Gate Gourmet Korea Co, Ltd and others v Asiana Airlines, Inc [2023] SGHC(I) 23

Introduction

This is the latest round in the long running dispute between the parties surrounding four agreements relating to the provision of catering facilities to Asiana Airlines, Inc (“Asiana”), the respondent to these applications.

Background

The Parties

Asiana is a Korean company engaged in the business of air travel and is part of the Kumho Asiana group of companies (the “Kumho Asiana Group”).

There are four applicants (the “Applicants”): the 1st Applicant, Gate Gourmet Korea Co Ltd (“GGK”), is a Korean company engaged in the business of providing catering and other services to the airline industry. It is a joint venture between the 2nd Applicant, Gate Gourmet Switzerland GMBH (“GGS”) and Asiana. GGK’s main customer is Asiana. GGS is a Swiss company which provides in-flight catering and other airline handling services. GGS and GGK are part of the Gate Gourmet group of companies of which the 3rd and 4th Applicants, Mr Christoph Schmitz (“Mr Schmitz”) and Mr Xavier Rossinyol Espel (“Mr Rossinyol”), are, respectively, the current and former Chief Executive Officers.

There are two applications before the court, the first, initially commenced in the General Division of the High Court (the “GDHC”), HC/OA 656/2023 (“OA 656”), on 28 June 2023 and subsequently transferred to this court as SIC/OA 14/2023 (“SIC 14”), seeks declaratory and anti-suit relief in relation to two civil suits commenced in the Courts of South Korea by Asiana against one or more of the Applicants. The second was a summons filed by the Applicants again in the GDHC (HC/SUM 1931/2023) seeking interim anti-suit relief pending judgment in OA 656, which has also been transferred to the SICC. The parties have however come to an agreement as to how to hold the ring pending delivery of this judgment and I need therefore say no more about this summons.

The first of the Korean cases is Case No. 2022 Gahap 51122 brought before the Incheon District Court (“Korean CA Proceedings”) against GGK and the second is Case No. 2022 Gahap 109880 brought before the Seoul Southern District Court (“Korean Compensation Proceedings”) against GGS, Mr Schmitz and Mr Rossinyol (collectively, the “Directors”).

The Four Agreements

The four agreements governing the relationship between the parties as referred to above were entered into to replace agreements in existence between Asiana and its previous catering supplier. The four agreements are:

(a) a Joint Venture Agreement dated 30 December 2016 (the “JVA”) between GGS (signed by Mr Schmitz and Mr Rossinyol on its behalf) and Asiana;

(b) a Catering Agreement dated 30 December 2016 between GGK and Asiana (the “CA”);

(c) a Bonds with Warrants Subscription Agreement dated 10 March 2017 (the “BWA”) between Gategroup Financial Services SarL (“GGFS”) and Kumho & Company Inc (“Kumho & Co”) (GGS’s and Asiana’s respective affiliate companies); and

(d) a Management Services Agreement dated 10 March 2017 between GGS and GGK.

There is also (apparently) a side letter dated 30 December 2016 linking the JVA and CA to the BWA on the basis that if the BWA was terminated prior to a given date, Asiana, GGS and/or GGK would be entitled to terminate the JVA and the CA.

All of these agreements were governed by Korean law and contained arbitration agreements in substantially the same form. In the CA and the JVA the clauses were in the following forms:

(a) Clause 28 of the CA: (the “CA Arbitration Agreement”)

(b) Clause 34.2 of the JVA: (the “JVA Arbitration Agreement”)

There is no need for the purposes of this application to enter into the precise details of the four agreements and the interrelationship between them. It is sufficient to record that under the JVA, GGS owned 60% of the share capital of GGK with Asiana holding the remaining 40%. For these shares, GGS would contribute KRW 80 billion by way of capital and Asiana KRW 53.33 billion. Under the CA, GGK was to provide airline catering and handling services to Asiana for a period of 30 years on an exclusive basis commencing on 1 July 2018. In return for the exclusivity, GGK agreed to pay Asiana the same sum, KRW 53.33 billion, as Asiana was due to pay for its share in GGK. In this respect therefore there was a set-off.

By the BWA, Kumho & Co and GGFS agreed that GGFS would invest in zero interest bonds with warrants issued by Kumho & Co in the aggregate principal amount of KRW 160 billion with a maturity date of up to 20 years.

The agreements were negotiated on behalf of the Kumho Asiana Group by, amongst others, Mr Park Sam-Koo (“Chairman Park”) who was at the time Chairman of the Kumho Asiana Group and co-CEO of Asiana. He also held key positions in other companies of the group and was a significant shareholder in the Kumho Asiana Group. On behalf of the Gate Gourmet group, Mr Schmitz and Mr Rossinyol were amongst the negotiators. The precise involvement of those three individuals in the negotiations is in dispute but it is not disputed that each played a part.

Procedural History

The Initial Dispute

The pricing mechanism for the catering services that GGK was to provide pursuant to the CA was set out in Annex 1.4. The parties were unable to agree on the correct interpretation of that Annex and the matter was referred to arbitration on 17 June 2019 under Clause 28 by GGK seeking an order that Asiana pay all outstanding invoices and for a declaration that the pricing mechanism was binding and did not require any further agreement.

Asiana counterclaimed for a declaration that that GGK was bound to negotiate and agree with Asiana on an adjusted price mechanism and for an order that GGK repay excess payments based on that adjusted price mechanism.

By its award dated 18 February 2021 (the “Final Award”) the arbitral tribunal (the “Tribunal”) upheld GGK’s claims and dismissed Asiana’s counterclaim. On 11 June 2021, Asiana commenced SIC/OS 11/2021 (“OS 11”) in the Singapore International Commercial Court (“SICC”) to set aside the Final Award. OS 11 was dismissed by a Judgment dated 27 May 2022 (Asiana Airlines, Inc v Gate Gourmet Korea Co, Ltd and others [2022] SGHC(I) 8) (“the SICC Judgment”) and the subsequent appeal from OS 11 to the Court of Appeal (CA/CAS 5/2022) was dismissed on 14 November 2022.

For present purposes it is important to note that during the course of the arbitration:

(a) Asiana did not challenge the jurisdiction of the Tribunal.

(b) Asiana did not contend that the CA was invalid. Indeed, their counterclaim was based on the assertion that the CA was valid.

(c) More specifically, Asiana did not contend that the CA Arbitration Agreement in clause 28 was invalid. Again, this would have been inconsistent with their filing a counterclaim in the arbitration.

(d) Asiana asserted that the CA was a self-standing agreement and was not, as GGK had contended, part of a package with the BWA.

(e) Asiana denied that Chairman Park was materially involved in the negotiation of the joint venture.

On the application to set aside before the SICC Asiana contended that the Tribunal had acted in breach of natural justice in that it had failed to consider its argument that if the CA and the BWA were part of a “package deal” as GGK had asserted, the CA might be null and void pursuant to Article 107 and also possibly Article 103 of the Korean Civil Code on the basis of the “abuse of power representation”.

This argument was considered and rejected by the SICC for the reasons given in [94] to [100] of its judgment.

The Enforcement Proceedings

Following the Tribunal’s Award, on 20 May 2021 GGK commenced proceedings in the Seoul Southern District Court (Case No. 2021 Kagi 1285) seeking leave to enforce the Final Award in Korea (“The Enforcement Proceedings”). These proceedings were suspended pending the final outcome of the challenges to the Final Award in the Singapore courts. No date has been fixed for a further hearing.

