South Korea wins final ruling in 264 billion won ISDS dispute with Chinese investor

The South Korean government has secured a final victory in an international investment dispute (ISDS) against Chinese investor Fengzhen Min. The International Centre for Settlement of Investment Disputes (ICSID) Annulment Committee rejected Min’s application to annul a previous ruling, meaning the government is no longer liable for approximately 264.1 billion won in damages.

The dispute originated from a 380 billion won project financing loan secured through Pi Korea, a company established by Min in 2007. Following the company's failure to repay the loan, Woori Bank sold the collateralized shares. Min had previously been convicted in 2017 for providing bribes to bank officials to secure the loan. Consequently, the original tribunal ruled that the investment was part of an illegal scheme and did not qualify for protection under the Korea-China investment treaty.

In addition to dismissing the claim, the committee ordered Min to pay approximately 1.5 billion won in legal costs incurred by the South Korean government during the annulment proceedings. The Ministry of Justice stated that this decision reaffirms the principle that investments involving illegal activities under domestic law are not protected under ISDS.