration under the provisions of amended Article 40, and its
commercial arbitration rules shall be deemed to be approved by the Chief
Justice of the Korean Supreme Court under the provisions of amended Article 41.
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