Chairman Park

On 26 May 2021 Chairman Park was indicted by the Korean Public Prosecutor for, inter alia, violating the Act on the Aggravated Punishment of Specific Economic Crimes in relation to alleged crimes of embezzlement and breach of trust.

The Respondent drew my attention to part of that indictment which reads as follows:

Chairman Park was tried before the Seoul Central District Court which resulted in a conviction. In its decision in 2021Gohap482 (the “Criminal Decision”) on 17 August 2022 Chairman Park was sentenced to 10 years of imprisonment.

Asiana drew my attention to various passages in reasoning of the Court in giving its sentencing decision: (the “Sentencing Reasons”)

Chairman Park has appealed against the conviction and the appeal is currently pending.

No charges have been brought against GGS, GGK or any of their employees nor have any of them been notified as suspects.

Asiana applied to the Court of Appeal on the appeal from the SICC Judgment to introduce evidence relating to the trial and conviction of Chairman Park but this was refused.

The 2022 Korean Proceedings

As a result of the investigations into the conduct of Chairman Park, Asiana commenced the two sets of proceedings in the Korean Courts referred to above. On 24 January 2022 Asiana brought the Korean CA Proceedings (see above at [5]) against GGK before the Incheon District Court seeking a declaration that the CA is invalid due to the doctrine of “abuse of power representation” under Article 103 of the Korean Civil Code (“Article 103”) on the basis that the coupling of the BWA with the CA was a breach of trust by Chairman Park and that GGK actively participated in that breach by entering the CA.

On 13 October 2022 Asiana commenced the Korean Compensation Proceedings (see above at [5]) against GGS and the Directors before the Seoul Southern District Court (Case No, 2022 Gahap 109880) seeking damages on the basis that:

It is these two proceedings that are the subject of this application for anti-suit injunctions.

The Applicable Legal Principles

Anti-Suit Injunctions

The fundamental principles governing the grant of anti-suit injunctions are not in dispute. Asiana directed my attention to the recent decision of the Court of Appeal in VEW v VEV [2022] 2 SLR 380 (“VEW v VEV”) at [42]–[43], where Andrew Phang Boon Leong JCA (as he then was) said this:

For their part, the Applicants accurately summarised the principles in their written submissions:

In the circumstances of this case, it is appropriate to have in mind the following observations of Steven Chong JA in Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd [2019] 1 SLR 732 (“Sun Travels”) at [67]–[68]:

Relying upon the reasoning of Quentin Loh J (as he then was) in [28]–[34] of Hai Jiang 1401 Pte Ltd v Singapore Technologies Marine Ltd [2020] 4 SLR 1014 (“Hai Jiang”), the Applicants asserted that that the court’s power to grant an anti-suit injunction was the flip side of the coin of the court’s power to stay domestic proceedings under s 6 of the Arbitration Act 2001 (2020 Rev Ed) and that, accordingly, the court should apply a prima facie test in order to determine whether there is a valid and binding arbitration agreement which has been breached.

Counsel for Asiana questioned whether this reasoning was supportable and invited me to consider the question afresh. I decline to do so for two reasons. First, I would not lightly depart from the reasoning of a fellow judge without full argument and I have not had this in this case. Secondly, with respect, on the basis of the arguments I have heard, I agree with Loh J’s reasoning.

The Effect of Delay

The parties also addressed me on the question of delay and the circumstances in which an otherwise appropriate application for an anti-suit injunction should be refused on the basis of delay. Sun Travels was such a case but with fairly extreme facts as the proceedings in the Maldives had not only been commenced but had resulted in a substantive judgment before the application for an anti-suit injunction had been made.

However the court in Sun Travels considered the relationship between delay and comity generally in [69]–[80] and concluded in [81]–[84]:

Cases where proceedings in the foreign jurisdiction have been the subject of a substantive judgment are therefore an extreme case. In cases where proceedings in a foreign jurisdiction have been commenced and have proceeded some way down the road to resolution, whether any delay in seeking anti-suit relief will serve to prevent the granting of such an injunction is a multi-faceted question underlying the exercise of the court’s discretion to grant the injunction sought. Each case will turn on its own facts. In the case of an alleged breach of an arbitration agreement, the exercise of the discretion involves drawing a balance between the prima facie right of a party to an arbitration agreement to insist on its right to enforce that agreement and on the duty on such an applicant to act with due diligence to enforce that right. Not every delay will be fatal—the answer lies in assessing the degree of the delay, what has happened during the period of the delay, the state of the foreign proceedings as a result of the delay and the underlying effect on comity in order to reach a conclusion as to whether the applicant has forfeited its right to compel litigation in the arbitral forum.

Non-Contractual Anti-Suit Injunctions - Vexation and Oppression

In the case where the parties to the foreign proceedings are also parties to the arbitration agreement and it is shown that the bringing of the foreign proceedings constitutes a breach of the agreement, then, subject to delay, prima facie an anti-suit injunction will be granted.

Where the sole defendant in the foreign proceedings is not a party to the arbitration agreement, the question of whether it would be vexatious or oppressive to the defendant if those proceedings were permitted to continue arises. The first four of the factors in [43] of the judgment in VEW v VEV (see above at [29]) will have to be addressed.

The courts have however had to consider cases where the defendants to the foreign proceedings include parties, some of whom are parties to the arbitration agreement and some who are not, as well as cases where a non-party is a defendant in the foreign proceedings and arbitration proceedings are brought against a person who is a party to the arbitration agreement where the same issues arise.

Whilst each case must turn on its own facts, guidance can be obtained from the reasoning in earlier cases. As Quentin Loh J (as he then was) put it in BC Andaman Co Ltd and others v Xie Ning Yun and another [2017] SGHC 64 at [104] (“Andaman”):

The question of the approach where both parties and non-parties were involved was considered by Lord Scott in the House of Lords in England in Donohue v Armco Inc [2001] UKHL 64 (“Donohue”) and cited at length in Clearlake Shipping Pte Ltd and Gunvor Singapore Pte Ltd v Xiang Da Marine Pte Ltd [2019] EWHC 284 (Comm) (“Clearlake”) at [21].

Lord Scott was considering the possibility of an anti-suit injunction being granted against a non-party to the arbitration agreement but who was alleged in the foreign proceedings to be liable as a joint tortfeasor with a person who was a party. The arbitration clause in that case was of similar scope to that in the CA Arbitration Agreement and the JVA Arbitration Agreement (see [8] above). At [60]–[62] of Donohue Lord Scott said this:

The logic of Lord Scott’s reasoning is, with respect, persuasive. If a party to an arbitration agreement which is wide enough to cover a tort that arose "out of or in connection with" the agreement and was not limited to a claim made solely against a party to the agreement, then, provided the subject matter of the foreign proceedings does arise out of or in connection with the agreement and the party has a sufficient interest in those proceedings, such as joint liability for damages, the ends of justice are, prima facie, best served by confining the litigation to one forum; the forum the parties to the arbitration agreement have chosen as the place to resolve their disputes.

Clearlake was a case brought before the High Court in England seeking an anti-suit injunction to restrain proceedings in Singapore which raised various tortious misrepresentation claims against two parties, Clearlake and Gunvor. The former was a party to a charterparty containing an arbitration clause but the latter was not. Following the grant of an ex parte anti-suit injunction the claimant sought to separate the claims so that a claim in contract was brought only against Clearlake with the claim in tort being brought only against Gunvor (see Clearlake at [16]).

