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Gov't wins investment dispute case worth $200M filed by elevator maker Schindler

Published: 14 Mar. 2026, 16:07

LEE JAE-LIM
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Justice Minister Jung Sung-ho briefs reporters at the Seoul's government complex on March 14 regarding Korea’s victory in an international investment dispute filed by Schindler. [YONHAP]

The Korean government has won an international investment dispute (ISDS) case worth about 320 billion won ($213 million) filed by Swiss elevator manufacturer Schindler. The government had previously prevailed in similar disputes brought by foreign investors, including Lone Star and Elliott.

Justice Minister Jung Sung-ho said at a briefing on Saturday that the Permanent Court of Arbitration (PCA) had dismissed all of Schindler’s claims at around 2:03 a.m.

“This represents a 100-percent victory for the Korean government,” Jung said.

As a result of the ruling, Schindler’s claim for damages of about 320 billion won filed during the arbitration proceedings was entirely rejected. The government also said it would recover approximately 9.6 billion won in arbitration costs from the company.

The dispute stems from a management control battle surrounding capital increases carried out by Hyundai Elevator between 2013 and 2015. At the time, Schindler, the company’s second-largest shareholder, argued that the capital increases were carried out not for legitimate business purposes but to defend the management control of Hyundai Group Chairwoman Hyun Jeong-eun.

Schindler filed the ISDS case in 2018, claiming Korean financial regulators failed to properly oversee the matter, causing Hyundai Elevator’s share price to fall and resulting in losses of roughly 500 billion won. During the arbitration process, the compensation claim was later reduced to about 320 billion won.

According to the Ministry of Justice, the arbitral tribunal found that the Korean government’s actions at the time were carried out within the scope of lawful authority and followed sufficient investigation and review. As no violation of the investment treaty was established, the tribunal determined that state responsibility under international law did not arise and dismissed all of Schindler’s claims.

Jung said, “There may be many attempts by foreign investors to shift responsibility to the state through international investment disputes over management control battles or shareholder conflicts in domestic private companies.”

“This ruling clearly reaffirms the principle that a state’s regulatory actions carried out reasonably for legitimate public purposes must be respected under international law,” he added. “It is meaningful in that it clearly separates private shareholder disputes from international investment disputes and protects the national treasury.”

Unless Schindler files a separate annulment application against the PCA ruling, the decision will become final. However, annulment procedures in international investment arbitration are permitted only on limited grounds, and observers say the likelihood of a successful challenge would be low even if such a case were filed.

Korea has recently recorded a series of victories in international investment disputes. In November of last year, the government successfully annulled a ruling by the International Centre for Settlement of Investment Disputes (ICSID) that had ordered it to pay about 317.3 billion won to U.S. private equity firm Lone Star, which had claimed improper government intervention in the sale of Korea Exchange Bank.

In February this year, Korea also prevailed in an international investment dispute filed by U.S. hedge fund Elliott Management. Elliott had argued that the National Pension Service voted in favor of the merger between Samsung C&T and Cheil Industries under government pressure. The government successfully fought to overturn a previous PCA arbitration ruling that had ordered it to pay roughly 130 billion won in compensation.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY SUK GYEONG-MIN [[email protected]]