Having reviewed the authorities, including Donohue, the Judge, Andrew Burrows QC, concluded in [23] as follows:

In [24] of Clearlake the Judge continued:

I agree that avoidance of forum fragmentation is a relevant consideration underlying Lord Scott’s reasoning.

In Hai Jiang at [81], Quentin Loh J said this about Clearlake:

Finally, in Andaman at [75] Loh J said this:

For my part, I find the reasoning in these citations compelling. In so far as an anti-suit injunction is sought by a party to an arbitration agreement to restrain foreign tort proceedings not only against itself but also against other parties to those proceedings, the position is as follows:

(a) The relevant arbitration clause must be interpreted to determine:

(i) whether it extends to cover tort disputes as well as contractual disputes; and

(ii) whether it extends to tort claims against non-parties.

(b) If it does, the court must decide whether bringing the tort claim against the party is a breach of the arbitration clause.

(c) If it is, prima facie the party is entitled to an anti-suit injunction in its favour.

(d) If the party has a sufficient interest in the tort claim such as a liability for damages, it is also prima facie entitled to an anti-suit injunction in its favour to restrain the continuation of the claim as against the non-party.

(e) If it does not, then it is open to the non-party to seek a non-contractual anti-suit injunction on the basis that the foreign proceedings are vexatious or oppressive.

The Proper Law of the Arbitration Agreement

It was common ground that the doctrines of separability and kompetenz-kompetenz apply both under Singapore and Korean law. Hence the agreement to arbitrate in the various agreements is separate from the main agreement in which it is contained. As a result, the proper law of the arbitration agreement has to be determined separately from that of the main agreement and the arbitration agreement can survive the termination or invalidity of the main agreement. Equally, it is within the power of the arbitral tribunal to determine whether it has jurisdiction to adjudicate over the dispute.

Both parties invited me to apply Singapore law to determine the law that governs the arbitration clauses in this case. There is a three-stage test which was set out in [62] of the judgment of Judith Prakash JCA in the Court of Appeal in Anupam Mittal v Westbridge Ventures II Investment Holdings [2023] 1 SLR 349 (“Anupam Mittal”):

So far as concerns the second stage, in [67] of Anupam Mittal, the Court noted that the general rule was that the choice of law to govern the main arbitration will lead to a conclusion that the same law was intended to govern the arbitration agreement (applying Sulamérica Cia National de Seguros SA and Others v Enesa Engelharia SA and others [2013] 1 WLR 102) (“Sulamérica”).

However, this rule can be displaced by the facts of the case particularly by considering how the effectiveness of the arbitration agreement will be affected by that choice of law (Anupam Mittal at [68]). In Sulamérica, the main agreement was governed by Brazilian law but the arbitration agreement provided for arbitration in London. Under Brazilian law there were fundamental difficulties in enforcing any award which led the Court to conclude that it could not have been the intention of the parties to have Brazilian law govern the arbitration agreement. In BCY v BCZ [2017] 3 SLR 357 the Court emphasised that the governing law of the main contract “should only be displaced if the consequences of choosing it as the governing law of the arbitration agreement would negate the arbitration agreement even though the parties have themselves evinced a clear intention to be bound to arbitrate their disputes” (see also Anupam Mittal at [69]).

Public Policy and Arbitrability

The Court of Appeal in Anupam Mittal considered the effect of public policy on the ability to arbitrate, drawing, in [46], upon one of its previous decisions:

The Court of Appeal went on to emphasise that the essential criterion of non-arbitrability was “whether the subject matter of the dispute is of such a nature as to make it contrary to public policy for that dispute to be resolved by arbitration” (see Anupam Mittal at [47]) [emphasis in original].

Finally, in [55] of Anupam Mittal the Court of Appeal expressed its view that consideration must be given to the question of whether the subject matter of the dispute was non-arbitrable either under the law of Singapore or of the foreign state in question.

There are a number of types of disputes which are generally recognised as being non-arbitrable: criminal, admiralty, family or company matters are examples given in the quotation in Anupam Mittal (see above at [55]). But what has to be emphasised is that it is first necessary to identify the subject matter of the dispute and then to consider whether or not that subject matter is of a nature that is non-arbitrable, rather than considering the impact which aspects of public policy (of any State) may have on the outcome of a properly founded arbitration dispute. There is a necessary and proper distinction between the subject matter of a dispute and the grounds relied upon for resolving that dispute.

The Issues

With that background I can turn to the issues that arise for determination in this application.

The Korean CA Proceedings

As regarding the Korean CA Proceedings, four issues arise for determination:

(a) What is the proper law of the CA Arbitration Agreement? (“Issue 1”)

(b) Is the subject matter of the Korean CA Proceedings non-arbitrable as being contrary to public policy under Korean law? (“Issue 2”)

(c) If it is arbitrable, what is the effect of Article 9(1) of the Korean Arbitration Act (“KAA”)? (“Issue 3”)

(d) Finally, if the Court has a discretion to grant the anti-suit injunction, how should it exercise that discretion? (“Issue 4”)

The Korean Compensation Proceedings

Concerning the Korean Compensation Proceedings, seven issues arise:

(a) What is the nature of the Korean Compensation Proceedings? (“Issue 5”)

(b) In what circumstances and on what basis does the law of Korea permit tort claims to be determined in arbitration proceedings? (“Issue 6”)

(c) The Mozambique judgment (“Issue 7”)

(d) What are “the matter or matters” in respect of which the Korean Compensation Proceedings are brought? (“Issue 8”)

(e) Does that matter or do those matters fall within the scope of the arbitration agreement on its true construction such that there is a prima facie breach of the JVA warranting an anti-suit injunction in favour of GGS? (“Issue 9”)

(f) Is GGS entitled to an anti-suit injunction to prevent the continuation of the tort claim against the Directors? (“Issue 10”)

(g) Are the Directors themselves entitled to an anti-suit injunction? (“Issue 11”)

The Korean CA Proceedings

Issue 1: What is the proper law of the CA Arbitration Agreement?

Applying the three-stage test in Anupam Mittal, the parties are agreed that there is no express choice of proper law of the CA Arbitration Agreement in the main agreement of the CA (the “CA Main Agreement”). The fact that Korean law is expressly chosen as the proper law of the CA Main Agreement is not of itself an express choice for the purposes of the first stage. It is however a strong pointer of an implied choice for the second phase.

Subject to one point, the parties were agreed that there was nothing to displace this starting point. GGK however contended that if the effect of Korean law was that the subject matter of the Korean CA Proceedings was non-arbitrable, this would negate the CA Arbitration Agreement even though the parties themselves had shown a clear intention to be bound to arbitrate their disputes (see Anupam Mittal at [69]).

This is a complex question as is illustrated in the discussion at [71]–[74] of Anupam Mittal of the distinction between the facts of that case and those in BNA v BNB and another [2020] 1 SLR 456. Should it be necessary I shall address this point after resolving Issue 2.

Issue 2: Is the subject matter of the Korean CA Proceedings non-arbitrable as being contrary to public policy under Korean law?

Asiana’s contention that the subject matter of the Korean CA Proceedings is non-arbitrable as being contrary to Korean Law has its foundation in the prosecution and conviction of Chairman Park. By the Criminal Decision issued on 17 August 2022 Chairman Park was sentenced to 10 years’ imprisonment for embezzlement and breach of trust under the Korean Act on the Aggravated Punishment of Specific Economic Crimes (the “SEC Act”).

The Sentencing Reasons (see above at [22]) emphasised the pivotal role that large scale businesses play in the Korean economy and the need for strict controls over ethical business practices and to the fact that the damage caused by the defendants had been translated into damage to the nation as a whole. This, in particular, had led to a tarnishing of Asiana’s corporate image which had an adverse effect on the national economy.

It was as a result of the investigation into Chairman Park’s conduct and his indictment that the Korean CA Proceedings were commenced on 24 January 2022 seeking a declaration that the CA was null and void. Reliance was placed upon the indictment of Chairman Park for his breach of trust in coupling Asiana’s catering business in the CA with the BWA in violation of the SEC Act. As a result, it was asserted that the CA was a contract contrary to good morals and other social order which was null and void pursuant to Article 103 of the Korean Civil Act, which provides that:

Prima facie, a dispute as to whether an agreement, such as the CA, is void in circumstances where there is an arbitration agreement is a matter to be decided by the Tribunal in a properly constituted arbitration. It is not a matter which falls to be decided, save with the consent of the parties, in a national court and hence it would be a breach of the arbitration proceedings to bring proceedings in a national court. Asiana did not dispute this as a matter of principle but contended that a dispute based on Article 103 constituted an exception on the basis that the dispute in the Korean CA Proceedings was non-arbitrable under Korean law. Hence, since the dispute was non-arbitrable, there was no breach of the CA Arbitration Agreement in commencing proceedings in Korea.

It was not suggested that the dispute based on Article 103 fell into one of the recognised categories of non-arbitrable matters (see [55] above) nor was it suggested that there was any statutory provision under Korean law which expressly made disputes under Article 103 non-arbitrable. I was referred to no case where a court in Korea had been asked to address the question.

It was pointed out by counsel for the Applicants that at the hearing of the setting aside proceedings, OS 11 (see above at [15]), Asiana contended that the CA was valid but, additionally, that if the interpretation placed on the CA by GGK was correct, this would result in the agreement being void under either Articles 103 or 107 of the Korean Civil Code (see above at [16] and [17]). It was not there suggested by Asiana that the Tribunal would have been unable to resolve a dispute under Article 103.

At the hearing, I drew the attention of the parties to a recent decision of this Court in CNA v CNB and another and other matters [2023] SGHC(I) 6 at [170] where an issue arose as to whether an agreement was void under Article 103 or 107 of the Korean Civil Code. In that case the Court had the assistance of two experts in Korean law, neither of whom suggested that a dispute under Article 103 was non-arbitrable.

This of course is not conclusive. The point which has been directly raised by Asiana in these proceedings may nonetheless be a good one which has escaped the notice of practitioners and some experts over the years.

Asiana relies on the expert report of Professor Lee Kitaik (“Professor Lee”) in support of its assertion of non-arbitrability under Korean law. Professor Lee is an eminent jurist who graduated from the Seoul National University College of Law in February 1982 and completed his studies at the Judicial Research and Training Institute, Supreme Court of Korea. He then became a Judge in Korea culminating in being appointed as a Supreme Court Justice in 2015. He retired from the Supreme Court in 2021 and in 2022 became an Endowed-Chair Professor at the Soang University School of Law. Over the years he has authored a number of academic papers covering various different subject matters.

In his expert report Professor Lee states his conclusion on the question of arbitrability:

In his report, Professor Lee further identifies the subject matter of the Korean CA Proceedings as being “confirmation of the CA’s nullity”. He draws attention to Articles 2(1) and 5(2)(a) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards concluded on 10th June 1958 (the “New York Convention”) (which is binding in Korea) which states that recognition and enforcement of an arbitral award that is not capable of settlement by arbitration under the law of the country may be refused. He then continues to consider the Arbitration Act of Korea before turning to Article 103 where he states in paragraph 26:

He goes on to give a number of reasons why the authority to make the decision as to whether a juristic act has gone beyond the bounds of the principle of private autonomy should be deemed to rest with the Korean court. In particular, at paragraph 32, he says this:

In paragraphs 36 to 45 he considers the effect a finding under Korean law on the “Arbitrability of a Juristic Act [the CA] Executed through a Breach of trust under the Korean Criminal Code” and opines that “Korean law has consistently recognized an act of breach of trust toward a company as a grave and serious act contrary to good morals and other social order”.

He concludes in paragraphs 44 and 45:

Professor Lee then turns to address the question of whether the arbitration clause in the CA is itself null and void notwithstanding the doctrine of separability. He accepts that the doctrine of separability exists under Korean law but contends that it does not apply indiscriminately and draws attention to what he refers to as a “theory” in paragraph 49:

The paper referred to in support of this theory is an article by Professor Su-mi Kang (“Professor Kang”), Professor of Law at the College of Law of Yonsei University, published in the Journal of Law, entitled “The Validity of Arbitration Agreement in cases where the Validity of the Main Contract is Contested – with particular focus on the Doctrine of Separability”.

This is a long, detailed paper but the essence of the reasoning relevant for present purposes is in the following section:

Professor Lee states that there is no Korean case law either from the Supreme Court or from the lower courts which address this question and expresses his own conclusion in paragraph 52:

The Applicants have retained Professor Hi-Taek Shin (“Professor Shin”) as an expert in Korean law to assist the court. Professor Shin is also an eminent Jurist. He has an LL.B and an LL.M degree from Seoul National University and a J.S.D. from Yale Law School. He also trained at the Judicial Research and Training Institute, Supreme Court of Korea. He practiced at a leading Korean law firm for 27 years until 2007 when he became a Professor of Law at Seoul National University School of Law as well as being the director of its Centre for International Economic and Business Law. He is currently a full-time arbitrator. He was a member of the taskforce which proposed amendments to the Korean Arbitration Act in 2016 and wrote the chapter on Korean arbitration law in The UNICITRAL Model Law and Asian Arbitration Laws, G. Bell (ed.) (Cambridge University Press 2018).

Professor Shin reaches the opposite conclusion to that expressed by Professor Lee and expresses this in paragraph 24:

Having confirmed that the principles of separability and kompetenz-kompetenz apply in Korea, Professor Shin draws attention to Clause 23 of the CA which expressly provides that if any provision of the agreement is invalid or unenforceable the other provisions shall remain in force as serving to emphasise the intention of the parties with regard to separability.

He then expresses his opinion with regard to the effect of the doctrine of separability in this case in paragraph 63:

The question that falls to be answered in his opinion is thus whether the agreement to arbitrate was separate from the question of whether the CA Main Agreement was reached in circumstances that render it contrary to Article 103.

Professor Shin considers the opinion of Professor Kang, and the kernel of his reasoning in rebuttal is found in the following extract from paragraph 76:

Drawing all this together, the experts are agreed that the principles of separability and kompetenz-kompetenz apply. They are agreed that the invalidity of all or part of the CA Main Agreement will not of itself serve to invalidate the CA Arbitration agreement. They are agreed that a defence based, for example, on fraud/duress (Article 110 of the Korean Civil Code), would not serve to invalidate the CA Arbitration Agreement.

It is not in dispute that the subject matter of the Korean CA Proceedings is whether and to what extent the CA is void. Professor Lee expressed it as being “confirmation of the CA’s nullity”. This is subject matter which is prima facie suitable for determination by way of arbitration under the agreement. More specifically, it is not in dispute that the question of whether the CA Main Agreement is void would be susceptible to resolution by way of arbitration if the CA Arbitration Agreement was valid.

The sole question therefore is whether, in the circumstances of this case, the dispute is non-arbitrable so that the CA Arbitration Agreement cannot be invoked.

It is accepted that the subject matter does not fall within any of the accepted categories of non-arbitrable agreements and that there is no express provision in Korean law which creates an exception to arbitrability when Article 103 is invoked. Further there is no case law which suggests that there is or even might be such an exception when it is accepted that there is no such exception in the case of fraud.

The subject matter of the Korean CA Proceedings is, as indicated above, the validity of the CA Main Agreement. The grounds on which it is alleged to be void is that it was entered into in circumstances which are contrary to Article 103 because of the actions of Chairman Park.

However, the parties entered into the CA Arbitration Agreement because they wished relevant disputes between them to be resolved by arbitration, not in the courts. The subject matter of the Korean CA Proceedings is a relevant dispute yet it is suggested that a subsequent event, the indictment and conviction of Chairman Park, can, of itself, serve to negate that wish.

In my judgment that cannot be the right way to approach the answer to the question. The actions of Chairman Park have been held to constitute a criminal offence. The Applicants played no part in that trial and, in any subsequent civil proceedings, whether in the Korean Courts or in an arbitration, Asiana would have to prove their case – that the CA was entered into in breach of Article 103.

But the scope of Asiana’s objection cannot be limited to a case where the history subsequent to the making of the agreement presents a potentially strong case that Article 103 might have been breached. If there is a principle that disputes over validity based upon Article 103 are non-arbitrable, it must apply to all cases where Article 103 is invoked. Hence the Tribunal would not have the authority to decide whether it was reasonable to invoke Article 103, far less to decide whether that Article was breached.

I consider that Professor Shin was correct when he said in paragraph 63 of his report that Asiana has not presented a rational argument as to how an agreement between the parties to resolve disputes by arbitration could be contrary to Article 103. There is no suggestion that the agreement to arbitrate was induced by any conduct that was contrary to “good morals and other social order”. There were rational reasons for agreeing to arbitrate which are not said to be tainted by Chairman Park’s conduct.

In my judgment it is necessary to draw a clear distinction between the grounds on which it is said that the subject matter of the CA Main Agreement is void and the grounds on which it is said that the CA Arbitration Agreement is void. It does not follow from the fact that Article 103 is being invoked to invalidate the CA Main Agreement, that the CA Arbitration Agreement is also rendered invalid. In any given case there might be grounds for saying that the CA Arbitration Agreement itself was tainted but that is a far cry from the submission made to me that there was a principle of Korean law that the doctrine of separability does not apply when a main contract is allegedly null and void because it contravenes Article 103.

As I see matters, were there to be a contention that a particular arbitration clause had been entered into in a manner that renders it void, this would be a matter for a properly constituted tribunal to decide, it would not serve to oust their jurisdiction.

For all these reasons I regret that I am unpersuaded by the reasoning of Professor Lee, based upon Professor Kang’s paper. I cannot help but feel that had Professor Kang’s views had any traction, they would have been the subject of subsequent academic papers or raised by way of argument in litigation in the intervening 15 years since it was published. I consider, with respect, that Professor Lee in paragraph 52 of his report was focussing too heavily on the very serious crimes of which Chairman Park was convicted and not sufficiently upon the generality of the effect that his reasoning would have had on an agreement to arbitrate.

In circumstances where there is no statutory provision that disputes under Article 103 are non-arbitrable under Korean law, the better view is that the principle of separability and kompetenz-kompetenz apply even in cases where Article 103 is raised. GGK have therefore raised the necessary prima facie case in this regard.

In these circumstances it is unnecessary to consider the alternative argument raised by GGK that if the Article 103 argument was a good one, then Singapore law became the proper law of the CA Arbitration Agreement so as to give effect to the parties’ clear desire to arbitrate their disputes (see [64] above).

Issue 3: What is the effect of Article 9(1) of the Korean Arbitration Act 2016 (“KAA”)?

Asiana contends that even if the dispute raised in the Korean CA Proceedings is arbitrable, nonetheless the bringing of those proceedings does not constitute a breach of the CA Arbitration Agreement because Korean law allows them to be brought pursuant to Article 9(1) of the KAA.

Article 9(1) of the KAA is the provision which implements in Korea Article II(3) of the New York Convention and Article 8(1) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”). It provides:

And Article 9(3) of the KAA goes on to provide:

This was not a point that was canvassed directly in the parties’ written submissions. It is referred to in Asiana’s written submissions in relation to delay and potential injustice to Asiana. The legal position was however covered in both experts’ reports and the argument was raised as a self-standing point by counsel for Asiana in his oral submissions and was responded to by counsel for the Applicants in his reply.

Professor Lee considers the effect of these provisions in paragraphs 54 to 56 of his report, wherein he relies on a decision of the Supreme Court of Korea (the “Supreme Court Decision”):

Professor Shin gives similar evidence in paragraphs 32 to 42 of his report. In paragraph 38 he refers to the same passage in the Supreme Court Decision cited by Professor Lee. It is to be noted that this passage is based on the premise “while arbitral proceedings are pending”.

He goes on to conclude in paragraph 39 that even if the counterparty were to commence an arbitration whilst the litigation is pending, the KAA does not require the courts to stay the litigation and accepts that this could lead to inconsistent conclusions. He goes on to draw attention to the fact that in the unusual facts of this case the fact that GCK has initiated the Enforcement Proceedings, in which the alleged non-arbitrability of the CA Arbitration Agreement owing to the effect of Article 103 is also raised, the possibility of two inconsistent decisions in the Korean courts also arises.

In his oral submissions counsel for Asiana drew upon the Supreme Court Decision cited by Professor Shin to submit that since under Korean law a party claiming nullity of the arbitration agreement may initiate proceedings concurrently with the same issue being raised in an arbitration, it could not be a breach of the CA Arbitration Agreement to do so. The argument made by counsel was as follows:

Counsel for the Applicants responded by acknowledging that Korean law permitted a party to seek relief in the Korean Courts but contended that this did not mean that Asiana were not in breach of the CA Arbitration Agreement by so doing.

Having regard to the way in which the point was developed, rather than dealing with this as a matter of generality I prefer to restrict my observations to the facts of this case. The pertinent facts are that the Korean CA Proceedings were commenced on 24 January 2022 after the Final Award had been made and the application to set it aside had been commenced in the Singapore Court. It was also made after the Enforcement Proceedings were commenced in the Korean Courts on 20 May 2021.

Article 9 of the KAA contemplates the commencement of proceedings in the Korean Courts either before or in the course of concurrent arbitration proceedings. This is clear from the wording of Article 9(3) and from the approach of the Korean Supreme Court (see [107] above). It does not apply to the facts of this case where the proceedings were commenced after the arbitration proceedings had been concluded and the Final Award had been made.

The purpose underlying Article 9 is to enable a party alleging that an arbitration agreement is void to have that issue determined by the National Court instead of, or as well as, by the Tribunal. It is not to enable a party who did not make that allegation in the arbitration nor seek to raise it before or during the course of the arbitration to do so in the National Court subsequent to the rendering of the Final Award. In these circumstances, I am satisfied that the Applicants are correct in their submission that Article 9 does not absolve Asiana from the possibility of being in breach of the CA Arbitration Agreement in starting the Korean CA Proceedings.

Issue 4: If the Court has a discretion to grant the anti-suit injunction, how should it exercise that discretion?

On the basis that the commencement of the Korean CA Proceedings was prima facie a contractual breach of the CA Arbitration Agreement, the correct approach to considering the exercise of discretion is as set out by Steven Chong JA in Sun Travels (see above at [31]). In the case of a contractual breach anti-suit relief will ordinarily be granted unless there are strong reasons not to do so and there is thus no need to adduce additional evidence of unconscionable conduct. But relief must be sought without undue delay and without unconscionable conduct on the applicant’s part.

Here, Asiana assert that the delays that have occurred in the Korean CA Proceedings coupled with the GGK’s manner of conducting those proceedings is such that GGK has lost the right to seek anti-suit relief. GGK seeks to counterbalance the effect of any delay by raising the issue of the alleged unconscionable conduct of Asiana in contesting the arbitration proceedings on the basis that the CA was valid and then, having failed, seeking a determination from a different tribunal that the agreement was void. I do not accept this. The conduct of the party in breach cannot serve to justify delay by the complaining party in seeking anti-suit relief. Indeed, where there is alleged unconscionable behaviour of this nature, this would seem to be a spur to seeking relief promptly; it cannot justify delay.

This is therefore a straight question of deciding whether any delay as has occurred in this case is such that the court should refuse to exercise its discretion to grant the injunction sought (see [36] above).

The procedural timetable for the Korean CA Proceedings is set out in paragraph 42 of Asiana’s written submissions:

In the Complaint filed on 24 January 2022, Asiana contested the validity of the CA Main Agreement on the basis that it was contrary to Article 103. It did not raise the issue surrounding the potential invalidity of the CA Arbitration Agreement until the filing of its Brief on 29 December 2022. In its first Reply on 14 March 2022 GGK contended that the proceedings were improper because they were brought in breach of clause 28 of the CA and sought that the proceedings should be terminated under Article 9 of the KAA.

On 22 May 2023, GGK requested Asiana to withdraw the proceedings on the basis that they were in breach of the CA Arbitration Agreement. This request was refused on 31 May 2023 and Asiana also refused to attend a meeting of the Joint Steering Committee which is the committee set up under the CA to try to resolve disputes.

In its second Reply Brief of 16 June 2023 GGK reiterated its contention that the claim should be dismissed and sought an order that the jurisdictional issue should be decided as a preliminary issue. There followed the first court hearing on 20 June 2023 at which the court acknowledged GGK’s position on jurisdiction but allowed Asiana to file a brief on the merits.

This application, SIC 14, was then commenced on 28 June 2023.

Although there is a delay from January 2022 until June 2023, it can be seen that this was taken up with the exchange of two rounds of Briefs during which Asiana expanded its case as indicated and GGK repeated its objection to the continuation of the proceedings and sought to engage with Asiana to agree their withdrawal. There was only one court hearing during which directions were given.

Although there was a second hearing on 22 August 2023 and a third was scheduled for 23 October 2023, the parties were unable to give me any indication as to when the Korean court might reach a decision on the issues.

Professor Lee considers the Korean CA Proceedings in paragraphs 67 to 73 of his report. In paragraph 68 he describes the first pleading date (ie, the first hearing) as being the occasion on which the court “directs the parties to state the major points of the complaint and the answer, sets out the contested issues and hears the parties’ opinions about matters to be proven”. The court may then designate additional pleading dates for the parties’ submission of evidence and examination of evidence. Eventually when the court is satisfied that sufficient pleading has been done it closes the pleading stage and designates a date for pronouncement of the judgment.

In paragraph 70 he refers to the second hearing on 22 August 2023 as being the time when Asiana submitted a detailed brief and when GGK announced that it would present detailed arguments to refute Asiana’s claims. He concludes “in other words, it can be said that the court is already reviewing the case” and he concludes in paragraph 73 that “the Korean CA Proceedings, in terms of duration and procedure have already progressed to a significant extent.”

However, Professor Lee lays particular emphasis on the steps that were taken between the first and second hearings and which were thereafter to be taken as a result of the second hearing. What I have to consider is the state of the proceedings and the delays up to the filing of this application which was immediately after the first hearing in June, whereas the second hearing was in late August.

Since the commencement of the proceedings in January 2022 up until the end of June 2023, there have been two rounds of pleadings, the second of which raised the additional claim of invalidity of the CA Arbitration Agreement. and one procedural court hearing which on the evidence equates to a Case Management Conference. There had been no substantive consideration of the issues by the court.

During that period Asiana were well aware that GGK were taking the point that the proceedings were in breach of the CA Arbitration Agreement and GGK acted reasonably and properly in inviting Asiana voluntarily to withdraw the proceedings or to take part in an agreed dispute resolution procedure.

As was pointed out in Sun Travels (at [83]) the focus of the inquiry is not delay simpliciter. What is of more importance is the extent to which the delay has allowed the foreign proceedings to progress. As can be seen from the above that by the end of June 2023 few judicial resources had been expended and the timetable for service of briefs had been generous. Moreover, no judgment on the merits has been handed down in any form.

Taking all these matters into account, I do not consider that the conduct of GGK during the relevant period was such as to disentitle it, in the exercise of the court’s discretion, to the relief it seeks to restrain Asiana’s breach of the CA Arbitration Agreement. GGK is therefore entitled to the anti-suit injunction which it seeks.

The Korean Compensation Proceedings

Issue 5: The nature of the Korean Compensation Proceedings

The Korean Compensation Proceedings were commenced on 13 October 2022 although service on the three defendants was not completed until June 2023. The Statement of Claim dated 13 October 2022 deals at some length with the part played in the negotiations by Chairman Park leading up to the conclusion of the four agreements and the illegality of his actions. The case raised against GGS and the Directors can be seen from the following extracts:

The relevant parts of the Korean Civil Code are:

From this, it is plain that in the Korean Compensation Proceedings, Asiana are not contending that the JVA (or any of the other four agreements) are invalid. They are raising a claim based upon Chairman Park’s alleged breach of trust and building upon this by making the assertion that because the Directors, and through them GGS, were well aware that Chairman Park’s conduct “was an act of disloyalty” all three have incurred joint and several liability to Asiana under the Korean Civil Code.

As is apparent from the sections of the Korean Civil Code, although expressed as being a breach of trust, Chairman Park’s conduct constitutes a tort. Professor Lee expresses the position under Korean law as follows at paragraph 62 of his expert report:

In oral submissions counsel for Asiana equated the case to an allegation of conspiracy in a common law jurisdiction and emphasised that the claim was not a contractual breach of the substantive clauses of the JVA. Counsel for the Applicants did not contend that the making of the claim was a breach of the main JVA but asserted that nonetheless it was, so far as GGS was concerned, a tort dispute which fell within the terms of the JVA Arbitration Agreement. Hence Asiana were in breach of the JVA Arbitration Agreement notwithstanding the fact that the claim was a tort claim and that the Directors were not parties to the JVA.

For convenience I shall repeat Clause 34.2 of the JVA, being the JVA Arbitration Agreement:

I have already concluded that the CA Arbitration Agreement contained in Clause 28 of the CA is governed by Korean Law. The parties did not suggest that any different conclusion should be reached on the JVA but it is not suggested that this arbitration clause is invalid.

Issue 6. In what circumstances and on what basis does the law of Korea permit tort claims to be determined in arbitration proceedings?

On this question I have received assistance from both Professors.

Professor Shin considers the matter in paragraphs 108, 110 and 112-115:

Professor Lee agrees that a tort dispute which is closely connected to the contract’s execution, performance and validity can fall within the scope of an arbitration proceeding but contends that existing case law demonstrates a common thread, that this close connection is only present where the tort claim also concerns a breach of contract claim.

Professor Lee goes on to contend that since the tortious act in issue is the Directors’ active participation in the tortious acts of Chairman Park and that none of them were parties to the JVA, any claim against them was non-arbitrable.

Whilst it may be that a case where there is not only a tort claim but also a related claim in contract is a prime example of a case which is closely connected for the purposes of arbitrability, I do not understand the Korean Supreme Court in its reasoning set out in paragraph 114 of Professor Shin’s Report to be limiting itself to cases where there was also a contract dispute. It cannot be that by avoiding raising a contract dispute where one was open to the complainant this could avoid the arbitration clause. The language of the Korean Supreme Court echoes that of Article 3(ii) of the KAA which expressly says “whether contractual or not”. The Korean Supreme Court uses the language “but also a dispute directly or closely relating to the formation, performance and validity of the agreement”.

Furthermore, I am unpersuaded that the fact that a claim in tort is made against individuals who are not parties to the agreement necessarily leads to the conclusion that there can have been no breach of the arbitration agreement. Where a claim in tort is made against both parties and non-parties to the agreement, regard must be had to the substance of the claim and not merely the form. As Lord Scott observed in paragraph 61 of his speech in Donohue (see [42] above) the party to the agreement seeking the injunction must show a sufficient interest that an adverse result in the foreign proceedings would materially affect him, such as having a liability in damages.

As a result, I am satisfied that on its true construction under Korean law the language of the JVA Arbitration Agreement, “[a]ll disputes, controversies or claims arising out of or in connection with this Agreement” [emphasis added] is wide enough to include tort disputes between the parties.

Issue 7. The Mozambique judgment

This does not however mean that all tort disputes involving the parties to an arbitration agreement will fall to be decided by way of arbitration. It is necessary to identify the nature or substance of the tort dispute and then to consider its relationship to the agreement in question.

The starting point lies in Article 9(1) of the KAA, cited in [104] above. The relevant passage for present purposes is the underlined words:

How should one go about determining whether any given “matter” is the subject of an arbitration agreement? Beyond directing my attention to the Korean Supreme Court Decision referred to in paragraphs 54 to 56 of Professor Shin’s report to the effect that the dispute in question must relate directly or closely to the formation, performance and validity of the agreement, the experts did not identify any Korean decision or academic paper illustrating how this task was to be addressed under Korean Law.

In paragraph 30 of his expert report, Professor Shin states that in circumstances where there is no direct authority in Korea, the courts will look to case law and commentary from other jurisdictions, particularly from jurisdictions which have implemented the Model Law such as the United States, United Kingdom, France, Germany and Singapore.

Subsequent to the oral hearing in this case, the Supreme Court of the United Kingdom (“UK”) delivered its Judgment in Republic of Mozambique (acting through its Attorney General) (Appellant) v Privinvest Shipbuilding SAL (Holding) and others (Respondents) [2023] UKSC 32 (“Mozambique”).

This was a case concerning the interpretation of Section 9 of the UK Arbitration Act 1996 (c 23) (the “UK Arbitration Act”) which mirrors Article 9(1) of the KAA in that it provides:

There were agreements between the claimants (“Mozambique”) and the respondents (“Privinvest”) governed by Swiss law relating to borrowings to purchase equipment which were secured by guarantees from Mozambique. These agreements contained conventional arbitration clauses. Mozambique subsequently brought legal proceedings in England alleging that there was a conspiracy involving Privinvest to pay bribes to corrupt officials of Mozambique and others which had resulted in Mozambique being exposed to losses under the guarantees.

Privinvest applied to the UK court for a stay under section 9 of the UK Arbitration Act on the basis that the conspiracy claims fell within the arbitration agreements.

The trial Judge dismissed the section 9 applications but this judgment was reversed on appeal to the Court of Appeal in England. Mozambique then appealed to the Supreme Court which had to decide what the correct approach was to determine whether the “legal proceedings are […] in respect of a matter which under the agreement is to be referred to arbitration” within the meaning of Section 9. In Mozambique, Lord Hodge, with whom the other Judges agreed, reviewed the applicable law in many common law jurisdictions, before concluding what the correct approach was.

It will thus be seen that there is a similarity between the issue raised in Mozambique and that which falls to be decided in this case. Accordingly, once this court became aware of the decision in Mozambique, it gave both parties the opportunity to provide further written submissions on the issues raised in Mozambique.

In Section 4(a) of his judgment Lord Hodge addressed the question of “the meaning and ascertainment of a ‘matter’” in section 9 of the UK Arbitration Act. The learned Judge identified (at [48]) that section 9 involved a two-stage process:

Lord Hodge went on to consider the fact that section 9 gives effect to Article II(3) of the New York Convention (as does Article 9(1) of the KAA) and then considered the jurisprudence developed in relation to legislation in other jurisdictions giving effect to Article II(3) of the New York Convention including the Cayman Islands (Gol Linhas Aereas SA v MatlinPatterson Global Opportunities Partners (Cayman) II LP [2022] UKPC 21. FamilyMart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Corpn [2023] UKPC 33), Hong Kong (Quiksilver Greater China Ltd v Quiksilver Glorious Sun JV Ltd and another [2014] 4 HKLRD 759), Singapore (Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 (“Tomolugen”)), and Australia (WDR Delaware Corpn v Hydrox Holdings Pty Ltd [2016] FCA 1164).

At [61] he cited with approval from the judgment of Sundaresh Menon CJ in Tomolugen:

Following this review, Lord Hodge expressed his conclusions in [71]–[78]:

As indicated in [149] above, the courts in Korea look to case law and commentary from other jurisdictions, particularly from jurisdictions which have implemented the Model Law in concluding the correct approach to interpreting statutory provisions such as Article 9(1) of the Korean Civil Code in circumstances where there is no specific guidance from decisions or academic commentary in Korea. Lord Hodge’s analysis is detailed and far reaching and I therefore propose to approach the two questions posed by him in the manner suggested in his reasoning.

Issue 8. What are “the matter or matters” in respect of which the Korean Compensation Proceedings are brought?

This is the first of Lord Hodge’s questions and I therefore turn to consider the facts and circumstances underlying the claim in the Korean Compensation Proceedings. First, Asiana submits that the main claim is a claim against the Directors, that this is a legitimate claim because they were the ones involved in the alleged illegal acts and that GGS’s vicarious liability is subsidiary to this. Accordingly the claim is about the part played by the Directors in negotiating all the agreements and that the position of GGS as a party to the JVA is immaterial to this question.

Counsel for the Applicants submits that although the claim is formulated as being a claim against the Directors with GGS being vicariously liable for their acts, in substance this is a claim primarily against GGS. It is not suggested that either Mr Schmitz or Mr Rossinyol is a man of such substance that he could pay the sums claimed. Their presence as defendants is necessitated by the way in which Korean law is enacted. The objective underlying the claim is to obtain damages from GGS as being vicariously liable for the Directors’ acts. There will be joint and several liability for those acts.

I consider that the approach of the Applicants constitutes the practical common-sense approach advocated by Lord Hodge. The claim is a claim for damages primarily directed against GGS based on its liability for the alleged tortious acts of the Directors. As indicated in [136] above counsel for Asiana equated these alleged tortious acts to a claim based on conspiracy in Common Law. I find this a helpful analogy.

The foundation of the claim lies in the assertion that the way in which the four agreements were structured (the Package Deal) was a conspiracy designed to prevent Asiana obtaining a fair price for the in-flight catering rights and that the Directors were well aware of this (see [132] above). The dispute thus relates directly to the formation of the Package Deal, particularly the interrelationship between the CA and the BWA, but Asiana contends that this is as far as it goes and that it is nothing to do with the JVA itself.

Counsel for the Applicants submits that this is too narrow a view. Counsel relies upon the fact that the CA was signed on the same day as the JVA by GGK and it was the JVA that established GGK as being the joint venture vehicle, owned 60% by GGS and 40% by Asiana. GGK then entered into the CA. The kernel of the dispute is whether in the circumstances this division of ownership represented a fair distribution of the profits. In support of this, they draw attention to the “[m]ethod for calculating the amount of damage suffered by the claimant” in the statement of claim (see [132] above). The principal sum sought from GGS is 60% of the business profit generated by GGK which would in substance equate to the profit which would have been made by GGK over the period of 30 years under the CA.

In the light of this the Applicants submit that the substance of Asiana’s claim is to seek to vary the economic benefits which the parties had agreed under the JVA so that Asiana obtains all the profits generated by GGK under the JVA rather than its 40% share subject to a deduction of the investment amount of KRW 80 billion.

Whilst the tort proceedings are framed in the pleadings as being a breach of trust akin to a conspiracy, regard must be had to the substance of those proceedings. They are proceedings which seek to address the alleged imbalance of the percentage ownership of GGK as between Asiana and GGS on the basis that the breach of trust was instrumental in creating that imbalance.

It is to be noted that Asiana has not sought to contend that the JVA is void or voidable because of the breach of trust. Article 103 is not relied upon. On the pleadings, if Asiana was wholly successful, it would receive damages to compensate it for the imbalance which on its contention would equate to a significant dilution of the sums that GGS would receive by way of profits in respect of its 60% shareholding.

GGS’s primary defence to the claim is that the Directors did not actively participate in Chairman Park’s illegal acts (see [132] above) but if this were to fail, there is further defence as to quantum. If there was an imbalance in the shareholding because of the illegal actions, what would have been the fair balance?

Taking all these matters into account, I have concluded that the Korean Compensation proceedings have been brought “to redress by way of damages the loss that Asiana have suffered owing to the alleged imbalance of the shareholdings in GGK due to the Directors’ involvement in the illegal acts of Chairman Park”. There are thus two “matters” which fall to be decided. First, was there a “conspiracy” between the Directors and Chairman Park to create this imbalance? Secondly, if there was, what award of damages would properly serve to redress that imbalance?

Issue 9: Do either of those matters fall within the scope of the JVA Arbitration Agreement on its true construction such that there is a prima facie breach of the JVA warranting an anti-suit injunction in favour of GGS?

This is a question of Korean law as to the correct interpretation of the JVA Arbitration Agreement (Clause 34.2). The question to be answered is whether the claim, not being a claim concerning the interpretation of the terms of the agreement, relates to a dispute directly or closely relating to the formation, performance or validity of the agreement (see above at [137]).

The JVA Arbitration Agreement is in conventional terms. It is recognised as being wide in its effect and “the Korean Supreme Court has consistently interpreted the scope of an arbitration agreement broadly”.

The matters falling for decision in the Korean Compensation Proceedings together constitute a dispute which seeks to undermine the way in which the JVA was negotiated and concluded and for this reason constitute, in my judgment, a dispute which is closely related to the formation or performance of the JVA within the meaning of Clause 34.2. It is not, as Asiana contended in its supplementary written submissions, a dispute which is only peripherally or tangentially connected to the formation of the JVA. It goes to the heart of that agreement.

Although Donohue is a decision under English law, the reasoning of Lord Scott at [60] is (see above at [42]), I believe, equally applicable to the interpretation of the JVA Arbitration Agreement under Korean law. The JVA Arbitration Agreement is not restricted to contractual claims. Lord Scott postulated a tort claim for fraudulent misrepresentation inducing the agreement containing the arbitration clause as being the sort of claim in tort which would be held to be a clause that arose “out of or in connection with” the agreement.

Here, the material wording of the JVA Arbitration Agreement is the same as was in the clause considered by Lord Scott and his postulated tort is of the same underlying nature as that alleged against the Directors and hence, GGS. Furthermore, GGS has more than sufficient interest in the outcome of the tort proceedings as it will be liable for any damages awarded.

I consider that the analogy with the facts and reasoning in Donohue is closer to the factual matrix in this case than are the facts and reasoning in Mozambique. In Donohue and in this case the allegation was that the illegal acts had induced the parties to enter the agreements on the terms which they did. In [106]–[109] of Mozambique, Lord Hodge explained that the matter identified as arising on the facts of that case was a factual dispute as to quantification which was held to be an insufficient connection.

Accordingly, I have concluded that the bringing of the Korean Compensation Proceedings was prima facie a breach of the JVA Arbitration Agreement.

Counsel for Asiana accepted that his clients were not taking a point on delay in relation to the current status of the Korean Compensation Proceedings, such that this would be an inappropriate case for the grant of an anti-suit injunction in favour of GGS to restrain the continuance of the proceedings as against it.

Issue 10: Is GGS entitled to an Anti-Suit Injunction to prevent the continuation of the tort claim against the Directors?

I refer back to the factors set out at [50] above. I have found that the JVA Arbitration Agreement on its true interpretation covers the tort claims against GGS. The next question is whether it is wide enough to cover tort claims not only against GGS but also its co-defendants. By parity of reasoning with that of Lord Scott in [60] and [61] in Donohue (see above [42]) I am satisfied that it does. To reach any other conclusion would be likely to lead to undesirable forum fragmentation. In all the circumstances, this is a clear case whereby the anti-suit injunction granted to GGS to prevent a breach of the JVA Arbitration Agreement should extend to cover the case against the Directors.

Issue 11: Are the Directors themselves entitled to an anti-suit injunction?

In the circumstances, it is not necessary that I should address this question. Had the tort action been brought only against the Directors, the analogy with the position of Gunvor in Clearlake (see above at [44]) would have been a strong one.

The Directors’ Undertaking

I should record that counsel for the Applicants offered an undertaking from the Directors to participate in and be bound by any arbitration between Asiana and GGS commenced in consequence of this anti-suit injunction. It is appropriate that an undertaking of this nature should be given.

Conclusion

For the reasons given, GGK is entitled to an anti-suit injunction to restrain Asiana from proceeding further with the Korean CA Proceedings and GGS is entitled to a similar injunction restraining Asiana from proceeding further with the Korean Compensation Proceedings both against it and against the Directors.

The parties should seek to agree:

(a) The wording of the injunction;

(b) The wording of the Directors’ undertaking; and

(c) The question of costs.

In so far as this cannot be done, the parties should within 21 days of this judgment file written submissions on the matters in dispute (limited to 5 pages) and indicate whether they are prepared to dispense with an oral hearing on those matters.